BAEC Bulletin - May/June 2023

BAEC Bulletin | May/June 2023 | 39

BY KEVIN M. HOGAN AND SEAN C. MCPHEE Western District Case Notes

Standing/Injury-in-Fact In In re Fisher-Price Rock ‘N Play Sleeper Marketing, Sales Practices, & Products Liability Litigation, 19-md-02903-GWL (Feb. 8, 2023), defendants sought dismissal of a class action contending that the class representative was a satisfied customer who suffered no loss and, therefore, lacked standing. In opposition, the class representative argued that she was injured because she “overpaid” for the product in that she never would have purchased it if defendants had disclosed what they knew about the risk of infant death associated with the product. She also argued that her claim for statutory damages was sufficient to confer standing. Noting first that subject matter jurisdiction is lacking where standing is absent, and that named plaintiffs who represent a class must allege and show that they were personally injured, the Court concluded that the class representative alleged a concrete and particularized injury sufficient to establish standing because overpayment for a product—even one that performs adequately and does not cause any physical or emotional injury—can be a cognizable injury-in-fact. And while the parties dispute the amount of damages plaintiff may be entitled to recover, that is a factual issue for a jury, but the class representative’s allegations that she was misled into purchasing the product were sufficient to establish standing for jurisdictional purposes. Accordingly, the motion was denied. Pleading Requirements Under False Claims Act In Pilat v. Amedisys, Inc., 17-cv-00136-JLS (Mar. 13, 2023), two relators filed a qui tam action on behalf of the United States, twenty-one states, and the District of Columbia asserting claims under the federal False Claims Act and the false claims acts of those states, contending that, during their employment with defendant, they observed defendant engage in numerous fraudulent practices directed at government-funded healthcare programs. Recognizing that such claims are subject to the heightened pleading requirements of Fed. R. Civ. P. 9(b), which essentially requires a plaintiff to identify the “who, what, when, where and how of the alleged fraud,” the Court determined that the relators failed to allege false claims or fraudulent conduct with the requisite specificity. In reaching this conclusion, the Court found that the allegations were merely conclusory, hypothetical statements regarding a purportedly fraudulent scheme, and failed to allege actual instances where the scheme occurred, or that false claims were actually submitted to the Government for reimbursement. Similarly, although the relators cited to their “personal knowledge,” they did not provide any details as to patients, invoices, records, providers, dates, supervisors, or the like. And while pleading on “information and belief” is permitted, that “must not be mistaken for license to base claims of fraud on speculation and conclusory allegations.” Finally, while complaints dismissed under Rule 9(b) are “almost always dismissed with leave to amend,” because

KEVIN M. HOGAN Managing Partner Phillips Lytle LLP

SEAN C. MCPHEE Partner Phillips Lytle LLP

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