Supreme Court Cert Grant in “Farha v. US” Can Clarify Level of Criminal Intent Needed to Prove “Knowledge”

johnlauroGuest Commentary

By John Lauro, a white-collar defense attorney who represented one of the WellCare defendants at trial and at the Eleventh Circuit.

On Friday, April 21, 2017, the US Supreme Court will meet in conference to consider a pending petition for certiorari in Farha v. United States, No. 16-888, a major white-collar fraud case raising an important issue of concern to the defense bar and their clients: whether “deliberate indifference” is a sufficient level of mens rea for proving “knowledge” with respect to federal criminal statutes.  The High Court should grant review and reverse the US Court of Appeals for the Eleventh Circuit ruling holding otherwise.

Farha is a classic case of overcriminalization, where civil and administrative remedies are more appropriate in the regulatory area of complex healthcare and business law. The case was extensively discussed in prior postings at the WLF Legal Pulse (here and here) and a WLF Legal Backgrounder [hot link to Kaiser’s piece]. In brief, following a raid by 200 FBI Agents at the offices of WellCare, a Florida Medicaid health maintenance organization, several executives, including the CEO, CFO, and general counsel, were indicted on healthcare fraud charges based on the government’s interpretation of Florida’s Medicaid law.   Continue reading

“U.S. v. Anthem/Cigna” and Regrettable Skepticism of Procompetitive Efficiencies

Antitrust & Competition — US Department of Justice

swisherAnthony W. Swisher, a Partner in the Washington, DC office of Squire Patton Boggs (US) LLP.

One of the principles underlying merger analysis has always been that mergers provide value to society. Historically, this idea has seen practical expression in a degree of humility on the part of the antitrust enforcement agencies, and a reluctance to intervene too hastily in a deal, lest they disrupt the benefits that might flow from it. Another practical expression of the recognition of merger-specific benefits is the availability of the efficiencies defense. Under the Horizontal Merger Guidelines, the Department of Justice’s Antitrust Division and the Federal Trade Commission will consider the degree to which a deal will permit the merging parties to obtain efficiencies that would not be available to them individually. Continue reading

FEDERAL REGULATORY READING LIST: Resources for New FDA Drug and Device Regulators

FDAThe Food and Drug Administration (FDA) faces a difficult balancing act in its role as the federal regulator of drug and medical-device manufacturers.  On the one hand, it is charged with ensuring that medical products are both safe and effective for their intended uses.  On the other hand, it must avoid imposing overly stringent regulations, lest it harm public health by blocking or delaying access to life-saving products, or to truthful information about those products.

Through its public-interest litigating, publishing, and communications capabilities, Washington Legal Foundation has long been at the forefront of efforts to ensure that FDA maintains the proper balance.  Those activities have generated an impressive body of material that would be instructive for new FDA leadership to review.  We provide a summary of and links to those documents below (limited to WLF’s FDA-related work product in the past several years) to simplify access to that work product. Continue reading

After SCOTUS’s “Escobar” Decision, Courts Increasingly Sink Implied-Certification FCA Suits

scales of justiceOver the last two decades, the False Claims Act (FCA) has become a popular tool for plaintiffs—and qui tam attorneys—to enrich themselves at the expense of government contractors.  To keep the profits flowing, private plaintiffs, called relators, have invented new legal theories under which to bring their claims. As they test the FCA’s bounds, defendants have urged courts to maintain the law’s traditional limits. Last June, the US Supreme Court addressed one of FCA relators’ more successful liability expansions: the “implied-certification” theory. As a recent WLF Legal Backgrounder notes, though the Court affirmed the availability of this liability theory in Universal Health Services v. US ex rel. Escobar, it also urged lower courts to carefully scrutinize relators’ complaints as a way of limiting the implied-certification claims. Federal appellate courts have begun taking the Supreme Court at its word and have rejected claims that cannot establish materiality or satisfy the FCA’s scienter requirement. Continue reading

A Q&A with Federal Regulation Scholar Susan Dudley on Reconsidering Regulations

dudleysusan-2015_crop_webSusan E. Dudley is Director of the George Washington University Regulatory Studies Center, which she founded in 2009, and a distinguished professor of practice in the Trachtenberg School of Public Policy and Public Administration. From 2007 to 2009, she served as the Administrator of the Office of Information and Regulatory Affairs (OIRA) in the U.S. Office of Management and Budget.

WLF Legal Pulse: As promised, Congress and the Administration have quickly gotten to work reconsidering and removing a host of federal regulations while also setting the stage for a much different approach to regulation.  Let’s first talk about what Congress is doing.

Professor Dudley: Under the Congressional Review Act of 1996 (CRA), Congress has 60 legislative days after a regulation is published to vote to disapprove it.  The procedures for disapproval are streamlined (including requiring a simple majority in the Senate) and if a rule is disapproved, the agency cannot issue something substantially similar. Continue reading

A 2017 Food-Court Resolution: End Regulation-through-Litigation Crusade Against Trans Fat

Partially hydrogenated oil chemical structure

Partially hydrogenated oil
chemical structure

In 2016, class-action lawsuits alleging that a processed food product or its labeling violated state consumer-protection laws continued to clog the federal courts, especially in California. The number of new food-related consumer class actions filed last year nearly equaled the number filed in 2015, according to a report in Food Navigator USA. It’s unclear whether these trends will hold in 2017, but there is one set of blatantly frivolous claims that should disappear this year: those that seek judicial regulation of products that contain partially hydrogenated oil (PHO), the main source of trans fat. A December 13, 2016 Southern District of California decision should frustrate such claims in the short term, and a forthcoming US Court of Appeals for the Ninth Circuit decision in a pending case may (and should) end them permanently. Continue reading

Should Pharmaceutical Manufacturers be Forced to Produce a Product Against Their Will?

5th-aAs the beginning of a new administration nears, politicians and pundits have been floating many ideas for regulating the cost and availability of pharmaceuticals and other medical treatments. One of the worst ideas being discussed is the judicial creation of a common-law duty to manufacture. Thankfully, there are significant Constitutional and judicial hurdles preventing this duty from materializing.

In order to develop and produce innovative, life-saving drugs, pharmaceutical manufacturers must go through incredibly expensive and time-consuming clinical trials required by the rigid guidelines of the Food and Drug Administration (FDA). As an incentive to go through this process, these companies receive patents to help them recoup the costs of the clinical trials. In some instances, however, even with market exclusivity, manufacturers are unwilling to continue producing these drugs, often because production ceases to be economically feasible. Continue reading