The Government’s Duty to Preserve Evidence in a Non-Intervened “Qui Tam” Case

Stephen_Wood_03032014Featured Expert Contributor, False Claims Act

Stephen A. Wood, Chuhak & Tecson, P.C.

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Every civil litigator and trial lawyer knows (or should know) that a party to litigation has a duty to preserve evidence and documents for use in discovery and trial.  The rule applies to all litigants, whether public or private entities or persons.  It may even be applied to non-parties in certain circumstances, although typically non-parties face more limited obligations.

The False Claims Act qui tam provisions present a unique set of challenges bearing on the government’s duty to preserve.  Qui tam complaints are filed under seal to facilitate the government’s investigation after which it may elect to take the case over.  When it declines to intervene in the qui tam case, the government typically considers itself to be a non-party, eschewing any duty to preserve evidence.  Yet, for many reasons, the government should be treated as a party for purposes of the duty to preserve evidence in those cases in which it has declined to intervene.  And in the face of a breach of that duty, both the government and the qui tam relator should face the prospect of sanctions as the circumstances warrant. Continue reading “The Government’s Duty to Preserve Evidence in a Non-Intervened “Qui Tam” Case”

False Claims Act Enforcement Tea Leaves Read at WLF Webinar

Fried Frank Of Counsel and author of the leading False Claims Act treatise, John T. Boese (on left), and his partner Douglas W. Baruch, offered insightful analysis on two recent Department of Justice policy documents (the “Granston Memo” and the “Brand Memo”) and their impact on FCA actions by both qui tam relators and federal prosecutors.

The slide presentation Boese and Baruch followed can be downloaded here.

The speakers also authored a February 2018 Working Paper for WLF on three new possible constitutional challenges to the FCA’s qui tam provisions, which can be found here.

DOJ Memo and Court Opinion Show Trend in Damming Flood of False Claims Act Suits

11th CircuitBusinesses that routinely contract with the government know that while the relationship comes with high financial rewards, it also can expose those companies to massive civil liability.  Under the False Claims Act (FCA), government contractors can find themselves sued for hundreds of millions of dollars based on mere technical violations of complex regulatory schemes.

Luckily, as highlighted in several of our previous posts, the U.S. Supreme Court has recently reinforced the high evidentiary threshold FCA plaintiffs need to meet to bring a successful claim under the most common theory of FCA liability.  A recently disclosed U.S. Department of Justice (DOJ) memo and a recent opinion from the U.S. Court of Appeals for the Eleventh Circuit might similarly lead to fewer baseless claims against government contractors. Continue reading “DOJ Memo and Court Opinion Show Trend in Damming Flood of False Claims Act Suits”

Federal Court’s Embrace of FTC Data-Breach Settlements as “Common Law” Treads on Due Process

d of washingtonThe Federal Trade Commission (FTC) has developed a well-known penchant for using individually negotiated settlement agreements and consent decrees to announce for the first time what qualifies as “unfair” or “deceptive” conduct under the FTC Act. In the data-privacy arena, FTC views these enforcement actions (and the resulting consent decrees) as a source of “common law” that places the business community on sufficient notice of what data-security practices § 5 of the FTC Act requires.

The U.S. District Court for the Western District of Washington recently ratified that view in a controversial ruling, Veridian Credit Union v. Eddie Bauer. The case arose following a 2016 cyberattack on Eddie Bauer’s network that compromised customers’ payment-card data. Veridian Credit Union, whose cardholders had their data stolen after shopping at Eddie Bauer, brought suit under Washington’s Consumer Protection Act (CPA), which like § 5 of the FTC Act also allows courts to award treble damages to private plaintiffs who are injured by “unfair” or “deceptive” acts. Veridian alleged that Eddie Bauer’s failure to adopt data-security measures that FTC has required in other cases constitutes an “unfair” practice under the Washington CPA. Continue reading “Federal Court’s Embrace of FTC Data-Breach Settlements as “Common Law” Treads on Due Process”

FTC Takes a Commendable First Step Toward Reducing the Burden of Consumer-Protection Investigations

Featured Expert Column:
Antitrust & Competition Policy — Federal Trade Commission

06633 - Royall, M. Sean ( Dallas )By M. Sean Royall, a Partner with Gibson, Dunn & Crutcher LLP, with Richard H. Cunningham, Of Counsel in the firm’s Denver, CO office, and Ashley M. Rogers, an Associate Attorney in the firm’s Dallas, TX office.

On July 17, 2017, Federal Trade Commission (FTC) Acting Chairman Maureen K. Ohlhausen announced internal process reforms that aim to “streamline information requests and improve transparency” in the agency’s consumer-protection investigations.  According to the announcement, going forward the Bureau of Consumer Protection will:

  • provide “plain language” descriptions of the civil investigative demand (CID) process the agency uses as its primary tool for gathering information during investigations on a compulsory basis;
  • provide “more detailed” descriptions of the scope and purpose of investigations;
  • limit the relevant time periods covered by CID informational requests;
  • “significantly” reduce the length and complexity of CID instructions for providing electronically stored data; and
  • increase the time available to respondents to respond to agency CIDs.

Continue reading “FTC Takes a Commendable First Step Toward Reducing the Burden of Consumer-Protection Investigations”

As CMS Considers Restricting Access to Pain Medication, Greater Opportunities for Public Input Are Required

CMSThe Centers for Medicare and Medicaid Services (CMS) is ramping up efforts to limit patients’ access to pain medication without giving affected parties sufficient notice or opportunity for comment.  Since the start of 2017, CMS has released three separate guidance documents on how insurers and payers should impose new limits on the use of opioids.  While opioid abuse undoubtedly presents a serious public health issue, CMS should take steps to foster transparency and avoid harming patients and providers alike by offering them a meaningful opportunity to participate in the development of policies that could limit pain management.  CMS also must do more to ensure that it adheres to statutes requiring complete openness whenever it solicits advice from advisory committees that include members who are not federal government employees.       Continue reading “As CMS Considers Restricting Access to Pain Medication, Greater Opportunities for Public Input Are Required”

The Government Should Stop Using ‘Operation Choke Point’ to Bully Banks into Cutting Ties with Legitimate Businesses

imagezOn the eve of the inauguration, many industries and businesses await the changes a new administration will bring.  In particular, payday lenders are hoping that they will once again be able to enjoy unrestricted banking access, as for the past several years their banking relationships have slowly been severed as a result of a government initiative known as “Operation Choke Point.”

Operation Choke Point began—without any Congressional approval or even knowledge—as a product of President Obama’s 2009 executive order to eliminate fraudulent and illegal businesses.  Not surprisingly, however, the initiative quickly expanded.  By 2013, the Department of Justice (DOJ) had started quietly launching the now-infamous federal initiative unconstitutionally cutting off countless legitimate businesses from banking services. Continue reading “The Government Should Stop Using ‘Operation Choke Point’ to Bully Banks into Cutting Ties with Legitimate Businesses”