Takemoto False Claims Act Case Closed
Jesse Hamby
January 21, 2016

Earlier last year we blogged about this MSP False Claims Act case being recommended to be dismissed with prejudice by Magistrate Judge McCarthy. For our prior blog and further background on this case, please click here.

Yesterday, United States District Judge William Skretny issued a decision and order denying Takemoto’s request to re-plead his case and objections to Judge McCarthy’s decisions. Judge Skretny concurred with Judge McCarthy’s findings, specifically that Takemoto failed to allege plausible causes of actions and that his amended complaint be dismissed and he not be permitted to replead his allegations. Additionally, Judge Skretny dismissed Takemoto’s amended complaint with prejudice, but without prejudice to the U.S., and ordered the Clerk of the Court to take the necessary steps to close the case.

CommentaryTheoretically, the United States could choose to bring this case again on its own without Takemoto, but since the United States declined to join in the case previously prior to it being unsealed, it likely will not choose to re-initiate. Additionally, without Takemoto the United States would not have the requisite evidence/personal knowledge about the Defendants that Takemoto claimed he had.  Therefore, it appears that this case is finally closed.

What can we learn from this MSP False Claims Act case that had the industry in a stir? Well, the coast is not completely clear. Another False Claims Act MSP case, United States, ex. rel. J. Michael Hayes v. Allstate Insurance Company, et al., which named over 20 liability insurance carriers and trucking companies that self-insure, is still pending. While the case appears to be still pending procedurally, substantively it appears to be over. Judge McCarthy previously threatened to file sanctions against Attorney Hayes for claiming personal knowledge about False Claims Act actions by the Defendants which was unsupported.

Will we see other MSP False Claims Act cases in the future? It is unknown, however, with MMSEA Section 111 reporting providing Medicare visibility into data about liability, workers’ compensation and no-fault claims, it would be difficult for a whistleblower to argue that a Responsible Reporting Entity (RRE) was trying to withhold information on a settlement with a Medicare beneficiary, unless the claim was not reported at all.

If a reportable claim was not reported, it would seem that the proper remedy for Medicare would be to issue a civil monetary penalty to that Responsible Reporting Entity (RRE) instead. Much of the claims made by Takemoto and Hayes within their Complaints referred to a time period in which Section 111 reporting was not in place at the time (prior to 2010), therefore these types of suits may be moot, given the visibility provided by Section 111 Reporting.


Heather Schwartz Sanderson, Esq., MSCC, CHPE, CLMP, CMSP

Chief Legal Officer

Franco Signor LLC