Attorney Fees Allowed in False Claims Settlement

     (CN) – Requests for attorney fees in a False Claims Act settlement are not barred by that law’s provisions, a federal judge ruled.
     Community Health Systems Inc. and its affiliates denied violating the FCA, but agreed last year to pay the federal government $97.2 million to settle claims over alleged improper billing and medically-unnecessary emergency department admissions.
     CHS paid attorney fees to two plaintiff relators, one of whom received $16.4 million for the emergency department claim. However, the company and its affiliates objected to paying attorney fees for other relators in the case.
     U.S. District Judge Kevin Sharp ruled last week that attorney fee requests in the case are not excluded by the settlement agreement or the FCA’s first-to-file or public disclosure provisions.
     “Defendant had several choices. They could have litigated with relators and the United States; could have agreed to settle only one suit with one relator and continued to litigate the others; they could have included a provision in the settlement agreement that specified they would only pay attorneys’ fees for one relator; or they could have negotiated a carve-out in the settlement agreement that specifically referenced the first-to-file bar and public disclosure provision,” the judge wrote.
     “They did none of those things. Instead they opted to omit the uncertainty entailed by litigating up to seven cases and entered into a settlement agreement that did not reserve the right to challenge entitlement to fees under either the first to file or public disclosure provisions of the FCA,” Sharp added.
     The judge said the settlement agreement reserved rights to attorney fees. He ruled that the amount of reasonable fees for each plaintiff is for a magistrate judge to decide.

%d bloggers like this: