Judge with gavel on table

An attorney who brought a False Claims case against a Mississippi long-term care provider using publicly available — and later disproven — information must pay the facility’s legal fees, a court has affirmed.

A US District Court judge for the Northern District of Mississippi Friday declined a request to reconsider the awarding of fees, which could surpass $1 million, and said a further hearing would be scheduled.

The decision is a rare win for a healthcare provider. It not only ensures that the case is dismissed but offers the promise of some repayment for the time and effort of battling a specious claim over several years.

The relator, or would-be whistleblower, in United States ex rel. Jehl vs. GGNSC Southaven, is an attorney who had previously deposed one of the facility’s licensed nurse practitioners in another case. That’s how he discovered, or so he thought, that Southaven had employed that NP when her multi-state license was temporarily revoked.

In 2019, Cameron Jehl brought a qui tam action seeking damages, penalties and fees under the False Claims Act, alleging that the NP had been unlicensed for nearly a year and violated federal regulations while serving as the director of nursing services. He claimed the facility, operating as a Golden Living Center, had received “millions in reimbursement payments” to which it was not entitled and sought a payout of $30 million.

By late 2022, two federal courts had found the case unmeritorious, noting a “complete failure of proof on each of the essential elements” of the plaintiff’s claims. With the decision in Southaven’s favor, the facility and its owners sought to have attorneys’ fees paid under the False Claims Act’s fee-shifting provision.

Senior US District Judge Glen H. Davidson noted that such redress is only available “if the defendant prevails in the action and the court finds that the claim of the person bringing the action was clearly frivolous, clearly vexatious, or brought primarily for the purpose of harassment.” A lower court last year found that Jehl’s claim fell into the frivolous category and ruled in the facility’s favor.

Protections worked

Key to this case: Not only did Jehl build his case on information available through public records (specifically barred by the False Claims Act ), but he also failed to do a follow-up search of a licensing database that would have shown that the nurse practitioner had her multistate nursing license reinstated by the time she worked in Mississippi.

“This inquiry would have informed him that the entire basis of his lawsuit … was ‘demonstrably wrong,’” Davidson wrote Friday, noting that Jehl failed to provide any new justification in his last request to overturn attorney’s fees.

An attorney for Southaven on Tuesday told McKnight’s the opinion and the order spoke for themselves and declined further comment. The facility is described in court documents as a nursing home, but now appears to offer only memory care, according to online listings.

In paperwork filed last April, attorneys broke out costs and supplied dozens of pages of invoices, with one chart implying total legal costs had exceeded $1.6 million. The case has dragged on another nine months since.

The possibility of recouping costs is a promising development, given that many providers have said they settled such suits to end the ceaseless spending associated with them. Legal experts have said such compensation remains rare.

“This is material victory for the skilled nursing provider and others that find themselves as targets of purported relators,” said Scott Kiepen, a partner at Hooper, Lundy & Bookman and co-chair of the firm’s litigation department. 

Kiepen actively represents providers in False Claims cases but is not involved in the Southaven proceedings.

“All too often relators are able to defeat motions to dismiss for various reasons, only to use voluminous, burdensome and expensive discovery as a means of attempting to coerce a settlement award,” Kiepen said.  “This decision will serve as a reminder to relators that frivolous and vexatious matters could lead to being ultimately responsible for material attorney fees. “

Hope for fewer cases

False Claims — meritorious or not — still dog nursing homes and other healthcare providers, but recent years have offered some promise that courts might reign in unfounded cases.

Last spring, the Supreme Court ruled that the federal government can move to dismiss any False Claim suit, even over the objection of whistleblowers who stand to gain financially from ongoing litigation, the Supreme Court ruled Friday morning.

The Polansky decision also indicated that states may move to dismiss whistleblower actions when they have intervened — whether that be in an early period when the case is sealed or later as new details emerge or the government finds the case baseless.

The government had declined to intervene in Jehl’s case, and going forward, cases like his may become more risky for whistleblowers to pursue.

Kirk McGill, special counsel at Hall Estill, told McKnight’s, last year that the new ability for the government to move for dismissal of False Claims cases could be a “major disincentive for a law firm to bankroll a qui tam suit because you could do years of work … and the government can dismiss the case out from under you.”