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Upcoming VaCLE Seminars on Hanging a Shingle and Reasonable Attorney Fees in Virginia

By Zachary Kitts on May 31, 2018 in , , ,

 

 

 

 

 

 

 

Upcoming Continuing Legal Education Seminars on Starting a Law Firm and Reasonable Attorney’s Fees in Virginia

As many of you know, for the last three years John Bredehoft and I handled the most difficult and involved part (even though I do say so myself) of three important Virginia CLEs — the Annual Employment Law Update in May of each year (through VaCLE) and then in the fall we did the annual case law update for the Virginia Bar Association’s Annual Conference of Labor Relations and Employment Law.

In all three seminars, we were responsible for reviewing interpreting the previous-year’s new case law, and it was a real pleasure to work with my good freind Bredehoft.  For decades (three decades in the case if VaCLE, and nearly five decades in the case of VBA) these seminars have been indispensable educational and networking opportunities for Virginia lawyers practicing in, or wanting to learn more about, employment law.  I myself attended these conferences from the very start of my legal career, and I have always found them to be top-notch education and social opportunities.

Prior to John and I taking over, Eddie Isler and Harris Butler handled the update portion of all three seminars for as long as I can remember, which is to say at least 12 or 13 years.  Under a new policy, however, the presenters of this one portion of the seminar will be rotated out every few years, beginning this year.  This certainly didn’t hurt my feelings, however, because (1) it was indeed an enormous amount of work and (2) it basically took up all of the time I could afford to spend, annually, preparing and speaking at CLEs.

So, because I do not have to prepare an enormous volume of new employment law cases, I am now free to speak at numerous other seminars on different topics, including two upcoming seminars through Virginia CLE — the first will be the semi-annual Hanging a Shingle seminar on July 11, 2018 and the second is Attorney Fee Awards in Virginia on August 23, 2018.  Video replays of both seminars will also be available throughout the Commonwealth at various times.

Spots are selling out fast, hope to see some or all of you there!

 

Virginia False Claims Act Lawyers

 

 

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Healthcare Records, Qui Tam Whistleblowers and HIPAA

By Zachary Kitts on April 29, 2018 in , , ,

Virginia Qui Tam and False Claims Act Lawyers

 

 

 

 

 

 

Healthcare Records, Qui Tam Whistleblowers and HIPAA

This month I published an article in the Journal of the Virginia Trial Lawyers Association entitled Healthcare Records, Qui Tam Whistleblowers and HIPAA.  

Regular readers of this blog will be familiar with much of the article’s content.  In a nutshell, the article examines the text of HIPAA itself and looks at the “privacy rule” portion of HIPAA — found at 45 CFR 164.502(j) — and explains why that rule — and why healthcare records — feature so prominently into qui tam practice under the federal False Claims Act and the Virginia Fraud Against Taxpayers Act.

The article then looks at the reason — or rather, reasons — why it is important for relators to copy healthcare records in the first place. In the opinion of this writer, there are two primary, interrelated reasons for relators to copy documents like healthcare records.  First, qui tam litigation under the FCA and VFATA is a practice heavy on forensic investigation skills.  Copies of the documents assist the relator’s lawyers in their efforts to flesh out and master every nuance in the case and to establish their client’s position as the original source of the information.  Unlike most civil litigation, much of the real work of a qui tam case is done by the relator’s lawyers in the early stages of the case.  Moreover, even the most sophisticated clients tend to combine emotions with their facts.  Copies of documents and other evidence assist the relator’s lawyers in their efforts separate emotion from fact and assemble the bigger picture and its potential implications.  Copies of relevant documents also can help lawyers identify other individuals or companies who may share liability.

Second, government lawyers handling qui tam cases essentially do battlefield triage when they sort through new cases – that is, they have to make quick decisions about which cases get attention and which cases do not.  Cases which can be presented to the government in a thorough, well-documented and thoughtful manner stand a much greater chance of receiving attention than those that do not.

For lawyers, this should be easy to understand — the government’s lawyers look at cases much in the same way that we do when a new potential client approaches us.  So just try to imagine your ideal client and how you would like to have the information about a potential case presented to you.

Next the article looks at what is — and what is not — protected activity under HIPAA.  There are very few cases examining whistleblower activity in the context of the HIPAA privacy rule, and the cases that do exist bear few surprises.  For example, in Howard ex rel. U.S. v. Arkansas Children’s Hosp., 2015 WL 4042170 (E.D. Ark., 2015) two whistleblowers survived a summary judgment motion asserting that they were not “whistleblowers” as defined by the FCA and were therefore not entitled to have the PHI in their possession.

In Monarch Fire Protection Dist. of St. Louis County, Missouri v. Freedom Consulting & Auditing Services, Inc., 678 F.Supp.2d 927 (E.D.Mo. 2009) the Court held that the whistleblower exception in HIPAA applies only to an individual showing the information to his or her own attorney for purposes of getting legal advice; parties are not, therefore, protected when they show the records to the attorney for a third-party for potential use in an unrelated case.   Nor is a disclosure of PHI to the EEOC in support of an individual’s employment-discrimination claim protected, because the EEOC does not enforce laws against fraud on the government.  Vaughn v. Epworth Villa, 537 F.3d 1147, 1153 (10th Cir. 2008).

Finally, the article examples Virginia Legal Ethics Opinion 1786 and its guidance for qui tam relators. Simply put, LEO 1786 is a must-read for lawyers practicing in this area; the hypothetical deals with a client who brings a collection of healthcare records to her lawyers to evaluate a potential case.   The client considers the documents to be confidential; the client had access to the documents as part of her work for the target defendant.  In formulating its answer, the Committee identified four factors as important ethical considerations: (1) the nature of the documents, (2) the nature of the sources of the information, (3) the method used by the client to gather the information, and (4) whether the attorney directed the client to gather the information.  The Committee points out that the attorney can only use the information if Virginia Ethics Rules 3.4(a) (which prohibits a lawyer from obstructing another party’s access to evidence and information) and 4.4 (concerning respect for the rights of third-persons) are not violated.

These rules, taken together, make it clear that potential qui tam relators should never remove original documents from their place of employment.  Doing so would obstruct the defendants’ access to those documents and, in the healthcare context, removing a patient’s medical chart certainly shows an utter disregard for the rights of the individual patient and his or her health.

I would like to thank VTLA for inviting me to write the article and especially Virginia lawyer Richard Armstrong for his work on behalf of VTLA.

 

Virginia False Claims Act Lawyers

 

 

 

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Virginia Fraud Against Taxpayers Act Amendments for 2018

By Zachary Kitts on March 30, 2018 in , , ,

Virginia Qui Tam and False Claims Act Lawyers

 

 

 

 

 

Virginia Fraud Against Taxpayers Act Amendments for 2018

I am pleased to announce that important changes to the Virginia Fraud Against Taxpayers Act were made in the 2018 legislative session.  The legislation — SB487 — was sponsored by state Sen. John Edwards (D-Roanoke) and passed both houses of the General Assembly unanimously and was signed into law by the Governor.  These updates were necessary and important because, as reported previously, penalties under the federal False Claims Act increased back in 2016, but there had been no corresponding increase to statutory penalties under the VFATA.  (As regular readers know, the federal False Claims Act and the VFATA both have treble damage provisions in addition to civil penalties in set amounts).

In order for the Commonwealth to qualify for an enhanced share of its Medicaid recoveries our VFATA must match the federal FCA in certain ways; while a discussion of the specifics is beyond the scope of this blog post, regular readers are familiar with the criteria.  In a nutshell, the VFATA must be at least as powerful as the federal FCA, which would include the amount of the civil penalties.

Now you might think amending the VFATA to match the federal FCA would be a no-brainer — the rewards of having a state statute that matches the FCA amount to tens of millions of dollars in an average year in Virginia and it is as close as a state ever gets to free money.  Moreover, Virginia has a long and proud tradition of vigorous law enforcement, which includes a General Assembly that regularly gives the men and women of law enforcement the tools they need to do their jobs.

That being said, Virginia also boasts a very pro-business environment; I therefore did not consider legislation raising the penalty range to be a sure thing.  At first blush, the optics are kind of harsh.  For a number of years now the penalty range has been a minimum of $5,500 and a maximum of $11,000; the General Assembly appeared happy — and comfortable — with that.  SB487, however, raises the range to a minimum of $10,957 and a maximum of $21,916; I imagined a great weeping and wailing from the Chamber of Commerce at the mere suggestion of such an increase.

And of course the legislative process at any level is at best an unsure thing.  Once legislators start tinkering with something, you never know where you will end up.  Amendments can be made by any one of the 140 legislators; and those amendments can range from very unhelpful to disastrous.  Hopefully, this year’s smooth sailing means our Virginia Fraud Against Taxpayers Act has found secure footing in the halls of the General Assembly, but it is certainly best to remain vigilant.

Virginia False Claims Act Lawyers

 

 

 

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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 the first blog on the Virginia Fraud Against Taxpayers Act, VaQuiTamLaw.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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