False Claims Act Case Against Abbott Partially Survives Dismissal

A motion to dismiss filed by defendant Abbott Laboratories was partially granted in the Southern District of California on Tuesday. The dismissal curtails allegations brought by Everest Principals LLC, who claim that the defendant violated the False Claims Act (FCA) and Anti-Kickback Statute (AKS). 

Specifically, the plaintiff alleges that the defendant medical technology company hosted events for physicians across 26 different states. These events were allegedly set up in order for physicians to meet potential patients as well as other physicians. During these events, plaintiffs say, physicians worked to obtain referrals for the defendant in exchange for monetary compensation and reimbursement for procedure costs.

In the order, the court stated that the defendant successfully argued dismissal for 22 of the 26 states cited in the plaintiff’s amended complaint. However, the court also stated that the new claim additions contained in the amended complaint were substantial enough to survive the motion for dismissal.

FCA claims in California, Florida, Georgia, and New York avoided dismissal. In California, the plaintiff alleges that the defendant paid a physician $1,404,280.64 in exchange for his referrals, as well as $23,412.22 for procedure reimbursements. The same allegations were made against Abbott for similar behavior in Florida, Georgia, and New York. In those states, the plaintiff alleges that the defendant paid physicians $589,000.00, $274,000.00, and $403,000.00 in kickbacks and procedure reimbursements, respectively.

The court denied dismissal of allegations in these states and ended the order by noting that all other allegations were dismissed without leave to amend.

The plaintiff is represented by Miller Shah and Olivier Schreiber & Chao.

The defendant is represented by Jones Day.