The False Claims Act allows an individual to file a lawsuit on behalf of the government, against another individual or company who has defrauded the government. This type of lawsuit is called a qui tam action. If the person bringing the lawsuit wins, he or she may be entitled to receive up to 30% of the recovery. Additionally, the False Claims Act protects whistleblowers from retaliation of their employers. For example, an employer cannot fire an employee because of a lawful act the employee engaged in to prevent the government from being defrauded.
On July 27, 2017, New York’s Federal appellate court decided a case which discusses a qui tam action and the retaliation provision of the False Claims Act.
The first issue in Fabula v. American Medical Response, Inc., was whether the plaintiff’s complaint satisfied the particularity standard.
In the Fabula case, Fabula worked as an Emergency Medical Technician (“EMT”) for AMR (“American Medical Response, Inc.”). AMR is the largest ambulance company in the United States. AMR can be reimbursed by Medicare and/or Medicaid depending on the reasons for transporting the patient. Fabula was fired after he refused to falsify a Patient Care Report (“PCR”) so that it could qualify for Medicare reimbursement. There was also a history of other EMTs and paramedics being forced to falsify documents so that AMR could be reimbursed. For these reasons, this qui tam action alleged that AMR defrauded the government by submitting false claims for Medicare and Medicaid reimbursement.
To start a lawsuit, the plaintiff must file a complaint with the court. The complaint is a document which states the facts that the plaintiff alleges occurred and that make the defendant liable to the plaintiff. In a federal lawsuit alleging fraud, there is a heightened pleading standard. In other words, the plaintiff must state with particularity the facts that occurred which caused the fraudulent action. If not, the complaint will likely be dismissed.
The lower court, ruled that the complaint in the Fabula case did not satisfy the particularity standard because the complaint did not state, among other things, details about invoice numbers and invoice dates. The Second Circuit disagreed and declined to require that every qui tam complaint needed to state the false invoices that were submitted to the government. Instead, the particularity standard can be satisfied as long as the facts alleged in the complaint create a strong inference that false claims were submitted to the government and that the other party “peculiarly” has the specific information needed to identify the false claims.
The second issue in the Fabula case was whether Fabula was fired in retaliation for refusing to falsify a document.
The lower court ruled that Fabula’s refusal to falsify the document was not considered “protected activity,” which is one of the requirements for a retaliation claim. The Second Circuit, however, again disagreed with the lower court and ruled that Fabula’s refusal to falsify the document was considered “protected activity” because his refusal made it difficult, or even impossible, for AMR to file a false claim and be reimbursed for that particular ambulance run. Thus, Fabula satisfied the retaliation requirement under the False Claims Act because he prevented or stopped at least one False Claims Act violation and as a result, was fired.
In sum, qui tam actions and determining whether an employer retaliated against an employee under the False Claims Act can be complicated.
If you have questions about workplace retaliation, qui tam, or whistleblower cases, contact the Long Island employment lawyers at Famighetti & Weinick, PLLC. Our phone number is 631-352-0050 and our website is http://linycemployment.com.
Today’s employment law blog was written by law student intern Thalia Olaya.
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