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Federal False Claims Act Penalties Increase

By Zachary Kitts on July 7, 2016 in , ,

Virginia Qui Tam Law.com -- The first blog dedicated to the Virginia Fraud Against Taxpayers Act and to Qui Tam Litigation in Virginia

 

 

 

 

 

 

Federal False Claims Act Penalties Increase

As regular readers know, any person violating the FCA is liable to the United States for treble damages, attorney’s fees and costs, and civil penalties of not less than $5,500 and not more than $11,000 per false claim submitted.  These civil penalties — which have been a part of the federal False Claims Act since the very beginning in 1863 — are set to increase this summer.

Section 701 of the Bipartisan Budget Act of 2015, Public Law 114-74 (Nov. 2, 2015) required federal agencies to publish regulations adjusting the amount of civil monetary penalties within the jurisdiction of each agency not later than July 1, 2016.  The Department of Justice published its proposed penalty amounts on June 30, 2016.

The penalty will increase to a minimum of $10,781 and a maximum of $21,563.   If these penalties seem severe, consider the following:  first, the penalty amounts have not been raised for more than ten years, and maybe as long as twenty years.  Second, if the penalties seem high, consider that the original FCA carried a civil penalty of $2,000.00 per false claim in 1863 when it was passed.  If we calculate that amount in today’s dollars, it would equate to a penalty of roughly $38, 878.04 for each false claim after inflation.

The increased civil penalties apply to acts occurring on or after August 1, 2016.

The challenge — and opportunity — of civil penalties

Historically, DOJ has used penalties as an incentive to settle — that is, DOJ has taken the position that if a case must be litigated, civil penalties will be sought, but if a defendant is willing to accept a settlement, the penalties can be compromised.  As a result, there is not as much case law on the topic of civil penalties as there might otherwise be.

One of the more interesting questions in FCA litigation involves determining the number of claims for which defendants should be subject to civil penalties. While it is clear that multiple penalties are possible under the FCA, counsel should be aware that large penalty awards could be subject to challenge under the Eighth Amendment’s Excessive Fines Clause if disproportionate to the amount of the damages to the government.

The number of civil penalties in a given case is a question of fact for the jury to decide. Traditionally it was thought that courts lacked discretion to reduce the number of the penalties once a jury had made a finding but the Fourth Circuit Court of Appeals reached a different result in a 2013 case. In United States ex rel. Bunk v. Gosselin World Wide Moving, N.V.,  the Fourth Circuit found that the district court had authority to enter judgment against the defendant for something other than the 9,136 false claims found by the jury where the relator was willing to accept a remittitur to $24 million to bring the penalty within the constitutional limits of the Eighth Amendment’s Excessive Fines Clause.

What about the Virginia Fraud Against Taxpayers Act?

The Commonwealth is required to update the Virginia Fraud Against Taxpayers Act to keep pace with any changes to the federal FCA, and that includes the amount of the civil penalties.  In the Commonwealth the General Assembly will need to act on increased penalties in the 2017 General Assembly session.

And rest assured that we will keep our readers abreast of any changes to the law…

K&G Law Group PLLC

 

 

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Implied certifications and conditions of payment – SCOTUS’s Escobar decision

By Zachary Kitts on June 30, 2016 in , ,

Virginia Qui Tam Law.com -- The first blog dedicated to the Virginia Fraud Against Taxpayers Act and to Qui Tam Litigation in Virginia

 

 

 

 

 

 

Implied certifications and conditions of payment have their day in Court

Implied Certification, Conditions of Payment, and the federal False Claims Act

On June 16, 2016 the Supreme Court issued its much-anticipated opinion in Universal Health v. Escobar.  The opinion — which was unanimous and was authored by Justice Thomas — deals with important principles in the world of the federal False Claims Act like “implied certification” and “conditions of payment” but before going further I want to point out one thing about the importance of Escobar or, in fact, of any SCOTUS opinion.   

The importance of Escobar? That is very much to be determined…

One thing I think all Americans learned during the Bush v. Gore case in 2000 is that reading and understanding Supreme Court opinions on the fly is an extreme sport not for the weak of heart. But, if it is difficult to read SCOTUS opinions on the fly, it is impossible to discern right away how significant any one particular SCOTUS opinion will be over the long haul.  Sometimes, opinions mark an important change in the legal culture of the United States.  As one example I would refer my readers to the Celotex and Liberty Lobby opinions in 1986 that ushered in the modern era of summary judgment in federal courts.

Other times, opinions that seem important when they are issued turn out to be less than important.  A good example of this is the Desert Palace case from 2003.  In the world of employment law this opinion was interpreted as SCOTUS saying that more employment law plaintiffs would get a jury trial. The reality turned out very differently.  When opinions turn out to be less important than they seem it is generally because the lower courts (who do most of the interpreting on a day to day basis) interpreted the opinion differently, and SCOTUS lacked the time or the interest to follow up and reinforce its initial opinion.

But, for what its worth, here is what we know for sure.  The Escobar opinion certainly means the following two things:  (1) The “implied certification” theory of false claims act liability is valid under some circumstances; and, (2) In order to serve as a predicate to an FCA violation, a contractual, regulatory, or statutory provision does not need to be labeled a “condition of payment.”

The holdings of Escobar — and the things that interested people have said so far

Many folks on the relator’s side (like Senator Grassley (R-IA)) found the opinion to be a great plus for taxpayers.  Leading FCA defense lawyers like Jack Boese and Jesse Witten also found some things to like about the Court’s ruling.

So here is my take:  I think the opinion is a win for relators and for taxpayers.  Some relator-side FCA lawyers didn’t like the fact that SCOTUS didn’t rule that every claim for payment implicitly represents that the billing party is entitled to payment.  By the same token, however, the Court clearly ruled that by submitting claims for payment to the Medicaid program for counseling services by individuals working in certain specific roles — when the services were in fact performed by individuals filling those roles but lacking the qualifications normally associated with those jobs — the defendants submitted a false claim to the United States.

With regard to the “condition of payment” ruling, the Court held that in order to rise to the level of an FCA violation, a defendant must violate a law or regulation that would be material to the government’s decision to pay, regardless of whether that condition is labeled by the government as a condition of payment.  This of course is good because there are a great many important rules that are not specifically labeled as “conditions of payment.”  The Court also said, however, that merely labelling something a “condition of payment” is not enough to make it material under the federal FCA.  The Court provided certain indicators of the government’s view of materiality, such as the routine payment of claims despite regulatory noncompliance, or rigorous government enforcement of a particular regulation and payment denials in instances of noncompliance.

Only time will tell how this opinion will play out…and stay tuned readers, because SCOTUS recently granted two new writs in FCA cases.

K&G Law Group PLLC

 

 

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Trade Secrets and Qui Tam — Part Two

By Zachary Kitts on May 19, 2016 in , , ,

Virginia Qui Tam Law.com -- The first blog dedicated to the Virginia Fraud Against Taxpayers Act and to Qui Tam Litigation in Virginia

 

 

 

 

 

 

Trade Secrets and Qui Tam — Part Two

This is part two of a two part post on the Defend Trade Secrets Act of 2016, which was signed into law last week. Part one of this post introduced the Defend Trade Secrets Act of 2016 and, most relevant to regular readers of this blog, the whistleblower protection provisions of the Defendant Trade Secrets Act.

Today we will look at the reasons why it was necessary to include whistleblower protections in the law in the first place.  It was necessary because defendants will sometimes — not often, but sometimes — bring counterclaims against qui tam relators for making copies of documents (or copying information in electronic form) to support their qui tam action.

Counterclaims of this nature are never successful if the relator copied documents and/or other information solely for purposes of bringing a qui tam action and has conducted his or herself like an adult person with a brain.

There have been a few interesting examples of how this type of counterclaim usually ends up.  One recent opinion came out of the U.S. District Court for the Northern District of Illinois a few weeks ago.  In that case qui tam relator Matthew Cieszynski had a defendant’s counterclaim dismissed against him.  That case is captioned United States ex rel. Matthew Cieszynski, et al. v. LifeWatch Services Inc., No. 13 C 4052 and you can read the Magistrate Judge’s opinion here.

Mind you, courts have more or less universally sided with qui tam relators in these types of counterclaims.  The U.S. District Court for the Eastern District of Virginia has several opinions on this point.  For example, in X Corp. v. John Doe,805 F.Supp. 1298 (1992)  Judge Ellis authored a well-reasoning and thorough opinion.

At the end of the day, there are important public policy interests underlying the FCA, and those interest support fully relators’ potential need to collect evidence in a manner that might otherwise violate the person’s employment contract, etc.

Next time around, we will look at how a relator should not conduct his or herself when collecting evidence for a qui tam action — and that opinion too is from the Eastern District.

K&G Law Group PLLC

 

 

 

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Trade Secrets and Qui Tam — Part One

By Zachary Kitts on May 13, 2016 in , , ,

 

 

 

 

 

 

 

Trade Secrets and Qui Tam — Part One

In a move that should be welcomed by all qui tam lawyers and whistle blowers,  President Obama signed the Defend Trade Secrets Act of 2016 into law yesterday.

As regular readers know, in addition to my qui tam practice, my firm also handles commercial tort cases (the larger category of legal cases to which trade secrets cases belong) but that is not why the DTSA is being covered in this blog.

No, I am covering the DTSA because it has special protections for qui tam whistleblowers who copy documents or other information to support their qui tam case.  Such protections are important and are necessary to protect whistleblowers who copy documents or other information for purposes of bringing a qui tam suit or at least investigating the possibility.   I have previously covered this topic before as it is one that routinely comes up on FCA work (although thankfully not in my cases.)

More to come on this important law, but the law nicely strikes a balance between the rights of trade secret owners and the rights of qui tam relators…more to come.

In the meantime, you can read the relevant sections of the bill below:

1) IMMUNITY.—An individual shall not be held criminally or civilly liable under any Federal or State trade secret law for the disclosure of a trade secret that—

“(A) is made—

“(i) in confidence to a Federal, State, or local government official, either directly or indirectly, or to an attorney; and

“(ii) solely for the purpose of reporting or investigating a suspected violation of law; or

“(B) is made in a complaint or other document filed in a lawsuit or other proceeding, if such filing is made under seal.

“(2) USE OF TRADE SECRET INFORMATION IN ANTI-RETALIATION LAWSUIT.—An individual who files a lawsuit for retaliation by an employer for reporting a suspected violation of law may disclose the trade secret to the attorney of the individual and use the trade secret information in the court proceeding, if the individual—

“(A) files any document containing the trade secret under seal; and

“(B) does not disclose the trade secret, except pursuant to court order.

“(3) NOTICE.—

“(A) IN GENERAL.—An employer shall provide notice of the immunity set forth in this subsection in any contract or agreement with an employee that governs the use of a trade secret or other confidential information.

“(B) POLICY DOCUMENT.—An employer shall be considered to be in compliance with the notice requirement in subparagraph (A) if the employer provides a cross-reference to a policy document provided to the employee that sets forth the employer’s reporting policy for a suspected violation of law.

“(C) NON-COMPLIANCE.—If an employer does not comply with the notice requirement in subparagraph (A), the employer may not be awarded exemplary damages or attorney fees under subparagraph (C) or (D) of section 1836(b)(3) in an action against an employee to whom notice was not provided.

“(D) APPLICABILITY.—This paragraph shall apply to contracts and agreements that are entered into or updated after the date of enactment of this subsection.

“(4) EMPLOYEE DEFINED.—For purposes of this subsection, the term ‘employee’ includes any individual performing work as a contractor or consultant for an employer.

“(5) RULE OF CONSTRUCTION.—Except as expressly provided for under this subsection, nothing in this subsection shall be construed to authorize, or limit liability for, an act that is otherwise prohibited by law, such as the unlawful access of material by unauthorized means.”.

 

K&G Law Group is a boutique-style law firm based in Nothern Virginia and practicing nationwide

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Level 3 Communications Settles State False Claims Act case

By Zachary Kitts on March 10, 2016 in , ,

Virginia Qui Tam Law.com -- The first blog dedicated to the Virginia Fraud Against Taxpayers Act and to Qui Tam Litigation in Virginia

 

 

 

 

 

 

State False Claims Act Settlement with Level 3 Communications

As regular readers know, one of our specialties here at vaquitamlaw.com is state false claims act settlements and, in particular, state Attorney Generals who make interesting use of their state FCA to combat fraud on the public fisc.

So I am very pleased to report a settlement this week from the Commonwealth of Massachusetts with Level 3 Communications.  Massachusetts Attorney General Maura Healy announced the settlement on March 7, 2016, in which Level 3 agreed to pay $8 million to the Commonwealth.

Those interested can read the settlement agreement here.

There are a couple of other interesting factors about this one, but a bit of background is in order first.

Who is Level 3 Communications and why would they lease space along state highways?

Level 3 Communications might just be the biggest company most people have never heard of.  As one of only seven Tier 1 internet providers in the world, Level 3 owns and operates roughly one-seventh of the physical “skeleton” of the internet.  This is quite a lucrative business for the obvious reasons.

Building that physical infrastructure is complicated and maintaining it is even more complicated.  One of the ways companies like Level 3 simplify is by running fiber-optic cables alongside interstates and other fixed, stable assets. This makes it easier to install the fiber optic cable and it also makes it easier to repair and maintain it.

In 2000, MassDOT and Level 3 entered into a 30-year agreement in which Level 3 agreed to pay MassDOT annual rent in exchange for the right to install and maintain conduits to run fiber optic cables alongside several Massachusetts highways.

Pursuant to the contract between the parties, Level 3’s annual rent obligation is based on, among other things, the number and length of fiber optic cables it installed and is subject to potential offset for certain in-kind benefits to MassDOT.

Importantly, Level 3 is also required to provide MassDOT annual certifications reflecting the number of fiber optic cables it installed in the conduits.

Violations of the Massachusetts FCA by Level 3 Communications

My readers tend to be a cynical bunch, so you can probably see where we are going from here.  Level 3 overstated the in-kind benefits it was entitled to offset from its lease payments and knowingly reduced its lease payments in an unlawful manner.

In some ways, this case is very similar to the oil and gas lease cases we see with the federal False Claims Act.  Oil and gas companies are required to pay a royalty to the United States for the right to drill for oil and gas on public lands…and many such companies fail to accurately report the amount of oil and gas they recover.

Examples of the sort of chicanery associated with oil and gas leases are plentiful.  In fact, over the last 16 years more than $3 billion has been recovered from big oil companies using the federal False Claims Act.

But this is the first case I am aware of that involves leases for the use of public infrastructure like highways, and congratulations are in order to the Commonwealth of Massachusetts and General Healy.

I would also like to point out some fine work by other parts of the Commonwealth’s state government.

Importance of Cooperation Between MassDOT and General Healy’s Office

Last but not least, I would also like to point out that although this was an important state false claims act case, this was not a qui tam case — meaning, there was no relator to provide the type of inside information that is so important to cases like this.  Instead, the various branches of state government had to identify the false claim, get it into the right hands, and then generate the evidence…no small feat when you are talking about a scheme that, by definition, is concealed and secret.

If there is one thing I have learned in prosecuting these non-healthcare state FCA cases, it is this — cooperation between the state agency and the state AG’s office is critical to a good outcome to a state false claims act settlement. This is not unique to state-level FCA enforcement, of course, and even in federal cases your qui tam will suffer if the federal agency does not agree with your theory of the case…but I digress…

MassDOT Secretary and CEO Stephanie Pollack and her team deserve some recognition, because it was her agency that (1) caught the false claims by Level 3, (2) recognized that Level 3 had violated the state false claims act, and then (3) made the referral to General Healy’s office.

Hopefully we will hear more of this sort of thing from the great Commonwealth of Massachusetts and elsewhere soon…stay tuned.

K&G Law Group PLLC

 

 

 

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Virginia Fraud Against Taxpayers Act Case Settles for $63 million

By Zachary Kitts on January 30, 2016 in , , , ,

Virginia Qui Tam Law.com -- The first blog dedicated to the Virginia Fraud Against Taxpayers Act and to Qui Tam Litigation in Virginia

 

 

 

 

 

 

Virginia Fraud Against Taxpayers Act Case Settles for $63 million

What is true in sports is also true in other contexts — records, dear readers, were made to be broken.

For a number of years now I have had the distinction of having the record  for the largest non-healthcare settlement under the Virginia Fraud Against Taxpayers Act…that case, Commonwealth of Virginia ex rel. Nisar Siddiqui v. Navy Federal Credit Union, et al., resulted in a recovery of more than $47 million to the Commonwealth.

The record from that cast stood for more than eight years, until General Herring announced this week’s settlement with eleven banks for a total of $63 million for violations of the Virginia Fraud Against Taxpayers Act.  Without question, General Herring has taken a greater interest in VFATA enforcement than any of his predecessors, as discussed previously in this blog.

And dear readers it is time for me to give Attorney General Mark Herring his due…it would, indeed, be churlish of me not to give credit where credit is due.

As regular readers know, it usually annoys me when lawyers hold a press conference to announce a new case they have filed.  I can forgive State Attorney Generals — almost all of whom are elected — a bit for using this tactic, given that they almost always want to get re-elected.  Still, it can be annoying when State AGs hold press conferences and announce big new cases when they have never delivered a big result.

I previously wrote in this blog that actually prevailing in a VFATA lawsuit is very different from doing a press release and announcing a new case with a demand for umpteen million dollars.

Until this week, Attorney General Mark Herring has done some of the later, and some of the former, but he had no truly huge recoveries….In fact I wrote those very words when General Herring announced this lawsuit, in which he sought something like $1.15 billion.

But now he has delivered the goods.  And, as we all know, he is seeking re-election later this year, instead of resigning to run for Governor as almost everyone else has.  With one announced Republican running against him, this is sure to shape up into an interesting election later this year….

In the meantime, I will be editing my marketing materials about my VFATA practice…I may no longer have the record for the largest non-healthcare VFATA recovery, but I still have the largest non-intervened, non-healthcare, VFATA recovery…

Stay tuned for more ….

 

K&G Law Group is a boutique-style law firm based in Nothern Virginia and practicing nationwide

 

 

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Changes to Eastern District of Virginia’s Local Rules could be problematic for False Claims Act practice

By Zachary Kitts on December 5, 2015 in , ,

Virginia Qui Tam Law.com -- The first blog dedicated to the Virginia Fraud Against Taxpayers Act and to Qui Tam Litigation in Virginia

 

 

 

 

 

 

Changes to the Local Civil Rules in the Eastern District of Virginia could be problematic for qui tam practice under the federal False Claims Act

Today’s post focuses on the Local Civil Rules in the U.S. District Court for the Eastern District of Virginia.  More specifically, today’s post focuses on a handful of proposed changes to the Local Civil Rules and how those changes could adversely affect qui tam practice  under the federal  False Claims Act.

Fernando Galindo, in his official capacity as the Clerk of Court, gave notice of the proposed changes and invited comments no later than January 11, 2016.  I encourage any and all lawyers who practice in this area to weigh in with a letter to Mr. Galindo.  I attach here my own letter to Mr. Galindo as well as a letter from David Pearline, another practitioner in the EDVa.

One final introductory point — I have handled qui tam cases in state and federal courts all over the country, and I strongly feel that there is no better place to litigated a qui tam case (or any other kind of case) than the Eastern District of Virginia.  There are many reasons why I feel that way, but one of the best things about practice in the EDVa is that there are very few local rules in the EDVa, and the ones we do have are short and sweet and cover basic administrative matters.

By way of contrast, in certain other federal courts, it is clear to me that the Court appointed a committee of distinguished lawyers and Judges who then did exactly what lawyers do best — they made it as complex as possible and went completely bananas with the local rules drafting, creating hundreds and hundreds of pages of very complex local rules governing everything from the use of tobacco products in private law firms to the exact dress code required of lawyers when attending a deposition.

But that is not what we did in the Eastern District of Virginia — we have very few local rules but the ones  we have count.

 Review of the Specific Potential Changes to Local Civil  Rule 5

A more detailed review of the changes is available  in my letter, but I want to review the most basic parts here.

The proposed amendment to Local Civil Rule 5(B) would be problematic because it would require the filing party to provide a description of any document filed under seal.  The description would then be posted to the docket and available to the public.

Currently, in a sealed qui tam case in the Eastern District of Virginia, only the case number of a sealed qui tam case is available, with the parties listed as [UNDER SEAL v. UNDER SEAL].

At a first glance this new proposed change might not be a problem if nothing more is noted in the description “filing  under seal in sealed qui tam case.”  In theory I suppose the docket could just reveal the case number and [UNDER SEAL v. UNDER SEAL] together with the date each document is filed.

The problem is that even that little bit of information — the date of the original complaint’s filing, the dates various government memos and documents were filed, etc. — could ultimately provide defendants with some kind of information.

And make no mistake about it – some defense lawyers who practice in this area try to seek out as much information as they can, in any way they can.  They use a variety of sophisticated tactics to try to discern whether a case is under seal somewhere and, if so, the posture of the sealed case.

Another proposed change concerns Local Civil Rule 5(C); the proposed change creates new requirements for a Motion to Seal.  Counsel for qui tam relators file a Motion to Seal the case along with the initial Complaint.  The new requirements found in this subsection would appear to complicate the process of filing a qui tam case by imposing new standards on anyone filing a Motion to Seal.

Subsection 5(C) seems to indicate that that subsection does not apply to filings under Local Civil Rule 5(B) — i.e., filings under seal required by statute — but I find the proposed rule a bit ambiguous.  Moreover, the proposed new Rule 5(C) would suffer from all of the problems associated with subsection (B) of the proposed rule.

One final comment is that proposed Rule 5(E) requires parties filing anything under seal to submit the filing in a sealed envelope.  This is, in my experience, impossible because the Marshals open up every envelope as it enters the Court.

Stay tuned, we shall see if these proposed local rule changes go through or if they are edited again.

 

K&G Law Group PLLC

 

 

 

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Best Lawyers in America Adds Definition of Qui Tam Practice

By Zachary Kitts on November 18, 2015 in , , ,

Virginia Qui Tam Law.com -- The first blog dedicated to the Virginia Fraud Against Taxpayers Act and to Qui Tam Litigation in Virginia

 

 

 

 

 

 

Best Lawyers in America Adds Definition of Qui Tam Practice

I am happy to announce that the publication Best Lawyers in America has added a definition of Qui Tam practice by yours truly.

I was happy to add my two cents on the topic for at least two reasons.  For one thing, Best Lawyers is the oldest and most highly-respected peer review guide to the legal profession worldwide, and it is an honor to be included in its pages.  Prior to my little blurb being added, there was no definition of qui tam litigation in the Best Lawyers publication.

The second reason is a little more abstract.  In my humble opinion, it is always a bit of a struggle to label a law practice focusing on state and federal false claims acts.  Some people like to call it “whistleblower practice,” and I suppose that name kind of fits — in fact, one can find the term whistleblower used in this blog from time to time.

The problem with the term “whistleblower” is that it also includes a number of things that are a bit far afield from qui tam practice.  As just one example, American patriot and super-sleuth Harry Markpolous has been called a whistleblower — with much justification — for his work catching fraudster Bernie Madoff.  That case had nothing to do with qui tam practice however.

As long as I am rambling here, I might was well say a few words about the etymology of the term “whistleblower.” According to my Merriam Webster dictionary, the term dates from 1970 and refers to “One who reports something covert or informs against another.”  Google Books has an interesting chart showing the use of this term, which seems to corroborate the definition found in Merriam Webster.

By the way, Wikipedia has an excellent List of Whistleblowers which shows that the concept of really is — the article lists Samuel Shaw as the first whistleblower for his efforts to expose the torture of British POWs during the Revolutionary War.

The Difference Between Whistleblowers and Qui Tam Relators

Perhaps the best way to put it is like this — all qui tam relators may be whistleblowers, but not all whistleblowers are qui tam relators.  As the articles found in Wikipedia and elsewhere make clear, the term whistleblower is very broad and includes many people who have no financial motivation whatsoever.

The representation of qui tam relators therefore differs from the representation of general whistleblowers because qui tam relators act pursuant to statutes like the federal False Claims Act and the Virginia Fraud Against Taxpayers Act which assign relators part of the government’s claim; that is to say, these statutes provide incentives for individuals with first-hand, non-public information about fraud on government entities to come forward, hire private counsel, and prosecute cases in conjunction with federal and state law enforcement authorities.

By creating incentives for individuals with first-hand information to hire private counsel and prosecute lawsuits in conjunction with the Department of Justice, the statute creates a true public-private partnership between individuals with knowledge of fraud, private practice lawyers specializing qui tam litigation, and federal prosecutors.  The public private partnership created by the FCA has been an unparalleled success; since 1986 more than $40 billion has been recovered, and qui tam whistleblowers have received hundreds of millions of dollars for their efforts.

Such recoveries are by no means easy or quick.  In addition to understanding the complex needs of modern government and the commercial entities servicing those needs, qui tam litigation has a number of unusual requirements not found in other types of federal civil litigation.  Those requirements – many of which are jurisdictional – include a pre-filing disclosure memorandum, a heightened pleading standard for the Complaint, and a number of unusual procedural hurdles such as filing the Complaint under seal.

So, a special thank you to Best Lawyers in America for asking me to write a summary of qui tam practice…and as always, dear reader, a special thank you to you for reading this blog!

 

K&G Law Group PLLC

 

 

 

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Another recovery for the Commonwealth of Virginia under VFATA

By Zachary Kitts on November 2, 2015 in , ,

Virginia Qui Tam Law.com -- The first blog dedicated to the Virginia Fraud Against Taxpayers Act and to Qui Tam Litigation in Virginia

 

 

 

 

 

 

Another recovery for the Commonwealth of Virginia under VFATA

What was that I was recently saying about recoveries under the Virginia Fraud Against Taxpayers Act?

Oh yes, that actually prevailing in a VFATA lawsuit is very different from doing a press release and announcing a big new case.  Heretofore, Attorney General Mark Herring has done some of the later, but not much of the former.  Until now, that is.

I am very happy to pass along news that broke last week about Virginia’s participation in the Stericycle false claims act case.  Stericycle, for those who don’t know, offers medical waste disposal services to a variety of customers, including school districts, health departments, colleges, police departments, nursing homes and municipalities, including more than 200 local and state government entities in Virginia.

The Complaint — filed in the Southern District of New York by qui tam relator Jennifer D. Perez — alleged that Stericycle charged its government entity clients automatic and unwarranted automatic price increases.  The first settlement in the case was obtained by the feds back in 2013 — you can read the Complaint in Intervention here.  From there it took the various states more than two years to work out their parts of the settlement.

Hopefully we will see, in the near future, some larger settlements out General Herring’s office — stay tuned readers.

 

 

 

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Virginia Fraud Against Taxpayers Act Settlement with UPS

By Zachary Kitts on October 23, 2015 in , , , , , ,

Virginia Qui Tam Law.com -- The first blog dedicated to the Virginia Fraud Against Taxpayers Act and to Qui Tam Litigation in Virginia

 

 

 

 

 

 

Virginia Fraud Against Taxpayers Act Settlement with UPS

As regular readers know, Virginia Attorney General Mark Herring has shown considerable interest in enforcing the Virginia Fraud Against Taxpayers Act.  He has taken steps to create an affirmative civil enforcement unit in his office, and he has intervened in some truly large cases, such as the one against guardrail manufacturer Trinity.

But holding a press conference to announce a big case and actually winning a big case are two very different things.  So I was very happy to see the Virginia Fraud Against Taxpayers Act in the news this week when General Herring announced the Commonwealth’s settlement in United States et al. ex rel Robert Fulk v. United Parcel Service which was litigated in the U.S. District Court for the Eastern District of Virginia.

Relator filed his case against UPS in 2011 alleging that UPS knowingly charged federal, state, and local government entities for guaranteed delivery service and then knowingly failed to deliver by the promised time.  Instead of being open and honest about the failure to make guaranteed-deliveries, UPS instead prepared false records and statements that showed that the deliveries had been made on time.

Mr. Fulk was represented in this case by Julie Grohovsy and Shan Wu and thier law firm, Wu Grohovsky & Whipple.  I happen to have some familiarity with the case, as I served as an expert witness for Wu Grohovsky & Whipples’s fee petition to recover their statutory attorney’s fees, costs and expenses.

The first settlement — on behalf of the United States and the State of New Jersey — was announced on May 19, 2015, but it took more time to work out the settlement for the remaining states.  The states settling this week included California, New York, Illinois, D.C., Virginia and nine others.

Moreover, New York City and the city of Chicago, both of which have city false claims acts, recovered money as well.  The Commonwealth of Virginia will recover $241,056 in compensation for these inaccurately recorded late deliveries.

So congrats to Julie and Shan and the rest of the Wu Grohovsky & Whipple team!

 

K&G Law Group PLLC

 

 

 

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