On Jan. 10, 2019, Am Law 100 firm Polsinelli won summary judgment on behalf of its client, Rural/Metro Corporation (“Rural Metro”), in the United States District Court for the District of Arizona. The False Claims Act case is known as Ralph Vassallo, et. al. v. Rural/Metro Corporation, et al.
Rural Metro is a large provider of ambulance transport services. In 2014, the company switched its billing and coding systems. Relators argued that certain mistakes during the implementation phase of the new systems purportedly led to incorrect claims being billed to the Medicare Program, and that the decision to transition to and maintain the new billing system led to the submission of “false claims” to Medicare. Rural Metro vigorously – and successfully – defended this case.
This case was originally filed under seal on Jan. 22, 2015. The Department of Justice declined intervention on Sept. 27, 2016. Since that time, this case has been advanced by Plaintiffs (“Relators”), Vassallo and Spahn, on behalf of the United States.
On Aug. 24, 2018, the company filed for summary judgment, arguing that the Relators could not show that the company had acted with the requisite scienter – i.e., with “reckless indifference” or “deliberate ignorance” – to have violated the Federal False Claims Act. The Court agreed.
Almost four years after the filing of the original complaint and 2.5 years after the government declined intervention, United States District Court Judge Susan R. Bolton held that the Relators’ case was fundamentally flawed. She found that the evidence submitted by Relators, “… falls short of what might reasonably satisfy the scienter requirement” under the Federal False Claims Act.
The Court’s order also makes clear that False Claims Act cases like this cannot be won merely by second-guessing, in retrospect, the wisdom of otherwise valid business decisions, and that the existence of mistakes, in and of themselves, does not demonstrate a knowing intent, i.e., deliberate ignorance or reckless indifference, to submit false claims to the government.
Polsinelli Shareholders Barry Alexander and Noam Fischman led a cross-functional team comprised of litigators and health care specialists. Fischman argued at the Nov. 19, 2018 summary judgment hearing for the company.
There is a 30-day window for appeal of the decision to the Ninth Circuit.
Polsinelli is an Am Law 100 firm with more than 825 attorneys in 21 cities coast to coast. Ranked #30 for Client Service Excellence1 and #10 for best client relationships2 among 650 U.S. law firms, Polsinelli is also named among the top 30 best-known firms in the nation3 for the second consecutive year. The firm’s attorneys provide value through practical legal counsel infused with business insight, and focus on health care, financial services, real estate, intellectual property, mid-market corporate, labor and employment, and business litigation. www.polsinelli.com | Polsinelli PC | In California, Polsinelli LLP
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Kelsey Rockey, Parris Communications
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