False Claims Act

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A federal district court in the Middle District of Florida issued a decision on Sept. 30th that threatens the federal government’s continued reliance on the False Claims Act (“FCA”) as the most powerful weapon in the Department of Justice’s enforcement arsenal. U.S. District Judge Kathryn Kimball Mizelle threw out a case against a group of Medicare Advantage organizations and providers on the grounds that an individual whistleblower suing on behalf of the federal government under the FCA, often called a “relator” in a “qui tam” lawsuit, violates the U.S. Constitution’s “appointments clause.” The Court concluded that relators, who are acting on behalf of the federal government, must be considered officers of the government and appointed in a manner consistent with Constitutional requirements. See U.S. ex rel Zafirov v. Florida Medical Associates, LLC, No. 8:19-cv-1236, 2024 U.S. Dist. LEXIS 176626, ECF No. 346 (M.D. Fl. Sept. 30, 2024).Continue Reading FCA Whistleblowers – No More?

A few weeks ago, we discussed two recent cyber-related False Claims Act (FCA) cases. One of those cases is a qui tam lawsuit against Penn State and, as of the date of our article, we were waiting to see if DOJ would opt to intervene in the case on behalf of the United States.Continue Reading Update – DOJ Declines to Intervene in Penn State Cyber-Related FCA Case

In recent weeks, there has been an uptick in news of cyber-related False Claims Act (“FCA”) activity. For example, on September 1, 2023, the court unsealed a qui tam lawsuit against Penn State University relating to allegations of non-compliance with Department of Defense (“DoD”) cybersecurity obligations. Separately, on September 5, 2023, the Department of Justice (“DOJ”) announced a multi-million dollar FCA settlement with Verizon under its Civil-Cyber Fraud Initiative (which focuses on leveraging the FCA to pursue cybersecurity related fraud by government contractors and grant recipients, as we previously discussed here). These and other cases suggest—as many had been speculating—that the number of enforcement actions and publicity associated with previously-sealed qui tam cases will continue to increase. They also signal that contractors and universities should brace for additional scrutiny and potential whistleblower claims in this area.Continue Reading Recent Cyber-Related False Claims Act Activity Signals Contractors and Universities Should Examine Their Cybersecurity Practices and Brace for an Uptick in Enforcement

On June 1, 2023, the Supreme Court issued a unanimous decision holding that the scienter element of the False Claims Act (“FCA”) is met if a defendant subjectively knew his or her claims were false and submitted them anyway. See United States ex rel. Schutte v. SuperValu Inc. and United States ex rel. Proctor v. Safeway. The Court’s ruling was narrow and avoided the more challenging—and common—issues raised during oral argument (which we blogged about previously).Continue Reading Supreme Court Clarifies that Subjective (Not Objective) Knowledge of Falsity of Claim Dictates False Claims Act Liability