Seventh Circuit Affirms Dismissal of Qui Tam Suit Against Cook County

An opinion was issued by the Seventh Circuit affirmed the dismissal with prejudice of plaintiff Noreen Lanahan’s complaint against her former employer, the County of Cook.

The plaintiff was an employee of Cook County’s Department of Public Health from 1994 to 2017 where she was responsible for managing federal grants. Lanahan filed a qui tam suit against the defendant, which alleged violations of the False Claims Act pertaining to the use of the federal grants that Lanahan was responsible for managing. Lanahan contends that she “repeatedly warned Cook County it was seeking federal reimbursement for unincurred expenses.”

When Cook County moved to dismiss Lanahan’s initial complaint for failure to state a claim, Lanahan filed a first amended complaint, which allegedly “differed very little from the initial complaint,” and was dismissed without prejudice. After the second amended complaint was dismissed with prejudice, Lanahan appealed the decision. The opinion at hand affirms the dismissal.

The second amended complaint cited four causes of action under the False Claims Act, including presenting false claims for payment, use of false statements, conversion, and reverse false claims. The defendant again filed a motion to dismiss for failure to state a claim, which was granted in an opinion noting that Lanahan “failed to cure the deficiencies that warranted dismissal of the First Amended Complaint.” Specifically, the claims did not indicate any specific falsities in the reports that Cook County had submitted for federal reimbursement and did not reveal that the defendant had retained any funding belonging rightfully to the government.

Lanahan’s appeal contains two arguments, both of which were rejected. Firstly, she argued that her second amended complaint was improperly dismissed, and secondly, she claimed it was improperly dismissed with prejudice. The court notes that none of her claims under the False Claims Act meet the necessary heightened pleading standards which assert that Lanahan “must state with particularity the circumstances constituting fraud or mistake.”

The opinion also explains that Lanahan “neglects to plead any facts from which we may infer Cook County intended to defraud the government,” and that Lanahan’s allegations “amount to nothing more than a putative regulatory violation.” The court affirms the dismissal of the second amended complaint.

The court also affirmed the decision to dismiss Lanahan’s second amended complaint with prejudice, since Lanahan “failed to adequately present her claims even after the district court dismissed her first amended complaint with a detailed discussion of its deficiencies.”

Lanahan was represented in the litigation by the Law Office of John Lanahan, while the defendant was represented by Hinshaw & Culbertson LLP as well as their own counsel.