In his brief filed on Monday, pharmacist-relator Thomas Proctor argued that the Third Circuit should overturn the district court’s grant of summary judgment in his False Claims Act (FCA) case contending that Safeway overcharged third-party payors for prescription drugs more than 14 million times. The appellant argued that the lower court’s interpretation of case law and statutory language within the FCA led it to the wrong conclusion.
The 157-page filing contends that Safeway, Inc. submitted false claims when it failed to report its true “usual and customary” (U&C) cash prices to third party payers of pharmacy claims like Medicare Part D, Medicaid, and others. Instead of reporting its lower cash U&C prices, Safeway reportedly and knowingly concealed the true prices through price matching and free membership programs. Safeway then allegedly reported higher U&C prices and obtained higher reimbursements from third parties, while offering lower cash prices to customers to remain competitive.
According to the brief, the Third Circuit has considered a similar scheme and confirmed that such conduct violates the FCA. In support of his argument for reversal, Proctor contended that the district court misread a Seventh Circuit case as redefining “usual and customary,” when in fact, it merely reiterated the well-known rule.
The appellant next argued that the court erred in applying a Supreme Court case setting forth a standard for “willful” violations of the Fair Credit Reporting Act that the D.C. Circuit applied to FCA “reckless disregard” through a three-step analysis. The appellant argues that here Safeway meets none of the three criteria, thus necessitating a result different from the one reached. Finally, Proctor claims that the trial court erred in determining that the “reckless disregard” scienter standard replaced the defined term “knowing” in the FCA.
The appellant is represented by Aschemann Keller LLC, Helmer, Martins, Rice & Popham Co., L.P.A., Idell PLLC, Goode Casseb Jones Riklin Choate & Watson, Gary M. Grossenbacher, and Glenn Grossenbacher.
