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False Claims Act Statistics, News & Analysis

  • 19
  • December
  • 2017

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Escobar Makes No Dent in Criminal Materiality Rules in Fourth Circuit

Last year, we wrote about a then-pending criminal wire fraud case, United States v. Raza, and the potential impact that Escobar’s materiality holding might have on its outcome. The Fourth Circuit recently issued its opinion, deciding that Escobar, if it had any application whatsoever in the criminal law context, did not upset long-held understandings of the objective materiality standard.

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  • 19
  • October
  • 2017

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Not a Bullseye, But the Government Hits Its Mark, Settling Triple Canopy for $2.6 Million

Earlier this week, the U.S. Attorney’s Office for the Eastern District of Virginia announced that defense contractor Triple Canopy has agreed to settle the long-running FCA suit related to its provision of security services in Iraq. Although a victory for the government, contractors can take some comfort from the fact that the $2.6 million settlement represents less than 25 percent of the damages sought in the government’s complaint-in-intervention (which totaled more than $12 million when trebled). $500,000 of the settlement will be paid to the relator pursuant to the FCA’s qui tam provisions.

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A Bad Week for Copycat Relators: Fourth and D.C. Circuits Say First-to-File Bars Cases Brought While Earlier-Filed Cases Were Pending Even After Earlier Case Is Dismissed

Defendants facing serial, related qui tam cases should breathe a collective sigh of relief because the Fourth Circuit and the D.C. Circuit have just rejected relators’ efforts to undermine the first-to-file bar. In decisions issued less than a week apart, the D.C. Circuit in U.S. ex rel. Shea v. Cellco Partnership, Nos. 15-7135 & 15-7136, and the Fourth Circuit in U.S. ex rel. Carter v. Halliburton Co., No. 16-1262, both held that the first-to-file bar compels dismissal of actions brought while earlier-filed actions were pending, even if those earlier-filed actions have since been dismissed. Both courts also put the kibosh on those relators’ efforts to evade the first-to-file bar by amending their complaints after dismissal of the earlier-filed action. We’re proud to say that the attorneys of Vinson & Elkins, the same people who bring you LLB, represented the defendants in Carter and an amicus supporting the defendants in Shea.

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"Common Sense" and Concealment of Noncompliance Lead Fourth Circuit to Find Triple Canopy Invoices Hit Their Materiality Mark and Were Impliedly False Despite No Specific False Representations

Earlier this week, the Fourth Circuit issued its first substantive post-Escobar implied certification opinion in the closely watched U.S. ex rel. Badr v. Triple Canopy. Prior to Escobar, the Fourth Circuit found that the government’s complaint-in-intervention stated an implied certification FCA claim, causing Triple Canopy to seek cert. After issuing the Escobar opinion, the Supreme Court remanded the case to the Court of Appeals to reconsider in light of Escobar. The Fourth Circuit largely affirmed its prior decision, finding that the government had sufficiently alleged both falsity and materiality. [Disclosure:  Two of the authors of this piece represented amici in support of Triple Canopy’s cert. petition.]

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A Cure for the Common Qui Tam? Escobar’s Materiality Standard and Government Inaction has Pharma Defendant Feeling Good Again

The Third Circuit recently joined the growing number of circuits refusing to find materiality where the government fails to act or intervene in the face of alleged noncompliance. See United States ex rel. Petratos v. Genentech, No. 15-3805 (3rd Cir. May 1, 2017). The D.C. Circuit; First Circuit; and Seventh Circuit all have reached similar conclusions. The Ninth Circuit will address this issue in the coming months in United States ex rel. Rose v. Stephens Institute.

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A Cause for Corporate Thanksgiving: 4th Circuit Announces False Claims Act Successor Liability Not Subject to Lenient "Substantial Continuity" Rule

Just in time for next week’s Thanksgiving holiday, asset-purchasers who are – or should be – concerned with a seller’s potential FCA culpability have something for which to be thankful. In an opinion published Tuesday, United States ex rel. Bunk v. Government Logistics N.V., No. 15-1088, 2016 WL 6695787 (4th Cir. Nov. 15, 2016), the Fourth Circuit announced that the government or relator, seeking recovery from the wrongdoer’s corporate successor-in-interest, cannot rely upon the relaxed “substantial continuity” theory. Instead, the FCA plaintiff must articulate a theory of liability on the more-difficult-to-meet traditional common law. This decision appears to be one of first impression among circuit-level courts.

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