George B. Breen, Member of the Firm in the Health Care and Life Sciences and Litigation practices and Chair of the firm’s National Health Care and Life Sciences Practice Steering Committee, in the firm’s Washington, DC, office, was quoted in the Bloomberg BNA Health Care Daily Report, in “Medicare False Claims Appeal Filing Presses Novel Defense,” by Matt Phifer. (Read the full version – subscription required.)
Following is an excerpt:
A federal appeals court is being asked to dismiss a False Claims Act case against a nursing home chain based on a novel argument: The whistleblower sold some of her interest in the case’s outcome to finance it.
Although third-party financing arrangements are routine in federal court litigation, attorneys representing Consulate Health Care are arguing former nurse Angela Ruckh’s decision to sell some or all of what she may recover if her claims succeed is more than a simple fee arrangement, violates the FCA, and may be suspect under the U.S. Constitution.
The motion, filed with the U.S. Court of Appeals for the Eleventh Circuit, seeks dismissal of an appeal that could be worth more than $300 million. If the appeals court accepts the arguments, it could have major implications for false claims litigation by changing how FCA cases are litigated, including what money may be recoverable and even what evidence is discoverable.
“It’s the first time I can recall that there’s been an effort made from a defense perspective to effectively seek dismissal because the relator has contracted with one of these litigation funding organizations as part of its effort to prosecute the case,” George Breen, a partner at Epstein Becker Green in Washington, said. …
Breen told Bloomberg Law the case raises questions about to whom a defendant is obligated to pay recoveries because the statute envisions recoveries being paid to relators, not third-party litigation financiers. “Are those expenses—if you ever engage in a relationship with a litigation funding source, and it’s paying for your fees and costs—are those recoverable from a defendant?”
Breen also pointed out that a relationship between a relator and a financing company is not an attorney-client relationship. “That opens the door for discovery,” Breen told Bloomberg Law. “What did the relator share with the third-party funding source?”
He explained that such information, if discovered, could undermine the relator’s case by revealing strategy as well as the relator’s thought processes with respect to the strengths and weaknesses of their case.