On September 29, 2015, the Fourth Circuit agreed to hear an interlocutory appeal in U.S. ex rel. Michaels et al. v. Agape Senior Community, Inc. to address whether the statistical method of extrapolation may be used to prove liability, in addition to damages, under the False Claims Act. The Fourth Circuit will be the first appellate court to rule on this controversial issue.
Extrapolation, or statistical sampling, is a method in which a sample of data is used to draw inferences about a larger population. Litigators implement extrapolation in areas of complex litigation, including antitrust, employment discrimination, mass torts, and voting rights cases. In the FCA context, however, litigators have utilized extrapolation solely to prove damages. The use of extrapolation expanded in 2014, when the U.S. District Court for the Eastern District of Tennessee, in U.S. ex rel. Martin v. Life Care Centers, allowed plaintiffs to use statistical sampling not only to calculate damages, but also to establish the underlying FCA liability. Subsequent rulings by federal district courts reach divergent positions.
In “Extrapolation in FCA Litigation: A Statistical Anomaly or a Tactic Here to Stay?”, a Feature Comment published by The Government Contractor, C&M Attorneys outline the origins of extrapolation, examine the divergent federal district court rulings on whether it may be used to prove damages, explain the significance of extrapolation to contractors facing False Claims Act liability, and offer practice tips for litigating cases with statistical sampling.