The D.C. Circuit reversed the district court’s dismissal of a serial relator’s qui tam lawsuit under the FCA’s first-to-file bar in U.S. ex rel. Heath v. AT&T, Inc., finding that the relator’s two qui tam lawsuits targeted factually distinct types of frauds. The D.C. Circuit further determined that the relator’s qui tam lawsuit satisfied the pleading requirements of Rule 9(b).
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Circuit Courts
Enforceability of Employee Releases on Qui Tam Actions
By Richard Arnholt on
Posted in 9th Circuit, Government Contracts
Employee severance packages and settlement agreements often include a broad waiver of any claims, known or an unknown, which an employee may have against the company. Although such broad pre-filing releases are highly recommended, companies doing business with the government should be cautioned that these waivers do not always protect against False Claims Act (FCA) litigation. A line of federal cases has established that these so-called “pre-filing releases” are sometimes unenforceable against suits filed by whistleblowers, or qui tam actions, for public policy reasons.
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United Technologies is Saved from $657 million False Claims Act Verdict by the Sixth Circuit
By Todd Overman & Bass, Berry & Sims on
On April 6, 2015, the Sixth Circuit delivered a costly blow to the United States government to the tune of $657 million when it issued its opinion in United States v. United Technologies Corporation and remanded the case back to the district court to review the damages award, yet again.
This was the second time that the Sixth Circuit heard arguments deriving from the United States False Claims Act case against Pratt & Whitney (“Pratt”), now owned by United Technologies, for false statements the company made when competing against GE Aircraft for contracts to build F-15 and F-16 jet engines. In 1983, in an attempt to outbid GE Aircraft and make it hard for the government to issue a split-award contract, Pratt misstated its projected costs and certified that the company’s bid included its “best estimates and/or actual costs.” After uncovering Pratt’s overstated costs projections, the government filed both an administrative action against the company in the Armed Services Board of Contract Appeals (“ASBCA”) under the Truth in Negotiations Act and a lawsuit in district court alleging violations of the False Claims Act.Continue Reading United Technologies is Saved from $657 million False Claims Act Verdict by the Sixth Circuit
Sixth Circuit Addresses the “Public” Aspect of the Public Disclosure Bar
By Taylor Chenery on
On February 25, 2015, the Sixth Circuit reversed a district court’s decision to dismiss FCA allegations pursuant to the FCA’s public disclosure bar because the “publicity” aspect of the public disclosure bar was not satisfied. The Sixth Circuit’s opinion became the most recent appellate decision to require disclosure beyond the government or the government’s agents or contractors to implicate the public disclosure bar.
In U.S. ex rel. Whipple v. Chattanooga-Hamilton County Hosp. Authority, OIG instituted an audit of the defendant’s billing practices in response to an anonymous complaint. That audit led to a subsequent investigation by OIG, during which it consulted with the DOJ. In 2009, the defendant resolved the matter through a refund to the government, and the government declined to pursue the matter further.Continue Reading Sixth Circuit Addresses the “Public” Aspect of the Public Disclosure Bar
Eleventh Circuit Refines Public Disclosure Bar Standards
By Matt Curley & Brian Roark on
The Eleventh Circuit affirmed the district court’s dismissal of a relator’s qui tam lawsuit under the FCA’s public disclosure bar and, in doing so, concluded that the ACA’s amendments to the public disclosure bar created grounds for dismissal for failure to state a claim, rather than for lack of jurisdiction. In U.S. ex rel. Osheroff v. Humana, Inc., the relator alleged that various Florida-based clinics and health insurers violated the FCA through the provision of various services to patients as kickbacks designed to induce and influence the patients’ healthcare decision-making. Defendants pointed to allegations in state court litigation and news media as publicly disclosing the allegations upon which the relator based his qui tam lawsuit, and the district court agreed.
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