On January 28, 2014, the Louisiana Supreme Court in Caldwell ex rel. State v. Janssen Pharmaceutical, Inc., - -- So.3d ---, 2014 WL 341038 (La. Jan. 28, 2014), reversed a trial court judgment of US$257,679,000 in civil penalties, US$70,000,000 in attorney fees and US$3,000,200 in costs and expenses, and granted judgment in favor of Defendants Janssen Pharmaceutical, Inc. and its parent company Johnson & Johnson, Inc.

In Janssen, Louisiana alleged that statements contained in a letter sent by defendants to doctors regarding a class-wide FDA warning failed to adequately characterize the risks associated with Risperdal® and violated certain provisions of Louisiana’s Medical Assistance Programs Integrity Law (MAPIL), La. Rev. Stat. §§ 46:437.1, et seq. The trial court and intermediate appellate court ruled that to prove a claim under MAPIL, Louisiana need not prove that a false or fraudulent claim was actually submitted to Louisiana’s Medicaid program, and that proof of false, misleading, misrepresentative or deceitful statements in general was sufficient to justify an award of civil penalties. Caldwell ex rel. State v. Janssen Pharm., Inc., 100 So 3d 865, 876 (La. App. 2012). The trial court verdict thus represented an award of penalties for each letter sent to Louisiana doctors, despite plaintiff never introducing evidence that the State had overpaid for any Risperdal® prescription as a result of the letter.

The Louisiana Supreme Court reversed the trial court’s and intermediate appellate court’s sweeping interpretation of MAPIL, and held that evidence of actual false claims are required. The Court further held that the trial record was insufficient to find liability under MAPIL because the State provided no evidence that defendants presented any actual false claim for payment to the Louisiana Medicaid program. Janssen, 2014 WL 341038, at *12. Key to the Supreme Court’s ruling was the statutory definition of a “false or fraudulent claim,” which the Court observed required that a person must have “knowingly caused a health care provider or its billing agent to present a claim for payment the health care provider or its billing agent knew to be false or misleading.” Id. at *8. In other words, the Court held, a false claim requires that the physician submitting the request to Medicaid for reimbursement know that the claim was untruthful or misleading. Plaintiff had failed to show that any doctor knowingly submitted such a claim.

In addition to announcing a narrower reading of MAPIL than the Louisiana attorney general had urged, this decision could potentially persuade other state courts to interpret their Medicaid fraud statutes in a similar fashion. We note that plaintiff has sought reconsideration of the decision, and that motion remains pending.