Recently, a district court in the Southern District of Florida dismissed with prejudice a qui tam complaint premised on the alleged sale of products adulterated and misbranded under the Food Drug and Cosmetic Act (“FDCA”). United States ex rel. Crocano v. Trividia Health Inc., No. 22-CV-60160-RAR (S.D. Fla. July 18, 2022). In so doing, the court declined to embrace the arguments asserted in a Statement of Interest filed by DOJ and reiterated that “the False Claims Act is not the proper avenue for holding [companies] accountable” for violations of the FDCA, because “the FDA’s use of its regulatory enforcement powers may be exercised fully to ensure further compliance.”

As discussed here, DOJ declined to intervene, but filed a Statement of Interest last month arguing that “deficiencies in [an] affected product resulting from FDCA violations may, in certain circumstances, be material to the government’s decision whether to pay for the affected product, and thus relevant in an FCA case.” In particular, DOJ encouraged the court to conclude that where fraudulent statements or omissions would have caused FDA to recall a product, claims for that product are “false” under the FCA. This so-called “fraud-on-the-FDA” theory has been received with mixed success in courts, as discussed here and here.

In the order granting the defendant’s motion to dismiss, the court agreed that “a regulatory violation can rise to the level of creating liability” under the FCA. However, the court...

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