Last year, we reported about a provision buried in the budget bill that called for all federal agencies to issue regulations by July 1, 2016 proposing increases to civil penalties in FCA cases under their jurisdiction. The first of those regulations has just been published, and it confirms that the range of civil penalties is set to almost double this year – with further increases to come in subsequent years.
Last year, we wrote about a district court decision disqualifying an attorney from serving as relator in a False Claims Act (“FCA”) action that he initiated against his client’s adversary in pending litigation (see here and here). The attorney and would-be-relator, Donald Holmes, was retained by an insurance company, Munich Re, in connection with arbitration against Northrop Grumman, who had submitted claims for damage to its shipyards allegedly resulting from Hurricane Katrina. Holmes, on behalf of the insurance company, filed a complaint in federal court to obtain certain documents from the Navy allegedly relevant to the arbitration. He eventually obtained the documents subject to a protective order that forbade their disclosure outside of the arbitration. However, Holmes promptly filed an FCA complaint against Northrop, alleging Northrop improperly used government funds allocated to compensate for Hurricane Katrina damage to instead cover cost overruns that occurred before the storm, based on the documents obtained from the Navy —in clear violation of the protective order.
Last Thursday one of the subcommittees of the House Judiciary Committee held a hearing on Oversight of the False Claims Act. Four stakeholders represented the diverse viewpoints of the plaintiffs’ bar, a compliance program reform initiative, the defense bar, and in-house counsel (copies of their prepared written testimony can be found here, here, here, and here).