I am pleased to announce that Virginia Qui Tam Law is now published in a Kindle edition , so the blog feeds are available from Amazon.com for those of you who own a Kindle.
I recently purchased a Kindle myself, and I have found it to be a very useful tool for my practice. For lawyers, I recommend the DX version, as it allows the user to transfer pdfs directly from any source to the Kindle.
As regular readers know, this Friday, the Circuit Court for Albermarle County is set to hear argument on the University of Virginia’s motion to quash Attorney General Ken Cuccinelli’s civil investigative demand pursuant to Virginia Code 8.01-216.7(D).
The strategy of Mann and UVa has been simple since day one–they have continually sought to turn this into a battle about academic freedom, rather than a simple investigation into whether or not Mann made misrepresentations on several grant applications.
As I have pointed out before, most lawyers representing targets of a CID take advantage of the opportunity to try to convince the government that there has been no wrongdoing, and that the client has nothing to hide.
There are very good reasons for this, because this epic battle over this CID is much ado about nothing. Even if a target “wins” and the CID gets set aside, they haven’t really won anything at all, because a CID is just a preliminary investigative tool.
The manner in which Mann and UVa have attempted to address public opinion strikes me as somewhat interesting for several reasons . The latest maneuver is to have the ACLU and others file amicus briefs in the Circuit Court for Albermarle County. That’s right–an amicus brief in a Virginia Circuit Court.
Of course, the ACLU doesn’t mind this one bit–they really have nothing better to do than file amicus briefs, and it will probably result in some donations for them–but I would be quite surprised if the Circuit Court allowed such a filing. While United States District Courts will occasionally allow amicus filings, they do not always do so.
(As an aside,the brief /files/116785-109034/AG_Mann_file_July_13.pdf”>brief filed by the Attorney General, I must say that a fine job was done. The brief addresses things like–gasp–the burdens required for OAG to issue CIDs and so forth.
Importantly, the brief also make some other important things clear, which, in my opinion, show which side is acting a little more rationally. As one example, OAG mentions in its brief that it has offered UVa the opportunity to share any dispositive evidence that might warrant an end to the investigation.
The brief details other attempts on the part of OAG to cooperate. As another example, apparently a number of FOIA requests were made to UVa in 2009, asking for Mann’s emails. The FOIA requests came up empty handed, and UVa said it did not have any emails of Dr. Mann’s at this late date.
So, OAG asked the University at the outset if that was still a correct answer, because if so, both sides could just skip the issue of the emails. Sounds like an attempt at cooperation if you ask me–but UVa never responded to this commonsense effort to narrow the issues.
Certainly, emotions are running high on both sides of this issue. Stay tuned for more.
Zach
Everyone knows by now that the U.S. Supreme Court has recently spoken on the topic of the pleading standards of Fed. R. Civ. P. 8 and instituted a “plausibility” pleading standard in the case of Bell Atlantic Corp. v. Twombly, 55 U.S. 544, 127 S.Ct. 1955, 167 L.E.D.2d 929 (2007). Unfortunately, some lawyers view the Twombly decision (together its counterpart Iqbal) as aimed only at the standards applicable to a Complaint filed by the plaintiff.
In fact, the opposite is true. The pleading requirements of Fed. R. Civ. P. 8 (as well as the infamous Rule 11) apply to the Answer filed by a defendant (and the affirmative defenses set forth in Answers) just as they apply to Complaints.
My favorite examples of evasive Answers are as follows:
The allegations of paragraph ___ contain a legal conclusion to which no response is necessary.
Paragraph ___ of the Complaint incorporates a document which speaks for itself, and as such no response is necessary.
Both of the above should, in most circumstances, be sanctionable. Even worse is the defendant who is inserts a laundry list of affirmative defenses. Either way, the result is that more work must be performed by the plaintiff to learn basic elements of the defense.
I am quite happy to report that two Virginia Federal Magistrate Judges have recently confirmed that defendants must comply with Twombly and Iqbal in filing their answers and asserting affirmative defenses. The opinions are Francisco v. Verizon South and Palmer v. Oakland.
Hopefully, this will result in fewer evasive and/or non-responsive paragraphs in Answers.
First, let me say that this is not a political blog. This is a blog dealing with the Virginia Fraud Against Taxpayers Act and with litigation under the Federal False Claims Act in Virginia Courts.
Let me also say that I have no thoughts whatsoever on the issue of global warming (sometimes also called climate change, depending on whether you believe in it or not). I’m not a scientist, and I haven’t ever really given it any thought. In fact, I just learned about two weeks ago that there are two different names for this particular concept, depending on the side of the argument one believes.
Let me also disclose that I think the University of Virginia is a great University, and even if the allegations of research fraud are true, I will still hold UVa in high regard.
So, with all of those caveats out of the way, I am going to do my best to call ’em as I see ’em.
As most of you are aware, Attorney General Ken Cuccinelli used his powers under the VFATA to serve a civil investigative demand on the University of Virginia. He seeks records and other information related to work of a guy named Michael Mann (who is a leading scientist studying climate change a/k/a global warming) while he was a professor at UVa.
The CID was issued based on information from the “Climategate” incident last fall. Climategate involved thousands of emails from Dr. Mann being leaked to the public. The emails allegedly show Dr. Mann conspiring to rig research results; apparently, reasonable people can disagree about what is said in these emails.
It is also a fact that if Mann’s emails do in fact contain evidence of Mann falsifying research results, he has liability to the Commonwealth under the Virginia Fraud Against Taxpayers Act. This is so because he received hundreds of thousands of dollars worth of state and/or federal grants to continue his research while he was at UVa.
So far, so good. It is certainly true that a certain small segment of the scientific
community–regardless of political agendas and scientific beliefs, and regardless of race, color or creed–is willing to fudge a little on research results, or on grant applications, or very often on the two things together.
For instance, last week the Baltimore Sun announced that a Columbia, Maryland biotech company paid $934,000 to settle a false claims act lawsuit alleging that it falsified research results and omitted critical data from its research in order to get extended funding for a federal grant.
It is also true that recipients of a CID (like UVa) have nothing to gain and much to lose by pushing back on a CID. A CID is a preliminary tool used by the OAG to determine whether a violation of the law has occurred. The OAG issues these requests prior to filing a lawsuit–it is really an excellent opportunity for a defendant to convince the OAG that there has been no wrongdoing.
I think most defense lawyers will tell you that the opportunity to talk someone out of filing a lawsuit is a great opportunity, and one that does not come everyday and in every kind of case. It is not an opportunity to be wasted. Moreover, it also makes absolutely no sense to waste money by escalating a CID into full-scale litigation.
And here is the real kicker–even if a party fighting a CID wins and successfully quashes the CID, guess what? They may not have to respond to the CID, but they have spent thousands and thousands of dollars, and the winning prize is normally a freshly-filed lawsuit by the OAG. And then, as soon as discovery begins in the case, the OAG will ask for exactly the same materials they requested in the CID. At that point, the defendant will have no choice but to produce the material.
In Virginia state courts, the irony is even thicker, because litigants can serve interrogatories, document requests, deposition notices, and other discovery with the complaint itself.
So, all of this leads me to wonder if UVa isn’t playing politics. This is not the first time they have clashed with the OAG this year. While it is beyond the scope of this blog, earlier this year, General Cuccinelli irritated a great many people at UVa and other state universities by advising them as to the current state of discrimination law. He issued the same proclamation that five other AG’s have issued confirming that sexual orientation is not a protected class, but for some reason he really touched off a nerve.
Whatever the reason, we have ourselves a full-blown lawsuit down in Albemarle County now folks–stay tuned for more.
Lest anyone think that the debate about Attorney General Ken Cuccinelli’s In fact, it is rather common for targets of lawsuits (or the recipient of a CID) pursuant to the Federal False Claims Act or the Virginia Fraud Against Taxpayers Act to claim that they are being targeted for political reasons. It is also very common for the people who support such targets to think that they are being targeted for political reasons.
The broad outlines of the facts of the case are as follows: Prof. Mann was formerly at UVa, where he performed research into his global warming theories (or climate change theories, depending on which view of this matter you believe).
Some recent revelations about Dr. Mann’s research indicates that he falsified research results in order to obtain various grants from state and federal government sources. I am referring, specifically, to the “climate-gate” scandal that broke last fall in which several thousand emails to and from Dr. Mann somehow ended up in the public realm.
Many of those emails purport to show Dr. Mann conspiring with others to hide certain evidence showing various flaws in his theories. Mann and his supporters reply that those emails are taken out of context, etc.
I have previously discussed the phenomenon of people not being able to believe that a certain person would knowingly submit a false claim to the government based on pure emotion. For example, in an old post about fraud on the federal government by a hearing-impaired business man, we heard things like: “I don’t think he would commit fraud on the government–he has always been very supportive of the hearing-impaired community.”
Huh? How is it that being a supporter of a good cause automatically makes a person honest?
Anyway, UVa has resisted General Cuccinelli’s civil investigative demand, and has filed a motion to Mixx Delicious Digg Facebook Twitter
The D.C. Examiner has a story today about Virginia Attorney General Ken Cuccinelli issuing a Civil Investigative Demand (“CID”) to the University of Virginia as part of an investigation into grant fraud. You can read Bill Flook’s excellent story here.
The story also has a quote from state Sen. Chap Peterson (D-Fairfax) about the CID, which he called “very grasping.” Peterson goes on to say:
“He has a constitutional duty to represent the state, [to] represent the taxpayer. A lot of this just seems to me agenda-driven.”
First, the purpose of the Virginia Fraud Against Taxpayers Act (Va. Code 8.01-216.1 et seq.) is to protect our public fisc from false claims on our tax dollars. Anyone who submits a false claim for the government money is damaging the Commonwealth, regardsless of the politics.
Second, there are a great many of us taxpayers that feel like policing the use of state grant money IS representing the taxpayer. A certain percentage of scientists and other researchers–brace yourself, folks–do make false statements and false records in association with government grant money.
Such false claims can arise in any number of ways, including a good many of which Dr. Michael Mann is suspected. This is not a novel use of a federal or state False Claims Act–much to the contrary, false claims and fraud in association with government grants is very much a bread and butter false claims act case.
There is absolutely, positively, nothing controversial about issuing a CID to a researcher who is suspected of making false statements and/or false records in order to get government grants. This is a very, very common type of False Claims Act violation, and General Cuccinelli can–and should–be investigating the use of the Commonwealth’s grant money.
General Cuccinelli, in his official capacity as Attorney General of the Commonwealth, issued this CID when he believed that a researcher was making (or had made) false claims and/or false records in association with state grant money.
But he is not the only with the power to take action–under the qui tam provisions of the Virginia Fraud Against Taxpayers Act, any individual with first-hand, personal knowledge of false claims or fraud in relation to a state (or for that matter federal) grant also has the power to hire a private attorney (that is, one with experience in this area of law) and initiate a case.
The law sets forth a very specific procedure, and also creates potentially very lucrative rewards–the damages to the state are multiplied times three, and the individual (in these cases, the individual is usually called a “relator”) can collect anywhere from 15% to 30% of the total damages to the state.
As more states struggle to pass state-level false claims act legislation, I have mentioned recently that PhRMA and other health care lobbyists seem to have switched their tactics. Simply put, as more and more states come on board and reap fantastic rewards from having a state FCA, it has become impossible for the paid health care lobbyists to make states believe that the world will end if their state has an FCA.
The new strategy seems to be to suggest “helpful” changes to the state’s FCA that will make it “better” than the federal FCA. What the changes really do is to make the state FCA non-compliant with section 6031 of the Deficit Reduction Act of 2005. The result of that, of course, is to make the statute pretty much useless.
Several times in the last few months, the hazards of this strategy have become apparent. This past week, Sen, Grassley OIG Daniel Levinson, asking for help.
I think that everyone familiar with Senator Grassley is familiar with his straight and to the point style–he is not one to mix his words, and he never leaves a doubt in anyone’s mind about what he wants to say.
Grassley asked the Inspector General for the Department of Health and Human Services and the Attorney General to review existing state False Claims Acts for compliance with recent changes to the federal False Claims Act and to issue appropriate guidance for any state interested in the federal incentive, which allows states to increase their shares of Medicaid recoveries by 10 percent by allowing whistleblower lawsuits.
As of this writing, 27 states have some form of false claims-style statute, but only 20 of those have submitted their false claims act to the feds for approval under DRA. Of those 20 states, only 14 have qualified for the 10% incentive. In order to qualify, the state FCA must be at least as effective as the federal False Claims Act in establishing liability to the state for false claims, and must also be at least as effective as the federal FCA in rewarding qui tam whistleblowers.
Additionally, the state law must contain civil penalties that are not less than the amount of the civil penalty created by the federal FCA and must provide for filing an action under seal for 60 days.
Not all of these conditions are literal word-for-word requirements–for example, the Virginia Fraud Against Taxpayers Act contains a seal period of 120 days, but it was approved by the HHS-OIG in 2007.
Grassley was aiming at two things with this letter. First and foremost, I believe he is taking aim at those legislators who adopt the oh-so-helpful suggestions of the health care lobbyists, and making it clear to them that they need to get on the winning team. He mentions in particular the new development of the “first to file bar” that is being added in some states.
Second, in light of the recent changes to the federal False Claims Act (which has been amended twice in the last 12 months) Grassley is also sending a message to states like Virginia that qualified years ago.
The Virginia statute mirrors the old FCA word for word–but since May of 2009, there is no question that Virginia’s Fraud Against Taxpayers Act has not been as protective as the federal False Claims Act. So Grassley is also telling Virginia and her 13 sister states that they need to start looking at some legislative fixes, or they could find themselves in a whole bunch of pain.
In defense of the Commonwealth, I will say this: coming in to this legislative session, we all thought about suggesting that the VFATA be amended to match the new federal FCA, but decided to refrain because of the possibility of further amendments. As it turns out, those further amendments did come true this year, just a few weeks ago.
But in the 2011 legislative session, we are going to need some amendments….
