Law360 Guest Article: Emerging Circ. Split Over Scope Of FCA First-To-File Bar

04/29/2014


In a recent decision, the D.C. Circuit significantly expanded the scope of the False Claims Act’s first-to-file bar, while also pitting itself against a handful of circuit courts going the other way. The first-to-file bar precludes FCA suits that are based on facts underlying a “pending action.” In United States ex rel. Shea v. Cellco Partnership, the D.C. Circuit held that the bar applies even where the first action has been dismissed and is no longer “pending.”[1] The court expressly rejected a contrary interpretation adopted by the Fourth, Seventh, and Tenth Circuits, which have held that the defense applies only while the first action remains pending. This decision solidifies a circuit split on the issue and increases the chances that the U.S. Supreme Court will address the scope of this important statutory defense.

Background
In Shea, the relator alleged that Verizon Communications Inc. had defrauded the government by billing for improper telecommunication surcharges. These allegations were similar to claims raised by the same relator in a prior FCA case — one that had been dismissed following a settlement under which the relator received nearly $20 million.

Excerpted from Law360, April 29, 2014. To view full article, click here (subscription required).

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