Category Archives: FCA

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Sarbanes-Oxley Whistleblower Protections Cover Employees of a Public Company’s Private Contractors

On March 4, 2014, the United States Supreme Court, in a 6-3 decision, expanded the protections offered to whistleblowers under anti-fraud laws, in Lawson v. FMR LLC.  In its decision, the Court ruled that a specific protection against retaliation enacted as part of the Sarbanes-Oxley Act after Enron’s collapse, i.e., 18 U.S.C. § 1514A, not … Continue Reading

Proceed with Caution: D.C. District Court Says Attorney-Client Privilege and Work Product Doctrine Do Not Survive Internal Fraud Investigation Conducted by Non-Attorneys

On March 6, 2014, the District Court for the District of Columbia issued an opinion in United States ex rel. Barko v. Halliburton Company et al. that should serve as a wake-up call for all companies conducting internal compliance investigations to evaluate whether those investigations are structured in a manner to maximize the protections of … Continue Reading

David Douglass on the False Claims Act

Sheppard Mullin government contracts partner David Douglass was recently quoted at length in an article discussing the defense of False Claims Act cases.  Although the Government is all too often using the False Claims Act as an all-encompassing fraud statute, Mr. Douglass notes that companies are having more success defending against these allegations in recent … 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

What Does 2013 Have In Store for Government Contractors and Their Lawyers?

By Louis Victorino and Jonathan Aronie (originally published in the San Diego Business Journal) It has been noted, the more things change, the more they stay the same. In the world of Government Contracts Law, however, the more things change, the more the phone rings. And while we’re only a few weeks into 2013, the … 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

Using the Internet to Defend Against a Whistleblower Action

By: Anne Perry We often cover social media aspects pertinent to government contracting here on the blog. Recently, however, Michelle Sherman of Sheppard Mullin’s Los Angeles office posted an article that may be relevant to contractors on the Social Media Law Update blog. In her posting, Michelle discusses how companies may be able to use the widespread … 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

Ninth Circuit Weakens Rule 9(b) In False Claims Act Litigation

By Robert M.P. Hurwitz The U.S. Court of Appeals for the Ninth Circuit recently weakened the impact of Federal Rule of Civil Procedure 9(b) in False Claims Act (“FCA”) cases. The FCA allows whistleblowers (called “relators”) to bring lawsuits against contractors on behalf of the federal government. Relators can receive up to 30 percent of the government’s … Continue Reading

Meanwhile, Sixth Circuit Remains Firm On Rule 9(b) In False Claims Act Litigation

By Christopher E. Hale This article continues discussion of Rule 9(b) in False Claims Act litigation from Ninth Circuit Weakens Rule 9(b) in False Claims Act Litigation, also published today. While the Ninth Circuit has joined the minority position on fraudulent scheme complaints, the Sixth Circuit has reiterated the standard adopted in Bledsoe II, requiring … Continue Reading

The Supreme Court Signals It Will Resolve FCA Original Source and Rule 9(b) Issues

Where is the line between a legitimate False Claims Act whistleblower and an opportunistic parasite? How detailed do a whistleblower’s allegations have to be to survive a motion to dismiss and subject a defendant to expensive discovery? These questions have split the federal courts. The Supreme Court recently invited the Solicitor General to offer the government’s opinions on … Continue Reading

Ninth Circuit Decision Emphasizes the Importance of a Well-Crafted FCA Settlement Agreement

With its recent decision in Cell Therapeutics Inc. v. Lash Group Inc., 9th Cir., No. 08-35619, Nov. 18, 2009, the United States Court of Appeals for the Ninth Circuit took a dramatic step towards preserving the rights of False Claims Act (FCA) defendants. The court’s ruling permits FCA qui tam defendants to seek recovery against third … Continue Reading

You Want a Piece of Stimulus Spending? How Much Risk Are You Willing to Accept?

Stimulus projects are likely to come with a thick string of transparency and accountability requirements, along with potentially severe financial penalties and, in some cases, possible prison time. These conditions may be extended not only to U.S. government contractors, but to companies undertaking federally funded projects for state and local governments. Companies that plan to … Continue Reading
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