Commercial Litigation Update

The U.S. Court of Appeals for the First Circuit recently provided important clarity—and welcome relief—for clinical laboratories facing False Claims Act (“FCA”) allegations based on a lack of medical necessity for processing tests ordered by a physician. In a case of first impression, United States ex rel. OMNI Healthcare, Inc. v. MD Spine Solutions LLC,[1] the First Circuit held that clinical laboratories may rely on an ordering physician’s determination that lab tests billed to Medicare are medically necessary. The First Circuit held that laboratories need not second-guess a physician’s certification absent red flags or suspected improper conduct. While the First Circuit’s decision does not relieve clinical laboratories of their existing obligation under the FCA to ensure they are not submitting a false claim to government payors, it provides much-needed clarity for clinical laboratories across the country on what constitutes the knowing submission of false claims to the government and highlights several practical takeaways for managing compliance risk.

In September 2025, the U.S. Attorneys’ Office for the Eastern District of Pennsylvania (EDPA) announced that it would be implementing a White-Collar Justice Program to strengthen its white- collar enforcement framework. Among other things, the program will “empower Assistant United States Attorneys to aggressively pursue complex investigations and significant new matters on their own initiative.”

This announcement demonstrates another step in federal districts ramping up their white-collar enforcement efforts while encouraging robust procedures for compliance and self-disclosure. This is a trend several years in the making: in September 2022, then-Deputy Attorney General Lisa Monaco directed U.S. attorneys and others within the DOJ to review their policies on corporate voluntary self-disclosure, and to draft and share a formal written policy to incentivize such self-disclosure, if one was lacking.

On July 25, 2025, the Eleventh Circuit issued an opinion in United States ex rel. Sedona Partners LLC v. Able Moving & Storage Inc. (No. 22-13340) addressing an important procedural question under the False Claims Act (FCA) and other fraud-based statutes: may a plaintiff rely on information learned during discovery to meet Rule 9(b)’s heightened pleading standard in an amended complaint? The court concluded that the answer is yes.

Rule 9(b) requires that allegations of fraud be plead “with particularity.” Defendants frequently rely on this standard at the motion-to-dismiss stage, aiming to defeat weak FCA complaints before discovery begins. In 2019, an unpublished Eleventh Circuit decision, Bingham v. HCA, Inc., 783 F. App'x 868 (11th Cir. 2019), suggested that plaintiffs could not use discovery to cure a deficient complaint. The concern was that such an approach could incentivize speculative suits filed without adequate factual grounding.