Over the last decade, False Claims Act (“FCA”) litigation has exploded, and actions asserting new theories of liability are resulting in increasingly large recoveries. Last year the U.S. Department of Justice (DOJ) announced that it had recovered $3.8 billion under the federal FCA in FY 2013. From all appearances FY 2014 promises to be another “banner year for civil fraud recoveries,” and the DOJ has already put up impressive numbers, particularly against pharmaceutical and medical device companies, including a massive $2.2 billion settlement with Johnson & Johnson, as well as settlements with Endo Health Solutions Inc. ($192.7 million), Halifax Hospital Medical Center ($85 million), and Amedisys, Inc. ($150 million).
While the DOJ continues to vigorously pursue FCA cases against companies in the health care and other sectors, cash-strapped states are now following suit. State Attorneys General (AGs) have increasingly pursued novel and creative FCA actions, as have private plaintiffs, who are authorized by qui tam provisions to stand in the shoes of states to sue and receive part of any recovery. A driver of this action was the Deficit Reduction Act (DRA) of 2005, which authorized states to receive, in addition to their own recoveries, 10 percent of the federal government’s share of recovered Medicaid funds if their FCAs are at least as robust as the federal FCA. As a result, since 2005 nearly a dozen states have either enacted false claims statutes or have amended existing statutes to make them equally or more robust than the federal FCA, including incorporating qui tam provisions and broadening the circumstances under which companies can be found liable for violations.
For example, late last year, in response to the DRA, New York state amended its FCA (New York State Finance Law § 187, et seq. (NY FCA)), to bring its false claims law more in line with the federal FCA. The New York statute now includes a “reverse false claims” provision that imposes liability as broadly as the federal FCA, providing that a person may be held liable for violating the NY FCA if that person “[k]nowingly conceals or knowingly and improperly avoids or decreases an obligation to pay or transmit money or property to the state or a local government, or conspires to do the same….” (NY FCA § 189(1)(h)). The New York amendments also allow the state, as intervenor in a qui tam case, to relate back to the qui tam plaintiff’s filing date for statute of limitations purposes, expanding the period for which the state can seek recoveries. In addition, the law provides attorneys’ fees for successful qui tam plaintiffs, incentivizing the plaintiff’s bar to partner with the state or pursue their own cases under the NY FCA. Continue reading “State False Claims Act Enforcement Explodes in 2014”
Recently, the U.S. District Court for the District of Columbia ruled that a company’s work product created during an internal mandatory disclosure investigation was not protected by the attorney-client privilege or attorney work-product doctrines. During discovery in United States ex. rel. Barko v. Halliburton Co. et al., KBR sought to withhold internal investigation reports relating to alleged fraudulent activities during its performance of the Logistics Civil Augmentation Program (LOGCAP III) contract in Iraq. The ruling casts doubt on whether documents created pursuant to internal investigations are protected by the attorney-client privilege or work-product doctrines and could significantly impact how companies conduct internal investigations, including their mandatory disclosure practices.
In the past two months, three important changes took place that will affect the federal workplace. First, in early February, President Obama signed an Executive Order raising the minimum wage for federal contractors from $7.25 to $10.10. On the heels of that Executive Order, in March, the President signed a memorandum directing the Department of Labor (“DOL”) to “propose revisions to modernize and streamline” the existing Fair Labor Standards Act’s overtime regulations. Finally, three days ago, the DOL’s new federal contract affirmative action regulations took effect—a development we first analyzed in this 
On Wednesday, March 12, 2014, the Department of Defense (DOD) and General Services Administration (GSA) Joint Working Group on Improving Cybersecurity and Resilience Through Acquisition (Working Group) requested 
The American Arbitration Association (AAA) recently adopted optional Appellate Rules which significantly change the resolution of post-award issues. The new Appellate Rules, effective November 1, 2013, permit appeals of arbitration rulings directly to an AAA appellate panel. Given the difficulty in overturning traditional arbitration awards, these new rules could help protect against factually and legally flawed outcomes. However, they also could add both time and expense to an arbitration, limiting the efficiencies and cost savings that often lead contractors to use arbitration provisions in the first place. This alert discusses the new Appellate Rules, and some things to keep in mind when evaluating whether to use them.