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Christopher M. Loveland is a partner in the Government Contracts and Business Trial Practice Groups in the firm's Washington, D.C. office.

Opportunistic relators have made a cottage industry of filing claims under the False Claims Act (FCA) alleging that contractors are violating the Trade Agreements Act (TAA) by misrepresenting the country of origin of products being sold to the government. Many of these relators are not company insiders and, as a result, lack detailed information regarding the sales practices of their targets. Instead, these relators cobble together publicly available information and often base their claims of fraud on inferences and innuendo. Courts, however, have steadfastly required relators to allege their claims of fraud with particularity – i.e., pleading details regarding the who, what, when, where and how of the alleged fraudulent conduct. As a result, many unsupported FCA claims have been dismissed. The most recent example is the FCA lawsuit filed by Jeffrey Berkowitz against nine government contractors in the U.S. District Court for the Northern District of Illinois in U.S. ex rel. Berkowitz v. Automation Aids, et al., No. 13-C-08185.[1] 
Continue Reading Another One Bites The Dust – False Claims Act Complaint Based On The Trade Agreements Act Is Dismissed With Prejudice For Relator’s Failure To Allege Fraud With Particularity

Now that you understand what prompts an agency subpoena or CID, the next step is to have a strategy, which involves answering the question, “what should I do?” Taking the right approach from the outset is critical to protecting your company’s interests.

Continue Reading You’ve Been Served—What to Do When You Receive an Agency Subpoena or CID (Part II)

Nothing sends chills through a Compliance Officer or General Counsel faster than receiving an agency subpoena or civil investigative demand (CID). The first questions that immediately come to mind are “what does it mean” and “what should I do?”

Continue Reading You’ve Been Served—What to Do When You Receive an Agency Subpoena or CID (Part I)

In a significant win for government contractors, health care providers, and financial institutions who operate in an increasingly onerous regulatory environment, the United States Court of Appeals for the D.C. Circuit issued an important False Claims Act (FCA) ruling in United States ex rel. Purcell v. MWI Corporation, No. 14-5210 (D.C. Cir. Nov. 24, 2015).  In Purcell, the D.C. Circuit held that the government cannot establish that a defendant “knowingly” submitted a false claim when it certifies compliance with an ambiguous contract provision based on its objectively reasonable interpretation of that ambiguous provision, and when the government had not officially warned the defendant away from its otherwise objectively reasonable interpretation of that provision.  The case provides some relief for those contractors who rely on their good faith interpretations of ambiguous regulations and contract provisions where there is otherwise no guidance or direction from the government.  It is also another example of the Justice Department expanding its FCA docket beyond traditional government contractor and health care defendants. 
Continue Reading D.C. Circuit: When The Government Is Silent, There Is No FCA Liability For A Contractor’s “Objectively Reasonable” Interpretation Of An Ambiguous Contract Provision

A relator bringing an action under the civil False Claims Act (FCA) is required to be an “original source” of the allegations.  31 U.S.C. § 3730(e)(4).  To qualify as an original source under the statute, the relator must (1) have “direct and independent knowledge” of the information giving rise to the claims and (2) “provide[] the information to the Government before filing the action.”  For the past 23 years, the Ninth Circuit also had a third requirement to qualify as an original source:  the relator must have had “a hand in the public disclosure of allegations that are a part of [the] suit.”  That third requirement, however, came to an abrupt end on July 7, 2015, when the Ninth Circuit in United States ex rel. Hartpence v. Kinetic Concepts reversed course, ruling that its holding in United States ex rel. Wang v. FMC Corp., 975 F.2d 1412 (9th Cir. 1992) was “wrongly decided” and that only the two requirements specified in the statutory language of the FCA must be satisfied for a relator to qualify as an original source.  Plaintiffs’ lawyers throughout the Ninth Circuit are rejoicing. 
Continue Reading The Ninth Circuit Overrules Decades of Precedent To Make It Easier For Relators To Qualify As An “Original Source”