False Claims Act

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When the United States government decides to intervene in False Claims Act litigation after initially declining intervention, it is not “déjà vu all over again.”  Instead, as one court has recognized, the “government is getting on a moving train,”[1] and it can only be permitted to “intervene at a later date” if it can show “good cause” for doing so.  See 31 U.S.C. § 3730(c)(3).

On February 24, 2021, a Tennessee federal district court offered a pointed reminder of this principle when it denied a government motion to intervene in a qui tam suit after DOJ originally had declined to intervene six months earlier.  See U.S. ex rel. Odom v. Southeast Eye Specialists, No. 3:17-cv-00689 (M.D. Tenn. Feb. 24, 2021).  In so ruling, the court vacated a magistrate judge’s Report & Recommendation (“R&R”), which found that DOJ had established “good cause” for intervention.  Although motions to intervene pursuant to Section 3730(c) are often granted, the recent order issued in U.S. ex rel. Odom v. Southeast Eye Specialists illustrates that the “good cause” showing is not a hollow requirement and that it can serve as a meaningful constraint on belated attempts by DOJ to intervene to pursue a case after initially declining to do so.

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Continue Reading False Claims Act Update: District Court Rejects DOJ Motion to Intervene for Lack of “Good Cause”

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.
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Continue Reading Senator Grassley and Senior DOJ Official Discuss Potential False Claims Act Changes and Enforcement Priorities

As the recent SolarWinds Orion attack makes clear, cybersecurity will be a focus in the coming years for both governmental and non-governmental entities alike.  In the federal contracting community, it has long been predicted that the government’s increased cybersecurity requirements will eventually lead to a corresponding increase in False Claims Act (FCA) litigation involving cybersecurity compliance.  This prediction may soon be proven true, as a December 2020 speech from Deputy Assistant Attorney General Michael Granston specifically identified “cybersecurity related fraud” as an “area where we could see enhanced False Claims Act activity.”  This post discusses recent efforts to use the FCA to enforce cybersecurity compliance — and, based on those efforts, what government contractors may expect to see in the future. …
Continue Reading Cybersecurity and Government Contracting: False Claims Act Considerations

Under the False Claims Act’s (“FCA”) first-to-file bar, “no person other than the Government may intervene or bring a related action based on the facts underlying the pending action.”  But can a relator amend her complaint to add, remove, or substitute relators without violating the first-to-file bar?  Recently, the Third Circuit in In re Plavix…

Late last year, a spokesman for the Department of Defense announced without fanfare that the agency would increase audits of certified cost or pricing data under the Truth in Negotiations Act (“TINA”).  While the full effect of that enhanced focus on TINA compliance remains to be seen, a recent decision by the Armed Services Board of Contract Appeals (“ASBCA”) provides helpful guidance for navigating upcoming TINA audits and defending against defective pricing claims, particularly in situations involving an on-going program where documents contain both facts and judgmental estimates.
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Continue Reading With Potential New TINA Audits on the Horizon, the ASBCA Provides a Helpful Primer on Defending Against Defective Pricing Claims

This week marks the four-year anniversary of the Supreme Court’s landmark False Claims Act decision in Universal Health Services, Inc. v. Escobar, 136 S. Ct. 1989 (2016).  In Escobar, the Supreme Court confirmed that the question of government knowledge lies at the heart of FCA liability determinations, but it did not specifically address…

The Fourth Circuit recently rejected a trial court’s ruling that a contractor’s mandatory disclosure submission waived its attorney-client privilege over the underlying internal investigation. In re Fluor Intercontinental, Inc., No. 20-1241 (Mar. 25, 2020) (per curiam). The court granted Fluor’s mandamus petition and directed the district court to vacate its orders requiring Fluor to produce privileged information from its internal investigation relating to the subject matter of four statements in its mandatory disclosure submission. Id. at 1. In doing so, the Fourth Circuit confirmed that “Government contractors should not fear waiving attorney-client privilege” when making mandatory disclosures. It also curtailed an outlier ruling and provided reassurances to other corporations and individuals who routinely make similar disclosures and fact proffers to the government.…
Continue Reading Have No Fear: Fourth Circuit Confirms Contractors Shouldn’t Fear Privilege Waivers When Making Mandatory Disclosures

On February 18, 2020, Washington Metropolitan Area Transit Authority (“WMATA”) Inspector General Geoffrey Cherrington announced that special agents from WMATA would be partnering with the Department of Justice’s Procurement Collusion Strike Force (“PCSF”) to prevent and detect fraud affecting WMATA.  The announcement portends a growing partnership amongst federal, state, and local entities in the procurement fraud space that could reverberate well beyond the Washington metro area.…
Continue Reading A Coalition Grows: What WMATA’s Partnership with the Procurement Collusion Strike Force Means for Government Contractors

On February 27 and 28, 2020, Joseph H. (Jody) Hunt, Assistant Attorney General for DOJ’s Civil Division, and Michael Granston, Deputy Assistant Attorney General, Commercial Litigation Branch, spoke about False Claims Act (“FCA”) enforcement at the Federal Bar Association’s annual Qui Tam Conference in Washington, D.C. They highlighted FCA enforcement priorities for 2020, and offered insights on the Department’s dismissal policy and cooperation policy – two topics that Deputy Associate Attorney General Stephen Cox also addressed in remarks earlier this year.…
Continue Reading Senior DOJ Attorneys Speak About FCA Enforcement Priorities, Dismissal, and Cooperation

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.
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Continue Reading Tenth Circuit Provides New Material on FCA’s Materiality Standard