Category Archives: False Claims

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Contractors Beware: An Overly Broad Confidentiality Agreement Could Cost You!

On October 29, 2015, DOD renewed the DFARS deviation implemented in February, which prohibits contracting with entities that require employees or subcontractors to sign internal confidentiality agreements or statements that prohibit, or otherwise restrict, such employee or subcontractor from lawfully reporting waste, fraud, or abuse.  Defense contractors should review their policies to ensure they meet … Continue Reading

Whew! That Was Close – D.C. Circuit Reaffirms Application of Attorney-Client Privilege and Attorney Work Product Doctrine in Internal Investigations

On August 11, 2015, the U.S. Court of Appeals for the D.C. Circuit issued a writ of mandamus supporting the robust applicability of the attorney-client privilege and attorney work product doctrines in the context of False Claims Act (“FCA”) investigations conducted under the direction of corporate and outside counsel. This marks a continuation of its … Continue Reading

Seventh Circuit Rejects FCA Implied False Certification Theory

On June 8, 2015, the U.S. Court of Appeals for the Seventh Circuit rejected the doctrine of implied false certification in a False Claims Act (“FCA”) lawsuit, U.S. ex rel. Nelson v. Sanford-Brown Ltd.  No. 14-2506, 2015 WL 3541422.  In a welcome decision for government contractors, the Court held that the FCA is “not the … Continue Reading

SCOTUS: No Unlimited Suspension of the Statute of Limitations Under the False Claims Act; “First-to-File” Doctrine Does Not Bar Related Suits in Perpetuity

In an opinion released May 26, 2015, Kellogg Brown & Roots Services, Inc. v. United States ex rel. Carter, the U.S. Supreme Court unanimously held that whistleblowers cannot extend the statute of limitations for war-related civil false claims under the Wartime Suspension of Limitations Act (“WSLA”), reinstating an already generous statute of limitations period under … Continue Reading

When it Comes to Crop Insurance, the FCA Bears Fruit

The federal crop insurance program is an often overlooked area of potential liability under the False Claims Act (“FCA”).  The program, which is governed by a substantial body of regulatory law, is subject to intense oversight by the U.S. Department of Justice.  So much so that the U.S. Department of Agriculture’s Risk Management Agency maintains … Continue Reading

Add Importers to Those Facing Expanding Whistleblower Claims Under the False Claims Act

On February 12, 2015, the Department of Justice (“DOJ”) announced that three U.S.-based importers had agreed to pay more than $3 million to resolve a lawsuit brought by the United States under the False Claims Act (“FCA”).  The Government alleged that the importers had made false declarations to U.S. Customs and Border Protection (“CBP”) and … Continue Reading

You Again?: Application of the First-to-File Bar Where Subsequent Actions Are Brought By the Same Relator

The Federal False Claims Act (“FCA”), 31 U.S.C. § 3729, et seq., has unique procedural aspects that come into play when a private whistleblower (the “relator”) seeks to sue on behalf of the Government.  One of these, the so-called “first-to-file” bar, applies when two “related” whistleblower actions are filed:  “When a person brings an [FCA … Continue Reading

The Fourth Circuit Strengthens the FCA’s Implied Certification Theory in Triple Canopy

Under the “implied certification” theory of liability, a government contractor can violate the False Claims Act (“FCA”) by submitting a mere invoice for payment.  The theory is that the invoice’s submission impliedly certifies compliance with contract conditions.  If a contractor is not complying with material contract requirements and — despite the contractor’s noncompliance — submits … Continue Reading

A Peek Around the Curtain: A “Reverse” False Claims Act Settlement for Avoiding Customs Charges

On November 14, 2013, the U.S. Department of Justice announced a False Claims Act settlement with Basco Manufacturing Company, a maker of shower enclosures, for $1.1 million related to misstatements on U.S. Customs and Border Protection (CBP) entry forms.  The alleged misstatements were intended to allow the company to avoid antidumping duties (ADD) and countervailing … Continue Reading

False Claims Act Whistleblower Bounties Exceed $345 Million in Fiscal Year 2013

The DOJ has released its Fiscal Year (“FY”) 2013 totals for civil settlements and judgments recovered under the federal False Claims Act (“FCA”).  To say that the Department had a successful year in prosecuting fraud against the government would be putting it mildly.  According to the DOJ release, the government recovered $3.8 billion under the … Continue Reading

Fourth Circuit Finds $24 Million False Claims Act Penalty Not Excessive Even Where No Damages Proven at Trial

In a recent False Claims Act (“FCA”) opinion that has already been heavily criticized, the Fourth Circuit held that a $24 million penalty was not “excessive” under the Constitution even where damages were not proven at trial and where the government had paid only a total of $3.3 million for the services in question.  United … Continue Reading

Threats and Vulnerabilities – What Every Contractor Should Know About The SBA’s New “Presumed Loss” and “Deemed Certification” Rules

By Franklin Turner and David Gallacher  Nearly three years ago, on September 27, 2010, the President signed into law the Small Business Jobs Act of 2010 (“Jobs Act”), which directed the Small Business Administration (“SBA”) to implement a variety of small business size and integrity requirements. As noted in our prior blog posting discussing many … Continue Reading

An FCA Kerfuffle: First Circuit Reaffirms the Intent of the “First to File” Rule and Deepens Circuit Split

By Alexander Major The First Circuit has added its say on the meaning of the False Claims Act’s “first to file” rule (31 U.S.C. § 3730(b)(5)) by holding that a first-filed complaint will preclude a later-filed suit, even when the first complaint is found insufficient under Rule 9(b) particularity requirements. See United States ex rel. … Continue Reading

Common Sense Prevails Once Again: District Court FCA Ruling Serves As Reminder That Whistleblowers Need to Prove Recklessness Too

By Christopher Loveland and Jonathan Aronie  While multi-million dollar False Claims Act (FCA) settlements paid by Government contractors get the lion’s share of the press, those with an attentive eye will have noticed a recent steady stream of more “contractor friendly” FCA decisions flying just under the national press’s radar. These cases, all arising in … Continue Reading

Sixth Circuit: FERA False Claims Act Amendment Applies Retroactively to Cases Pending as of June 7, 2008

By John Hynes On November 2, 2012, the Sixth Circuit held that a 2009 amendment Congress made to the liability provisions of the False Claims Act ("FCA") applies retroactively to civil FCA cases pending as of June 7, 2008. U.S. ex rel. Sanders v. Allison Engine Co., Nos. 10-3818/10-3821, at *17-20 (6th Cir. Nov. 2, … Continue Reading

Predicating False Claims Act Liability On False Cost Estimates May Impact Contractors’ Willingness to Take On Projects Involving Next Generation Technologies

By Joseph Barton In 1995, the U.S. Air Force awarded Lockheed Martin the RSA II Contract (the “Contract”) for the provision of software and hardware used to support space launch operations at Vandenberg Air Force Base and Cape Kennedy. Importantly, the Contract is a cost-reimbursement type contract whereby a contractor is paid for the allowable … Continue Reading

Another U.S. District Court Follows The Lead Of The D.C. Circuit In Addressing The “First-To-File Bar” Circuit Split And Pushes Back Against An Opportunistic Relator

By Christopher Loveland and Jonathan Aronie While the False Claims Act (“FCA”) generally is understood to be a “whistleblower” statute, it has been a tool of choice in recent years for opportunistic qui tam relators who lack any inside information regarding the very companies they sue. Not surprisingly, this lack of inside information has resulted … Continue Reading

The Supreme Court To Decide Whether FOIA Responses Trigger The False Claims Act’s Public Disclosure Bar

By Robert M. P. Hurwitz The Supreme Court recently heard oral argument in a case testing the scope of the False Claims Act’s public disclosure bar. The False Claims Act (“FCA”) is the government’s primary weapon against waste, fraud, and abuse in government contracting.  Penalties for FCA violations are harsh: actual damages are trebled, and each false … Continue Reading

D.C. Circuit Rejects “Collective Knowledge” But Shines Spotlight on Processes

By Robert M. P. Hurwitz A good internal investigation gives equal scrutiny to people and processes. It may be easier to replace or reprimand the “bad apple” employee than to overhaul a system with which employees are familiar and has become ingrained in the operational culture. Nevertheless, it is increasingly vital that companies take a hard look at … Continue Reading

Could You Be The “Beneficiary” Of The “Inadvertent” Submission Of A False Claim?

By Charles L. Kreindler and Barbara E. Taylor Are you a parent corporation with a subsidiary that does business with a state or local government? Are you a manufacturer or supplier whose products end up down the distribution chain with a state or local government? If so, you could be the “beneficiary” of a false claim and … Continue Reading

Size Does Matter – Impacts Of The Small Business Jobs Act Of 2010

By David S. Gallacher On September 27, 2010, President Obama signed into law the Small Business Jobs and Credit Act of 2010 (Pub. L. No. 111-240). The Act is intended to free up capital by providing tax cuts for small businesses (some of which are temporary) and to promote exports of U.S. products, all with a … Continue Reading

Implied False Certification Theory Gains Support In Ninth Circuit

By Robert M.P. Hurwitz Last month, the U.S. Court of Appeals for the Ninth Circuit extended the breadth of the False Claims Act for actions brought within that Circuit by accepting the implied false certification theory of liability. This is a significant development that increases the risk of doing business with the government and enhances the … Continue Reading

Amendments To New York State False Claims Act Encourage Qui Tam Actions

By Anthony N. Moshirnia On August 13, 2010, effective August 27, 2010, the New York legislature enacted Chapter 379, turbo-charging the New York False Claims Act (“FCA”), N.Y. State Fin. Law § 187 et seq., and providing would-be whistleblowers with powerful new incentives to file qui tam actions. The revised New York FCA generally adopts the provisions … Continue Reading