U.S. ex rel. Steury v. Cardinal Health, Inc. (Summary)

FALSE CLAIMS ACT

U.S. ex rel. Steury v. Cardinal Health, Inc., No. 12-20314 (5th Cir. Aug. 20, 2013)

The United States Court of Appeals for the Fifth Circuit ruled that a complaint under the False Claims Act filed by a former employee of a health care vendor was deficient under an “implied false certification” theory because it failed to adequately allege that a contractual merchantability provision was a condition of payment.  The court found that the former employee’s allegations that merchantability was a “standard condition” of the vendor’s contracts with the government were deficient under Federal Rule of Civil Procedures 9(b).

The court noted that such conclusory allegations did not identify the contractual provisions regarding merchantability, nor did they identify how the vendor’s products deviated from the government’s specifications.  Also, the court did not address the former employee’s “worthless goods” theory because her complaint failed to plead it with the requisite particularity by not stating that any pump sold to the government over nine years was ever found to be deficient or worthless.