Tag Archives: False Claims Act

The Perils of Bad Recordkeeping: A Lack of Country of Origin Documentation Results in Adverse Inference of Non-Compliance with the Trade Agreements Act

In a recent False Claims Act (“FCA”) case, United States ex rel. Louis Scutellaro v. Capitol Supply, Inc., the U.S. District Court for the District of Columbia held that the defendant’s failure to retain Country of Origin (“COO”) documentation for the products it sold to the government entitled the relator and the government to an … Continue Reading

Common Sense Prevails: “Tougher” To Satisfy Rule 9(b) Standard in “Implied Certification” FCA Case Arising from GSA Schedule Contractors’ Alleged TAA Non-Compliance

A U.S. District Court recently dismissed a False Claims Act (FCA) qui tam action alleging that numerous GSA Schedule contractors violated their obligations under the Trade Agreements Act (TAA), resulting in the submission of false claims under the “implied certification” theory of FCA liability.  As discussed further below, the court’s decision — United States ex rel. Berkowitz … Continue Reading

First-To-File Rule of the False Claims Act Continues to Present Interpretive Challenges

Two years ago, when the Supreme Court addressed the “first-to-file” bar of the False Claims Act (FCA) in Kellogg Brown & Root Services, Inc. v. United States ex rel. Carter, it predicted that its holding might “produce practical problems,” as “[t]he False Claims Act’s qui tam provisions present many interpretive challenges, and it is beyond … Continue Reading

Confidentiality Agreements Continue To Pose Potential Compliance Trap for Contractors

Federal contractors who require employees to sign confidentiality agreements—including those selling only commercial products or in small quantities—need to examine their agreements closely. For the last two years, the government has sought to prohibit confidentiality agreements that restrict employees’ ability to report fraud, waste, or abuse to “designated investigative or law enforcement representative[s]” for federal … Continue Reading

Supreme Court Hears Argument Over False Claims Act’s Seal Requirement

Last week, the United States Supreme Court heard argument in State Farm Fire & Casualty Co. v. United States ex rel. Rigsby over the False Claims Act’s (FCA) “seal requirement.”  The controversy highlights an important statutory tool for government contractors who face allegations of making false claims for payment.  It also provides important lessons for … Continue Reading

Employee Efforts to Stop Employer FCA Violation is Protected Activity Even When No Distinct Possibility of FCA Litigation, says Fourth Circuit

The Fourth Circuit recently held, in an unpublished opinion, that the anti-retaliation or “whistleblower” provisions of the False Claims Act (“FCA”) protect an individual’s efforts to stop a contractor from violating the FCA, even when there is no “distinct possibility” of litigation.  This “distinct possibility” standard was adopted prior to 2009 when the whistleblower provision … Continue Reading

ASBCA Addresses CDA Jurisdiction Over Claims Involving Contractor Fraud

The Armed Services Board of Contract Appeals (“ASBCA” or the “Board”) recently issued an opinion addressing several important, and controversial, topics of interest to government contractors.  The lengthy opinion addressed key issues related to the Board’s jurisdiction over government claims and affirmative defenses based on alleged contractor fraud, the Contract Disputes Act (“CDA”) statute of limitations, … Continue Reading

Supreme Court on False Claims Act: Implied Certification OK, But Materiality Is No Gimme

Last week, in Universal Health Services Inc. v. U.S. ex rel. Escobar, the Supreme Court unanimously affirmed the viability of the “implied false certification” theory of False Claims Act liability, at least in certain circumstances.  Writing for a unanimous Court, Justice Thomas explained that a defendant can face FCA liability under an implied certification theory … Continue Reading

Civil Penalties Across All Federal Agencies Set to Increase Significantly by August 2016

On May 3, 2016, the U.S. Railroad Retirement Board (“RRB”) issued an interim final rule adjusting civil False Claims Act (“FCA”) and Program Fraud Civil Remedies Act (“PFCRA”) monetary penalty amounts for the RRB.  The interim final rulemaking resulted in an increase of the PFCRA maximum to $10,781 and a new FCA range of $10,781-$21,563.  … Continue Reading

Fourth Circuit Distinguishes Supreme Court’s Rockwell International Decision, Determines that Qui Tam Plaintiff May Amend FCA Complaint With “Further Detail” Gained From Public Disclosure

In U.S. ex rel. Beauchamp v. Academi Training Ctr., LLC, the Fourth Circuit recently determined that the public disclosure rule did not necessarily bar a False Claims Act (“FCA”) qui tam suit where the plaintiff amended its complaint with details gained from a news story that was published online after its prior complaint was filed. … Continue Reading

High Court to Resolve Split of Authority on “Implied” False Claims

On December 3rd, the Department of Justice released its annual summary of recoveries in False Claims Act (FCA) cases.  Although down from last year’s $5.69 billion, this year’s recoveries of $3.5 billion demonstrate the power that the government wields to drive settlements of fraud allegations.  Of the $3.5 billion, $1.1 billion in recoveries are attributable … Continue Reading

Contractor Defeats Government’s Opportunistic Allegations of Fraud

On October 31, 2015, the U.S. Court of Federal Claims (CoFC) in Horn & Associates, Inc. v. United States (No. 08-415C) rejected three fraud-based counterclaims that were filed by the U.S. Government in response to a breach of contract action brought by the plaintiff, Horn & Associates (Horn), through a certified claim under the Contract … Continue Reading

No Money for Nothing — Eighth Circuit Limits Relators’ Ability to Recover a Share of Government Settlements of Qui Tam Suits

Following an 8-2 en banc decision issued by the United States Court of Appeals for the Eighth Circuit earlier this month, potential relators may think twice before bringing their False Claims Act (“FCA”) qui tam suits in the Eighth Circuit.  In Rille v. PricewaterhouseCoopers LLP, No. 11-3514 (8th Cir. Oct. 5, 2015), the Court vacated a … Continue Reading

Ninth Circuit Narrows Application of the False Claims Act’s Public Disclosure and First to File Bars

United States ex rel. Hartpence v. Kinetic Concepts, Inc., No. 12-55396 (9th Cir. July 2015) is one of many recent decisions limiting a contractor’s ability to dismiss False Claims Act (“FCA”) lawsuits at an early stage of the litigation.  In Hartpence, the Ninth Circuit resurrected two FCA cases in one sweeping decision by interpreting the … Continue Reading

D.C. Circuit Creates Circuit Split Regarding Jurisdictional Nature of the False Claims Act’s First-to-File Rule

In the recently decided U.S. ex rel. Heath v. AT&T Inc., No. 14-7094 (June 23, 2015), the D.C. Circuit rejected the general consensus of the circuit courts and held that the False Claims Act’s (“FCA”) first-to-file rule is not jurisdictional.  This decisions creates a circuit split between the D.C. Circuit and the First, Fourth, Fifth, … Continue Reading

Judge Rejects Government’s Objections and Orders 1st Bifurcated FCA Trial of Its Kind

Last week, a federal court reaffirmed its decision to hold an upcoming False Claims Act (“FCA”) trial in two parts, in what is the known instance of a court bifurcating the liability phase of a FCA trial. The case, United States v. AseraCare, Inc., Civ. Action No. 2:12-CV-245-KOB (N.D. Alabama), concerns the alleged submission of … Continue Reading

Seventh Circuit Rejects Doctrine of Implied False Certification to Establish False Claims Act Liability

In United States v. Sanford-Brown, Limited, No. 14-2506 (7th Cir. June 8, 2015), the Seventh Circuit declined to adopt the “so-called doctrine of implied false certification” to establish liability under the False Claims Act (“FCA”). This doctrine treats an invoice submitted by a contractor as an implicit representation that the contractor has complied with any … Continue Reading

College’s Falsification of Grades and Attendance Records May Trigger FCA Liability

On Wednesday, April 29, the Eighth Circuit issued an opinion holding that evidence of a for-profit college’s falsification of grades and attendance records may support a claim that it “fraudulently induced the Department of Education [“DOE”] to provide [it] funds,” and was thus liable under the False Claims Act (“FCA”).  Specifically, the claim alleged that, … Continue Reading

SEC and State OIG Allege that Contractors’ Policies, Procedures, and Agreements Suppress Whistleblowing

In a span of two days, two separate agencies took action against contractor policies and agreements that may discourage whistleblowers.  On March 30, 2015, the U.S. Department of State Office of Inspector General (“State OIG”) issued a report contending that certain contractor policies and agreements have a “chilling effect” on whistleblowers.  On April 1, 2015, … Continue Reading

First Circuit Finds Pharma Relators’ Suit Ten Years Too Late Under First-to-File Rule

This week, the U.S. Court of Appeals for the First Circuit declined to revive a False Claims Act qui tam suit against Baxter Healthcare Corporation, agreeing with the district court that the relators were not the “first to file.” The case is United States ex rel. Ven-A-Care of the Florida Keys, Inc. v. Baxter Healthcare … Continue Reading

Third Circuit Requires Actual Knowledge of Fraudulent Claim to Satisfy FCA’s “Direct” Knowledge Requirement

The Third Circuit recently ruled that a qui tam relator must have “direct knowledge” of the fraud or false statements at issue in order to satisfy the False Claims Act’s (“FCA”) “original source” jurisdictional requirement.  A relator fails to satisfy the direct knowledge requirement where his or her allegations are mere inferences based on the … Continue Reading

Supreme Court Will Consider Petition on False Claims Act Penalties

When the Supreme Court convenes its “long conference” on Monday to consider pending petitions for certiorari, much of the public focus will be on the various cases about same-sex marriage.   Government contractors, however, should pay closer attention to Gosselin World Wide Moving, N.V. v. United States ex rel. Bunk et al., a case involving the … Continue Reading

Eighth Circuit Adopts Flexible Pleading Standard for FCA Whistleblowers

The Eighth Circuit recently joined the ranks of four other federal circuits allowing whistleblowers to plead False Claims Act (FCA) violations without identifying specific examples of false claims submitted for reimbursement.  In so doing, the Eighth Circuit concluded that the heightened federal pleading standards required for fraud claims are satisfied where a whistleblower can provide … Continue Reading
LexBlog