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 expenses it incurs plus an additional payment to allow for a profit.Continue Reading Predicating False Claims Act Liability On False Cost Estimates May Impact Contractors’ Willingness to Take On Projects Involving Next Generation Technologies
False Claims
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 Sheppard Mullin on
Posted in False Claims, FCA
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 in many qui tam cases being dismissed either because they merely mimic the allegations of a previously-filed case or do not plead their allegations of fraud with sufficient particularity.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
The Federal Government Takes Aim at Medicare Fraud
By Sheppard Mullin on
On May 2, 2012, Federal agents with the Department of Justice’s (“DOJ”) special task force made the biggest Medicare bust in U.S. history, and a splash in the media, when it cracked down on a number of unrelated Medicare fraud schemes across the country that resulted in an alleged $450 million in false claims being submitted to Medicare over the past six years. A total of 107 people were arrested, including doctors, nurses, social workers, office managers, and patient recruiters. Charges ranged from submitting false billing for home healthcare, mental health services, HIV infusions, and physical therapy, to money laundering and receiving kickbacks.Continue Reading The Federal Government Takes Aim at Medicare Fraud
The Supreme Court To Decide Whether FOIA Responses Trigger The False Claims Act’s Public Disclosure Bar
By Sheppard Mullin on
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 claim (such as an individual invoice) triggers a penalty of up to $11,000. Under the FCA’s qui tam provisions, whistleblowers (formally called relators) can bring lawsuits on behalf of the government. Whistleblowers receive a significant bounty for acting as private prosecutors: they are entitled to between 15 and 30 percent of the government’s proceeds from the litigation. This is a substantial sum, as the trebling and penalty provisions catapult many modest matters into multimillion dollar actions.
Continue Reading The Supreme Court To Decide Whether FOIA Responses Trigger The False Claims Act’s Public Disclosure Bar
D.C. Circuit Rejects “Collective Knowledge” But Shines Spotlight on Processes
By Sheppard Mullin on
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 systems, structures, and processes. A recent opinion from the D.C. Circuit indicates that these organizational elements will be the next battleground in False Claims Act (“FCA”) litigation.
Continue Reading D.C. Circuit Rejects “Collective Knowledge” But Shines Spotlight on Processes
Could You Be The “Beneficiary” Of The “Inadvertent” Submission Of A False Claim?
By Sheppard Mullin on
Posted in False Claims, FCA
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 could be liable for penalties and treble damages.
Continue Reading Could You Be The “Beneficiary” Of The “Inadvertent” Submission Of A False Claim?
Size Does Matter – Impacts Of The Small Business Jobs Act Of 2010
By Sheppard Mullin on
Posted in False Claims, FAPIIS, FCA, IDIQ, Legislation, Multiple Award Schedule, Set-Aside, Small Business, Subcontracts, Teaming Agreements
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 view to stimulating the small business sector as an engine of job creation. But, as usual, the Administration’s efforts to improve the economy through stimulus measures also give rise to new risks for companies doing business with the federal Government – whether as a prime or a subcontractor, as a large or a small business.
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Implied False Certification Theory Gains Support In Ninth Circuit
By Sheppard Mullin on
Posted in False Claims, FCA
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 Government’s leverage in negotiations with contractors.
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Amendments To New York State False Claims Act Encourage Qui Tam Actions
By Sheppard Mullin on
Posted in False Claims
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 recently added to the federal FCA. New York’s amended FCA also differs from its federal and sister state counterparts in three key ways.
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Ninth Circuit Weakens Rule 9(b) In False Claims Act Litigation
By Sheppard Mullin on
Posted in False Claims, FCA
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 ultimate recovery. This bounty incentivizes relators to bring FCA lawsuits. It also causes some relators to see the FCA as a retirement-advancing lottery, and their complaints often characterize innocent business challenges as fraudulent schemes.
Continue Reading Ninth Circuit Weakens Rule 9(b) In False Claims Act Litigation