FCA Alert Blog
Kelley Drye's FCA Alert blog provides guidance on emerging trends in False Claims Act investigations and litigation.
The federal government and more than half of all states have false claims acts that are serious risks to businesses, including those that have never thought of themselves as government contractors. In the past decade, the False Claims Act (the "FCA") has become an increasingly powerful weapon used by the federal government to combat fraud and abuse in health care, military and other government-funded programs.
Under the FCA, 31 U.S.C. §§ 3729-3733, those who knowingly submit, or cause another person or entity to submit, false claims for payment of government funds are liable for three times the government's damages plus civil penalties of $5,500 to $11,000 per violation. The FCA contains qui tam provisions that reward private citizens (known as "relators" or "whistleblowers") who file false claims actions on behalf of the government by providing them a bounty of 15-30% of the amount recovered in the action. Since Congress amended the FCA in 1986, the government has recovered more than $30 billion from entities accused of violating the statute.
These successes along with regulatory growth and the increased receipt of government funds by more and more businesses have brought with them an expansion of the reach of the FCA. Businesses that never thought of themselves as government contractors now face exposure under the Act even if they are not themselves government contractors or a direct recipient of government funds.
Encouraged by the significant FCA recoveries by the federal government, more than half of all states have enacted state false claims acts with qui tam provisions (the "state FCAs"). To date, California, Colorado, Connecticut, Delaware, Washington D.C., Florida, Georgia, Hawaii, Illinois, Indiana, Iowa, Louisiana, Maryland, Massachusetts, Michigan, Minnesota, Missouri, Montana, Nevada, New Hampshire, New Jersey, New Mexico, New York, North Carolina, Oklahoma, Rhode Island, Tennessee, Texas, Virginia, and Wisconsin have enacted some form of a state FCA.
Kelley Drye has a team of more than twenty-five attorneys from junior associates to senior partners with extensive experience defending, litigating, trying, and settling federal and state FCA investigations and lawsuits brought against Fortune 500 companies and other government contractors and corporations that participate directly and indirectly in government-funded programs in a wide range of industries: healthcare and pharmaceuticals, defense contracting, manufacturing, financial services, and technology. We have also represented companies in Congressional investigations, jury trials, criminal investigations and prosecutions, class action lawsuits, and common law fraud and consumer protection actions brought by state attorneys general that often accompany large-scale FCA cases.
Our strategic approach is to assist our clients in resolving their challenging claims through aggressive representation, whether it be at trial, during discovery, or negotiating a settlement. We work with our clients to achieve their ultimate goal at a cost which is reasonable.
Representative Experience
- Representing multiple defendants against the government and qui tam relators in nationwide FCA cases brought against the healthcare and pharmaceutical industries and defense contractors.
- Defending companies in litigation brought pursuant to the state FCAs of California, Florida, Illinois, Hawaii, Massachusetts, Missouri, Montana, Texas, and Utah.
- Defending health care companies against Medicaid fraud claims in state and federal courts in Alabama, Alaska, Arizona, Arkansas, California, Connecticut, Florida, Hawaii, Idaho, Illinois, Iowa, Kansas, Louisiana, Massachusetts, Minnesota, Mississippi, Missouri, Montana, New Jersey, Nevada, New York, Ohio, Oklahoma, Pennsylvania, South Carolina, Utah, West Virginia, and Wisconsin.
- Representing high level executives of large health care companies in federal prosecutions concerning alleged payments of kickbacks to doctors and medical equipment distribution companies for patient referrals. In one case, the client was acquitted of all charges following a 10-week trial. In another, the court granted a motion for judgment of acquittal at the conclusion of the government's case in chief.
- Representing company executives at hearings before the Subcommittee on Oversight and Investigations of the House Committee on Energy and Commerce and informal interviews with Committee Staff arising out of or related to large-scale FCA litigation.
- Advising and representing corporations and government contractors in responding to subpoenas and informal requests for information from various federal and state government agencies, including the Department of Justice, the Office of the Inspector General for the Department of Health and Human Services, and the Subcommittee on Oversight and Investigations of the House Committee on Energy and Commerce.
- Negotiating all types of federal, state, and joint FCA settlements, including agreements that often accompany FCA settlements such as Corporate Integrity Agreements ("CIAs"). We have negotiated settlements with the Department of Justice and the Attorneys General of more than twenty states, including states that are very active in state FCA enforcement, including Texas, Florida, and Massachusetts.
Our experience in conducting discovery in federal and state FCA cases includes:
- Conducting depositions of hundreds of state and federal government officials, including high level officials from Centers for Medicare and Medicaid Services ("CMS") and the Office of the Inspector General for the Department of Health and Human Services (the "OIG").
- Litigating privilege assertions, such as the deliberative process privilege, often used by the government to block discovery in FCA cases.
- Analyzing extensive government claims data, company sales transaction data, and market share data.
- Negotiating confidentiality agreements with government agencies, relators, and class action plaintiffs to protect clients' sensitive business information.
- Negotiating with government agencies in producing electronic data and documents.
