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TEN YEARS AND GOING STRONG HERE AT VAQUITAMLAW.COM!

By Zachary Kitts on February 28, 2018 in , , , , ,

 

 

 

 

 

 

Announcing the ten year anniversary of the first blog on the Virginia Fraud Against Taxpayers Act and qui tam litigation in Virginia — and announcing the launch of a new web page WWW.FREEWHISTLEBLOWERBOOK.COM

I am proud to announce a milestone this month that may or may not be meaningful to my readers but which is very meaningful to me — the ten year anniversary of this blog, Virginia Qui Tam Law.com.  As part of the festivities, I am also announcing the launch of a new website www.freewhistleblowerbook.com to promote my recently-published book How to Be a Successful Qui Tam Whistleblower, as announced previously on this blog.

In the grand scheme of things, ten years is not all that long for a blawg, so I can’t claim to be one of the first Virginia blawgs.  I also won’t waste a lot of time on sentimentality or on reviewing the last ten years of blog posts.  The archives of this blog are, after all, there for anyone to read.  Suffice it to say that this blog has become a labor of love.  I have written posts late at night and early in the morning, on weekends and holidays, and during family vacations. (In fact, for more than few of these posts, I recall them the same way one remembers other family vacation memories.)

To me, this blog is somewhat like a family member and I have — at least in part — built my law practice on it.  I started this blog to generate interest in the Virginia Fraud Against Taxpayers Act and in qui tam litigation in Virginia, and I can certainly say that the level of interest now is far and away greater than it was ten years ago.

I promised my readers then that this blog would be something a bit different than the usual law blog, and even different from the usual law blog put out by qui tam lawyers…and I trust, based on the feedback I have gotten, that have been successful — again, at least in part.

If my posts the last few years have been less frequent or less detailed, it is only because of increasing demands on my time and not because of any lack of enthusiasm…as all bloggers do, I resolve to do better in the future and to deliver more and better content on a regular basis.

But I do have an additional announcement to make, and one that ties in with the ten year anniversary of this blog — in conjunction with the publication of my new book How to be a Successful Qui Tam Whistleblower would like to announce the launch of my new webpage, www.freewhistleblowerbook.com

I encourage you to visit the new site, get your free copy of my book How to be a Successful Qui Tam Whistleblower, (either in hard copy or as an ebook).

And that’s not all — I have decided to start publishing a newsletter…just as I promised you ten years ago that this blog would be something different, so too will my newsletter…and I encourage you to sign up for my free newsletter.  which I promise will be interesting indeed….

The best is yet to come!

 

 

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Commentary on the Top Virginia Verdicts for 2017 (as published by Virginia Lawyers Weekly)

By Zachary Kitts on January 23, 2018 in , , , ,

 

 

 

 

 

 

This week’s issue of Virginia Lawyers Weekly covers the top jury verdicts in Virginia during 2017.  Of particular interest to me is the number one entry — a $3.8 million jury verdict in Heard Construction, Inc. v. Waterfront Marine Construction, Inc. et al. from the Circuit Court for the City of Chesapeake.

Both parties were government contractors who bid on project to replace a boat ramp on Pier 34 of the Little Creek Naval Base in Virginia’s beautiful tidewater region.

Like most other government contracts, sealed bids were required, and the lowest offer would win.  Defendant was the low bidder, but plaintiff was classified as a HUBZone business entitled to a 10 percent pricing preference under 48 CFR 19.1307.

But here is the rub.  The 10 percent pricing preference was available if — and only if — defendant was classified as a “large” business under the applicable size standard at the time of the bid.

Defendant misrepresented its size as “small,” and therefore the 10 percent preference did not apply and defendant was awarded the bid.  Plaintiff then discovered that defendant was actually a “large” business at the time of the bid, and submitted a bid protest.

In considering the protest, the local Small Business Administration office requested information from defendant to verify its size status, and defendant responded with information that led the SBA office to determine that defendant was “small,” as it claimed.

Apparently, that information was false, because a request for reconsideration before the SBA resulted in a different outcome.

Plaintiff filed suit in the Chesapeake Circuit Court, alleging tortious interference against Waterfront Marine, along with the former principals of defendant and defendants’ parent companies. After a four-day jury trial, the jurors found defendants liable and awarded damages in the amount of $3.8 million.

To me, on the above facts, this case seems to be tailor-made to be a qui tam action under the federal False Claims Act and/or Virginia Fraud Against Taxpayers Act, and one wonders why a qui tam wasn’t brought.  Had plaintiffs brought a qui tam action, they would have been entitled to treble damages, civil penalties, litigation costs, and attorney’s fees.  Hence, we would be talking about a $11.4 million case and not a $3.8 million case.

I suppose it could be the case that plaintiffs simply came across the information slowly, over time, and thus the existence of the possible false claims act case only became apparent over time.  It is also true that, had the plaintiff brought a qui tam instead of a plain-jane lawsuit, it would have only obtained, at most, 30% of the $11.4 million.

So there are reasons why, in this scenario, a plaintiff might elect his or her remedies in this way…still, I think a qui tam under the Virginia Fraud Against Taxpayers Act would have been a better route…but to a hammer, everything looks like a nail!

 

 

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How to Be a Successful Qui Tam Whistleblower

By Zachary Kitts on November 30, 2017 in ,

 

 

 

 

 

 

Interested readers can now check out How to be a Successful Qui Tam Whistleblower at my Amazon author page where they can either purchase a hard-copy or (if you are a Kindle subscriber) you can pick up a free electronic copy.

Coming soon — a new webpage dedicated to the book…stay tuned dear readers…

 

 

 

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Lawyers and Client Confidentiality

By Zachary Kitts on October 31, 2017 in , , ,

 

 

 

 

 

 

Lawyers and Client Confidentiality

Now that some of the smoke has cleared from the Ty Cobb-John Dowd lunchtime chat at BLT I figured I would provide my two-cents on it from a legal ethics point of view.

For those of you who either live outside the beltway or didn’t click on the link above, a few months  back two of President Trump’s lawyers chose to have a loud discussion of things pertaining to Mueller’s investigation, their client’s interests, and so forth, whilst sitting next to a reporter from the New York Times.

What’s interesting about this situation from a legal ethics point of view is this — the ABA Model Rules Committee (and the comparable committees of at least 24 state bars, including Virginia) have updated their Rules of Professional Conduct over the last couple of years to include the duties lawyers owe to clients with regard to the creation, storage, and retrieval of information.  While those rule changes were focused on and driven by technological changes in our society (i.e., the use of email, the vulnerability of email and other systems to outside hackers, etc.) they all would have been equally applicable in a pre-computer age.

New specific language has been added to ABA Model Rule 1.1 (which is entitled “Competence in the Practice of Law”) and ABA Model Rule 1.6 (which is entitled “Protecting Client Information”).   It is important to note that the new commentary doesn’t change the lawyer’s duty; indeed, the confidential handling of client information and secrets is nothing new and is rather fundamental to being a lawyer.

What is new is the focus on client confidentiality as it pertains to electronically stored information…but you don’t need a computer or an email address to run afoul of these rules.

The ABA Model Rules

As a bit of background, lawyers and the practice of law are regulated at the state level, which means there is no national standard for just about anything pertaining to lawyers.  Each state has its own rules of Professional Conduct, its own disciplinary procedures, and so forth.  To further the practice of law, the American Bar Association has its own Model Rules of Professional Conduct   which form a sort of model for the states to follow.  Each state is of course free to adopt one or more of the ABA’s Model rules if it so chooses.

ABA Model Rule 1.1 now has the following language:

A lawyer shall provide competent representation to a client. Competent representation requires the legal knowledge, skill, thoroughness and preparation reasonably necessary for the representation.

ABA Model Rule 1.6 now has a subsection (c) that reads as follows:

A lawyer shall make reasonable efforts to prevent the inadvertent or unauthorized disclosure of, or unauthorized access to, information relating to the representation of a client.

Here is what is interesting — nothing in the above-language addresses technology directly; as written, it would have been entirely possible to violate subsection (c) of the rule in the days before computers and e-mail. A year or so ago I did an ethics presentation with Paul Lawrence  at the TAFEF Conference and as part of my prep I went looking for just such an ethics case..and I found one, from the state of Indiana.

In In re Lehman a lawyer committed what would have been a low-tech breach of the new Rule 1.1 and 1.6 by pitching boxes of sensitive client documents (things like tax returns, birth certificates, and so forth) in his dumpster without bothering to shred them.

And now, we have a second example of a low-tech breach of some high-tech rules…if that is what this is.  Let us not forget, readers, that we live in an era of top-notch TV shows like Breaking Bad and Homeland that feature elaborate trickery and complicated ruses…I seriously doubt that lawyers at the level of Ty Cobb and John Dowd would be stupid enough to loudly discuss the private legal matters of POTUS at a public cafe in Washington, D.C. just a few blocks away from the White House.  Anyone who has lived in DC for any amount of time knows that eyes and ears are everywhere, and that is especially true right in front of the Washington office of the New York Times…

CONCLUSION

So there is still no new thing under the sun — modern rules and regulations concerning lawyers and client confidences are guided by ancient legal principles, because lawyers have always had a duty to protect such information.

And, while I don’t know any lawyers crazy enough to engage in the sort of public loud bragging that was apparently going on at BLT that day, I do know plenty of lawyers who would be willing to look stupid (and therefore sacrifice themselves) if by doing so they somehow served a client interest…and that is what I suspect here…

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Deputy Attorney General Announces New Anti-Fraud Effort for Disaster Relief Programs

By Zachary Kitts on September 30, 2017 in , ,

 

 

 

 

 

Deputy Attorney General Rod Rosenstein Announces Anti-Fraud Effort to Root Out Fraud on Disaster Programs

The Atlantic hurricane season is nothing new, but it seems to have been particularly virulent this year (though thankfully not for us here in Virginia).  What is new, however, is a new anti-fraud effort announced this week by Deputy Attorney General Rod Rosenstein.  As regular readers know, in certain drastic situations — such as a hurricane — the federal government puts massive resources into play, which is without question the right thing to do.  And, as with any massive deployment of government resources, there will always be a few unscrupulous actors who take advantage of the situation.

That was certainly the case following Hurricane Katrina in 2005, when billions of dollars poured into the Gulf Coast. In the wake of Katrina the National Center for Disaster Fraud (NCDF) was born.  The NCDF is a partnership between the U.S. Department of Justice and various federal law enforcement and regulatory agencies to coordinate resources to investigate, prosecute — and hopefully, deter — fraud related to natural disasters.

Department-Wide Standards Are Announced for the First Time

Needless to say, DoJ has previously co-ordinated its efforts in response to the massive storms that hit the Gulf Coast this year.  As just one example, several weeks ago, several USAOs in affected districts announced a coordination of efforts.  But the “Rosenstein Memo” is new in that it is Department-wide.

In a brief memo dated Sept. 22, 2017,  the Deputy Attorney General, among other things, requires each of the 94 U.S. Attorney’s Offices to designate a point of contact for fraud investigations and prosecutions.

Deputy A.G. Rosenstein had this to say:

The Justice Department is committed to pursuing any fraudsters seeking to capitalize on the tragedy and will devote the necessary resources to do so.  It is imperative that the department is able to properly track and manage its response to claims of disaster fraud and that agencies receive timely and relevant investigative leads and other relevant information. By working together, we can ensure that federal emergency relief funds are properly distributed to those who need them most and that taxpayers are not victimized by fraudsters or other criminals.

And that, dear readers, is a good start.  Stay tuned for reports on the inevitable criminal and civil prosecutions that will follow.

 

 

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Attorney’s Fee Awards in Virginia State Courts 

By Zachary Kitts on August 31, 2017 in ,

 

 

 

 

 

 

Attorney’s Fee Awards in Virginia State Courts

As regular readers know, in addition to handling fee-shifting cases of my own, I am often asked to serve as an expert witness in litigation over reasonable attorney’s fees.  For years I have been mystified about the fact that Virginia state courts tend to award fees at lower rates than federal courts.  That could be because Circuit Courts are accustomed to more routine legal matters than federal courts.  It could also be that many Circuit Court judges are accustomed to “splitting the baby” so to speak.

Fortunately, several recent opinions from Virginia state courts give me some hope that this tide is turning and that Courts of the Commonwealth are beginning to take fee awards seriously.

A few months back I covered the SCOVA opinion in Lambert v. Sea Oats Condo Association.  There, the Supreme Court of Virginia overturned a Circuit Court that awarded a lawyer only $375 in attorney’s fees after hundreds of hours of work.  The Court based its reasoning on the idea that because the entire case was over a mere $500, it would be unreasonable and “unfair” (to use the term the Circuit Court used) to aware more than that amount in attorney’s fees.

Today, Virginia Lawyers Weekly covered a recent opinion from a Circuit Court for Hanover County in Winding Brook Owner’s Assoc. v. Thomlyn, LLC.  There, the total attorney’s fee award came to about ten times the amount of the judgment obtained.  The Circuit Court properly held that that should not matter, because the contract at issue contained a fee-shifting clause.

There is one aspect of the opinion that I predict will cause someone, somewhere, some heartache.  Judge Harros wrote: “Expert testimony is not required in all instances to prove the reasonableness of attorney’s fees, especially when the attorneys have submitted affidavits and detailed time records.”  This may be true in some instances.  For example, as part of a sanctions motion or a fee award for a discovery dispute, it might not be practical or warranted to require a lawyer to testify as an expert.

But when the amounts are large, or are likely to be larger than the total amount of damages awarded, I certainly agree with Virginia litigator Stephen Emmert who is quoted by Virginia Lawyers Weekly in the article.  Emmert — who has long been an iconic figure in Virginia legal circles — is quoted as saying: “If I were litigating something like this, I would always want to have an expert.”

To that I add my hearty “amen.”  And not just because I have served as a paid expert witness on this topic numerous times.  In fact, I would go one step further and add that a bifurcation motion — pursuant to Virginia Sup. Ct. Rule 3:25 should be litigated — preferably early on — in such cases.

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VaQuiTamLaw author Zachary Kitts Appointed to Virginia State Bar’s Mandatory Professionalism Course

By Zachary Kitts on July 31, 2017 in , ,

 

 

 

 

 

 

Zachary Kitts appointed to the faculty of the Harry L. Carrico professionalism course

Earlier this month I was appointed to the faculty of the Virginia State Bar’s Mandatory Professionalism Course.  Most states and jurisdictions require a similar course for newly admitted lawyers, but Virginia’s course was the first such program.  The course is named for Chief Justice Harry L. Carrico, who in addition to his 42 years on the Supreme Court of Virginia, was the driving force behind the creation and implementation of this course.

Attorneys and judges appointed to serve on the faculty are recognized for their commitment to upholding and elevating the highest standards of honor, integrity, and courtesy in the legal profession, and I am proud to be among them. At the definite risk of sounding like an old-timer, when I took the course — in 2001 — it was still led by Justice Carrico himself.  Justice Carrico retired in 2003 so I must have been one of the last classes to have this privilege.

The Carrico Professionalism Course was just one of the three professionalism courses I attended in the 2001-2003 time-frame. Virginia’s course was however the best of the three for the same reason that Virginia’s continuing legal education courses are among the best — the faculty prepares to teach this CLE the same way they prepare a case for a client.

But there is also more to it than that.  As I recall, the faculty of the course I attended back in October of 2001 really opened up and shared personal stories from their years in practice.  Although “professionalism” is central to being a lawyer it is hard to define in the same way that words like “ethics” are hard to define.  One of the things I came away with was the understanding that professionalism requires constant work — it is not a merit badge you obtain and then forget about.

Soon to follow — my attempt at defining “professionalism” and what it means to me…

 

 

 

 

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Fredericksburg Hospitalist Group Pays $4.2 Million to Settle False Claims Act Case

By Zachary Kitts on June 30, 2017 in , , ,

 

Fredericksburg Hospitalist Group Pays $4.2 Million to Settle False Claims Act Case

The United States Department of Justice and the Virginia Office of the Attorney General announced a $4.2 million settlement in a qui tam case of mine earlier this month.  My firm (K&G Law Group) was one of three firms involved and so I would be remiss not to mention my esteemed co-counsel, Steve Baril and Mike Lesser.

We jointly represented Rick Morrow, a former executive of Fredericksburg Hospitalist Group, P.C.  Mr. Morrow will receive 17% of the total settlement.  Mr. Morrow, who has spent his entire career in health care, was pleased with the outcome:  “Overbilling for health care services saps our federal and state tax dollars, and I am glad we have laws like the federal False Claims Act and the Virginia Fraud Against Taxpayers Act that level the playing field and allowed me to address these wrongs.”

The Complaint was filed on Mr. Morrow’s behalf in 2014 and his allegations — that defendants upcoded hospitalist services from 2010 to 2015 — were investigated by Assistant U.S. Attorney Robert McIntosh, and Assistant Attorney Generals Vincent J. Vaccarella and Adele M. Neiburg.

In a statement U.S. Attorney Dana J. Boente said “Rooting out fraudulent billing by healthcare providers is a priority; this office will continue to pursue such matters vigorously.

Hospitalists — defined as physicians who focus only on treating patients within a hospital — typically bill using CPT codes for patient evaluation and management services.   These include codes 99221-99223 (initial hospital care services) and  99231‑99233 (subsequent hospital care). Each of these groups of codes has three levels, for low, moderate, and high complexity. Thus, CPT 99221 is a low complexity initial encounter; CPT 99222 is one of moderate complexity, and CPT 99223 is an initial encounter of high complexity.

These codes also have an option to bill based on face-to-face time spent with the patient.  For example, codes 99221 covers up to 30 minutes, 99222 covers up to 50 minutes and 99223 covers up to 70 minutes.  If billing based on time, the physician is required to properly document the patient encounter to justify the billing amount and CPT code.  As regular readers know, in the world of FCA qui tam litigation, cases like this are commonly called “upcoding cases,” but the truth is that upcoding just means billing for services not provided.

For my part, I would like to thank all of the aforementioned government lawyers, Mr. Morrow (for being such a great client) and Mike and Steve for being some of the best lawyers I have ever worked with.

 

 

 

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Virginia Supreme Court Issues Important Attorney’s Fee Opinion

By Zachary Kitts on May 26, 2017 in

 

 

 

 

 

 

Virginia Supreme Court Issues Important Attorney’s Fee Opinion

The Virginia Supreme Court issued an important attorney’s fee opinion recently.  The opinion, in Lambert v. Sea Oats Condominium Association, Inc., — S.E.2d. —-, 2017 WL 1378202 (Va., 2017) should be of interest to Virginia practitioners, as it lays to rest several hobgoblin-style arguments normally made by those resisting a fee petition in Virginia state courts.

As regular readers know, I maintain more than a passing interest in this topic for a number of reasons, not the least of which is that much of my law practice concerns fee-shifting statutes, and I have served as an expert witness in a number of cases on this topic.

BACKGROUND

Plaintiff Martha Lambert filed a civil action in a Virginia General District Court (for non-Virginia lawyers, GDCs have jurisdiction over misdemeanor criminal cases and civil cases up to $25,000).  Her claim alleged, in a nutshell, that her condominium association failed to reimburse her for a repair to the common area of her condominium in the amount of $500.  She sought judgment in the amount of $500 plus an award of attorney’s fees and costs pursuant to Va. Code § 55-79.3(A).  Under that code section a prevailing party “shall be entitled to recover reasonable attorney fees” in an action to enforce compliance with condominium instruments.

Lambert lost at the GDC, and appealed to the Circuit Court, where she won.  In addition to the $500 in damages awarded, she sought attorney’s fees and costs in the amount of $9568.50.  Citing the small nature of her award – and nothing else – the court awarded her exactly $375 in attorney’s fees and costs.

THE SUPREME COURT OF VIRGINIA REVERSES THE CIRCUIT COURT

Justice Mims, writing for SCOVA held that while a Circuit Court can consider the amount of damages awarded, that that is only one factor in an overall analysis of the reasonable nature of the fee. More important is his holding that Circuit Courts cannot limit an award of attorney’s fees based on a small award at trial if a plaintiff receives everything they demanded in the ad damnum.

This case is important for another reason as well.  It appears to put to rest the issue of whether a party must include evidence of its attorney’s fees in a fee-shifting case as part of its case in chief.  Where a party seeks to recover its legal fees pursuant to a statutory or contractual fee-shifting provision, it is appropriate to delay the issue of an attorney’s fee award until after the merits of the case have been decided.  The Court referenced Virginia Rule 3:25(D), which allows the parties to request a Court Order establishing a procedure for adjudicating an attorney’s fees claim after the case in chief has concluded.

As Virginia practitioners know, our Supreme Court is not big on issuing guidance to lawyers and litigants, so when it does we should all listen and listen close, and hopefully Judges throughout the Commonwealth will do the same.

 

 

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UPDATE: THE 2017 VIRGINIA ATTORNEY GENERAL RACE WILL BE REPUBLICAN JOHN ADAMS AGAINST DEMOCRAT MARK HERRING

By Zachary Kitts on April 28, 2017 in

 

 

 

 

 

 

UPDATE: 2017 VIRGINIA ATTORNEY GENERAL RACE WILL BE REPUBLICAN JOHN ADAMS AGAINST DEMOCRAT MARK HERRING

It appears that no primary will be necessary for Republicans to pick their 2017 challenger to AG Mark Herring — Richmond lawyer John Adams will be the Republican nominee for Virginia Attorney General in 2017.

As reported a few weeks ago in the Richmond Times Dispatch, Chuck Smith failed to collect the necessary number of signatures to qualify.  As I said before, Chuck Smith seemed to be a promising candidate and, of course, democracy itself benefits from a hard-fought primary.  Republican John Adams, on the other hand, turned in an impressive 15,573 signatures—far exceeding the minimum requirement.

By the way, I’m not sure if Virginia’s qualification system is more complicated than other states, but the process of collecting signatures is a bit more complicated than you might think.  Candidates needed 10,000 signatures from registered voters, including 400 from each of Virginia’s 11 congressional districts.  And there is only a very limited window of time in which to collect the signatures. Smith didn’t meet the requirements and so there will not be a primary.

Stay tuned readers, we here at vaquitamlaw.com will be asking the Attorney General candidates for comment on their approaches toward the Virginia Fraud Against Taxpayers Act and whether they would support vigorous enforcement of the law….

 

 

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