False Claims Act-Archive

On Monday, May 14, 2019, the Supreme Court issued a decision essentially expanding by four years the time available for private suits to be brought by relators under the False Claims Act (“FCA”), regardless of whether the Government decides to intervene. In Cochise Consultancy, Inc. v. United States ex rel. Hunt, No. 18-315, 2019 WL 2078086 (U.S. May 13, 2019), plaintiff-relator Billy Joe Hunt filed a complaint on November 27, 2013, alleging two defense contractors (collectively, “Cochise”) violated the FCA in 2006 and 2007 by submitting false claims for payment under a subcontract providing security services in Iraq. The United States declined to intervene, and Cochise moved to dismiss the complaint, arguing that the action was barred under the FCA’s statute of limitations clause, 31 U.S.C. § 3731.
Continue Reading Supreme Court Addresses False Claims Act Statute of Limitations

The Department of Justice (DOJ) recently released its annual statistical report on recoveries and new matters under the False Claims Act (FCA). The aggregate reported recovery of $2.8 billion for fiscal year (FY) 2018 is the lowest such total since FY 2009 and is 17% lower than last year’s total and less than half of FY 2014’s all-time high recovery of over $6.1 billion. As the table below shows, however, DOJ’s and private qui tam relators’ levels of enforcement activity on behalf of the Departments of Health and Human Services (HHS) and Defense (DOD) in FY 2018 remained consistent with recent trends.
Continue Reading Health Care Suits at Center Stage in DOJ’s FCA Recovery Report for FY 2018

And it is even more difficult still if the defendant had – and acted in accordance with – a reasonable interpretation of the vague or ambiguous statute, regulation or contract
Continue Reading The Supreme Court Discusses When A Statute May Be Unconstitutionally Vague – Will It Be Extended to False Claims Act Cases?

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

They say bad facts make bad law. And in the world of the False Claims Act (“FCA”) 31 U.S.C. § 3729, et seq., where much law is made at the dismissal stage, bad allegations can be just as dangerous. When the Triple Canopy case (U.S. ex rel. Badr v. Triple Canopy, Inc.) was on appeal before the Fourth Circuit for the first time in 2015, it seemed like it was the epitome of such a case. In 2015, courts were still wrestling with the viability of the implied certification theory under the FCA. So a case involving Ugandan mercenaries with falsified marksmanship scorecards hired to protect U.S. and Iraqi facilities in Iraq was exactly the type of case that seemed likely to cement the Fourth Circuit as a favorable jurisdiction for FCA cases brought under the implied certification theory. Recently, the Fourth Circuit ruled (again) on the case—this time taking into consideration the Supreme Court’s decision in Universal Health Services, Inc. v. U.S. ex rel. Escobar, 136 S. Ct. 1989 (2016). Although the FCA defense bar hoped this might result in a different decision, the Fourth Circuit appears to be standing by its 2015 decision in which it held that the government had adequately stated a claim for relief under the FCA’s implied certification theory.
Continue Reading Straight Shooter: The Fourth Circuit Stands By Its Earlier Decision In Case About Iraqi Security Guards Whose Inability To Shoot Straight Gave Rise to FCA Liability

Note: This article was originally published on April 25, 2017, on Law360’s White Collar Legal News and Analysis website.

What happens when an employee of a government contractor falsifies a record that is entered into an internal database that is subject to government review, but the contractor discovers the record and rectifies the situation before the record is actually reviewed or otherwise presented to the government? Could an aggressive prosecutor pursue the contractor for a criminal false statement?
Continue Reading No Contractor Liability For False Statement Gov’t Didn’t See

The DC Circuit recently issued a decision in U.S. ex rel. McBride v. Halliburton — F.3d —-, 2017 WL 655439 (D.C. Cir. Feb. 17, 2017), in which it applied Universal Health Services, Inc. v. United States ex rel. Escobar, 136 S. Ct. 1989 (2016) to a government contracts False Claims Act matter.  It found that the government’s failure to seek repayment after investigating a relator’s claim was “very strong evidence” that the false statement or claim was not material.

Continue Reading DC Circuit Finds Government Failure to Seek Repayment is “Very Strong Evidence” of Non-Materiality In False Claims Act Case

Effective August 1, 2016, the False Claims Act’s (FCA) civil penalty will double.  As it currently stands, the FCA’s civil penalty ranges from $5,500 to $11,000 per violation.  But as of August 1, the FCA’s civil penalty range will almost double to a minimum of $10,781 and a maximum of $21,563.

The increase is the result of an interim final rule issued yesterday by the Department of Justice.  81 Fed. Reg. 42491 (June 30, 2016).  Although the increase was expected, it still reflects a dramatic increase in risk to those doing business with the federal government.  Health care providers are uniquely at risk, because those entities are often sending thousands of claims to the federal government for reimbursement.  When thousands of claims are at issue, the civil penalty can easily add up.


Continue Reading DOJ Rule Increases FCA Penalties to Over $20,000 Per Claim

While we may be hard pressed to recall which ancient epic poem includes the tale of the Trojan Horse (it’s the Aeneid, in case you’re wondering, although it’s also referenced in the Iliad), we all know the lesson—if it seems too good to be true, it probably is. For recipients of Federal grants, there are lots of administrative hurdles but, once you get the money, it’s smooth sailing, right? Hold on a minute.
Continue Reading “Beware Greeks Bearing Gifts”: FCA Enforcement Turning to Federal Grants?

The Department of Justice has issued its annual press release touting its False Claims Act recoveries from 2015. The government’s haul was substantial: just over $3.5 billion.  This is the fourth consecutive year that recoveries were at or above this level, but represents a significant decline from the government’s record $6.1 billion total recovered in 2014.
Continue Reading 2015: Another Big Year for FCA Recoveries