56 F.4th 152
1st Cir.2022Background
- Two consolidated qui tam suits against AthenaHealth: Geordie Sanborn (filed Oct. 30, 2017) and Cheryl Lovell & William McKusick (filed Dec. 21, 2017). Both alleged Kickback Act violations; Sanborn also alleged an EHR compliance claim; Lovell & McKusick alleged a billing-claims theory.
- DOJ investigated, intervened in January 2021 only as to the Kickback Claims; it did not intervene in Sanborn's EHR-Compliance Claim or in Lovell & McKusick's Billing Claim.
- The parties executed a global settlement (Jan. 27, 2021) paying the United States over $18.25 million; the settlement acknowledged a private allocation agreement among relators and reserved fee disputes under 31 U.S.C. § 3730(d).
- The government separately paid a relator's share to Sanborn; Sanborn then paid Lovell & McKusick an unknown sum pursuant to a private sharing agreement (not a government payment).
- Lovell & McKusick sought attorneys’ fees under § 3730(d); the district court denied their fee request. The district court awarded Sanborn fees for the intervened claim but disallowed fees for his non-intervened EHR claim; both appeals followed.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether relators who received payment via a private sharing agreement (not from the government) may recover attorneys' fees under § 3730(d)(1). | Lovell & McKusick: they received payment and so are entitled to fees. | Athena: § 3730(d)(1) requires receipt of a statutory relator's share paid by the government; private sharing doesn't qualify. | Held: Fees under § 3730(d)(1) are limited to persons who receive a relator's share from the government; private sharing payments do not qualify. |
| Whether "action" in § 3730(d)(1) means the whole case or individual claims—i.e., may a relator recover fees for a non-intervened claim when the government intervened in other claims. | Sanborn: "action" means the case as a whole, so fees should cover both intervened and non-intervened claims. | Athena/Government: "action" should be read claim-by-claim; fees limited to intervened claims. | Held: "Action" is best read claim-by-claim; Sanborn cannot recover § 3730(d)(1) fees for the non-intervened EHR claim. |
| Whether Sanborn can recover fees under § 3730(d)(2) for a settled action in which the government did not intervene. | Sanborn: alternatively entitled to fees under § 3730(d)(2). | Athena: argument waived because not raised below. | Held: Sanborn waived any § 3730(d)(2) argument by failing to press it in the district court. |
| Whether the FCA first-to-file bar (31 U.S.C. § 3730(b)(5)) barred Lovell & McKusick from recovering fees. | Lovell & McKusick: (argued entitlement to fees) | Athena: first-to-file bar precludes later filers from fees on overlapping claims. | Held: Court did not reach this question; resolved appeal on narrower ground (lack of statutory relator's share). |
Key Cases Cited
- Barnhart v. Thomas, 540 U.S. 20 (statutory-interpretation principle about nearest reasonable antecedent)
- United States v. Millennium Lab'ys, Inc., 923 F.3d 240 (First Circuit precedent on FCA interpretation)
- United States ex rel. Bryant v. Community Health Sys., Inc., 24 F.4th 1024 (holding only persons who receive a relator's share may recover attorney fees)
- Merena v. SmithKline Beecham Corp., 205 F.3d 97 (third circuit: read FCA provisions claim-by-claim)
- Rockwell Int'l Corp. v. United States, 549 U.S. 457 (Supreme Court adopting Merena's claim-by-claim logic for the public-disclosure bar)
- United States ex rel. Ven-A-Care of the Fla. Keys, Inc. v. Baxter Healthcare Corp., 772 F.3d 932 (discussing balance of incentives and opportunism under the FCA)