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(Transcribed and edited lightly by The Employment Law Group)

R. Scott Oswald: [Addressing camera] We are here with Doug Baruch, who is a partner at Morgan Lewis, and we are talking about medical necessity.

[Turning to Baruch] So Doug, we have a panel at this year’s False Claims Act conference at the FBA on medical necessity. Give us a sense of what medical necessity is under the False Claims Act, and why it matters to folks who practice under the False Claims Act.

Douglas W. Baruch: Well, I don’t think anybody wants to be subjected to potential allegations of fraud or wrongdoing based on disagreements over clinical judgments — and that’s really where the False Claims Act was going before [U.S. v. AseraCare Inc.] came down.

Oswald: AseraCare is [a hospice case] out of the Eleventh Circuit, [which] includes Florida … So let’s talk about medical necessity in the wake of the AseraCare case. Does it apply beyond hospice, as an example?

Baruch: Sure. So it certainly can apply beyond hospice. The question in AseraCare was whether mere clinical disagreements among physicians can be the basis for establishing falsity under the False Claims Act.

Oswald: So, in the wake of AseraCare, now what’s the landscape? In order to have a claim under the False Claims Act, what would a relator need to have in order to meet that standard?

Baruch: In addition to all the other elements — just focusing on falsity itself — there has to be some objective evidence of falsity. It can’t be merely based on a disagreement among experts as to a government expert, or an expert hired by relators’ counsel, claiming that the physician or the provider got it wrong. That’s not going to be enough, coming in after the fact and making that type of assessment. There has to be some other indicia of falsity.

Oswald: So what would those indicia be?

Baruch: Well, the traditional elements of some kind of misconduct, such as a false certification. The physician certified that a patient was eligible for some type of treatment but never examined the patient — that would be indicia, right? Even if the patient actually was eligible for and actually had the diagnosis that ultimately the physician provided, if the physician never examined the patient that could be a basis for claiming that there was a false claim.

Oswald: Talk to us a little bit about the panel and what folks in the audience might expect to hear from you on the subject of medical necessity — in particular, where that aspect of the False Claims Act is going in the future.

Baruch: Sure. I myself will be interested in hearing from the government what their perspective is on it, and what relators’ counsel are doing about it. But essentially I think … the panel’s going to be talking about whether, in the wake of AseraCare, there’s going to need to be more than simply an after-the-fact, cold record review with an expert to determine whether there’s indicia of False Claims Act violations. They’re going to have to have something more, even at the time of the complaint being filed. There has to be some other evidence of fraud — and not simply corporate policies that are focused on improving [the patient census] and … billing and things like that. There has to be some other evidence that the judgment of the physician that a patient had the medical necessity that the physician attested to was wrong.

Oswald: Got it. So give us a sense of the kind of advice, broadly, that you’re giving to your clients right now as it relates to medical necessity in the wake of the AseraCare case.

Baruch: The AseraCare case obviously was something that is beneficial, because it does limit the reach [of the False Claims Act] within the Eleventh Circuit. I certainly don’t think anybody’s all that comfortable yet, because it’s just one case that’s out there. It’s certainly an important decision — and a decision, in my view, in the right direction — but it’s not something that providers can be comfortable knowing that across the board, across their nationwide … network, that the AseraCare case is going to insulate them from liability for the same types of allegations that were raised in AseraCare.

Oswald: Doug, thank you.

Baruch: Sure thing.

Oswald: [Turning to camera] We look forward to seeing you at this year’s False Claims Act conference on February 27-28, [2020] here in Washington. You can find us, and register, at fedbar.org.

———-

R. Scott Oswald is managing principal of The Employment Law Group, P.C. Douglas W. Baruch is a partner at Morgan, Lewis & Bockius LLP.

 

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(Transcribed and edited lightly by The Employment Law Group)

Katherine J. Seikaly: [Addressing camera] Hi — I’m Kate Seikaly. I’m a partner at Reed Smith and I am the co-chair of the Qui Tam Conference for 2020. It’ll be held February 27-28 here in Washington, D.C. Today we are meeting with Scott Oswald from The Employment Law Group, who is moderating a panel on AUSA procedure.

[Turning to Oswald] So Scott, tell us what we can expect from your panel.

R. Scott Oswald: So this is a panel, Kate, we conceived of two years ago. We did a panel just like this with our [Affirmative Civil Enforcement] coordinators from U.S. Attorney’s offices in D.C. and in Virginia and in Maryland. And what we learned was how many things they did in a very similar way — but also some real differences in how they investigate and prosecute these [qui tam] claims. So the thought was, this time, that we would expand it. We have ACE coordinators coming to us from the Southern District of Florida, from the Eastern District of Pennsylvania, from the Southern District of California, and from the District of Minnesota.

We are really looking forward to having them, because we are going to ask them questions about what kind of cases they like to see; what kind of cases maybe they don’t like to see; and also how their offices are set up; what kind of internal resources they have; what kind of experience they have in prosecuting these cases; how they work with main Justice; and what both relators’ counsel and defense counsel can expect in dealing with their offices.

Seikaly: Well that sounds really interesting. What do you think our audience members will be able to learn from your panel?

Oswald: Well relators’ counsel for sure: At the outset, which of these offices might be the best office to file their case? We know that the federal False Claims Act is a broad venue statute, so most relators’ counsel have multiple options on where they might file their case. And so choosing that office, choosing that prosecutor, is really important in the process.

You’ll be able to find out, for instance, which of these ACE coordinators will talk to you in advance about your case; how they want to accept that initial approach — do they want just a telephone call, do they want a white paper, maybe a PowerPoint?; how they want to receive you as relators’ counsel; and what you can expect from that office as relators’ counsel.

For defense counsel it’s maybe best practices on getting the very best treatment for your client from that office and that jurisdiction.

Seikaly: And I know in past conferences we’ve given the audience members a chance to ask our panelists questions. Will we have that opportunity for your panel?

Oswald: We absolutely will. And so, you know, as these folks are up there and explaining how they do their business, people in the audience will be able to raise their hands and ask them, you know, these kinds of questions. “How do I prepare my relator?” as an example. “What do you like best when I think that the relator’s counsel has the wrong end of the stick on the case? How do I best approach you under those circumstances? What do you want to see from me?”

So, these are all things that, you know, as the panel progresses that folks in the audience will have an opportunity to ask about.

Seikaly: I think it’s going to be really great. I’m looking forward to it, Scott.

Oswald: Thank you!

Seikaly: [Turning to camera] Thanks for joining us. We do hope to see you here in D.C. on February 27-28, 2020. For more information, you can visit fedbar.org.

———-

R. Scott Oswald is managing principal of The Employment Law Group, P.C. Katherine J. Seikaly is a partner at Reed Smith LLP.

 

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(Transcribed and edited lightly by The Employment Law Group)

R. Scott Oswald: [Addressing camera] We are back with another moderator for the next Qui Tam Conference in Washington on February 27-28, 2020 and [turning to Chizewer] we’re with David Chizewer from Goldberg Kohn.

David, tell us a little bit about your panel. It’s on IICFPA and CIFPA, right? What are these acronyms?

David J. Chizewer: Right. Those stand for the California Insurance Fraud Prevention Act and the Illinois Insurance Claims Fraud Prevention Act. They are counterparts in a very major way to the federal and state False Claims Acts.

Oswald: So what’s the difference between these two statutes and the federal False Claims Act and state analogs?

Chizewer: The federal government under the federal False Claims Act has collected billions of dollars — and whistleblowers have helped the government to collect billions of dollars — in health care fraud. Many of the [illegal] schemes that companies have used to overbill the Medicaid and Medicare systems have also been implemented against [private] insurance companies. And people think, well, you know, the government needs whistleblowers to assist them in uncovering this fraud because the government is a huge, underfunded, bureaucratic organization that can’t discover the fraud themselves — but … insurance companies, those are private companies with more of a direct incentive to uncover fraud. Yet we don’t see insurance companies alongside the government bringing these claims and recovering the same level of dollars. And so I think certain state legislatures thought, well, maybe we need whistleblowers not only to help government entities but to also help insurance companies uncover fraud.

Interestingly enough, you do see insurance companies in the healthcare area go after … the single, solo overbilling doctor who’s using a more complex code to bill every single one of his services, for example. And you’ll hear of doctors who complain about insurance companies going after them — but those are small dollars. They may be adding up across the country, but it’s interesting that you don’t necessarily see insurance companies jumping into some of these really big False Claims Act cases where whistleblowers are helping the government to uncover hundreds of millions of dollars worth of fraud.

And so at least two state legislatures, California and Illinois, have thought: “Hey, let’s see what happens if we allow whistleblowers to help insurance companies uncover this fraud.”

Oswald: So under the federal False Claims Act, an individual stands in the shoes of the government. Here, how is this different?

Chizewer: Right. So the interesting thing is, the legislatures haven’t said [that] if the whistleblower can uncover fraud against an insurance company, that somehow the whistleblower gets the insurance company’s money like they do [with] the government. Because insurance companies, they’re private — and insurance companies haven’t necessarily agreed to allow private citizens to get a portion of the damages that they’ve suffered.

So the way the state legislatures have worked it, is they’ve said, “OK, well there are penalties — criminal penalties — for defrauding insurance companies and those can be monetary penalties. And those monetary penalties belong to the government. So as a governmental entity, as our legislature, we can assign some of that penalty money to whistleblowers if they help us uncover fraud.”

And then you’re not really invading the insurance company’s private damages: You’re just giving whistleblowers a portion of the public penalty money for, you know, going against bad actors.

Oswald: If I don’t live in Illinois or in California but I want to blow the whistle on insurance fraud, do I care about these statutes?

Chizewer: Well, if you are incentivized [by a potential reward]. You don’t have to be a resident of the state. If you know that a company within that state is committing some type of insurance fraud, you can uncover that and get a portion of the penalties that the state would impose on the fraud-doer.

Again, you don’t have access — you don’t get an assignment of a portion of the actual insurance companies’ private damages, since those are private companies and they haven’t agreed to assign to private citizens portions of damages that they’ve suffered. But because of the criminal aspect of fraud, of insurance fraud, and the monetary penalties that go along with that, you can recover a percentage of the monetary penalties.

And sometimes the percentages in these insurance acts are even bigger than in the False Claims Acts.

Oswald: Wow. So tell us a little about your panel at the Qui Tam Conference in 2020 —

Chizewer: Right —

Oswald: What can we expect to hear if we’re in the audience?

Chizewer: Right. Well again this is a panel where we want to be objective and represent both sides — really three sides. You’ve got defendants who are accused of insurance fraud; you’ve got whistleblowers who are bringing the fraud [claims]; and there’s the insurance companies. We’re going to hopefully have someone on the panel who has represented insurance companies who have brought their own claims for their own damages under these statutes — as both a whistleblower and a damaged party — and maybe [we can get] perspective on why we need whistleblowers, and why aren’t more insurance companies filing claims under these statutes.

And then we’ll, of course, have defense lawyers who are defending claims under these statutes, who will have their own perspective on whether these [laws] are a good or bad thing.

Oswald: David, thank you.

Chizewer: Sure thing.

Oswald: [Turning to camera] We look forward to seeing you on February 27-28 here in Washington at the 2020 Federal Bar Association Qui Tam Conference. You can register on our Web site at fedbar.org.

———-

R. Scott Oswald is managing principal of The Employment Law Group, P.C. David J. Chizewer is a principal at Goldberg Kohn Ltd.

 

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(Transcribed and edited lightly by The Employment Law Group)

R. Scott Oswald: [Addressing camera] Welcome — we are here with another one of our discussions with our moderators in anticipation of the Qui Tam Conference, which is in Washington on February 27-28, 2020. We are here with Selina Coleman.

[Turning to Coleman] Selina, you are a partner at Reed Smith. Tell us a little bit about your panel.

Selina P. Coleman: So we are presenting on the False Claims Act and discovery in the wake of the Supreme Court’s decision in Escobar.

Oswald: Tell us about Escobar. There’s a little something for everyone [in the case], both for the relators’ bar and for the defense bar. Talk to us about materiality in particular — and how that plays out in discovery, as it might come up in your panel.

Coleman: Absolutely. Escobar, to your point, was perceived as a win by both the relators’ bar and the defense bar. But one thing that really came out of it is that, when the government has knowingly paid a claim [despite an alleged fraud], that is strong evidence that [the alleged fraud] is not something that is material to the government. And as a result, after Escobar both the defense bar and the relators’ bar really want to have a sense of what did the government think about certain conduct — and whether or not that conduct would have mattered to them when they paid certain reimbursement claims.

Oswald: So why is discovery relevant in that situation?

Coleman: Discovery from the government could actually go to show what the government was thinking when it might have paid certain claims. There might be some things that the government might not have contemplated, whether it mattered or not to their payment decision. But to the extent that the government did review something — did discuss [it] internally, whether with respect to certain defendants or just generally discuss a certain type of reimbursement claim or a type of conduct, for example, in the context of reviewing a qui tam lawsuit — that might become something that would matter both for the defendants and the relators in that case.

Oswald: Does it matter how the government has treated other defendants at all? Or just the one defendant that is seeking the discovery?

Coleman: It could matter how they perceived the issue for other defendants. If the government has looked at something and decided that it isn’t something that would necessarily effect their payment decision, and decided to keep paying the claims for other defendants, then the defendant to the relevant qui tam lawsuit might say that that would show that it wouldn’t be material to the government in that context [either].

Oswald: Last year we had Michael Granston [of the U.S. Department of Justice] speak at the Qui Tam Conference, and one of the things that he stressed was the fact that the government was not going to be goaded into dismissing claims merely because discovery was a nuisance for a particular [federal] agency. Comment on that: How have you seen that play out?

Coleman: I certainly agree with that sentiment. While Escobar has led to increased discovery requests, which are known as Touhy requests, that isn’t something that should be used — at least from my perspective — as a tool to wield against the government. It really should be something that’s used by the defense bar or the relators’ bar to try to get the evidence it needs to either prove a relator’s case or, in the case of the defendant, to show that the relator’s claims cannot survive.

Oswald: One of the things we try to do at the Qui Tam Conference is have viewpoints from all sides. Tell us a little bit about that: There’ll be relators’ counsel, government counsel on your panel? Who should we expect?

Coleman: Absolutely. We wanted to present a balanced panel and, recognizing that many of our audience members will want to see the government’s perspective on seeking discovery from their agencies, we do have two folks in the government. We will have Lt. Col. Chris LaCour, who is head of torts for the [U.S.] Army. We’ll also have Amy Kossak, who’s with the Department of Justice, where she’s a trial attorney. So we will have both of them represented on the panel. They’ve dealt with a number of Touhy requests.

We’ll also have Chris Harwood. He is a partner at Morvillo and he will provide the defense perspective. We will also have Jed Wulfekotte, who is a partner at Stein Mitchell. He will speak on behalf of relators’ counsel.

Oswald: I want to finish with just a little bit about you. Lawyers are people, too. Other than faith and family, give me a sense of what gets you up in the morning. What’s your passion?

Coleman: My clients, really. I have always loved health care since I was a child. It’s always been a passion of mine, but I was an English major so medicine wasn’t in the cards [for me]. I am so excited about what they do. They are doing great things, and it is my pleasure to serve them and work with them to solve problems.

Oswald: Selina, thank you.

[Turning to camera] We look forward to seeing all of you at next year’s Qui Tam Conference. It is on February 27-28 here in Washington. You can register at the Federal Bar Association Web site at fedbar.org.

———-

R. Scott Oswald is managing principal of The Employment Law Group, P.C. Selina P. Coleman is a partner at Reed Smith LLP.

 

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(Transcribed and edited lightly by The Employment Law Group)

R. Scott Oswald: [Addressing camera] Welcome back to our continuing conversation with our moderators and speakers in anticipation of the Qui Tam Conference, which is in February here in Washington, D.C. And today we have Derek Adams, and [turning to Adams] Derek is a partner at Feldesman Tucker Leifer & Fidell.

Derek M. Adams: That’s right.

Oswald: Did I get that right?

Adams: You did.

Oswald: Okay, thank you. Your panel is on an emerging topic for sure, and that is (c)(2)(A) dismissal. Can you just explain for everyone watching what that is — and the power that the Department of Justice has to dismiss a qui tam case?

Adams: Sure. Thanks, Scott.

So under the False Claims Act, the Department of Justice … has the ability to move to dismiss, affirmatively move to dismiss. In most cases, as you know, there’s an investigation that occurs and then the DOJ makes the decision: Are we going to intervene in the case or are we going to decline? And the relator has the ability to then proceed with the case.

In a small percentage of cases, the DOJ [may] actually step in and say: We don’t want the relator to move forward with the case, [so] we are going to affirmatively move to dismiss the case under a provision that’s referred to in the statute under (c)(2)(A).

Oswald: And my guess is that most relators and their counsel aren’t too happy when that happens.

Adams: That is correct — especially if you are, you know, a year after the [original] intervention decision. It’s been coming up more recently: There’s the Granston memo that came out in the beginning of 2018, and there’s been a lot of attention the last couple of years about when the DOJ is using [dismissal], whether they’re using it more often, and how the landscape has changed as a result of that.

Oswald: So Mike Granston spoke to us last year at the Qui Tam Conference. One of the points he made was that his memo was really just a codification of what had already been the policy of DOJ. It was pretty much business as usual. Is that right? Has it been business as usual?

Adams: So, I agree. I agree with Michael. I was in [the] Civil Frauds [division] prior to that and I had (c)(2)(A) cases. I litigated (c)(2)(A) cases. I brought (c)(2)(A) decisions — (c)(2)(A) motions. So it was a tool that we used in certain circumstances.

I think the big change that happened with the memo and movement in 2018 was more awareness among all of the US Attorney’s offices that this is something that they should consider, in certain circumstances, at the point of intervention. So I don’t think it was a change in policy so much as a change in practice, right? It was a little bit more awareness among the DOJ that this is a tool to consider — and that there are good reasons to use it in certain circumstances.

Oswald: Maybe one of the fears on the relators’ side is that agencies now will have some say in this — an agency maybe that is slightly embarrassed by the fact that these mis-billings have occurred. What does the memo say about that, and how has that played out since the memo?

Adams: Sure. So the memo has now been integrated — pieces of it — into the Justice Manual. So there’s factors within the Justice Manual that DOJ will look at and determine if they’re going to move to dismiss a case, and what … things they take into account. The effect on the agency is certainly one of the factors that they look at, and [whether it will] potentially affect agency programs, for example, if they let this case proceed with the relator bringing the case.

In terms of potential embarrassment of an agency, I would say materiality is such a big issue especially after Escobar, that there’s more awareness from the defense side about obtaining evidence during litigation that might help to show that the alleged fraud was not material. And if there are agency witnesses who knew about it at the time — [so that] the government is going to have a very difficult time establishing materiality — that might be a reason that, at the time of intervention, they may consider moving to dismiss rather than letting the case proceed for two years and then having that come out with an agency witness, for example.

Oswald: So if I’m in the audience and I’m watching the panel and soaking it all in, what can I expect?

Adams: We’re really going to focus on separating fact from fiction. There’s been so much written about (c)(2)(A) over the last two years, and there’s a view that this is widespread — that it’s happening all over the place and, potentially, DOJ [is] using it improperly to move to dismiss when they shouldn’t be. [But] if you look at the raw numbers of cases that have come out, even in 2018-2019, they’re not that much compared to the number of False Claims Act cases that are brought. So we’re going to talk about things like that.

We’re also going to talk about strategic ways from the relator’s side, the defense side, and from DOJ’s perspective — how each party can potentially utilize (c)(2)(A) for their advantage. So, defendants: What are the arguments you can make to get DOJ to consider moving to dismiss a case? Is it saying to them, “We are going to subpoena every witness at the agency and you’re going to be buried in documents for two years”? Or is it doing something more strategic?

And from the relator side, what are the things you can do to try to work it out with DOJ so they don’t move to dismiss — even if they’re thinking of moving to dismiss?

We’re going to hear from great panelists at the DOJ, Colin Huntley and Ed Crooke, who are both assistant directors in Civil Frauds. They have been there for a long period of time and are very familiar with (c)(2)(A) and with how it’s being used currently by the Department of Justice, so they’re going to give some great insight into that. And then we have Anna Haac who’s on the relator side at Tycko & Zavareei. She has brought a case … that was declined and then [went on to make] important case law. So it’s going to be interesting to hear her perspective of potentially some of the ways that (c)(2)(A) may impede new case law, for example, that the relators’ bar might be making on declined cases.

So we’re really well rounded. And I’m on the defense side of FCA cases, so I’ll have that perspective too. It will be a well-rounded and interesting panel.

Oswald: Derek, thank you.

Adams: Thank you Scott.

Oswald: [Turning to camera] And thank each of you for watching this episode. We look forward to seeing you in Washington on February 27-28, 2020. You can register at fedbar.org.

———-

R. Scott Oswald is managing principal of The Employment Law Group, P.C. Derek M. Adams is a partner at Feldesman Tucker Leifer Fidell LLP.

 

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(Transcribed and edited lightly by The Employment Law Group)

R. Scott Oswald: [Addressing camera] We are here with Marlan Wilbanks, who is one of our moderators for this year’s Qui Tam Conference on February 27-28, 2020 in Washington.

[Turning to Wilbanks] Marlon, tell us a little bit about your panel coming up.

Marlan B. Wilbanks: We have an interesting panel. The subject matter is very relevant; it’s dealing with multi-relator litigation. For the panel we have a government representative, Lori Oberembt, who’s a very senior member of the Department of Justice here in the civil section. We have Chris Burris, who is a very experienced lawyer with King & Spalding in Atlanta — always been on the defense side, that I’ve worked against in several cases, have a lot of respect for. And Marc Raspanti, who for at least two decades has handled FCA work on behalf of the whistleblower or the relator. So we have three panelists that have seen the evolution of these cases and have some ideas about where we’re headed in situations where you have more than one person that files a whistleblower case.

Oswald: And why does that matter? What is the first-to-file bar?

Wilbanks: The first-to-file bar is intended to stop copycat litigation. It’s basically statutorily designed to be sure that it’s only the first person that brings the relevant information to the government that’s rewarded. [I]t’s a very significant thing in our practice, because the government wants to pay one relator — and the defendants, when it comes around to paying fees, they want to pay one relator. So what do you do when there’s more than one relator? That’s what our panel is about.

Oswald: Got it. So tell us a little bit about trends in this area. What has the department’s position been previously, what is it today, what do you see in the future?

Wilbanks: The trend, because there are more cases filed, is that there are more multi-relator cases. You don’t know when you file your case, because it’s under seal, if anyone has beaten you to the courthouse. There could be, before or after, any number of complaints. What I see more now is the government wanting to work with more than just the first-filed relator — wanting to work with all of them, to get the most information possible. And that’s good.

The tough part is: How are the relators going to work between themselves? [How will they] figure out, if there is a relator share award paid, what [happens] if the second, third, and fourth [whistleblowers] did more work than the first? They may not be on the best legal ground — yet equitably, they made the pie bigger.

So that’s where we are. Defendants are aware of that and defendants want to — they don’t want to deal with multiple layers of relators. So they have to try and get a feel [for] who the government thinks is first to file. And that’s very important but, in the end, many times it’s actually [decided by] litigation. You could file first but there [might] be a defect in your complaint so that a subsequent [filer] may actually have the only valid legal complaint that’s pending.

So there’s a lot of moving parts, but [this is] going to happen more and more because more people are filing FCA cases.

Oswald: So the first-to-file — the first filer might have an incentive to actually negotiate with the other relators down the stream?

Wilbanks: Absolutely, because sometimes, in a football analogy, you can get Mr. Inside and Mr. Outside. You may have somebody that’s an insider, from a corporate position — but these other whistleblowers have worked at locations everywhere else, so that helps the argument that it’s a corporate-wide scheme.

Oswald: Might make the case bigger?

Wilbanks: Might make it bigger. Might make it national, as opposed to local.

Oswald: Got it. And talk to us about the defense bar. How do they see the multi-relator-type cases, as opposed to a single relator case?

Wilbanks: Yeah, I think it creates for them both opportunities and problems. The problems are, as I mentioned before, where there’s smoke there’s fire. Different people [are] bringing different pieces of evidence to the government that can make it a strong case for the whistleblower.

The opportunity is that it really gives them a chance to learn a lot about the case … that may help them defend, regardless of who is first-to-file. [I]t also gives them a real chance to pit the relators against each other, particularly in situations where they’re trying to figure out who the defendants should be dealing with — who they should pay attorney fees and costs at the end of the case.

It’s an interesting dynamic that’s very fact-driven, but defendants are well aware that there have been legal battles between the whistleblowers — and whistleblower lawyers — over this very issue. And so is the DOJ. From the government’s standpoint, what they want is for everybody to play nice.

Oswald: And is it in the relators’ interest for everyone to play nice on their side?

Wilbanks: It is. It is. Because — two answers to the same question.

Yes, it’s in their interest because bad law can … blur the lines as to what most of us think [are] pretty clear guidelines now, on the first-to-file bars and [on] other jurisdictional bars.

But some people are unreasonable. The government can’t do anything to force it. What the government does have to do sometimes, to help parties reach an agreement, is come out and give their opinion — it’s not up to them, they’re not the judge, but who they believe provided the first information on the covered conduct that they’re focusing on.

And sometimes that helps lawyers who are saying, “No, this is about my client’s case” and the other one’s [saying], “No, it’s about my client’s case.” Because the government also only wants to pay one relator in a multi-relator [case], if it’s on the same cause of action.

Oswald: And it might give relator’s counsel some cover —

Wilbanks: Absolutely.

Oswald: — in dealing with their client.

Wilbanks: Absolutely.

Oswald: Marlan, thank you.

Wilbanks: Thank you.

Oswald: [Turning to camera] And we look forward to seeing each of you in Washington on February 27-28, 2020 for this year’s Qui Tam Conference. You can register at the Federal Bar Web page at fedbar.org.

———-

R. Scott Oswald is managing principal of The Employment Law Group, P.C. Marlan B. Wilbanks is senior partner at Wilbanks & Gouinlock, LLP.

 

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(Transcribed and edited lightly by The Employment Law Group)

R. Scott Oswald: [Addressing camera] I am here with Cleveland Lawrence III. Cleveland is the co-chair of the whistleblower practice at Mehri & Skalet, and we are here with him to talk about his panel at this year’s Qui Tam Conference — the Federal Bar’s Qui Tam Section annual conference on February 27-28, 2020.

[Turning to Lawrence] Cleve, tell us a little bit about your panel.

Cleveland Lawrence III: Sure, Scott. We are going to be focusing on emerging trends in False Claims Act litigation. [We’ll be] trying to put our finger on the pulse of what’s going to be coming down the pike, and preparing everyone — both the government and especially whistleblowers — for the types of cases that we expect.

Oswald: So give me an example of an emerging trend we might hear about during the panel.

Lawrence: We have started to see the beginnings of more cases involving antitrust violations, and bid-rigging, and collusive price-fixing, and things like that as a basis for False Claims Act liability and —

Oswald: Why is that a false claim?

Lawrence: Well, it depends on what kinds of certifications are required to be made to the government. Certainly in the context of a bid-rigging or some kind of collusive pricing where the government is being victimized, that would seem to be a relatively straightforward false claim on the government’s funds. Certainly, had the government known that the prices were not proper, it would not have wanted to pay those players.

Oswald: The government wouldn’t come in — wouldn’t want to accept the claim from the very beginning?

Lawrence: Absolutely. That’s the theory.

Oswald: So in those kind of cases under the False Claims Act, how do damages work? For a case where there might be price-fixing or bid-rigging from the very start?

Lawrence: Well, the most aggressive and certainly the theory that I enjoy the most is a fraudulent inducement theory of liability, where the theory would be that the entirety of the contract is null and void because the government never would have entered into that agreement had it known that the bid was rigged or something like that. In those types of cases, the government has even argued that the entire value of the contract then can be the measure of damages — because not only was the actual money wasted, but the purpose of the government’s process was frustrated [by] someone [who] was claiming eligibility for something that they should never have been eligible for.

Oswald: Give me another emerging trend that maybe is off the beaten path, that if I’m in the audience I might hear about.

Lawrence: Sure. Another trend that I think we are going to see more and more of, especially in today’s world of trade war, will be an extension of government procurement cases that are largely based on falsifications of things like country of origin, or violations of the Trade Agreements Act or the Buy America Act. We’ve seen the uprising of those sentiments with this administration, and all of these massive tariffs that are being placed on goods being imported into the country. Some of those [levies] will be passed along to consumers but a lot of companies will try to find ways those around those tariffs and avoid having them collected by the government. So those are going to be False Claims Act cases coming down the pike.

[This applies] in the area, I think, of cybersecurity as well. We’ve seen examples of some cases on the edges of the False Claims Act involving cybersecurity, especially with the trade war and the hypersensitivity about software, and where it comes from, and what kind of access it gives to potential hackers or others. Cybersecurity, I think, is really on everyone’s mind.

Oswald: So in those cases the government contractor — what? Is making representations to the United States about its own cybersecurity? Is that what’s going on?

Lawrence: Or about products that it’s providing to the government to keep our information safe, and [about] the origins of those goods, or software, or things of that nature. Certainly, if we knew that software was coming from China, we would probably feel different about whether we should buy it or not.

Oswald: Tell us a little about your panelists. Who’s going to be on the panel?

Lawrence: Sure — I have a great group. On the relators’ bar side we have Eric Havian, who is a partner at Constantine Canon, a longtime qui tam attorney. And he’s going to, I think, explore some of those antitrust issues and some of the other types of cases that are a little more novel that he and the partners at his firm are bringing. We also have John McKnight, who is a leader at the Sanford Heisler Sharp firm. He has a lot of experience in the government procurement realm and can talk a lot about some of those Trade Agreements Act and Buy America Act frauds that that we discussed a little bit. On the defense side we have Marcia Madsen, who’s one of the most knowledgeable defense lawyers in government contracting, and certainly in the FCA and qui tam world, and a frequent speaker on panels like these. We’re expecting to add a government representative to the panel as well, but I think we’re off to a really great start.

Oswald: Cleve, thank you.

Lawrence: Great to be with you, Scott. Thanks.

Oswald: [Addressing camera] And we look forward to seeing each of you on February 27-28, 2020. You can register on the Federal Bar Web site at fedbar.org.

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NOTE: Since this interview was recorded, Mr. Lawrence’s panel has added its government representative — Rebecca Tinio, deputy chief of the civil frauds division at the U.S. Attorney’s Office for the Southern District of New York.

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R. Scott Oswald is managing principal of The Employment Law Group, P.C. Cleveland Lawrence III is of counsel at Mehri & Skalet PLLC.

 

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