Thulin v. Shopko Stores Operating Co., LLC, No. 13-3638 (7th Cir. 2014)
Annotate this CaseThulin was a Shopko pharmacist. During his tenure, Thulin observed what he believed to be a scheme in which Shopko submitted inflated claims for prescription drugs to the Medicaid program. Thulin filed a qui tam complaint, claiming violation of the federal False Claims Act by overbilling Medicaid, alleging that Shopko is a “sophisticated,” “multi-regional” business that developed and programmed the PDX system and should have been aware of federal law governing submission of claims, and bringing claims under the laws of eight states. The district court dismissed the federal claim under FRCP 9(b) and 12(b)(6). The Seventh Circuit affirmed. To be liable under the Act, Shopko must have acted with “actual knowledge,” or “deliberate ignorance” or “reckless disregard” of the possibility that its claims were false. Thulin’s allegations were not sufficient to satisfy that requirement even if Shopko’s practices were contrary to the Federal Assignment Law. Although malice, intent, and other conditions of the mind may be alleged generally, vague allegations that a corporation acted with reckless disregard or with reason to know of facts that would lead a reasonable person to realize that it was submitting false claims, simply because of its size or sophistication do not clear even this lower pleading threshold.
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