Government’s Authority to Unilaterally Dismiss Qui Tam Fraud Suit Faces Court Test

whistleLast week, the United States filed its long-awaited motion to dismiss a major False Claims Act (FCA) lawsuit filed in the Northern District of California, U.S. ex rel. Campie v. Gilead Sciences, Inc. The Government argued that dismissal was warranted “to avoid the additional expenditure of government resources on a case that it fully investigated and decided not to pursue.” Last December in a U.S. Supreme Court filing, the Government promised that it would seek dismissal of the suit—filed by whistleblowers formerly employed by Gilead, a large brand-name drug manufacturer. The Government likely made that promise to ensure that the Supreme Court would not agree to hear Gilead’s appeal from a Ninth Circuit decision reinstating the case.

The motion could end up becoming a major test of the Granston Memo, a January 2018 Department of Justice memo that directed department lawyers who review FCA qui tam lawsuits to consider seeking dismissal. The FCA grants the Government a virtually unfettered right to dismiss FCA suits filed by private litigants in the name of the United States. Yet the Ninth Circuit and several other federal appeals courts have demonstrated their willingness to closely examine Government efforts to shut down relators’ FCA lawsuits. And the district judge hearing the Gilead case very recently rejected a similar motion to dismiss—ruling that the Government must demonstrate that it has undertaken an absolutely thorough investigation before he will even consider dismissal. Continue reading “Government’s Authority to Unilaterally Dismiss Qui Tam Fraud Suit Faces Court Test”

Knick v. Scott Township: Whack-a-Mole at the Supreme Court

whackToday’s Supreme Court argument in Knick v. Scott Township made clear that state and local governments are playing Whack-a-Mole with private property rights. Whack-a-Mole is the arcade game in which every time a mole is whacked down, a new one pops up. At issue in Knick is whether to overturn the Court’s 1985 Williamson County decision, which held that Fifth Amendment Takings Clause claimants are generally relegated to state court.

When property rights advocates subsequently pointed out that Williamson County effectively barred property owners from ever asserting their Fifth Amendment rights, state and local governments persuaded the Court to re-interpret the nature of a Takings Clause violation (in its 2005 San Remo Hotel decision) to eliminate the no-right-to-assert problem. But when Justice Gorsuch suggested at today’s oral argument that this revised interpretation of the Takings Clause undercuts Williamson County’s rationale, the attorney for Scott Township denied the validity of the revised interpretation—in effect arguing that San Remo ought to be overruled. Continue reading Knick v. Scott Township: Whack-a-Mole at the Supreme Court”

Expressions Hair Design Speech Case Back on Track after Detour to NY State Court

creditcardFor more than 40 years, merchants have sought the right to impose surcharges on customers who use credit cards when making purchases. They prefer customers to pay with cash because when a customer pays with a credit card, the merchant must pay a transaction fee to the credit-card issuer. To encourage cash transactions, many merchants would like to express their pricing in a way that conveys to customers that credit purchases lead to higher prices, but a number of States closely regulate how merchants may express that viewpoint.

A First Amendment challenge to such regulations reached the U.S. Supreme Court two terms ago. The Court granted merchants a preliminary victory in Expressions Hair Design v. Schneiderman, ruling that a New York pricing statute did, in fact, regulate speech and overturning a U.S. Court of Appeals for the Second Circuit decision that reached the opposite conclusion. Continue reading Expressions Hair Design Speech Case Back on Track after Detour to NY State Court”

Supreme Court Poised to Overturn Ninth Circuit Ruling Granting Bond Hearings to Criminal Aliens

supreme courtThe October 10 Supreme Court oral argument in Nielsen v. Preap demonstrated that the justices continue to be sharply, ideologically divided over the federal government’s authority to detain criminal aliens pending completion of removal proceedings. But contrary to some early post-argument commentary, the oral argument left little doubt about the likely outcome: Chief Justice Roberts, Justice Thomas, Justice Alito, Justice Gorsuch, and Justice Kavanaugh will vote to overturn the U.S. Court of Appeals for the Ninth Circuit’s constricted interpretation of the government’s detention authority. While the Court may impose some time limits on the authority to detain criminal aliens who were released from prison many years before the initiation of removal proceedings, those five justices expressed no support for the sweeping limitations imposed by the Ninth Circuit. Continue reading “Supreme Court Poised to Overturn Ninth Circuit Ruling Granting Bond Hearings to Criminal Aliens”

Soda Warning Case Tests How High Court’s NIFLA Decision Affects Commercial Speech Mandates

FirstAmendmentFor the past several decades, the U.S. Supreme Court and at least some federal appeals courts have been moving in opposite directions with respect to First Amendment protection for commercial speech. The Supreme Court’s trend since the mid-1970s has been to afford ever-increasing protection to truthful speech uttered by commercial speakers. In sharp contrast, some federal appeals courts have become increasingly deferential toward government efforts to control such speech. The Supreme Court’s June 2018 decision in NIFLA v. Becerra resoundingly affirmed the Court’s strict limits on the government’s authority over commercial speech, particularly in the context of compelled speech.

The first major test of whether appeals courts will heed that directive came before an en banc panel of the Ninth Circuit on September 25. The questions posed by the 11 judges on the panel suggest that the Ninth Circuit remains reluctant to embrace NIFLA’s message. Continue reading “Soda Warning Case Tests How High Court’s NIFLA Decision Affects Commercial Speech Mandates”

FTC Enforcement Powers Face Serious Challenge

FTC_Man_Controlling_TradeThe Federal Trade Commission (FTC) has long asserted broad authority to sue businesses for engaging in unfair or deceptive acts or practices.  But a recent federal court decision (Federal Trade Commission v. Shrire Viropharma Inc.) calls that authority into serious question.  If upheld on appeal, the decision could lead to major changes in the way FTC carries out its enforcement responsibilities.

The decision focused on § 13(b) of the Federal Trade Commission Act (FTCA).  That statute authorizes FTC to seek injunctive relief in federal court against anyone who “is violating, or is about to violate” a law enforced by FTC.  FTC has long contended that § 13(b) also authorizes actions against entities based on past violations, even in the absence of evidence that the entity “is about to” commit new violations.  A Delaware federal district judge’s rejection of that contention has thrown a monkey wrench into FTC’s enforcement apparatus. Continue reading “FTC Enforcement Powers Face Serious Challenge”

Supreme Court Continues to Nibble Away at Alien Tort Statute’s Sweep

supreme courtYesterday’s decision in Jesner v. Arab Bank, PLC, the U.S. Supreme Court’s third major decision involving the Alien Tort Statute (ATS), continues a trend of reining in human rights activists’ efforts to police private businesses’ overseas conduct through ATS litigation.  The Court held that foreign corporations may not be sued under the ATS for their overseas conduct.  But as with past Supreme Court ATS decisions, the justices once again failed to shut the door entirely on human rights activists: the ruling said nothing about the many ATS claims pending against American corporations.  It thereby ensured that U.S. companies will continue to face such claims for the foreseeable future.

While Jesner suggests that five justices likely would rule that the federal courts should not recognize an ATS cause of action against American corporations for their overseas activities, several federal appeals courts have exhibited little willingness to limit the scope of ATS liability unless directly ordered to do so by the Supreme Court. Continue reading “Supreme Court Continues to Nibble Away at Alien Tort Statute’s Sweep”