Escobar

Many of our clients have been calling to ask whether failure to comply with the Administration’s Executive Order imposing vaccine mandates on federal contractors could lead to False Claims Act liability, and what steps they can take to minimize the risk of liability.  Much remains unknown, especially what specific obligations will be included in the FAR clause to be released on October 8.  However, we have highlighted a few key considerations that should be front of mind for all contractors and subcontractors.
Continue Reading COVID-19 Vaccine Mandate for Federal Contractors Could Pose False Claims Act Risk

On February 17, 2021, Senator Chuck Grassley (R-IA) and Brian Boynton, Acting Attorney General for the Department of Justice’s Civil Division, provided opening remarks at the Federal Bar Association’s annual Qui Tam Conference. Both emphasized the key role of the FCA in combating fraud against the Government, and noted an anticipated increase in FCA enforcement actions in the coming years, particularly related to the Government’s pandemic response. In addition, Senator Grassley offered a preview of potential legislative changes to the False Claims Act, and Boynton outlined DOJ’s enforcement priorities for the coming year.
Continue Reading Senator Grassley and Senior DOJ Official Discuss Potential False Claims Act Changes and Enforcement Priorities

Earlier this month, the United States Court of Appeals for the Tenth Circuit issued a decision that provided further clarity on the False Claims Act’s standard for materiality.  The decision, United States ex rel. Janssen v. Lawrence Memorial Hospital, further demonstrated that materiality should be viewed through the eyes of the government customer rather than an hypothetical bystander.  The decision also reconfirmed that the FCA is not a “general antifraud statute” and that contractual or regulatory language conditioning payment on compliance will not necessarily prove that noncompliance was material.  Lawrence therefore serves as an important reminder to government contractors, practitioners, and other stakeholders about the significance of the materiality element in FCA litigation.
Continue Reading Tenth Circuit Provides New Material on FCA’s Materiality Standard

The False Claims Act has long protected relators from retaliation for preparing a qui tam complaint.  But what if an employee “blows the whistle” on a garden-variety problem — for instance, a laboratory that she believes is falling short of standards in a federal funding agreement?
Continue Reading Blowing the Whistle on a Breach of Contract? D.C. Circuit Addresses Scope of FCA’s Anti-Retaliation Rules

Last year, we wrote about a trial court’s decision to dismiss a False Claims Act (“FCA”) complaint regarding alleged Trade Agreements Act (“TAA”) non-compliances because the relator failed to plead fraud with “particularity” under Rule 9(b).  That decision offered a sweeping rebuke of speculative FCA claims, and emphasized why it can be difficult to present a valid FCA claim based on a potential violation of a complex regulatory scheme like the TAA.

Last month, the United States Court of Appeals for the Seventh Circuit unanimously affirmed that decision in United States ex rel. Berkowitz v. Automation Aids, Inc., — F.3d — , 2018 WL 3567836 (7th Cir. July 25, 2018).  In doing so, the Seventh Circuit provided additional guidance about various topics, including the Rule 9(b) standard for implied certifications and the power of the materiality defense.  Our takeaways are below.
Continue Reading Alleged Sales of Non-TAA-Compliant Products Under GSA Schedule Contracts Are Not False Claims, 7th Circuit Holds

Due to the government’s increased focus on domestic preference requirements – for example, through President Trump’s formal policy and action plan for agencies to “scrupulously monitor, enforce, and comply” with the so-called “Buy American Laws,” and Congress’s proposed legislation to make certain Buy American requirements more robust – contractors should not be surprised if there

Last year, the Supreme Court’s watershed Escobar ruling altered the landscape of False Claims Act litigation when it declared that the FCA’s materiality requirement presented a “demanding” barrier to plaintiffs alleging contractual non-compliance. In the 15 months since that time, lower courts have issued a steady stream of rulings interpreting and refining this standard. In the latest—and perhaps most consequential—of these rulings, the Fifth Circuit overturned a $663 million FCA jury award on materiality grounds in the bellwether case of U.S. ex rel. Harman v. Trinity Industries, Inc. While the outcome may not be a surprise given the trend in recent decisions addressing the FCA’s materiality requirement—not to mention an earlier Fifth Circuit ruling involving a strikingly similar issue—Trinity serves as a forceful reminder of the formidable barrier to recovery presented by the materiality requirement.
Continue Reading Trinity: Divine Fifth Circuit Ruling Gives FCA Defendants Reason for Praise