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”

The Supreme Court’s “American Express” Antitrust Case: What’s at Stake

swisherFeatured Expert Column: Antitrust & Competition Policy — U.S. Department of Justice

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

With the New Year comes the opportunity to consider the cases to the U.S. Supreme Court will hear in the second half of its October Term 2017. As has become routine in the last several years, the Court has an antitrust case on its docket. In Ohio v. American Express Co., the justices will have the opportunity to consider the proper application of the rule of reason to vertical agreements between credit card companies and merchants. The case presents important substantive issues, but also provides a chance to see whether the Court’s recent trends in antitrust enforcement will continue. The justices will hear arguments in the case on February 26. Continue reading “The Supreme Court’s “American Express” Antitrust Case: What’s at Stake”

FDA Makes a Welcome Return to Courtroom Advocacy for Uniform, National Regulation

FDAThrough the Food, Drug & Cosmetic Act (FDCA) and its amendments, Congress put the Food and Drug Administration (FDA) in charge of establishing uniform, national regulation of consumer products. In the past decade, private litigants and state officials have increasingly undercut regulatory uniformity through state tort and consumer-protection lawsuits. Rather than defend its congressional mandate through amicus briefs or other courtroom advocacy, FDA remained mostly silent during that period.

This year, under the leadership of Commissioner Scott Gottlieb and Chief Counsel Rebecca Wood, FDA has stepped off the sidelines and is once again promoting uniformity by defending its regulatory role in several third-party legal action. That is a positive development for the producers and purchasers of FDA-regulated goods, which comprise nearly 25% of U.S. consumer spending. Continue reading “FDA Makes a Welcome Return to Courtroom Advocacy for Uniform, National Regulation”

WLF Webinar to Feature Two Seasoned FCPA Compliance Practitioners

LowmoyerThe FCPA Approaches Middle Age: Is the Anti-Corruption Law Slowing Down or as Spirited as Ever?

Tuesday, November 14, 1:00-2:00 p.m. EST

Live webcast, click here to view

Speakers: Homer E. Moyer, Jr., Miller & Chevalier and Lucinda A. Low, Steptoe & Johnson

Description: For 40 years, the Foreign Corrupt Practices Act has kept business interaction with overseas government officials on a short leash. But four decades of federal enforcement dominated by voluntary disclosures and widely disparate settlements has deprived FCPA targets of clear standards and guidance. Our speakers will derive lessons and trends from recent DOJ and SEC actions, forecast what the law’s next decade may bring, and identify possible vulnerabilities ripe for judicial review.

“U.S. v. Martoma”: Second Circuit’s Latest, but Perhaps not Last, Word on Insider-Trading Tippee Liability

Featured Expert Contributor, Corporate Governance/Securities Law

bainbridgeStephen M. Bainbridge, William D. Warren Distinguished Professor of Law, UCLA School of Law.

Matthew Martoma was a portfolio manager at S.A.C. Capital Advisors, LLC, a hedge fund owned and managed by Steven A. Cohen, which had been the subject of numerous insider trading investigations. One of those investigations resulted in Martoma being charged with insider trading on the stocks of a pair of drug companies developing a new Alzheimer’s disease drug treatment. Martoma had received tips of material nonpublic information about the treatment from two drug company employees. Martoma was convicted and appealed.

In a 2-1 opinion by Chief Judge Katzmann, the Second Circuit affirmed Martoma’s conviction. Its decision in United States v. Martoma is the first major interpretation of the Supreme Court’s decision in Salman v. United States, and the first effort to determine the remaining scope, if any, of the Second Circuit’s 2014 decision in United States v. Newman. Continue reading ““U.S. v. Martoma”: Second Circuit’s Latest, but Perhaps not Last, Word on Insider-Trading Tippee Liability”

Update: Justice May Yet be Served in 30-Year-Old EPA Wetlands Case Against Small Erie, PA Farmer

Guest Commentary

By Lawrence A. Kogan*

An April 20, 2017 WLF Legal Pulse post on the need for a new strategy for federal wetlands regulation presented a long-running enforcement action against a small Erie, Pennsylvania farmer as indicative of the harm wrought by the government’s deeply flawed current approach to “waters of the United States” (WOTUS). Two recent developments—an order by a federal magistrate judge in the US District Court for the Western District of Pennsylvania and the filing of three Federal Tort Claims Act (FTCA) claims by the targeted farmer, Robert Brace—might significantly change the course of this 30-year law-enforcement misadventure.

The US Environmental Protection Agency (EPA) first initiated a lawsuit under § 404 of Clean Water Act (CWA) against Brace in 1990 (United States v. Brace). The suit claimed Brace unlawfully failed to obtain a US Army Corps of Engineers (Army Corps) dredge-and-fill permit for drainage-tilling activities undertaken on government-designated wetlands.  The suit came after Brace, a well-known property rights advocate, had endured three years of being served with EPA, Corps, and US Fish & Wildlife Service (FWS) administrative-violation notices. Continue reading “Update: Justice May Yet be Served in 30-Year-Old EPA Wetlands Case Against Small Erie, PA Farmer”

“Kokesh v. SEC”: Its Wide-Ranging (and Mostly Good) Implications for Disgorgement Actions

MorrisGuest Commentary

By Andrew J. Morris, a Partner with Morvillo LLP. Mr. Morris authored a March 10, 2017 WLF Legal BackgrounderIs the Clock Running out on SEC’s Unchecked Pursuit of Disgorgement Penalties?

In Kokesh v. Securities and Exchange Commission, the US Supreme Court ruled that SEC actions for disgorgement are governed by the five-year statute of limitations for penalties. This decision is a real blow to the SEC: It ends the practice of using disgorgement actions to obtain massive sanctions for conduct that took place many years in the past, outside the limitations period for penalties and forfeitures. The decision also invites defendants to make further challenges to SEC enforcement actions by litigating several related issues.

Implications for Enforcement Proceedings

The Court’s opinion, written by Justice Sotomayor, is summarized in a WLF Legal Pulse post authored last week by UCLA School of Law Professor Stephen Bainbridge. The gist of the decision is that disgorgement is a form of penalty because it involves a defendant who has violated a public law and must pay money to the United States Treasury; this contrasts with non-penalty cases, where the defendant has injured a particular victim and must pay compensation to that victim. And because disgorgement is a penalty, the Supreme Court held, disgorgement actions are covered by 28 U.S.C. § 2462, the five-year statute of limitations for penalties. Continue reading ““Kokesh v. SEC”: Its Wide-Ranging (and Mostly Good) Implications for Disgorgement Actions”