Basic legal principle knocks down False Claims Act suit

Hillcrest Health Center in Oklahoma City beat back a False Claims Act (FCA) lawsuit earlier this month, using a legal principle designed to protect defendants from repeated litigation over similar issues. U.S. District Judge Lee West ruled Jan. 4 that a whistle-blower suit brought by former resident John King should be dismissed because it overlapped with an earlier suit King brought. "There is an ancient legal doctrine called res judicata that everyone learns about in the first year of law school that says you can't sue the same party repeatedly over the same general set of facts once there has been a final judgement," explains health care attorney Jesse Witten, who helped defend Hillcrest. Witten, of the Washington, DC office of Jones Day, says this marks the third reported case in which this defense has been used successfully in a false claims action, but probably not the last.

King initially filed an employment action that claimed he was fired because he refused to take part in fraud. That case was settled in January 1999 and the parties entered into a voluntary dismissal. He later filed a FCA lawsuit that alleged that Hillcrest engaged in eight fraudulent schemes that included false claims for medical procedures, treatments, and prescriptions.

Judge West noted that the FCA specifically bars all qui tam suits based on publicly disclosed information unless the person bringing the action is an "original source" of the information. West found that King had alleged sufficient "direct and independent knowledge" about all but one of the alleged schemes.

However, West ruled that King should have brought one lawsuit that made all of those allegations because many of the witnesses, documents, facts, and legal issues would be the same. "Indeed, all events described in the two lawsuits involve the same individuals and the evidence presented in both lawsuits would substantially overlap," asserted Judge West.