False Claims Act (FCA) enforcement and litigation has increased rapidly in recent years. The U.S. Department of Justice routinely obtains billions of dollars in settlements and judgments from civil cases involving alleged fraud against the government each year, with a significant portion of the recovery coming from the more than 700 suits filed annually under the FCA’s qui tam provisions. Our lawyers have defended hundreds of FCA actions initiated by federal, state, and local government authorities, as well as those by private qui tam plaintiffs, across a wide range of industries.
We bring value to our clients in the following ways:
- A multidisciplinary approach with a deep national regulatory and investigatory bench. Our clients entrust us with their most complex FCA matters, relying on our multidisciplinary approach. We provide solutions across all key areas of law, including white collar, healthcare, life sciences, FDA, government contracts, banking and financial services, labor and employment, tax, international trade, and appellate. We have FCA practitioners in offices throughout the United States who partner with our subject matter, regulatory, and industry experts to establish formidable teams. Our lawyers have been consistently recognized for their FCA work by leading legal directories and publications, including Chambers USA, LMG Life Sciences, The Legal 500 US and Benchmark Litigation.
- A full-service, lifecycle FCA practice. Our lawyers advise clients throughout the lifecycle of potential FCA claims. On the front end, we help companies with compliance and risk management issues, including developing robust ethics and compliance programs designed to minimize FCA risk. We have extensive experience handling sensitive internal investigations regarding compliance issues and advising regarding self-reporting, including providing advice on related employment issues. We also have considerable experience assisting companies in their interactions with whistleblowers and potential whistleblowers. We assist during government investigations of qui tam matters, before an intervention decision is made, and during which, quite frequently, parallel civil and criminal investigations are proceeding. We understand what factors play into the government’s decision whether to intervene, and have succeeded in convincing the government not to intervene in FCA cases on many occasions.
- In those cases where the government has decided to intervene and the client has determined that settlement is the best option, we employ numerous strategies to resolve those cases on terms favorable to our clients. To that end, we have a vast amount of experience with damages modeling to reduce the amount of such resolution, as much as possible, based on principled arguments grounded in both the facts and the case law. Our lawyers also advise on issues related to those resolutions such as tax treatment, negotiation of CIAs, compliance program implementation and monitoring, and employment issues.
- Understanding of all aspects of FCA-related litigation. Where matters cannot be resolved through settlement, we bring to bear our formidable litigation skills. In FCA matters, we engage in cutting-edge and complex motions practice, regarding issues such as public disclosure, original source, and 9(b), with many cases successfully dismissed at the pleading stage. Where matters are not dismissed at the outset, we are well equipped to engage in affirmative and defensive discovery in the most complicated of regulatory areas. Thereafter, we have prevailed on numerous occasions at the summary judgment stage. We also have the expertise necessary to successfully try FCA cases.
We also have extensive experience litigating FCA matters brought by State and local authorities, which is increasingly important as state and municipal FCAs proliferate and there is increased coordination between the DOJ and State AGs, and a growing alliance between State AGs and plaintiffs’ contingency fee lawyers.
We also have significant experience litigating ancillary matters related to core FCA claims, including retaliation claims, securities and product liability litigation, and suspension, debarment and exclusion proceedings.
- Sophisticated thought leadership. We bring our depth of experience and breadth of resources from the firm’s myriad legal disciplines to analyze emerging issues within this dynamic area of law on our industry-leading blog, Original Source: The Sidley Austin False Claims Act Blog. We also are frequent authors and presenters on cutting-edge FCA topics. We apply knowledge management techniques to take advantage of our prior FCA work, including by maintaining databases of settlements and prior motions, analyses of state False Claims Acts, and a robust database of FCA cases, and other resources, which enables us to leverage our previous engagements to provide cost-effective representation to our clients.
Our team has assisted clients from numerous industries, including:
- A major defense contractor in a FCA case involving allegations of fraud related to a weather satellite program. Following the government’s declination, the court dismissed the case with prejudice based on the public disclosure bar.
- A professional services firm, KPMG, in a qui tam action alleging that several government contractors presented claims for payment for travel expenses, which did not reflect volume-based vendor commissions, rebates and incentive payments.
- A government contractor in a Department of Justice investigation stemming from a qui tam case alleging that a GSA schedule contractor intentionally violated the price reductions clause.
- An aluminum manufacturing company in a civil qui tam investigation involving alleged non-conforming aluminum supplied for NASA’s and the Department of Defense’s rocket programs.
Healthcare and Life Sciences Companies
- DaVita in connection with a government investigation of criminal and civil FCA claims related to the Company’s physician joint venture practices. The Company resolved the matter with a $350 million civil FCA settlement in 2014. Also in connection with that matter Sidley negotiated DaVita’s Corporate Integrity Agreement.
- One of the largest clinical laboratory services companies in connection with qui tam suits brought in federal and state courts alleging payment of improper kickbacks and violation of state “usual and customary charge” requirements for Medicaid.
- Bayer Corporation in joint criminal and civil investigation by the U.S. Attorney’s Office for the Eastern District of New York and Main Justice’s Consumer Protection Branch and Civil Fraud Section regarding the alleged off-label promotion of pharmaceutical products. Government declined to proceed with enforcement action and persuaded relator to dismiss the qui tam complaint.
- Kimberly-Clark in civil qui tam actions filed in California, Texas, and Georgia in which the relator alleges that Kimberly-Clark’s surgical gowns and other healthcare products did not meet industry standards. The DOJ has declined to intervene.
- Walgreens in two qui tam false claims act cases. One in the Central District of California alleges that Walgreens improperly delayed dispensing “time-sensitive” medications. The matter in the Eastern District of Pennsylvania involves allegations that Walgreens dispensed drugs that did not comply with certain package safety requirements.
- Bayer Corporation in a qui tam lawsuit in which the court dismissed the relator’s second amended complaint with prejudice for failure to plead fraud with particularity.
- Ista Pharmaceuticals, Inc. in criminal and civil qui tam investigations involving off-label promotion and kickbacks brought by DOJ’s Consumer Protection Branch and Civil Fraud Section and the U.S. Attorney’s Office for the Western District of New York.
- Bayer Corporation in a qui tam lawsuit in which the court dismissed the relator’s complaint under the False Claims Act with prejudice, agreeing with Sidley that the complaint was based upon publicly disclosed information and relator — a corporation formed for the sole purpose of filing this lawsuit — was not an original source of the information.
- Numerous financial institutions in matters involving the National Mortgage Settlement and other global settlements.
- Bank of America, N.A., in a qui tam suit in which the district court and Ninth Circuit agreed with Sidley’s arguments that Fannie Mae and Freddie Mac are not “officers, employees, or agents of the federal government for purposes of the False Claims Act.”
- Deutsche Bank National Trust Company, The Bank of New York Mellon, and Bank of America, N.A., in an action alleging fraud in connection with the Home Affordable Modification Program (HAMP), which was dismissed by the Court for failure to state a claim and satisfy the heightened pleading requirements under Rule 9(b).
- A large financial institution in companion cases brought by a qui tam relator who appeared on 60 Minutes alleging a massive fraud in connection with the government’s investment in mortgage-backed securities, and both cases were dismissed in their entirety.
- A large financial institution in multiple Department of Justice investigations stemming from a qui tam actions alleging fraud in connection with government purchases of mortgage-backed securities (MBS).
- Numerous clients in state FCA cases based on alleged failure to pay sales and other taxes. For example, we represented AT&T in qui tam case brought under Illinois False Claims Act, alleging that state taxes were due on delivery charges for internet sales. We convinced the state that no taxes were owed whereupon the state intervened and dismissed the case, extinguishing relator’s claim.
Sidley’s False Claims Act practice features lawyers who previously served in senior government posts, including an Acting Attorney General (and head of the Civil Division); a former Deputy Attorney General; a former Acting Chief Counsel of the FDA; a former Head of the FDA’s Special Prosecution Task Force; two former U.S. Attorneys and eight former Assistant U.S. Attorneys; a Special Assistant United States Attorney; a former Special Assistant to the Chief Counsel of the FDA Health Policy Advisor to the Senate Committee of Health, Education, Labor and Pensions; and four former Associate White House counsels.
We have worked with Main Justice and U.S. Attorneys’ Offices around the country and have extensive experience in historically active jurisdictions such as the Eastern District of Pennsylvania and the District of Massachusetts, as well as jurisdictions that have more recently become active in the FCA space, such as the Eastern District of New York, the District of New Jersey, the Central District of California, the Middle District of Florida, the Northern District of California, and scores of federal and state jurisdictions in between.