Executive Summary

• What’s new: The Seventh Circuit affirmed dismissal of an outsider’s qui tam action under the False Claims Act, outlining a potential path to dismissal where a relator lacks inside information and relies on speculation rather than particularized factual allegations.
• Why it matters: DOJ data show record qui tam filings driven in large part by data miners analyzing publicly available data, and the DOJ’s new FOCUS initiative actively encourages such filings, making outsider qui tam actions an increasing litigation risk for companies that submit claims to the government.
• What to do next: Defendants facing outsider qui tam actions should consider challenging the sufficiency of relators’ factual allegations at the pleading stage, arguing that statistical analyses and assumptions about company practices lack the particularized factual basis required to state a viable FCA complaint.

__________

The record for the highest number of qui tam actions filed in a single year was set last year, according to the U.S. Department of Justice (DOJ). The DOJ explained that data miners who analyze publicly available data to identify indications of fraud have driven much of the surge, rather than company insiders who have traditionally filed qui tam actions.

Embracing the work of data miners, the DOJ earlier this year launched an initiative called Fraud Oversight Through Careful Use of Statistics (FOCUS), inviting submissions from data miners who suspect fraud against the...

Read Full Story: https://news.google.com/rss/articles/CBMiigFBVV95cUxOTTZRQkc4MFZpcHRPY0VwYk00...