FCA NOW

29 Oct, 2015

Eighth Circuit Vacates Relators’ FCA Settlement Recovery; Concludes that the FCA “Allows Relators to Recover a Percentage of the Proceeds of the Settlement of ‘the Claim’ Brought by the Relators, and Only That Claim”

The U.S. Court of Appeals for the Eighth Circuit recently vacated an award of settlement proceeds to relators of several related qui tam actions because the district court failed to make factual findings as to whether the government’s settlement with one of the defendants was based on claims that factually overlapped with the claims brought by the relators. Rille v. PricewaterhouseCoopers LLP, et al., No....

False Statement / Procedure

9 Oct, 2015

Supreme Court Asked To Clarify Application of Rule 9(b) in FCA Cases

On September 21, 2015, counsel for AT&T, Inc., and other telecommunications providers asked the U.S. Supreme Court to resolve a circuit split over what relators asserting FCA claims must do to meet Federal Rule of Civil Procedure 9(b)’s requirement of particularity. Pet. for a Writ of Cert., AT&T, Inc. v. United States of America ex rel. Heath, No. 15-363 (Sept. 21, 2015). Under the Universal...

Express Certification / False Statement / Procedure

30 Sep, 2015

Utah Court Dismisses False-Certification Case Alleging Submission of False Certificates of Conformance

On September 22, 2015, the U.S. District Court for the District of Utah dismissed a qui tam complaint brought against Triumph Gear Systems, Inc. (“TGS”) and its parent company Triumph Group, Inc. (“Triumph”). In an opinion issued by District Judge Dale A. Kimball, the Court found that the complaint failed at the “most basic level” to identify a single false claim submitted to the government....

False Statement / Persons subject to FCA

26 Sep, 2015

Judge Dismisses FCA Claim Against City of Chicago; Concludes that “Subsequent Nonperformance of a Future Commitment” Was Not a Falsehood Under FCA

On September 16, 2015, the U.S. District Court for the Northern District of Chicago dismissed a False Claims Act (FCA) case against the City of Chicago, because the qui tam complaint did not satisfy the relevant pleading standard. In an opinion issued by District Judge Andrea Wood, the court found that the complaint failed to allege facts with particularity as required under Federal Rule of...

False Statement / Scienter

22 Sep, 2015

Southern District of New York Opinion Provides Guidance on Satisfying Scienter Requirement Under False Claims Act

Not every mistake or negligent act gives rise to liability under the False Claims Act. That principle has long been central to the FCA. But the dividing line– between making a mistake, on the one hand, and “knowingly” or “recklessly” submitting a false claim, on the other–can be murky. In United States ex Rel Kirk v. Schindler Elevator Corp., No. 05-cv-2917, 2015 WL 5296714 (S.D.N.Y....

Corporate Integrity Agreement / Enforcement / False Statement

21 Sep, 2015

New Justice Department Directive Underscores Focus on Individuals—and Importance of Cooperation—in False Claims Act Investigations

In a recent memorandum issued to Main Justice litigating components and United States Attorney’s offices nationwide, Deputy Attorney General Sally Quillan Yates emphasized that “fighting corporate fraud and other misconduct” remains a top priority for the Department and the Federal government’s vow to seek “individual accountability for corporate wrongdoing.” The memorandum, which appears to be designed to respond to criticism regarding the Department’s response to...

Insurance Coverage

9 Sep, 2015

Fifth Circuit Concludes That FCA Claim Was Not Covered By Insurance Policy

The U.S. Court of Appeals for the Fifth Circuit recently rejected a shipbuilder’s claim against its insurance company seeking defense and indemnification from a False Claims Act suit. See XL Spec. Ins. Co. v. Bollinger Shipyards, Inc., No. 14-31283, 2015 WL 5052504, 2015 U.S. App. LEXIS 15160 (5th Cir. Aug. 27, 2015). Over a decade ago, shipbuilder Bollinger Shipyards, Inc. retrofitted patrol boats under contract...

Procedure / Public Disclosure

4 Sep, 2015

Third Circuit Upholds Application of pre-ACA Public Disclosure Bar to FCA Claims Filed after the ACA’s Effective Date

On August 26, the United States Court of Appeals for the Third Circuit upheld a district court’s decision to apply the version of the FCA’s public disclosure bar in existence before the enactment of the Patient Protection and Affordable Care Act (“ACA”) to qui tam claims filed after the ACA’s effective date. United States ex rel. Judd v. Quest Diagnostics Inc., No. 14-3156 (3d Cir....

Byrd Amendment / False Statement / Settlements

27 Aug, 2015

Sandia Corporation Agrees to Pay $4.7 Million to Settle Allegations Related to its Lobbying Activities

On August 21, 2015, the Justice Department announced that Sandia Corporation—owned by Lockheed Martin, the world’s largest defense contractor—agreed to pay $4,790,042 to settle allegations that it violated the Byrd Amendment and the False Claims Act by using federal funds for lobbying activities. The settlement with Sandia is a recent example of the Justice Department’s willingness to use the Byrd Amendment as a hook for...

False Statement / Procedure

19 Aug, 2015

Fourth Circuit Affirms Dismissal of FCA Complaint Alleging Contracting Fraud

In an unpublished decision issued on Thursday, August 13, 2015, the Fourth Circuit Court of Appeals reemphasized Federal Rule of Civil Procedure 9(b)’s “stringent particularity requirement” when it affirmed a lower court’s dismissal of plaintiff’s FCA claim, finding “that the district court did not err in concluding that the amended complaint failed to plead fraud with the requisite specificity.” McLain v. KBR, Inc., No. 14-1816...

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