Amicus Curiae Briefs from TAFEF

Attached is the amicus brief that we filed in the Supreme Court in Digital Reality Trust, Inc. v. Somers. The brief argues that the anti-retaliation provisions in the Dodd-Frank Act should apply to both whistleblower that report fraud internally, as well as those that report to the SEC. The brief explores the intent of Congress in passing the whistleblower protection provisions, the text and meaning of the statute, and the policy reasons for protecting internal whistleblowers. This fantastic brief was authored in large part by Claire Sylvia, Erika Kelton, Sean McKessy, Alexander Westerfield, David Jochnowitz, and John Tremblay of Phillips & Cohen LLP. Many thanks to them for their hard work!

In important cases, TAFEF submits briefs of amicus curiae to help courts correctly interpret the False Claims Act and related whistleblower statutes. These are listed below:

 

  • Second Circuit: U.S. ex rel. Wood v. Allergan, Inc. (submitted 11/07/2017)
    Authored with Max Smith of Morgan Verkamp.
    This brief argued in favor of affirmance of the District Court for the Southern District of New York’s ruling denying the defendant’s motion to dismiss in part on first-to-file grounds.  The defendant moved for and was granted interlocutory appeal on the question of whether a relator was required to dismiss and refile their complaint if it was barred by the first-to-file provision when it was originally filed, or whether a relator was allowed to amend his or her complaint to cure the defect after the previous cases had been dismissed.  The brief argued that the history and policy of the FCA and the 1986 amendments support allowing a first-to-file defect to be cured by supplementation under Rule 15.  The brief further explores the implications of a rule mandating refiling for relators and the reasons why such a rule was not intended by Congress in drafting the first-to-file bar.

  • Seventh Circuit:  U.S. ex rel. Berkowitz v. Automation Aids Inc. (submitted 10/27/2017)
    Authored with David ChizewerMatt Organ, and Emily Gilman of Goldberg Kohn
    This brief argued in favor of reversal of the District Court for the Northern District of Illinois’s ruling granting the defendant’s motion to dismiss for failure to plead with the requisite particularity under Rule 9(b).  The district court found that the relator’s claims failed because he did not allege that a single person within each defendant corporation had knowledge of all of the details of the fraud and the submission for the false claims.  The brief argued that the FCA’s knowledge requirement does not require that one corporate actor possessed knowledge of all of the elements of the fraud scheme, and that collective knowledge of corporate employees can establish a knowing false claim by that corporation.  The brief also discussed generally the FCA’s knowledge requirements.

  • Supreme Court: Digital Reality Trust, Inc. v. Somers (submitted 10/18/2017)
    Authored with 
    Claire Sylvia, Erika Kelton, Sean McKessy, Alexander Westerfield, David Jochnowitz, and John Tremblay of Phillips & Cohen LLP
    The brief argues that the anti-retaliation provisions in the Dodd-Frank Act should apply to both whistleblower that report fraud internally, as well as those that report to the SEC. The brief explores the intent of Congress in passing the whistleblower protection provisions, the text and meaning of the statute, and the policy reasons for protecting internal whistleblowers.

  • Fifth Circuit: U.S. ex rel. Paul Solomon v. Lockheed Martin Corp. (submitted 3/22/2017)
    Authored with David ChizewerMatt Organ, and Fred Klein of Goldberg Kohn
    The brief covers the proper interpretation of the “original source” requirement of the FCA’s public disclosure bar and argues that the district court improperly evaluated the meaning of “voluntarily provided,” explaining that a whistleblower who provides information to the government without being compelled has done so voluntarily.  The brief explains why the relator in this case, a quintessential insider with direct knowledge of the fraud, is exactly the kind of whistleblower the 1986 amendments were meant to encourage to come forward.

  • Eleventh Circuit: U.S. ex rel. Paradies v. GGNSC Administrative Services (Aseracare) (submitted 9/7/2016)
    Authored with Colette MatzzieClaire Sylvia, and Amy Easton of Philips & Cohen
    The brief covers the district court’s erroneous interpretation of the FCA to require proof of an objective falsehood, and argues that the terms “false” and “fraudulent” should be broadly construed and that professional judgment does not immunize fraudulent conduct.  The brief further argues that the court usurped the jury’s role by improperly evaluating the soundness of expert testimony.

  • U.S. Supreme Court: State Farm v. U.S. ex rel. Rigsby (submitted 9/19/2016)
    Authored with Rick Morgan of Morgan Verkamp
    The brief discusses the nature and purpose of the seal and the importance of whistleblowers in fighting fraud and argues that a seal breach should not result in dismissal of a relator from a case, rather, courts should be allowed to evaluate how to respond to such a breach
    .
  • First Circuit:  U.S. ex rel. Escobar v. Universal Health Service (submitted 8/22/2016) 
    Authored with Jennifer Verkamp of Morgan Verkamp
    On remand from the Supreme Court, the brief argues that the Court’s ruling in Escobar affirmed that bright line categories are not a means to determine FCA liability and that the government’s payment of claims during the pendency of an FCA suit does not negate materiality.

  • Ninth Circuit: U.S. ex rel. Rose v. Stephens Institute (submitted 8/7/17) 
    Authored with Jennifer Verkamp of Morgan Verkamp and Claire Sylvia of Philips and Cohen
    This brief covers materiality and falsity in the wake of the Supreme Court’s decision in Universal Health Services v. U.S. ex rel. Escobar, and argues that categorical bright lines have been rejected by the Court, that no express false statement is required on the claim form for liability to attach, that materiality should be evaluated holistically, and that the government’s payment of claims during the pendency of an FCA case does not negate materiality.

  • Ninth Circuit: US ex rel. Rose v. AAU
    Authored with Morgan Verkamp and Phillips & Cohen
    The brief addresses falsity and materiality under Escobar

  • Ninth Circuit: U.S. ex rel. Welch v. My Left Foot
    Authored with Hughes Socol Piers Resnick & Dym  
    Requiring employees to arbitrate FCA qui tam claims pursuant to private employment contracts will deter relators from reporting fraud and severely undermine the purpose of the FCA, which is to enlist private individuals with information about fraud to bring that information to the Government’s attention and to add to the Government’s resources in combatting fraud.

  • Eleventh Circuit: U.S. ex rel. Van Raalte v. Healogics, Inc.
    Authored with McCabe Rabin, P.A. 
    The District Court read Clausen v. Laboratory Corp. of America, Inc. too narrowly and failed to recognizes that this Circuit and the majority of other circuits have recognized that 9B can be met without specific examples of false claims.  In addition, the District Court erred by applying Rule 9(b) in an overly restrictive manner that crossed the line from “testing the pleading” to “testing the evidence.”

  • U.S. ex rel. Anthony Spay v. CVS Caremark Corp. et al
    Authored with: Phillips & Cohen,LLP 
    Government knowledge is not a defense to the FCA. Doctrines invoking "government knowledge," while perhaps convenient shorthand, only perpetuate focus on the wrong question. The relevant question is whether a defendant knowingly submitted materially false or fraudlent claims for payment. No extra statutory doctrine is necessary to evaluate whether those element have been met in a particular case.
     
  • Universal Health Services, Inc. v. United States and Commonwealth of Massachusetts ex rel. Julio Escobar and Carmen Correa
    Authored with: Morgan Verkamp, LLC
    Implied Certification does not need to be ruled on by the courts, it is clearly part of the spirit False Claims Act. “There is no ‘express words’ requirement in the FCA. Rather, liability is bounded by materialist and knowledge, the mechanisms chosen by Congress to prevent the parade of horribles petitioner fears.”

  • U.S. ex rel. Kraus v. Wells Fargo
    Authored with: McInnis Law
    The existing precepts of the FCA – knowledge and materiality – provide the appropriate means to limit the scope of liability under the statute, and that courts should not substitute artificial categories or “magic word” tests to determine whether a claim is false.

  • People of the State of New York ex rel. Empire State Ventures v. Sprint Nextel Corp. 
    Authored with: Willens & Scarvalone LLP
    Plaintiffs are required to prove that a defendant committed violations to the FCA, rather than prove that the defendant also had an intention to defraud. Sprint’s motion to dismiss the case should not be granted.

  • Kellogg Brown & Root Servs., Inc. v. U.S. ex rel. Carter 
    Authored with: Nolan Auerbach & White P.L. 
    The first-to-file qui tam provisions are meant to strengthen the False Claims Act and to prevent potential relators who do not add meaningful information to an action from becoming involved. This provision however, is not intended to prevent new important information or allegations from being used against organizations involved in defrauding the government.

  • U.S. ex rel. Escobar v Universal Health Services Inc. 
    Authored with: Morgan Verkamp LLC
    Under the FCA, liability should be understood as whether the defendant knowingly violated conditions that are material to payment of the claim. This does not need to be contingent on explicit phrasing in a contract, statute, or regulation. A violation should be measured on its relationship to the issues that are central to payment, and whether a request for payment was submitted under fraudulent pretenses.
     
  • U.S. ex rel. Whipple v Chattanooga
    Authored with: Goldberg Kohn, Ltd.  
    Congress explicitly included a provision to allow for relators to come forward with information that is independent from public knowledge. The provisions of the FCA do not make it so that a relator with independent and unique information cannot file a qui tam suit because information on a defendant is publicly available.

  • U.S. ex rel. Kurt Bunk & Ray Ammons v. Birkart Globalistics
    Authored with: Phillips & Cohen, LLP
    The contention that qui tam provisions violate Article II is false. Relators are not agents of the United States and thusly, should not be considered in violation of the charge to the Executive Branch to “take Care that the laws be faithfully executed.” The history of the False Claims Act proves beyond a doubt that a challenge of separation of powers should not stand.
     
  • Schindler Elevator Corporation v. U.S. ex rel. Kirk
    FOIA releases should not be considered as something that can discredit a relator in qui tam cases. If this were to be the case then companies could just release information and FCA cases against them waived. “Disclosure of a public record is merely that, a disclosure; the mere fact that a public record has been disclosed does not automatically transform the record into an administrative report and investigation, consistent with the meaning of the words used in §3730(e)(4).”

  • U.S. ex rel. Cafasso v. General Dynamics C4 Systems
    Authored with: Law Offices of Paul D. Scott, PC
    The Rule 9(b) provisions of the False Claims Act do not require all elements of a fraud are pled in particularity. Rule 9(b) is a standard for a plea not as a hurdle for evidence and relators to overcome before a case is initiated.
     
  • Perius v. Abbott Laboratoris
    Authored with: Maduff & Maduff, LLC and Murphy Anderson, PLLC
    This Court should hold that a witness who cooperates with a Government subpoena is within the anti-retaliation protection of 31 U.S.C. § 3730(h).

  • ACLU v. Holder (4th Circuit Court of Appeals)
    Authored with: Vezina & Gattuso, LLC and Cook & Kitts, PLL
    The district court was correct in its rulings that: the False Claims Act does not violate first amendment rights, that appellants do not have the standing to challenge the status of hypothetical or real relators, that the False Claims Act is one out of many options taken by relators to combat fraud, and that the seal does not violate the separation of powers.

  • Graham County Soil & Water Conservation District v. U.S. ex rel. Wilson
    Authored with: Vogel, Slade & Goldstein, LLP
    Whether an audit and investigation performed by a State or its political subdivision constitutes an “administrative ... report ... audit, or investigation” within the meaning of the public disclosure jurisdictional bar of the False Claims Act, 31 U.S.C. § 3730(e)(4)(A).

  • U.S. ex rel. Gohil v. Aventis Pharmaceuticals
    Whether the district court erred in ordering the relator to produce, to the defendants, unredacted documents that reveal the relator’s communications with the government during a four-and-one-half-year period during which the relator’s qui tam complaint was under seal while the government investigated the relator’s allegations of fraud against the defendants.

  • ACLU v. Holder (Eastern District of Virginia)
    Authored with: Cook & Kitts, PLLC and Vezina & Gattuso, LLC
    The district court was correct in its rulings that: the False Claims Act does not violate first amendment rights, that appellants do not have the standing to challenge the status of hypothetical or real relators, that the False Claims Act is one out of many options taken by relators to combat fraud, and that the seal does not violate the separation of powers.

  • U.S. ex rel. Eisenstein v. City of New York
    Where the United States elects not to proceed with a qui tam action under the False Claims Act, and the relator instead conducts the action for the United States, must a notice of appeal be filed within the 60- day period provided for in Fed. R. App. P. 4(a)(1)(B), applicable when the United States is a “party,” or the 30-day period provided for in Fed. R. App. P. 4(a)(1)(A)?

  • U.S. ex rel. Frazier v. IASIS Healthcare Corporation - October, 2008
    Authored with: Bothwell Bracker & Vann, PC
    Whether the district court erred in holding that Federal Rule of Civil Procedure 9(b) requires Relator in a False Claims Act qui tam suit to plead details about specific false claims, even when Relator alleged that Defendant submitted false certifications of compliance on cost reports, and that each claim was submitted to federal health care programs and originated from illegal referrals from physicians, which rendered all claims false or fraudulent. Whether the district court abused its discretion in holding that granting leave to amend would be futile, and dismissing complaint with prejudice, when the court agreed that the complaint could state a claim, that this was the first challenge to the sufficiency of the pleadings under Rule 9(b), that the amendments described by the district court’s opinion were not required by precedent, and that Relator offered to amend.

  • U.S. ex rel. Duxbury v. Ortho Biotech Products
    Whether the district court erred in dismissing the relator’s False Claims Act qui tam suit against a pharmaceutical company on the grounds that the relator did not possess actual claims evidence at the pleading stage of litigation.

  • U.S. ex rel. LaCorte v. Merck & Co.
    The Court does not have the power to review terms of a settlement for fairness, adequacy or reasonableness, since the parties have already agreed to the terms of the settlement. Additionally, there is no statutory basis for reducing a relator’s share to below 15% since the relator did not conduct criminal activity, violate the False Claims Act.

  • Allison Engine Company v. U.S. ex rel. Sanders
    Whether United States Navy subcontractors that make false claims for federal Government money can be liable under 31 U.S.C. § 3729(a)(2) or (a)(3) of the False Claims Act, even if the subcontractors’ false claims were not presented to an officer or employee of the United States Government or a member of the Armed Forces of the United States.

  • Welch v. Chao
    Authored with: Taylor & Associates and The Employment Law Group, PC
    The SOX whistleblower provisions are unquestionably remedial in nature and Congress intended that they be interpreted broadly to encourage reporting and allow whistleblowers to help enforce securities laws.

  • U.S. ex rel. Lowman v. Hilton Head Health System
    Whether the district court erred in ruling that the False Claims Act’s three-year tolling period commences when the private citizen-relator discovers the fraud.

  • U.S. ex rel. Feingold v. Blue Cross and Blue Shield of South Carolina
    Authored with: Bothwell & Harris, LLP
    Whether the district court erred in ruling that a non-employee relator who had a “wealth of information” about a defendant’s fraudulent scheme did not have sufficient “indicia of reliability” to satisfy Fed.R.Civ.P. 9(b) because he could not prove prior to discovery that claims were actually submitted to the Government? II. Whether the district court erred in dismissing the relators’ 31 U.S.C. § 3729 claims on the grounds that fraudulent claim records knowingly made or certified by a Medicare contractor, which allows a healthcare provider to get a false or fraudulent claim paid or approved by the Government, are not actionable because the Medicare Act includes a full immunity provision for Medicare contractors?

  • Exxon Mobil Corporation v. Alabama Department of Conservation and Natural Resources
    Authored with Erik S. Jaffe PC
    The existence of routine audit procedures, such as are present in this case and in essentially all government contracts, are not a substitute for, and do not obviate, reliance on the fundamental duties and premises of integrity and honesty imposed by the law of fraud. Rather, audits are necessarily imperfect backstops that promote, but do not guarantee, such integrity and should be seen as a complement to, not a replacement for, reliance on the honesty of representations made in the course of commercial dealings.

  • Rockwell International Corporation v. United States of America
    Authored with: Kello, Huber, Hansen, Todd, Evans & Figel, PLLC and National Employment Lawyers Association 
    The “public disclosure bar” of the False Claims Act (“FCA”) precludes jurisdiction over certain qui tam actions that are based on the public disclosure of fraud allegations or fraudulent transactions. See 31 U.S.C. § 3730(e)(4)(A). A court has jurisdiction over such a suit only if it is brought by the Attorney General or an “original source” relator. Jurisdiction exists over the present suit because the relator, Stone, is an original source of the information on which the allegations in his qui tam complaint were based.

  • Scott v. Metropolitan Health Corporation
    The False Claims Act, 31 U.S.C. §§ 3729 et seq., provides a cause of action for an employee who is “discriminated against in the terms and conditions of employment” by her employer “because of” the employee investigating, bringing, or otherwise assisting in bringing an FCA qui tam action. 31 U.S.C. § 3730(h). The applicable legislative history broadly defines “because of” to not only include those actions taken exclusively because of the employee’s qui tam activities, but also those actions motivated, “in part,” by the employee’s qui tam activities. S. Rep. No. 99-345, at 35 (1986), reprinted in 1986 2 U.S.C.C.A.N. 5266, 5300.

  • U.S. ex rel. Sikkenga v. Regence Bluecross Blueshield of Utah
    The False Claims Act (FCA), 31 U.S.C. §§ 3729 et seq., imposes civil liability on any person who “knowingly makes . . . a false record . . . to get a false . . . claim paid or approved by the Government.” Id. § 3729(a)(2). The Medicare Act, 42 U.S.C. § 1395u(e), provides Medicare contractor employees immunity for false payments certified or made “in the absence of gross negligence or intent to defraud the United States.” 42 U.S.C. § 1395u(e)(1) and (2). Likewise, the Medicare Act extends the same level of immunity to the Medicare contractor. Id. § 1395u(e)(3). Indeed, as the legislative history explains, Congress intended to limit Medicare contractors to “the same immunity from liability . . . as would be provided their certifying and disbursing officers.” H.R. Conf. Rep. No. 89-682 (1965), reprinted in 1965 U.S.C.C.A.N. 1943, 2231 (emphasis added).

  • Commisioner of Internal Revenue V. John W. Banks and Commissioner of Internal Revenue V. Sigitas Banatis
    Authored with: Charles J. Cooper 
    It is commonplace for multiple FCA relators to combine their knowledge of a defendant’s wrongdoing, and to bring a qui tam action together, or to merge their efforts after filing separate qui tam cases. In this context, it is unthinkable that the IRS would seek to tax any one of the co-relators on the full amount of the FCA bounty that is paid out to all of them. Rather, it is common practice for each relator to include in his taxable income only that portion of the FCA reward that he or she actually receives. Just so, where a lawyer, like an additional relator, is paid a separate share of the FCA reward, that portion should be taxable only to the lawyer. Any other result would contradict the policy Congress sought to advance in enacting and amending the FCA. That policy is clear: to provide a financial incentive sufficient to encourage qui tam relators to root out and expose fraud against the Government, and to discourage Government contractors from engaging in such fraud in the first place. Forcing qui tam relators to pay tax on the contingency fee amounts paid to their lawyers will reduce the total incentive to the relator by close to 50 percent. Since there is certainly no evidence that Congress understood that relators would be subject to the “assignment of income” doctrine when it amended the FCA in 1986, applying any such result to the FCA context would be in conflict with Congressional intent.
      
  • State of Vermont Agency of Natural Resources v. US ex rel. Stevens
    History and tradition play a uniquely central role in determining the scope of Article III's “case or controversy” requirement. Not only does this Court look directly to the traditions of the Framers' era in defining “cases of a Judiciary nature,” [FN2] but modern standing doctrine has been designed to address the Framers' original concerns as applied to the new regulatory state. Given the initial heavy reliance of the Founding Generation on qui tam enforcement of federal law, and the acceptance of this mechanism by both this Court and the Executive Branch for over two centuries, it would be quite extraordinary for this Court to override Congress' carefully considered judgment concerning how best to protect the proprietary interests of the United States.

  • State of Vermont Agency of Natural Resources v. US ex rel. Stevens
    Authored with: University of Michigan Law School
    **  A qui tam suit raises no constitutional concerns under the Eleventh Amendment or associated principles of state sovereign immunity. “In ratifying the Constitution, the States consented to suits brought by other states or by the Federal Government.” Alden v. Maine, 119 S.Ct. 2240, 2267 (1999). The United States is a real party in interest in qui tam suits under the False Claims Act, which seek to vindicate the United States' sovereign and proprietary interests. Because a qui tam relator sues on behalf of the United States, her suit qualifies as a suit by the United States for purposes of the states' immunity waiver. Any requirement that the United States' interests be advanced only by executive branch officials would run counter to the framers' original understanding.
    **  States are “persons” subject to liability under the False Claims Act. Any contrary determination would apply to suits initiated by the Department of Justice as well as by relators, and thus would deprive the Department of its most effective weapon against fraud. Moreover, this interpretation is supported by conventional modes of statutory construction, including text, purpose, history, and established usage. And not only is the federalism-based “plain statement” rule this Court sometimes invokes to limit private actions against states inapposite here, but state liability under the False Claims Act actually preserves the traditional balance of federalism by precluding one state from siphoning into its own coffers some of the federal funds intended to benefit the entire country.