False Claims Act

Representative Matters

• State of California v. Watts Indus., Inc. Represented a major valve manufacturer in a qui tam action brought under the California False Claims Act on behalf of 160 cities and water districts. The plaintiff alleged that our client was responsible for selling the cities waterworks parts containing excess lead over a 10-year period, and that the lead leached into the municipal water supplies. The cities sought damages and penalties in excess of one billion dollars. We successfully resolved the matter by obtaining summary judgment of some of the claims, prevailing in a trial of other claims and obtaining insurance coverage to settle the remainder of the case.
• Career Education Corporation. U.S. ex rel. Powell v. Am. InterContinental Univ., Inc., No. 1:08-CV-02277-RWS (N.D. Ga.). In what has been described as a "bet the company" case, we represent Career Education Corporation, a NYSE for-profit education provider, in a False Claims Act case. The suit seeks to require Career Education to disgorge all federally guaranteed student loan money, Pell grants and other government related funds, from 2001 to the present.
• Defended a publicly traded home health care provider against a qui tam action that alleged various violations of the FCA; negotiated a favorable settlement prior to a DOJ intervention.
• Obtained dismissal of an FCA qui tam complaint against a publicly traded health care provider on the basis that the relator failed to comply with the statutory seal requirements; obtained affirmation from the Sixth Circuit Court of Appeals and successfully opposed the relator’s certiorari petition to the United States Supreme Court.
• Represented a Fortune 500 client in an internal investigation related to potential False Claims Act exposure arising from an acquisition target's government contracting practices.
• Obtained summary judgment, affirmance of that judgment on appeal and, ultimately, judgment and settlement in excess of nine-figures on behalf of a product manufacturer in litigation arising out of a California False Claims Act action brought on behalf of over 100 municipal entities, as well as in a related common law fraud action.
• Represented a leading furniture manufacturer in a major General Services Administration (GSA) and Department of Justice False Claims Act investigation into the client’s alleged non-compliance with commercial pricing disclosure requirements in connection with multiple GSA Multiple Award Schedule contracts.
• Represented a NASDAQ company in the first-reported Small Business Administration and Department of Justice False Claims Act investigation into a contractor’s alleged false certification of business size.
• Represented a medical transcription company that at one time was the largest provider of such services to the Department of Veterans Affairs. A criminal investigation was launched in 2003 against the client and ultimately dropped. A civil investigation into alleged False Claims Act violations followed, and the government initially claimed tens of millions of dollars in damages. We simultaneously prosecuted affirmative litigation against the government regarding the same contract terms, and convinced the Department of Justice of the client’s interpretation of the provisions at issue, resulting in a substantial affirmative recovery for the client.
• Represented a client in a major civil False Claims Act investigation where the relator was barred from any share of the settlement. We have been involved in many challenges to this provision of the False Claims Act.
• Represented several groups of hospitals and health care providers defending against various False Claims Act investigations.
• Represented health care companies and physician groups in defense of actions brought under the federal False Claims Act and the Texas Medicaid Fraud Prevention Act by qui tam relators, the Department of Justice and the attorney general of Texas.
• Obtained parallel dismissals of a federal False Claims Act qui tam action alleging the performance of medically unnecessary cardiac catheterizations, and a related state class action brought by patients against the facilities where the catheterizations were performed. The dismissals were affirmed on appeal.
• Currently serving as Independent Review Organization (IRO) for a major pharmaceutical company following the company’s settlement with the Department of Justice and HHS Office of Inspector General. As part of that settlement, the company entered a Corporate Integrity Agreement (CIA), which required the company to retain an IRO, as approved by HHS-OIG, to review the company's systems, controls and policies and procedures pursuant to the terms of the CIA. We were selected and approved to serve as the IRO.
• Represented a company in a Department of Justice investigation of admissions to inpatient rehabilitation facilities in the company's hospitals across the country. The investigation was run by the Department of Justice in Washington, and the U.S. Attorney’s Office in Atlanta. It involves a review of admissions criteria, medical records, policies, procedures and compliance at the company's hospitals that have inpatient rehabilitation units. The investigation is unique in that it is on the cutting-edge of a growing trend by the Department of Justice to investigate the medical necessity of admissions to hospitals where Medicare is the payer. This is a developing area of law under the federal False Claims Act.
• Currently represent four defendants in a qui tam FCA lawsuit, alleging sales of products to the federal government that are claimed not to be compliant with the Trade Agreements Act. Our expertise in domestic source requirements in government procurement is unmatched; we have authored widely circulated articles, conducted internal investigations of manufacturing clients’ supply chain to address Buy American Act and Trade Agreements Act compliance issues, conducted seminars and trainings of sales staff and senior executives, traveled with clients on customer sales visits where ARRA and Buy American restrictions were a key issue, and defended False Claims Act investigations and lawsuits alleging noncompliance.
• Currently represent a client in an ongoing DOJ and FCC inspector general investigation into fraud in the E-Rate program.
•  Served as counsel to a NASDAQ company in the first reported investigation by the U.S. Small Business Administration (SBA), General Services Administration (GSA) and DOJ into a contractor’s alleged violation of the FCA based upon a purported false certification of business size.
• Successfully resolved a highly publicized defective pricing investigation by GSA and DOJ into manufacturing company’s compliance with pricing obligations arising under the GSA Schedule.
• Counseled a publicly traded company in a federal investigation of alleged fraudulent billings in connection with federal highway projects.
• Handled investigations by the SBA inspector general into the accuracy of small business size representations.
• Represented a major information technology company in an investigation of fraud against the client by a former employee related to the performance of government contracts.
• Regularly advise clients on possible mandatory or voluntary disclosure issues under the Contractor Code of Business Ethics and Conduct FAR clause, which requires disclosure of credible evidence of, among other things, violations of the FCA. Examples of disclosure matters we have handled or are currently handling include allegations of kickbacks and improper payments by subcontractors, improper retention of overpayments by the federal government, claims of overbilling on professional services and products, and other traditional FCA claims.