Banana Republic or Legalistic Lawlessness?

NEIL H. BUCHANAN

UF Levin College of Law professor and economist Neil H. Buchanan reflects, based on current trends, on what the legal system in the United States will look in a few years. Specifically, Buchanan considers whether the country will become a “banana republic” or whether instead we will see a system of “legalistic lawlessness.”

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United States, ex rel. Banigan & Templin v. Pharmerica, Inc.

Docket: 18-1487

Opinion Date: February 19, 2020

Judge: Kermit Victor Lipez

Areas of Law: Drugs & Biotech

The First Circuit reversed the judgment of the district court dismissing this qui tam action under the False Claims Act (FCA) against PharMerica, Inc. under the public disclosure bar, holding that relator James Banigan fell within an exception to that bar as an "original source of the information." Banigan and Richard Templin, former employees of the pharmaceutical company Organon, brought this action under the FCA and several of its state law equivalents alleging that PharMerica committed fraud by participating in a Medicaid scheme that rewarded it financially for incentivizing physicians to change patients' antidepressant prescriptions to Organon's medications. The district court dismissed the action under the public disclosure bar, which excludes from the subject matter jurisdiction of federal courts qui tam actions that are based upon the public disclosure of allegations in a civil hearing and other sources. The First Circuit reversed, holding that where the allegations of fraud were based upon Banigan's direct knowledge, Banigan's sources met the statutory requirement of "direct and independent knowledge of the information on which the allegations are based," see 31 U.S.C. 3730(e), to qualify as an original source.