The United States of America ex rel Jesse M. Polansky, M.D., M.P.H. v. Geisinger Holy Spirit

UNITED STATES DISTRICT COURT

MIDDLE DISTRICT OF PENNSYLVANIA

THE UNITED STATES OF

AMERICA ex rel. JESSE M.

POLANSKY, M.D., M.P.H.,

Plaintiff, CIVIL ACTION NO. 1:20-cv-00599

v. (SAPORITO, J.)

GEISINGER HOLY SPIRIT, et al.,

Defendant.

MEMORANDUM

This is a False Claims Act (“FCA”) action brought on behalf of the

United States by a relator, Jesse M. Polansky, M.D., M.P.H.

The relator, Dr. Polansky, is a licensed physician with broad-based

Medicare, Medicaid, and commercial health insurance experience in

evidence-based medicine, utilization review, and informatics. The

amended complaint alleges that, after spending eight years as a senior

medical officer at a federal agency, the Centers for Medicare & Medicaid

Services (“CMS”), Dr. Polansky was employed in this same field by a

series of private-sector employers: Executive Health Resources, Inc.

(“EHR”) for a two-month period between December 2011 and February

2012; Health Management Systems, Inc., for a period of months between

the fall of 2012 and the summer of 2013; Holy Spirit Health System for a

six-month period between December 2013 and May 2014; Delmarva

Foundation for an unspecified period during 2014; and Summit Health,

for a period of months between the spring of 2015 and August 2015.

Dr. Polansky alleges that the defendants—Geisinger Holy Spirit,1

Geisinger Community Medical Center,2 Geisinger Medical Center,3 and

Spirit Physician Services, Inc.4—participated a years-long scheme to

submit fraudulent claims for payment to the United States government.

The gist of the amended complaint is that the defendants relied on the

fraudulent policies and practices of a billing vendor—Dr. Polansky’s

former employer, EHR—to exploit differences in reimbursement rates for

1 So named in the amended complaint. Geisinger Holy Spirit,

formerly known as Holy Spirit Hospital, is a not-for-profit hospital

located in Cumberland County, Pennsylvania. It became a Geisinger

affiliate in 2014. It was later acquired by Penn State Health in 2020, and

it is now known as Penn State Health Holy Spirit Medical Center.

2 Geisinger Community Medical Center is a not-for-profit hospital

located in Lackawanna County, Pennsylvania, operated by Geisinger

Health System.

3 Geisinger Medical Center is a not-for-profit hospital located in

Montour County, Pennsylvania, operated by Geisinger Health System.

4 Spirit Physician Services, Inc., is a not-for-profit organization that

manages primary care and specialty physician practices in affiliation

with Geisinger Holy Spirit. The amended complaint alleges that it is

owned by Geisinger Health System.

inpatient and outpatient services, causing them to systematically bill

Medicare and Medicaid for medical services provided to thousands of

patients at higher inpatient rates, instead of lower outpatient rates.

“The FCA’s provisions authorize private persons to bring

civil enforcement actions on behalf of the United States and to collect a

portion of damages that may be awarded if an FCA violation is proven.”

, 327 F. Supp. 3d 358, 361

(D. Mass. 2018).

The [FCA] requires a [relator], before

proceeding with suit, to disclose to the government the

information on which the claim is based. The

government then has sixty days to investigate the

matter and to decide whether to intervene. The

government also has the option to step into the action

at a later date. In either case, the relator is not entitled

to a recovery under the [FCA] if the action is one which

runs afoul of the jurisdictional bars contained in 31

U.S.C. § 3730(e).

, 123 F.3d 734, 738

(3d Cir. 1997) (citations omitted).

The defendants here have moved to dismiss this action under one

of these jurisdictional bars, the government action bar,5 which provides

5 The defendants assert several other grounds for dismissal as well,

which we do not reach.

that: “In no event may a person bring [a False Claims Act action]

which is based upon allegations or transactions which are the subject of

a civil suit or an administrative civil money penalty proceeding in which

the Government is already a party.” 31 U.S.C. § 3730(e)(3). Although the

FCA’s financial incentive encourages whistle-blowing relators with

genuinely valuable insider information to expose fraud, it also attracts

parasitic suits based on information already known to the government.

, 559 U.S. 280, 294 (2010);

, 9 F.4th 269, 271–72 (5th Cir. 2021); , 327 F. Supp.

3d at 361. The government action bar is intended to discourage such

opportunistic behavior. , 9 F.4th at 271–72; , 327

F. Supp. 3d at 361–62. Thus, this statutory provision “must be analyzed

in the context of the twin goals of rejecting suits which the government

is capable of pursuing itself, while promoting those which the

government is not equipped to bring on its own.”

, 292 F. Supp. 3d 570, 576 (D.R.I.

2017) (internal brackets omitted) (quoting

, 24 F.3d 320, 326 (1st Cir. 1994), and

, 14 F.3d 645, 651

(D.C. Cir. 1994)).

The defendants contend that the instant action is barred

because it is duplicative of a prior action initiated by this same

relator concerning the very same allegedly fraudulent scheme,

( ), 422

F. Supp. 3d 916 (E.D. Pa. 2019), , 17 F.4th 376 (3d Cir. 2021), ,

599 U.S. 419 (2023). To prevail on their motion to dismiss, the defendants

must show that: (1) the instant action is “based upon” the same

“allegations or transactions” involved in the prior litigation; and (2) the

government “is already a party” to that prior litigation. , 327

F. Supp. 3d at 362.

In , the relator alleged that EHR exploited a difference

in reimbursement rates for inpatient and outpatient services,6 causing

its approximately 2,400 client hospitals to fraudulently bill Medicare and

Medicaid by falsely designating patient admissions as inpatient when

6 , 422 F. Supp. 3d at 919 n.3 (noting the relator’s

allegation that “Medicare generally pays about $4,000–$5,000 more for

inpatient services . . . than it does when the same services are provided

to a patient classified as outpatient observation”).

they should have been marked as outpatient instead.7 The relator filed

his original complaint in under seal on July 26, 2012, and the

government declined to intervene on June 27, 2014. The then-operative

second amended complaint was served on EHR and other defendants.

Those defendants filed a motion to dismiss, which was denied on July 26,

2016.8

The parties conducted extensive discovery. This apparently

included several discovery motions, one of which resulted in the

imposition of sanctions against the relator for his belated production of a

7 , 422 F. Supp. 3d at 919 n.4 (“[T]here are two

potential levels of review for a physician’s initial determination of

whether a patient should be classified as inpatient or outpatient. At the

first level, a review is conducted by an internal hospital committee using

standard industry criteria. If the internal committee determines that a

patient does not qualify for inpatient designation, many hospitals then

have a physician advisor, such as [EHR], conduct a second level review.

After physician advisor review, the hospital—not the physician advisor—

submits the claim to Medicare or Medicaid. Relator alleges that [EHR],

as a physician advisor conducting second level reviews (i.e., reviewing the

determination of the internal review committee that a patient does not

qualify for inpatient status), ‘knowingly misconstrued regulations when

reviewing hospital admission determinations, fraudulently certifying

‘thousands upon thousands of cases’ for hospitals to submit to Medicare

and Medicaid as inpatient claims rather than outpatient as

appropriate.’”) (citations and internal brackets and ellipses omitted).

8 , 196 F. Supp. 3d

477 (E.D. Pa. 2016).

DVD containing approximately 14,000 documents he had obtained while

employed at a federal agency, CMS.9

While the parties were litigating that sanctions motion, the

government notified them by email in February 2019 that it intended to

exercise its authority under 31 U.S.C. § 3730(c)(2)(A) to dismiss the case.

The parties and the government then entered into negotiations, and in

May 2019 the government notified the court that it did not

intend to exercise its dismissal authority, provided that the relator

proceeded on his claims under a significantly narrowed framework. But

the government reserved its right to reevaluate whether dismissal was

warranted based on future developments.

The relator then filed his third amended complaint, purportedly

adhering to that narrowed framework negotiated with the government,

and discovery continued. Soon, however, it became apparent that

disagreements remained between the government and the relator as to

the appropriate scope of the relator’s claims under the narrowed criteria

they had negotiated.

9 The relator was also admonished regarding an attempt to

unilaterally change the selection of claims for a bellwether jury trial.

In August 2019, a special master recommended that the

government produce certain documents that it had withheld on the basis

of the deliberate process privilege, and that it produce responsive

documents for additional custodians. The government filed objections to

the special master’s report. The court overruled the objections

with respect to some of the documents, and directed the parties to provide

supplemental briefing as to the rest. On August 20, 2019, apparently

finding the cost of permitting the litigation to continue now outweighed

its potential benefit, the government moved to dismiss the

action pursuant to its authority under 31 U.S.C. § 3730(c)(2)(A). On

November 5, 2019, following briefing and a hearing, the court

granted the government’s motion and dismissed the action. The dismissal

was affirmed on appeal by the United States Court of Appeals for the

Third Circuit on October 28, 2021, and by the Supreme Court of the

United States on June 16, 2023.

While the judgment was pending on appeal, the relator

commenced the instant FCA action, filing his original complaint under

seal on April 10, 2020. In November 2023, the government completed its

investigation of the relator’s claims and declined to intervene, and the

complaint was unsealed and served on the defendants. The defendants

moved for dismissal of that original complaint, and the relator filed his

amended complaint, which is the currently operative pleading in this

matter. The defendants now move for dismissal of the amended

complaint.

We are compelled to conclude that the instant action is indeed based

upon the same allegations or transactions involved in the prior litigation.

The amended complaint alleges the allegedly fraudulent

scheme as the one at issue in , except instead of being directed

at EHR itself, this action is directed at a small subset of EHR’s

approximately 2,400 hospital clients who allegedly overbilled Medicare

and Medicaid in reliance on EHR’s policies and procedures. There is,

frankly, very little daylight between the two cases, with the relator

simply recycling many of the allegations originally asserted in

. , Defs.’ Br. Supp. 23–27 (chart comparing allegations of

and the amended complaint in this case), Doc. 79; Defs.’ Reply

Br. 14–16 (further discussing the same), Doc. 84.

[T]he government action inquiry is essentially a test

of factual similarity. If a relator’s allegations are the

same as allegations already made by the government,

or are similar enough to be characterized as feeding off

of the government’s allegations, the government action

bar applies. By contrast, if a relator’s case is seeking to

remedy fraud that the government has not yet

attempted to remedy, the government bar does not

apply.

, 438 F. Supp. 3d 246, 262 (E.D. Pa. 2020)

(footnote and internal quotation marks omitted).

“When considering the commonality between these ‘allegations [or]

transactions,’ the Court focuses specifically on the ‘allegations or

transactions of .’”

, 531 F. Supp. 3d 247, 264 (D.D.C. 2021) (quoting

, 764 F.3d 699, 707 (7th

Cir. 2014)), , 34 F.4th 29 (D.C. Cir. 2022). Thus, the

FCA’s government action bar “‘prohibit[s] actions when

either the allegation of fraud or the critical elements of the fraudulent

transaction themselves’ are the subject of a governmental civil action or

penalty proceeding.” , 764 F.3d at 707–08 (quoting , 14 F.3d

at 654); , 123 F.3d at 740 (“It is clear that the FCA’s reference

to ‘allegations or transactions’ is in the disjunctive, so that disclosures

which reveal either the allegations of fraud or the elements of the

underlying fraudulent transaction are sufficient to invoke the

jurisdictional bar.”) (considering the FCA’s public disclosure bar under

§ 3730(e)(4), which uses the same “allegations or transactions” language).

If an allegation of fraud has already been made, the

analysis is straightforward. But even if no allegation of

fraud has been made, the [§ 3730(e)(3) government

action bar] may still apply so long as facts disclosing

the fraud itself are in the government’s possession . . . .

In this latter case, the court must determine whether

facts establishing the essential elements of fraud—

and, consequently, providing a basis for the inference

that “fraud has been committed”—are in the

government’s possession . . . .

, 764 F.3d at 708 (quoting , 14 F.3d at 654). As the Third

Circuit has recognized, “the inference of fraud requires recognition of but

two elements: ‘a misrepresented state of facts and a true state of facts.’”

, 123 F.3d at 741 (quoting , 14 F.3d at 655).

Here, we are presented with a “straightforward” case under the

government action bar. It is beyond dispute that the prior FCA action,

, alleged a fraudulent scheme in which EHR and its

approximately 2,400 hospital clients sought to defraud the United States

by overbilling Medicare and Medicaid for medical services provided to

thousands of patients, misclassifying them as inpatient services rather

than less remunerative outpatient services. The instant FCA action

simply asserts these very same of fraud against three of those

2,400 hospital clients, alleging that the three hospital defendants in this

case utilized EHR and its allegedly fraudulent billing policies and

procedures to submit a subset of the very same allegedly fraudulent

transactions—the submission of allegedly fraudulent claims for payment

to Medicare and Medicaid—that were at issue in .10

The relator argues that the instant action nevertheless is not

“based upon” the action because it involves different

defendants,11 and thus seeks to “remedy fraud that the government has

not yet attempted to remedy,” , 438 F. Supp. 3d at 262. But

this argument by the relator is based on a false premise—the fraud

10 Indeed, although it was not named as a defendant in that action,

factual allegations about the billing practices and conduct of Geisinger

Holy Spirit were specifically and extensively pleaded in the

complaint, holding Holy Spirit out as an exemplar of EHR hospital

clients. These facts apparently were known to Dr. Polansky because he

was employed by Holy Spirit as a physician advisor for a six-month period

prior to its affiliation with Geisinger Health Systems.

11 In , the named defendants included EHR, several of its

corporate parent companies, and two of EHR’s client hospital systems

located in California and Connecticut. Although it was not a named

defendant, the complaint included extensive factual

allegations regarding the conduct and practices of Holy Spirit, as

observed by Dr. Polansky while employed there. Although not specifically

identified in the complaint, based on the facts alleged in this

case, Geisinger Community Medical Center and Geisinger Medical

Center were evidently among the 2,400 hospital clients of EHR described

in the complaint.

alleged in the case is the very same fraud alleged in this case,

and thus this case seeks to remedy the very same fraud as the earlier

one. In , it was alleged that EHR conducted second-tier

utilization reviews for its approximately 2,400 hospital clients—

including the three hospital defendants named in this case—reversing

internal review committee decisions that patients did not qualify for

inpatient status. It was alleged that EHR misconstrued applicable

federal regulations to certify thousands of such cases to permit its

hospital clients to submit those claims to Medicare and Medicaid as

inpatient claims. In this case, the three hospital defendants are alleged

to have relied on EHR and its billing practices and procedures to conduct

these same utilization reviews, obtaining allegedly fraudulent

certifications for hundreds of cases, which they then submitted to

Medicare and Medicaid for payment as inpatient claims. This second FCA

action merely shifts the target of litigation from EHR itself to three of its

hospital clients who actually submitted some of those same allegedly

fraudulent EHR certifications in support of their claims for payment to

Medicare and Medicaid.12 Thus, it is clear to the court that, irrespective

of the particular defendants named in the instant amended complaint,

the instant FCA action is based upon the very same allegations or

transactions as those involved in

, 552 F.3d 503, 514 (6th Cir. 2009) (where the

primary focus of fraud allegations in a FCA action were contained

in a prior lawsuit, the action was based on the same allegations

or transactions, despite the inclusion of additional factual detail and

different or additional defendants in the second action) (considering the

FCA’s public disclosure bar under § 3730(e)(4), which uses the same

“allegations or transactions” language),

, 3 F.4th 813 (6th Cir. 2021);

, 84 F. Supp. 3d

12 The amended complaint in this second FCA action adds some

factual allegations to suggest that officials at Holy Spirit knew that the

billing practices at issue were questionable, but the fraudulent scheme

itself remains the same as in the prior FCA action against EHR. It also

adds a non-hospital defendant affiliated with Holy Spirit Hospital, Spirit

Physician Services, Inc., which allegedly participated in this very same

fraudulent scheme, benefiting from Holy Spirit Hospital’s systemic

misclassification of patients as inpatients rather than outpatients, which

in turn permitted the physician group to bill related physician services

to Medicare at higher inpatient rates as well.

575, 590 (S.D. Tex. 2015) (same).

The relator further argues that the government action bar does not

apply to this case because, at this point, the government is no longer a

party to , as that case has been dismissed by final order.13 The

relator points to the language of the statute, which uses the present tense

in referring to the government’s status as a party to the prior action,

contending that the government ceased to be a party to the

action when that action was dismissed. 31 U.S.C. §3070(e)(3)

(barring a later FCA action “based upon allegations or transactions which

the subject of a civil suit . . . in which the Government already a

party”) (emphasis added). But “[t]he opposite conclusion comports more

with the reality of litigation: a person remains a party to his suit, even

after the suit’s conclusion.”

, 876 F.3d 1011, 1017 (9th Cir. 2017). Unlike a neighboring

provision—the FCA’s first-to-file bar, 31 U.S.C. § 3730(b)(5)—the

statutory language of the FCA’s government action bar contains no

language to suggest any limitation to actions.

13 “At this point” because was still pending on appeal at

the time when the original complaint in this second FCA action was filed.

§ 3730(b)(5) (“[N]o person other than the Government may . . . bring a

related action based on the facts underlying the action.”)

(emphasis added), § 3730(e)(3) (“In no event may a person bring [a

False Claims Act action] which is based upon allegations or

transactions which are the subject of a civil suit or an administrative civil

money penalty proceeding in which the Government is already a party.”);

, 876 F.3d at 1018 (“Congress could have utilized the

term ‘pending’ to express the intention for § 3730(e)(3) to lose effect once

the prior action was dismissed.”); , 292 F. Supp. 3d at 579 (“Had

Congress wanted the government action bar to have the same reach as

the pending case bar, it likely would have included [the word

“pending.”]”). Indeed,

[i]f the reading of the statute were as the [relator]

suggests, such that a government action bar dissolves

whenever a suit in which the Government is a party is

dismissed, the central policies behind the government

action bar would be undermined. For example, after

the Government is made aware of, investigates,

intervenes in, and settles a suit, subsequent

original source relators . . . could allege the same fraud,

bring identical lawsuits, and bring no additional

benefit to the Government except the recovery of

additional funds. This would be plainly contrary to the

purpose of the government action bar: to promote the

exposure of additional fraud while weeding out

duplicative suits the Government is capable of

pursuing on its own. Where the Government already

has been party to a suit based on the same allegations,

the Government is clearly capable of pursuing the suit

itself, and the government action bar should prohibit

these duplicative successor suits.

, 292 F. Supp. 3d at 580; , 876 F.3d at 1016 (“Both

common sense and statutory language demonstrate that the Government

remains a ‘party’ even after the cessation of its enforcement action. . . .

[T]he government-action bar applies even when the Government is no

longer an active participant in an ongoing lawsuit.”). Thus, we

find the government action bar applicable to this case, despite the

ultimate dismissal of .

Finally, the relator argues that the government action bar is limited

to allegations or transactions in a prior suit

, rather than a relator. But that proposition finds no support

in the statutory language of the government action bar, which contains

no such restriction, providing only that a FCA action is

jurisdictionally barred if it is “based upon allegations or transactions

which are the subject of a civil suit . . . in which the Government is

already a party,” 31 U.S.C. § 3730(e)(3).

In support of his argument, the relator cites to in three case

law decisions: (1)

, 24 F.3d 320, 328 (1st Cir. 1994); (2)

, 153 F.3d 667 (8th Cir. 1998); and (3)

, No. 09-4230, 2013 WL 3327505 (E.D. Pa.

July 2, 2013).

In , the First Circuit considered a FCA action

involving the acquisition by the Federal Deposit Insurance Corporation

(“FDIC”) of certain promissory notes issued by an insolvent company, S.

Prawer & Co. (“Prawer”).

In July 1991, serving as a receiver, the FDIC supervised a transfer

of assets from a defunct bank to Fleet Bank of Maine (“Fleet”). The

contract between the FDIC and Fleet—the “Assistance Agreement”—

provided that Fleet had the right to “put,” or cause the FDIC to

repurchase, any loans acquired by Fleet from the defunct bank. Among

the assets transferred to Fleet from the defunct bank were five

promissory notes given to the defunct bank by Prawer, representing $1.1

million that Prawer had drawn against a $2 million line of credit issued

by the defunct bank. Prawer entered into a new agreement with Fleet for

a $2 million line of credit. Prawer drew upon this new line of credit to

fully satisfy its obligations under the original notes, and it continued to

draw on that line of credit. By May 1992, Prawer had drawn $1.6 million

against its $2 million line of credit with Fleet, represented by seven

promissory notes. On May 1, 1992, Prawer informed Fleet that it had sold

virtually all its assets to another company. On May 6, 1992, Fleet

exercised its right under the Assistance Agreement’s put-back provision

to cause the FDIC to purchase the $1.6 million in Prawer promissory

notes. In November 1992, the FDIC brought an action against Prawer

and other defendants, seeking to collect upon the notes put back to it

pursuant to the Assistance Agreement. It also alleged that the sale of

Prawer’s assets was a fraudulent conveyance because Prawer had been

insolvent and peddled its assets for less than full value to settle debts to

certain creditors. After responding to the FDIC’s complaint, Prawer filed

a third-party complaint against Fleet and one of its subsidiaries,

asserting that the notes were not putable under Fleet’s contract with the

FDIC. The collection case was settled before the court issued a ruling on

any of the parties claims and defenses. , 24 F.3d at 323.

In June 1993, the relators filed a FCA action,

alleging that Fleet, a corporate subsidiary of Fleet, a law firm and

individual lawyers that represented Fleet and its subsidiary, and an

FDIC staff attorney had created and used false records and statements

to cause the government to pay Fleet $1.6 million for the Prawer notes

pursuant to the put-back provisions of the Assistance Agreement. Shortly

after it was filed, the action was dismissed by the court

, relying on the government action bar. at 323–24.

On appeal, however, the First Circuit reversed the district court’s

decision, concluding that the action was not “parasitic” of the

prior collection action—i.e., the action before it was not based

upon allegations or transactions of fraudulent conduct that were the

subject of the earlier collection action. The appellate court identified two

facts that combined to compel its decision. First, the appellate court noted

that the earlier collection case brought by the FDIC did not involve any

claims whatsoever by the FDIC against Fleet or the other

defendants, much less fraud claims against them.14 Second, the appellate

14 As noted above, the FDIC’s prior action sought to collect on the

notes put back to it by Fleet. The only fraud alleged was the fraudulent

conveyance of assets from an insolvent Prawer to another company for

less than full value. The action was based on an entirely separate

court noted that the two cases involved entirely different transactions—

the action involved Fleet’s put-back of the Prawer notes pursuant

to its contract with the FDIC, and the collection action involved Prawer’s

making of the notes and alleged failure to satisfy them. In , the

appellate court contrasted the case before it against the prototypical case

it imagined Congress had in mind when it drafted the government action

bar: “i.e., a action based upon allegations or transactions

in an attempt to recover for fraud committed against

it.” at 328.

The relator primarily relies on an Eighth Circuit decision, ,

which quoted this in out of context, refashioned into a

more restrictive rule by adding the word “only,” for reasons that are

unclear. , 153 F.3d at 676 (“[T]his section will typically bar

only a ‘ action based upon allegations or transactions pleaded

in an attempt to recover for fraud against it.’”). But, as

in , this observation by the court was .

involved a FCA action against various contractors based upon

and distinct allegation of fraudulent conduct by Fleet and others involved

in Fleet’s exercise of the put-back provision.

allegations of fraud involving the submission of false claims for payment

for environmental remediation work completed at a particular Superfund

site. The defendants sought dismissal under the government

action bar, pointing to a long history of federal and state litigation and

administrative proceedings involving the assessment of liability for the

cost of environmental remediation at that same Superfund site.

at 671–73. The appellate court rejected that argument, holding that the

false claims action simply was not based upon any allegations or

transactions of fraudulent conduct that were the subject of these prior

environmental cleanup liability proceedings. at 676.

The of both of these out-of-circuit opinions was the

same: a FCA action cannot be precluded under the government

action bar where the allegations or transactions of fraudulent conduct

upon which the action is based were simply not present in earlier

litigation or administrative proceedings. The passages relied upon by the

defendants in this case are .

The relator also cites an Eastern District of Pennsylvania case,

, in support of his argument. While the court referenced

the in passing, quoting it in summarizing the FCA’s

government action bar, , 2013 WL 3327505, at *9 (“This

section will typically bar only a action based upon allegations or

transactions pleaded by the government . . . .”) (ellipses in original)

(quoting , 153 F.3d at 676), the court’s recitation of the

rule is itself as well, playing no role whatsoever in the

court’s ultimate determination that the complaint before

it simply did not rely on the same facts and evidence included in an

earlier U.S. Department of Labor (“DOL”) investigation.15 *12–13.

Thus, we find the relator’s argument on this final point

unpersuasive and entirely unsupported by the statutory text of

§ 3730(e)(3).

Accordingly, we find that our exercise of jurisdiction in this

15 In , the relator alleged that the defendant contractor

systematically misclassified a significant number of its workers on

federally funded transit projects for the purpose of paying those workers

a lower wage than required by federal labor laws, permitting it to

underbid competitors. The defendant argued that the action was

precluded by the government action bar, pointing to an earlier DOL audit,

in which the only violation found was the underpayment of holiday wages

to four employees who performed carpentry work over a holiday weekend.

, 2013 WL 3327505, at *11. Ultimately, the court

concluded that government action bar did not apply because, although

the action and the prior DOL investigation involved some similar

underlying facts, the earlier investigation did not involve any allegations

or transactions of fraudulent conduct at all. at *12–13.

FCA action is precluded by the government action bar, 31 U.S.C.

§ 3730(e)(3), as it is based upon allegations or transactions of fraudulent

conduct which are the subject of a prior civil suit in which the government

is already a party, . The defendants’ motion to dismiss will be

granted and this action will be dismissed for lack of subject matter

jurisdiction.

An appropriate order follows.

Dated: April 30, 2025

JOSEPH F. SAPORITO, JR.

United States District Judge