State University Hospital Fends Off FCA Claims Under "Arm-of-the-State" Test
Client Alert | 1 min read | 07.16.13
In U.S. ex rel. King v. The University of Texas Health Science Center-Houston, a federal court considered whether The University of Texas Health Science Center–Houston was subject to liability under the qui tam provisions of the federal civil False Claims Act, based on a former employee's allegations that the hospital had defrauded the federal government by covering up misconduct related to federal research grants, and retaliated against the employee for reporting the misconduct. Applying the "arm-of-the-state" test (previously discussed here), the court held that the university hospital was a state entity -- and thus, was not a "person" subject to suit under the FCA -- and likewise held that employee's FCA retaliation claim was barred by sovereign immunity, providing a victory in the latest round of FCA scrutiny impacting higher ed institutions (discussed here and here).
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Client Alert | 3 min read | 11.21.25
On November 7, 2025, in Thornton v. National Academy of Sciences, No. 25-cv-2155, 2025 WL 3123732 (D.D.C. Nov. 7, 2025), the District Court for the District of Columbia dismissed a False Claims Act (FCA) retaliation complaint on the basis that the plaintiff’s allegations that he was fired after blowing the whistle on purported illegally discriminatory use of federal funding was not sufficient to support his FCA claim. This case appears to be one of the first filed, and subsequently dismissed, following Deputy Attorney General Todd Blanche’s announcement of the creation of the Civil Rights Fraud Initiative on May 19, 2025, which “strongly encourages” private individuals to file lawsuits under the FCA relating to purportedly discriminatory and illegal use of federal funding for diversity, equity, and inclusion (DEI) initiatives in violation of Executive Order 14173, Ending Illegal Discrimination and Restoring Merit-Based Opportunity (Jan. 21, 2025). In this case, the court dismissed the FCA retaliation claim and rejected the argument that an organization could violate the FCA merely by “engaging in discriminatory conduct while conducting a federally funded study.” The analysis in Thornton could be a sign of how forthcoming arguments of retaliation based on reporting allegedly fraudulent DEI activity will be analyzed in the future.
Client Alert | 3 min read | 11.20.25
Client Alert | 3 min read | 11.20.25
Client Alert | 6 min read | 11.19.25
