A recent First Circuit appellate court decision makes it clear that “first” in the so-called “First To File Bar” of the False Claims Act, 31 U.S.C. § 3730(b)(5), means “first” not “best” or “better.” Section 3730(b)(5) states that, when a private party files a qui tam action under the False Claims Act, “no person other than the Government may intervene or bring a related action based on the facts underlying the pending action.” In the First Circuit case, the court ruled that a prior qui tam suit against Baxter Pharmaceutical, which had already been settled, barred a second law suit against the company by other relators. The court held that the two suits were similar enough to trigger the first to file bar and it did not matter that the second complaint had many more specific details than the first. The court’s reasoning focuses on whether the first complaint gave the Government sufficient information to start an investigation that could have uncovered the misconduct alleged in the second complaint. If it does the analysis ends there and the second suit must be dismissed.
Practice tip: If there was (or is pending) an FCA case against the same defendant that is similar to the one you are considering you may very well have to forego filing or at least go into it knowing that it is highly likely your second to file case will get tossed.
To read the Baxter opinion see UNITED STATES, EX REL. VEN-A-CARE OF THE FLORIDA KEYS, INC., Plaintiff, Appellee, v. BAXTER HEALTHCARE CORPORATION, Defendant, Appellee, v. LINNETTE SUN AND GREG HAMILTON, Appellants. UNITED STATES, EX REL. LINNETTE SUN; UNITED STATES, EX REL. GREG HAMILTON, Plaintiffs, Appellants, v. BAXTER HEALTHCARE CORPORATION, Defendant, Appellee. No. 13-1732, No. 13-2083, UNITED STATES COURT OF APPEALS FOR THE FIRST CIRCUIT, 2014 U.S. App. LEXIS 22564,December 1, 2014, Decided.
