Civil Practice – Fales Claims Act – First-to-File Rule

The district court was correct to dismiss this matter based on the application of the first-to-file rule.

Although the district court should have considered Plaintiff’s amended complaint, we nevertheless affirmed.

The False Claims Act’s first-to-file rule allows only one relator at a time to pursue a False Claims Act claim related to a given fraud. Here, the district court dismissed the case of Plaintiff-Relator, Ganesa Rosales, against Amedisys North Carolina, LLC, and two other defendants, because another relator beat her to the punch by five years. But Rosales argued that her claims were distinct from those in the earlier-filed complaint. She contended, in part, that the district court erred by refusing to consider new claims she asserted in an amended complaint.

In this appeal, Rosales sought to overturn the district court’s order dismissing her claims against Amedisys NC, Dr. Batish, and his practice. She argued that she was the first relator to bring claims against each of those defendants, as well as the first to bring a claim based on the Anti-Kickback Statute.

To address Rosales’s arguments, the first question we had to consider was which of Rosales’s complaints we review when applying the first-to-file rule. The district court concluded that it was restricted to reviewing the Original Rosales Complaint. The district court erred on this point because the False Claims Act’s first-to-file rule must be applied claim-by-claim and defendant-by-defendant, and this analysis should look to the most recent properly filed complaint. Rosales was not seeking to rely on facts arising after the time she filed the Original Rosales Complaint. Instead, she merely argued that she was in fact the first to file certain (allegedly) new claims clarified or raised in the Amended Rosales Complaint. That, we held, she is permitted to do. In sum, we concluded that a district court applying the False Claims Act’s first-to-file rule should analyze all properly filed complaints claim-by-claim to determine which relator was the first to bring a specific claim, or to bring that claim against a particular defendant.

Aided by our consideration of her amended complaint, Rosales argued that her claims against Amedisys NC are not barred by Byers’s earlier-filed claims against Amedisys Holding (the parent corporation) because she brought claims against three additional defendants—Amedisys NC, Dr. Batish, and his practice—and added a False Claims Act claim for a violation of the Anti-Kickback Statute. Nonetheless, even with the consideration of Rosales’s amended complaint, we concluded that the district court was correct to dismiss this matter based on the application of the first-to-file rule.

Likewise, we found no significance to the Amended Rosales Complaint’s addition of claims against Dr. Batish and his medical practice. As the district court noted, Dr. Batish “is a medical director, and the [Original Byers Complaint] includes allegations against Amedisys [Holding]’s medical directors,” meaning the Original Byers Complaint gave “the government . . . enough information to discover the fraud in North Carolina that Rosales alleges.” We agreed. Again, a comparison between the two complaints demonstrates that they alleged the same material elements of fraud. Both complaints alleged that Amedisys Holding’s “medical director[s] often sign[ed] certifications for patient(s) without having seen the patient or having reviewed the patient records at the time of certification.” Both complaints alleged that “nurse case managers were instructed not to bother the medical director with eligibility and admissions determinations.” And both complaints alleged that these were “systematic” and “wide-spread” practices. The district court was correct to apply the first-to-file bar to Rosales’s claims against Dr. Batish and his practice.

Finally, the Amended Rosales Complaint added a False Claims Act claim for a violation of the Anti-Kickback Statute. In rejecting Rosales’s claim premised on the Anti-Kickback Statute, the district court relied solely on its conclusion that “Rosales cannot amend her complaint to defeat the first-to-file rule.” We disagreed. But we affirmed as Rosales’s Opening Brief fails to argue how her Anti-Kickback Statute claim is distinct from the allegations in the Original Byers Complaint or the other complaints filed before hers, at least two of which alleged a kickback scheme and cited the Anti-Kickback Statute.

Affirmed.

United States ex. rel. Ganesa Rosales v. Amedisys North Carolina LLC (Lawyers’ Weekly No. 001-054-25, 20 pp.) (James A. Wynn, J.) Appealed from the U.S. District Court for the Eastern District of North Carolina, at Wilmington (James C. Dever III, J.) Argued: John J. Beins, Beins Goldberg, LLP, Chevy Chase, Maryland, for Appellants; Brian Kenneth French, Nixon Peabody, LLP, Boston, Massachusetts, for Appellees. On Brief: Samuel Ranchor Harris, III, Ranchor Harris Law, PLLC, Wake Forest, North Carolina, for Appellants; Brian T. Kelly, Nixon Peabody LLP, Boston, Massachusetts, for Appellees. U.S. Court of Appeals for the Fourth Circuit