Insights: Alerts New Case Lends Support to the Position that Public Universities Are Immune from False Claims Act Liability
In its decision, the court looked to previous cases involving OHSU where courts had determined that OHSU was entitled to sovereign immunity because of its nexus to the state of Oregon. Additionally, the court applied a five factor test set forth by the United States Court of Appeals for the Ninth Circuit for determining whether an entity is “an arm of the state” for purposes of sovereign immunity:
1. Whether a money judgment would be satisfied out of state funds;
2. Whether the entity performs central governmental functions;
3. Whether the entity may sue or be sued;
4. Whether the entity has the power to take property in its own name or only in the name of the state; and
5. The corporate status of the entity.
The court concluded that based on these factors and previous decisions regarding OHSU’s status, that it was “an arm of the state.” The Supreme Court has ruled that the definition of “person” for FCA liability purposes does not include states or arms of a state. Accordingly, the court dismissed the case against OHSU (but did grant plaintiffs leave to file an amended complaint on their unjust enrichment/payment by mistake claims to the extent they were not related to express contracts already addressed).
While this decision was at the district level and may still be appealed, public universities should evaluate the holding to determine whether they can use the principles in their own FCA cases. Doing so might reveal a powerful shield against the Government’s FCA sword.
While we are pleased to have you contact us by telephone, surface mail, electronic mail, or by facsimile transmission, contacting Kilpatrick Townsend & Stockton LLP or any of its attorneys does not create an attorney-client relationship. The formation of an attorney-client relationship requires consideration of multiple factors, including possible conflicts of interest. An attorney-client relationship is formed only when both you and the Firm have agreed to proceed with a defined engagement.
DO NOT CONVEY TO US ANY INFORMATION YOU REGARD AS CONFIDENTIAL UNTIL A FORMAL CLIENT-ATTORNEY RELATIONSHIP HAS BEEN ESTABLISHED.
If you do convey information, you recognize that we may review and disclose the information, and you agree that even if you regard the information as highly confidential and even if it is transmitted in a good faith effort to retain us, such a review does not preclude us from representing another client directly adverse to you, even in a matter where that information could be used against you.