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
Supreme Court Shakes Up FOIA Exemption for Confidential Information
On Monday, the Supreme Court significantly altered how government agencies will treat confidential commercial information protected from disclosure by Exemption 4 of the Freedom of Information Act (“FOIA”) — an issue that recurs repeatedly with respect to information submitted by contractors to government agencies. Food Marketing Institute v. Argus Leader Media, No. 18-481 (U.S. June 24, 2019). The Court overturned 45 years of lower-court precedent requiring that the submitter show both that the information was not publicly disclosed, and that its release would cause substantial competitive harm. The Court’s decision seemingly expands the scope of Exemption 4 by removing the “substantial competitive harm” requirement. However, the effect of this apparent expansion is unclear, because the Court suggested but did not resolve whether Exemption 4 also requires a new element: a showing that the submitter’s information was provided under an assurance by the government that it would keep the information confidential.
Notwithstanding the question left open by the Court, Food Marketing points the way to several steps that contractors can take to protect their commercial and financial information from release under the new interpretation of Exemption 4.Continue Reading Supreme Court Shakes Up FOIA Exemption for Confidential Information
Supreme Court Extends Statute of Limitations for Relators in FCA Cases, in Limited Circumstances
As previously discussed on this blog, the Supreme Court announced last year that it would resolve a circuit split over when a relator needed to file a qui tam action under the False Claims Act (“FCA”). Earlier this month, the Court decided in Cochise Consultancy Inc. v. United States ex rel. Hunt, that relators can — in limited circumstances — take advantage of the FCA’s 3-year “alternative” statute of limitations, which means they may file their complaints up to four years after the default 6-year period has expired.
Now that the dust has settled, it is worth stepping back to take stock of the ruling’s practical effect. We believe that Cochise will have limited impact on most qui tam actions, although it leaves some important questions open. For FCA aficionados, the ruling by Justice Thomas also foreshadows a plain-reading, textual approach to future questions that may arise.
Continue Reading Supreme Court Extends Statute of Limitations for Relators in FCA Cases, in Limited Circumstances
New DOJ Cooperation Credit Guidelines a Welcome Sign, but Key Questions Remain Unresolved
This week, the Department of Justice (“DOJ”) released formal guidelines (“the Guidelines”) for awarding credit to entities that cooperate in False Claims Act (“FCA”) investigations. Frequently hinted at by DOJ officials in recent speeches and public statements, the Guidelines have been eagerly anticipated by practitioners in the FCA space.
Despite the build-up, the Guidelines are hardly revolutionary in many respects, as they largely memorialize existing discretionary practices for awarding cooperation credit that are well familiar to practitioners in the area. Nonetheless, the codification of the Guidelines in the Justice Manual may prove to be a significant development, especially if this more formal policy statement results in greater transparency and consistency in settlement discussions with DOJ. Unfortunately, the Guidelines leave unresolved certain key questions, and whether DOJ ultimately achieves its objective of promoting increased disclosure and cooperation will depend substantially on the manner in which the Guidelines are implemented.
Continue Reading New DOJ Cooperation Credit Guidelines a Welcome Sign, but Key Questions Remain Unresolved
Debate Over Qui Tam Constitutionality Resumes After 20-Year Hiatus
The motivating force behind the False Claims Act, 31 U.S.C. §§ 3729-3733 (“FCA”) is its provision for qui tam enforcement, which authorizes private parties (aka relators) to initiate FCA cases on behalf of the United States. Id. § 3730(b)(1). Immediately after re-invigoration of the FCA in 1986, scholars and litigants questioned the constitutional validity of statutory authorization for relators to sue on behalf of the U.S. government. After 15 years of litigation, this debate withered, but has been recently re-invigorated.
This post summarizes four principal challenges to the constitutionality of qui tam enforcement, and then discusses two recent events in which these challenges have reappeared: the confirmation hearings for Attorney General nominee William Barr and a cert petition that asks the Supreme Court to rule on qui tam constitutionality.
Continue Reading Debate Over Qui Tam Constitutionality Resumes After 20-Year Hiatus
A Tale of Two Protests: Recent GAO Decisions Highlight Impaired Objectivity OCIs
Organizational conflicts of interest (OCIs) are perpetually thorny issues in federal procurement that contracting officers are required to identify and evaluate “as early in the acquisition process as possible.”[1] Although the Government Accountability Office (GAO) has identified several OCI categories,[2] two recent decisions highlight so-called impaired objectivity OCIs, which arise when a contractor’s ability to provide objective advice or recommendations to the government will be undermined by competing interests. The two decisions serve as an important reminder of what does — and does not — qualify as meaningful consideration by the contracting officer in such situations, and how prospective contractors can assist in identifying and mitigating such OCIs.
Continue Reading A Tale of Two Protests: Recent GAO Decisions Highlight Impaired Objectivity OCIs
Time to Resolve a Question About Time: Supreme Court to Consider FCA’s Statute of Limitations
When does a private party need to file a qui tam action under the False Claims Act (“FCA”)? Such a seemingly simple question has resulted in three different answers from six different courts. This past Friday, November 16, 2018, the Supreme Court announced it would resolve that circuit split — by granting a request to review the Eleventh Circuit’s decision in United States ex rel. Hunt v. Cochise Consultancy, Inc. The case will merit close attention, as the ultimate outcome could help protect government contractors from intentional and prejudicial delay in litigation.
Continue Reading Time to Resolve a Question About Time: Supreme Court to Consider FCA’s Statute of Limitations
Alleged Sales of Non-TAA-Compliant Products Under GSA Schedule Contracts Are Not False Claims, 7th Circuit Holds
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
Takeaways From Recent FCA Decisions On Buy American Act and Trade Agreements Act Compliance
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
Continue Reading Takeaways From Recent FCA Decisions On Buy American Act and Trade Agreements Act Compliance
UPDATED: Covington’s Escobar Tracker
In Universal Health Services v. United States ex rel. Escobar, 136 S. Ct. 1989 (2016), the Supreme Court changed the landscape for False Claims Act litigation. The Court endorsed implied certification liability in certain circumstances, but set a high bar for demonstrating the materiality of a violation of law,
Continue Reading UPDATED: Covington’s Escobar Tracker