On April 24, Ropes & Gray filed an amicus brief with the U.S. Supreme Court on behalf of the Pharmaceutical Research and Manufacturers of America (PhRMA), the Biotechnology Industry Organization (BIO), and the U.S. Chamber of Commerce.
The brief encouraged the Supreme Court to grant certiorari in Purdue Pharma v. United States ex rel. May. Under the False Claims Act, the ability of relators to bring claims on behalf of the government is circumscribed by congressionally imposed limitations, including the public disclosure bar, the first-to-file bar, and a six-year statute of limitations. In a series of rulings culminating in the Purdue decision, the U.S. Court of Appeals for the Fourth Circuit has effectively eliminated these three critically important limitations.
First, the Fourth Circuit breaks with every other circuit by interpreting the FCA’s public disclosure bar to allow relators to file suit predicated on publicly disclosed allegations so long as they can demonstrate that they did not “actually derive” their allegations from the public disclosure. The ruling allows relators to circumvent the narrow “original source” exception, which allows publicly disclosed allegations to be asserted only by relators possessing first-hand knowledge of those allegations, and only if they gave notice to the government before filing.
Second, the Fourth Circuit interprets the FCA’s first-to-file bar to preclude a subsequent suit only while the earlier suit remains pending, thereby allowing serial qui tam suits asserting the same claims.
Finally, the Fourth Circuit applies the Wartime Suspension of Limitations Act (WSLA), a criminal procedural statute, to relator-filed civil FCA claims, resulting in indefinite tolling even for unintervened qui tam suits with no connection to any armed hostilities. The combined result of these three errors is a prescription for never-ending qui tam suits based on stale, second-hand and recycled allegations, at a considerable cost to businesses forced to defend what are often meritless claims.
The PhRMA brief was written by business & securities litigation partner Doug Hallward-Driemeier (Washington, D.C.)
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