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.
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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.
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As we blogged previously, Federal prosecutors are increasingly pressing claims under the Savings and Loan crisis-era Financial Institutions Reform, Recovery, and Enforcement Act (FIRREA), as they continue to pursue alleged misconduct by financial institutions in the run-up to the 2008 crash. Often brought in conjunction with FCA claims, FIRREA gives prosecutors a much longer (10 year) statute of limitations, as well as more lenient burdens of proof. This trend continues with Citigroup’s $7 billion settlement announced Monday, which included a $4 billion FIRREA civil fine.
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On June 27, 2014, the Department of Justice (“DOJ”) elected to intervene in a FCA suit based solely on an alleged failure to timely refund overpayments to the government. The failure to refund provision was one of the significant changes to the FCA wrought by the Affordable Care Act, and this suit is believed to be the first one in which DOJ has intervened based solely on allegations of a failure to refund.
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On June 25, 2014, the U.S. Department of Health and Human Services’ Office of Inspector General (“OIG”) released a Special Fraud Alert addressing two increasingly common relationships between clinical laboratories and physicians that may raise fraud and abuse concerns—payments to referring physicians for (i) specimen collection and (ii) data submission/review for laboratory registries. This Special Fraud Alert is likely a response to the increasingly competitive nature of the clinical laboratory industry as a result of downward pressure on reimbursement, new health reform delivery structures and the influx of small esoteric laboratories offering limited, specialized test menus. In this environment the OIG is concerned that some laboratories may be taking steps to win business from referring physicians in potential violation of the Federal Anti-Kickback Statute. Arrangements that are the focus of Special Fraud Alerts are common targets for FCA claims. More information about the Special Fraud Alert and a link to the underlying document can be found here.
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July 2, 2014 11:44 AM
| Posted by Jaime Jones and Brenna Jenny
| Topic(s): Penalties
Three industry advocacy groups recently filed an amicus brief urging the Supreme Court to provide clear measures of proportionality between misconduct and financial liability under the FCA. See Gosselin World Wide Moving, N.V. v. United States ex rel. Bunk, U.S., No. 13–13–99, amicus brief filed 6/23/14.
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July 1, 2014 3:10 PM
| Posted by Ellyce Cooper and Patrick Kennell
| Topic(s): Privilege Issues
Last Friday, the D.C. Circuit issued an opinion in In re Kellogg Brown & Root, Inc., No. 14-5055 (D.C. Cir. June 27, 2014), reversing the much discussed privilege ruling in U.S. ex rel. Barko v. Halliburton Co., 1:05-CV-1276 (D.D.C. Mar. 6, 2014), a case we previously wrote about here and here. In reversing the District Court’s opinion, the Court of Appeals held that “[s]o long as obtaining or providing legal advice was one of the significant purposes of the internal investigation, the attorney-client privilege applies, even if there were also other purposes for the investigation.” (Slip Op. at 7-8) (emphasis added).
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On July 1, the Supreme Court granted the petition for a writ of certiorari in Kellogg Brown & Root Services, Inc. v. United States ex rel. Carter, a case which will have significant implications for two key issues under the False Claims Act: statute of limitations and the first-to-file bar.
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The U.S. District Court for the District of Columbia ruled on June 19, 2014 that the Wartime Suspension of Limitations Act (WSLA) does not apply to the FCA. As a result, the court dismissed Floyd Landis’s non-intervened qui tam claims against his former cycling teammate, Lance Armstrong.
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