False Claims Act & Qui Tam Litigation

Primary contacts

Eric W. Sitarchuk, Kelly A. Moore, Douglas W. Baruch, Zane David Memeger, B. Scott McBride, Meredith S. Auten, Tinos Diamantatos, Jennifer M. Wollenberg

Morgan Lewis has one of the premier False Claims Act (FCA) and qui tam defense practices in the United States. Our lawyers have litigated such matters in numerous federal and state courts and defended against FCA investigations by both US Attorney and state Attorney General offices throughout the United States. We approach every matter with a sophisticated eye toward the multifaceted risks that may be implicated in order to thoughtfully, proactively, and efficiently guide our clients to optimal outcomes.

We have handled federal and state FCA matters in more than 40 jurisdictions. A hallmark of our practice is our ability to persuade government civil prosecutors not to intervene in such matters while, if necessary, aggressively litigating non-intervened cases pursued by private plaintiffs’ counsel on behalf of relators (whistleblowers). Our lawyers also have deep background in handling related administrative matters such as federal and state healthcare program exclusion proceedings, as well as suspension and debarment matters for government contractors.

Our representation of clients in FCA matters brings to bear our command of the issues at all stages of these matters, including handling internal investigations and subpoena and civil investigative demand responses; defending against investigations and persuading authorities to decline intervention and relator’s counsel to drop cases; negotiating settlements; aggressively litigating both intervened non-intervened cases; and leveraging our talented FCA appellate practitioners to maximize positive results for clients.

In addition, Morgan Lewis lawyers have a remarkable record of accomplishment in collateral matters that may arise from FCA investigations, including defending against parallel criminal investigations; administrative proceedings, including negotiating corporate integrity agreements; and potential follow-on litigation such as state consumer protection and third-party payor class action litigation.

Our team includes a number of fellows of the American College of Trial Lawyers as well as nationally recognized veteran FCA litigators who have been involved in precedent-setting work on the FCA’s scope, the role of relators, and theories on liability and damages. Additionally, our team includes lawyers who have served in important government roles, including former US attorneys, assistant US attorneys, federal prosecutors, and supervisors from numerous US state attorney offices; senior enforcement lawyers; supervisors from the US Department of Health and Human Services Office of Inspector General; state prosecutors; and other government agency leaders. Our lawyers, who are widely regarded thought leaders in the FCA space, speak and write frequently on FCA developments and issues related to enforcement and litigation, and serve as expert witnesses on FCA issues.

Our lawyers share in the authorship of Civil False Claims and Qui Tam Actions, the comprehensive, two-volume treatise published by Wolters Kluwer that is frequently cited by federal and state courts as an authority on the FCA, provides a full history of the federal law, an in-depth analysis of its liability provisions and the case law interpreting them, extensive perspectives on FCA practice and procedure, and a survey of state and local false claims laws.

We have represented clients doing business in an array of industries—pharmaceuticals, life sciences, medical devices, healthcare, defense, aerospace, technology, energy, education (academic medical centers and universities), import/export, insurance, financial services, and transportation and logistics, among others. As such, we are very familiar with FCA issues faced by particular business segments and how best to address those issues. Indeed, there are very few FCA issues that we have not already seen and dealt with. And when new ones do arise, we are often on the leading edge of developing arguments as to why the FCA should not apply.

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Life Sciences & Healthcare

Our healthcare and life sciences FCA/qui tam practice is a mainstay of our white collar practice. We have handled federal and state FCA matters for major pharmaceutical manufacturers, medical device companies, drug wholesalers, chain pharmacies, health insurers and managed care, group purchasing organizations, hospital systems, academic medical centers, physician practices, skilled nursing facilities, hospices, clinical diagnostic laboratories, and many others.

We have handled some the most significant healthcare FCA cases for some of the largest institutions in the healthcare industry and have defended against virtually every theory raised in such matters, including in the following areas:

Anti-Kickback Act (e.g., advisory boards, speaker programs, administrative and data fees)
Pharmaceutical pricing (e.g., AWP, AMP, ASP, best price, usual and customary price)
Formulary management
Off-label marketing
Clinical trials and alleged fraud on the FDA
Good clinical and manufacturing practice
Medical necessity
Billing fraud
Medicare Advantage bidding
Risk scoring and coding
Alleged Stark law violations

Our deep understanding of the industry—based also on our regulatory and compliance experience in these fields—gives us an edge in efficiently and effectively handling these matters. As a result, we have a long and proven track record of obtaining excellent outcomes for our clients.

Financial Services

Our team regularly represents major financial services companies, including banks, in FCA litigation and investigations, and our successes include having litigated and resolved one of the largest affirmative FCA actions ever brought by the DOJ against a bank. Our experience also includes having achieved two dismissals for a financial institution in separate qui tam actions relating to mortgage lending and servicing practices. We also regularly defend financial institutions in confidential DOJ investigations stemming from qui tam actions. Our experience in this area extends to enforcement actions arising under the civil monetary penalty provisions of the Financial Institutions Reform, Recovery, and Enforcement Act of 1989, which the DOJ frequently employs in tandem with FCA actions to pursue financial institutions and those doing business with them.

Government Contracting

Another mainstay of our practice is defending clients against FCA cases arising out of allegations of federal and state government procurement fraud across the government contractor spectrum, including both defense and civilian agency procurement. Our experience in this area ranges from military aircraft manufacturers and major technology companies, to US Department of Defense and State Department contractors providing goods and services in South America, Iraq, and Afghanistan. A growing area of FCA and qui tam activity and enforcement is technology contracts with federal, state, and local government agencies. We have deep familiarity and experience in this space and have lawyers with specialized knowledge involving the unique issues raised by government technology procurement.

We have prevailed on motions to dismiss FCA actions brought against two of the largest technology contractors in the United States, and our team has scored appellate victories in FCA cases on behalf of other government contractors. We also have successfully resolved related concerns with agency suspension and debarment officials. Here, too, we are able to enhance and complement our litigation talents by drawing upon our colleagues with government contracts regulatory and compliance experience.

We also routinely conduct internal investigations and assist with the mandatory disclosures required by the Federal Acquisition Regulation mandatory disclosure rule concerning credible evidence of certain criminal or civil violations related to government contracts, as well as overpayments.

Energy

Our lawyers have experience handling FCA matters in the energy sector, where many cases proceed under the so-called “reverse false claim” theory of liability. For example, we have handled FCA-related investigations and litigation for oil and gas companies accused of underpaying royalties for minerals extracted from federal lands, as well as FCA cases involving the storage and handling of nuclear waste, and the ownership of nuclear technology. We also have experience in collateral energy matters, including an independent auditor/monitor assignment arising out of the Deepwater Horizon incident.

State Escheatment and Tax Matters

Another growing area of state FCA enforcement is in the alleged failure to escheat abandoned property to states. This can be an issue for many industries, including insurers, banks, and companies offering gift cards or certain incentive points programs. We have represented clients in a variety of industries in such matters, and in a number of different states. In addition, the New York Attorney General’s Office is aggressively using a unique feature of the NY FCA—its applicability to state tax matters. Other states are considering similarly expanding their FCAs to include state tax. We have particular experience with this issue in New York.