Back in January, we wrote about a district judge in Massachusetts who granted summary judgment in favor of a False Claims Act (FCA) defendant, ruling that the “but for” causation standard should be applied when violations of the Anti-Kickback Statute (AKS) form the basis for FCA claims.
This month, the First Circuit Court of Appeals issued an opinion in U.S. v. Regeneron Pharmaceuticals, Inc., in which it also adopted the but for causation standard, adding to the growing list of circuit courts to have adopted the standard (the Sixth and Eighth Circuits have previously done so). The only circuit to have addressed the issue and rejected the but for causation test is the Third Circuit, which requires only requires proof of a “causal link” between unlawful remuneration and a claim for reimbursement.
The AKS, in relevant part, provides that, in addition to possible criminal liability, a claim for reimbursement that includes items or services “resulting from” a violation of the AKS constitutes a false or fraudulent claim for purposes of the FCA. As with the other cases addressing this issue, the question before the First Circuit revolved around the phrase “resulting from.” Like the Sixth and Eighth Circuits before it, the First Circuit ultimately concluded that this phrase requires proof of but for causation (i.e., but for the unlawful kickback, the allegedly false claim would not have been submitted).
In jurisdictions requiring proof of but for causation (First, Sixth, and Eighth Circuits), it is going to be exceedingly difficult for FCA plaintiffs to develop such proof. That being said, the still-developing circuit split is likely to eventually attract the attention of the Supreme Court, which will ultimately decide the issue for good.
The attorneys at Chilivis Grubman represent businesses and individuals in connection with False Claims Act investigations and litigation, including whistleblower actions brought under the FCA’s qui tam provisions. If you need assistance with such a matter, please contact us.