Victory in the United States Court of Appeals for the Second Circuit

Second Circuit Affirms Dismissal of Federal Qui Tam Action Alleging False Claims Act Violations

SACS obtained a victory in the United States Court of Appeals for the Second Circuit, which unanimously affirmed the SDNY’s grant of summary judgment to our client, a school district in the state of New York.

Proceeding under the False Claims Act, plaintiff brought suit against our client and various other school districts alleging that false claims were fraudulently submitted to the United States government for Medicaid reimbursement. Plaintiff also alleged violations of the Individuals with Disabilities Education Act and section 411(k)(13) of the Medicare Catastrophic Coverage Act of 1988, 42 U.S.C. § 1396b(c). The claims stemmed from remote-learning services provided by numerous school districts across the United States as an accommodation to special needs students during the COVID-19 pandemic. Plaintiff claimed that the school districts were required to convene meetings to amend the students’ Individualized Education Plans to include remote services, but failed to do so.

The Second Circuit agreed with SACS’s position that plaintiff waived many of his arguments by failing to object to the initial report and recommendation by the Magistrate. Next, the Court held that the worthless services claims failed on the merits, as “the SAC does not allege facts showing that any misrepresentation or omission in any claim made to the federal government was knowingly material.” Finally, leave to replead would be futile because plaintiff “could not plausibly allege scienter or materiality given the guidance of federal agencies indicating that schools could provide remote services to students covered by the IDEA.”

Briefing was completed by Jonathan Shaub and Nicholas Tam.

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