Welcome to Original Source: The Sidley Austin False Claims Act Blog

The False Claims Act (FCA) has long been a key enforcement tool for the federal government in matters involving government contracts or other expenditures of government funds. FCA enforcement has traditionally focused primarily on two industries receiving a substantial amount of government funds: healthcare and defense and other government contractors. Recently, however, FCA enforcement has expanded to other industries, including financial services. Through the False Claims Act Blog, lawyers in Sidley’s White Collar, Healthcare, FDA, Government Contracting, Financial Services, Appellate, and other practices will provide timely updates on new and interesting developments relating to FCA enforcement and litigation.

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August 27, 2014 1:52 PM | Posted by Carol Lynn Thompson and Chris Rendall-Jackson | Topic(s): Public Disclosure
On July 28, 2014, the Seventh Circuit another decision in a string of recent decisions by that court restricting the scope of the public-disclosure bar. read more
August 26, 2014 4:48 PM | Posted by Scott Stein and Brenna Jenny | Topic(s): Anti-Kickback Statute, Knowledge/Scienter
The Southern District of Ohio recently granted defendants’ motion to dismiss in a FCA case based on alleged violations of the Anti-Kickback Statute (“AKS”) through “swapping.” Swapping allegations can take a variety of forms; here, relator claimed that defendant Mobilex (a provider of mobile, on-site x-ray services to Skilled Nursing Facilities (“SNFs”) and long-term care facilities) deeply discounted its services for Part A beneficiaries while charging higher rates to services for Part B beneficiaries. Because Mobilex’s clients are reimbursed on a per diem basis for the x-rays provided to Part A beneficiaries, the facilities allegedly received remuneration in the form of pocketing the extra discount on Part A services. This remuneration, according to relator, was intended to induce facilities to refer to Mobilex the opportunity to provide x-rays to Part B residents as well, at non-discounted prices. read more
August 19, 2014 11:51 AM | Posted by Jay Zimbler | Topic(s): Settlement, Taxes
Last week, in Fresenius Medical Care Holdings, Inc. v. United States, No. 13-2144, __ F. 3d __ (1st Cir. Aug. 13, 2014), the Court of Appeals for the First Circuit affirmed a district court opinion that had allowed a defendant in an FCA action to deduct for federal income tax purposes amounts in excess of both single damages and relator payments. This affirmance is of considerable import because, in a well-reasoned opinion, the First Circuit expressly rejected the government’s “Catch-22” argument that the ability of a taxpayer to deduct at least a portion of this excess was precluded by the absence of an agreement between the parties. read more
August 18, 2014 11:58 AM | Posted by Scott Stein and Joe Dosch | Topic(s): Original Source, Public Disclosure, Procedure
On August 7, 2014, the Eighth Circuit affirmed the dismissal of a qui tam False Claims Act suit, and in doing so offered helpful guidance regarding the proper application of the public disclosure bar (while highlighting an open issue regarding public disclosure). The court also addressed whether consideration of materials outside of the pleadings automatically requires the court to treat a motion to dismiss on public disclosure grounds as a motion for summary judgment. read more
August 7, 2014 1:30 PM | Posted by Kristin Graham Koehler and Elizabeth Kolbe | Topic(s): Dodd-Frank
Almost four years after the passage of the Dodd-Frank Act, two recent developments suggest that clarifications regarding the whistleblower anti-retaliation provisions may be around the corner. read more
August 5, 2014 12:00 PM | Posted by Kristin Graham Koehler and Paul Sampson | Topic(s): Minority Business Enterprise
Government investigators have continued to hone in on one particular type of business arrangement—the use of so-called minority or disadvantaged business enterprises (“MBEs” and “DBEs”) to secure government contracts. Myriad state and federal contracts require MBE or DBE participation, or at least grant advantages to MBE or DBE bidders. As recent prosecutions have demonstrated, businesses have used MBEs or DBEs to win lucrative government contracts, only to perform the work themselves and retain all – or virtually all – of the money the government had intended for the MBEs or DBEs. read more
August 4, 2014 12:09 PM | Posted by Kristin Graham Koehler and Nicole C. Frazer | Topic(s): Privilege Issues
The New Jersey Supreme Court recently held that the common interest rule—which protects attorney-client communications and attorney work product shared among attorneys representing different clients—can trump both statutory and common law rights to access government records. Martin E. O’Boyle v. Borough of Longport, No. A-16-12, 070999 (N.J. July 21, 2014). The Court’s broad rule applies in both civil and criminal cases and lends clarity to New Jersey law on the common interest rule in situations involving requests to access government records. read more
July 25, 2014 11:59 AM | Posted by Scott Stein | Topic(s): Knowledge/Scienter, Government Knowledge, Iqbal/Twombley
On July 22, 2014, the Ninth Circuit issued an important decision supporting the principle that good faith disputes about ambiguous or disputed interpretations of law should not be actionable under the FCA. read more
July 24, 2014 11:27 AM | Posted by Gordon Todd and Paul Sampson | Topic(s): Intervention, Procedure, Relators
In U.S. ex rel. Prince v. Virginia Resources Authority, No. 5:13CV00045, 2014 WL 3405657 (W.D. Va. July 10, 2014), the Western District of Virginia recently held that dismissal of a relator’s suit on procedural grounds does not prejudice the United States’ ability to subsequently to pursue identical FCA claims, despite having declined to intervene in the dismissed action. read more
July 18, 2014 11:47 AM | Posted by Gordon Todd and Marisa West | Topic(s): Procedure, Discovery, Government Knowledge
In a recent decision, the Eastern District of Louisiana compelled the Federal Emergency Management Agency (“FEMA”) to produce a witness for deposition in a qui tam False Claims Act suit despite the agency’s Touhy regulations. Williams v. C. Martin Company Inc., et al., No. 07-6592, 2014 U.S. Dist. LEXIS 91802 (E.D. La. July 7, 2014). The Williams decision may have broad implications for Defendants seeking to discover evidence from Federal agencies in defending against FCA claims. read more
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