United States ex rel. Shea v. Verizon Wireless

Case Updates

The D.C. Circuit vacated its decision in light of the Supreme Court’s ruling on the first-to-file bar issue in Kellogg Brown & Root Service, Inc. v. U.S. ex rel Carter, and remanded to the district court for further proceedings.

The Supreme Court considered the issue in the more recent Kellogg Brown & Root Service, Inc. v. U.S. ex rel Carter case and determined that the FCA’s first-to-file bar keeps new claims out of court only while related claims are still being litigated. The relator had filed a cert petition urging the Court to grant, vacate, and remand in light of Carter. The Supreme Court did precisely that.

The D.C. Circuit held that the False Claims Act’s “first-to-file” bar prevented a repeat plaintiff from filing duplicative, stale claims against the company.

The U.S. Chamber urged the D.C. Circuit to affirm the decision of the district court. The Chamber argued in its amicus brief that the Appellant’s argument that the court should read the “first-to-file” bar to allow any number of duplicative claims to be filed so long as only one case is active at a time cannot be squared with the plain language of the statute or Congress's recognized goals in enacting the False Claims Act (FCA). The Chamber pointed out in its brief that the first-to-file bar speaks in absolute, exception free terms: Beginning the moment “[w]hen a person brings an action under t[theFCA’s qui tam provision], no person other than the government may . . . bring a related action based on the facts underlying the pending action.” 31 U.S.C. § 3730(b)(5). The Chamber argues that the appellant's argument would also undermine the FCA’s basic goal of putting the government on notice of potential fraud and actually reduces incentives for prompt disclosure because claims subsequent to the first-filed one would merely be delayed rather than barred.