Marchand & Rossi, L.L.P., nka Marchand Law, L.L.P. v. Bryan K. White, et al.
The federal False Claims Act ("FCA"), 31 U.S.C.
§ 3730, includes an interrelated series of provisions
intended to incentivize, through monetary awards,
private reporting and prosecution of schemes to
defraud the United States. The state of Texas has
enacted a parallel statutory scheme to protect state
interests.
Petitioner Marchand Law, L.L.P. investigated a
fraudulent scheme and filed a lawsuit on behalf of its
"whistleblower" clients pursuant to the FCA and
parallel Texas enactment. Unbeknownst to them,
another whistleblower previously had initiated a FCA
lawsuit regarding a non-intersecting scheme, which
had select actors in common, but discrete features and
objectives.
There was no evidence either set of whistleblowers
independently would have discovered or prosecuted
both schemes for the benefit of the United States or
state of Texas. There moreover was no evidence the
United States or Texas would have discovered both
schemes based on knowledge of only one. The district
court nevertheless dismissed the suit filed by
Marchand Law, L.L.P.'s clients based on the FCA "firstto-file" rule, which the district court treated as a
jurisdictional bar to any subsequent federal or state
lawsuit. The Fifth Circuit Court of Appeals affirmed
based on circuit precedent.
The questions presented are as follows:
1. Whether the fundamental utility of the FCA—to
incentivize private citizen investigation and
prosecution of fraud against the United
States—is jeopardized by precedent that allows
dismissal of "second-filed" suits even in the
absence of evidence parallel schemes would have
been discovered but for the second-filed suits.
2. Whether divergent standards of review utilized
by circuits to evaluate first-to-file challenges
contributes to lower courts' failures to allow
independently viable FCA claims to proceed on
the merits.
3. Whether in the absence of congressional intent,
the FCA in any event can displace parallel statelaw whistleblower remedies.
Whether the FCA first-to-file rule allows dismissal of independently viable claims