United States v. Midwest Neurosurgeons, LLC, et al, No. 20-2445 (8th Cir. 2022)

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Justia Opinion Summary

Defendant, a neurosurgeon, chose to use implants distributed by DS Medical, a company wholly owned by his fiancée. Physicians in other practices grew suspicious and filed various claims under the False Claims Act. The jury returned a verdict for the government on two of the three claims. The district court then awarded treble damages and statutory penalties in the amount of $5,495,931.22. Following the verdict, the government moved to dismiss its two remaining claims without prejudice, see Fed. R. Civ. P. 41(a)(2), on the ground that any recovery would be “smaller and duplicative of what the [c]ourt ha[d] already awarded.”
 
The Eighth Circuit reversed and remanded for a new trial. The court explained that are several ways to prove that a claim is “false or fraudulent” under the False Claims Act. One of them is to show that it “includes items or services resulting from a violation” of the anti-kickback statute. This case required the court to determine what the words “resulting from” mean. The court concluded that it creates a but-for causal requirement between an anti-kickback violation and the “items or services” included in the claim. Thus, the court reversed and remanded because district court did not instruct the jury along these lines.

Court Description: [Stras, Author, with Loken and Arnold, Circuit Judges] Civil case - False Claims Act. To show a claim is false or fraudulent, plaintiff may show the claim "includes items or services resulting from a violation" of the anti-kickback statute - 42 U.S.C. Sec. 1320a-7b(g); the phrase "resulting from" creates a but-for causal requirement between an anti-kickback violation and the items or services included in the claim; here, the district court did not properly instruct the jury on the but-for causal relationship, and the matter must be reversed and remanded for a new trial; the False Claims Act expressly provides a preponderance-of-the-evidence standard for all essential elements and the government may establish an illegal kickback by a preponderance of the evidence as part of a larger False Claims Act case; as a result,the district court did not err in refusing to give a beyond-a-reasonable doubt instruction regarding the illegal kickback.

Primary Holding

The Eighth Circuit reversed the district court’s judgment and concluded that the words “resulting from” create a but-for causal requirement between an anti-kickback violation and the “items or services” included in the claim. Thus, the court remanded because the district court did not instruct the jury along these lines.


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