Can Statistical Sampling Be Used to Prove Liability Under the FCA or Does Each Provision of the Statute Require Individual Proofs?

Introduction The False Claims Act (FCA) is the federal government's primary antifraud tool for recovering payments made for false claims submitted to government agencies or programs.1 Under the FCA, a defendant must pay triple actual damages plus civil penalties.2 FCA recoveries have exceeded $56 billion, due largely to the help of whistleblowers.3 With such large sums at stake, the fight over the use of statistical sampling is one of the most important and hotly litigated topics in FCA litigation today. Because there are no circuit court of appeals cases that squarely address the use of statistical sampling for establishing liability, the lower courts are in disarray and in need of a proper framework. Daubert, on the other hand, asks whether a particular sample in a particular case was done properly-that is, if the evidence "both rests on a reliable foundation and is relevant to the task at hand" and if the expert is qualified.36 The latter is a black and white evidentiary issue obviously subject to the district court's discretion.37 The former is an abstract legal question squarely within appellate review. [...]it follows, that the Fourth Circuit appropriately declined to issue an opinion on the legality of sampling, not because there is no legal question at all but, rather, because the relators did not present it.38 Instead of narrowing the question to a Daubert determination (and thus metaphorically "shooting themselves in the foot" so to speak, at least about their sampling appeal), the relators should have framed the question as a pure question of law and asked the court to decide whether the statute "requires" direct proof for each claim, or, alternatively, permits sampling. Under the 2009 version, all that is required is to show that there existed a duty or obligation to repay funds.125 In 2010, Congress answered this question too, in the context of Medicare overpayments, by creating a duty within the ACA.126 The ACA includes a duty for those receiving an overpayment of Medicare or Medicaid to report and return the overpayment within sixty days.127 Moreover, the ACA added that this duty also constitutes an obligation under the reverse false claim provision of the FCA.128 Thus, as of at least 2010, the ACA and FCA, working in tandem, created a duty to repay Medicare overpayments and establish FCA liability without needing to introduce specific proofs of individual false statements or claims. Because courts having previously held that the government