False Claims/Qui Tam

The Risks.
Companies in a wide variety of industries - whether they think of themselves as traditional government contractors or not - can find themselves facing allegations that they submitted false claims or made false statements to the United States government. Given statutory penalties of up to $11,000 for each false claim and treble damages, the consequences can be ruinous. And the whistleblower (or qui tam) provisions of the False Claims Act give individuals - including current and past employees, as well as competitors - a powerful financial incentive to bring these lawsuits.

Our Solution.
Crowell & Moring LLP has earned a national reputation in the False Claims Act and qui tam litigation arena, having defended more than eighty such cases since the False Clams Act was substantially amended and expanded in 1986. We regularly assist clients in heading off government involvement in such cases through representation during the investigation phase, and have also successfully litigated numerous cases, obtaining victories for clients on summary judgment or other motions and at trial. Where settlement is the best option, we deal frequently and have useful working relationships with many of the attorneys and senior Department of Justice officials responsible for prosecuting the government's False Claims Act cases and formulating policy. We also lobby Congress on behalf of those industries affected by the Act. For many clients, we have established compliance programs that seek to avoid false clams cases in the first place. Now, with the 2009 amendments to the False Claims Act, we are actively helping clients understand the statutory changes, minimize their risks of suit, and respond to False Claims Act allegations.

Representative Matters:

Resolution without litigation
Our first objective in every False Claims Act case is to persuade the Government not to intervene; we then seek to convince relators, through their counsel, that litigating on their own will not succeed. As a result, the overwhelming majority of Crowell & Moring's False Claims Act cases settle or are withdrawn long before trial.

Litigated resolutions

United States ex rel. Davis v. U.S. Training Center, Inc. (f/k/a formerly known as Blackwater Lodge & Training Center), Case No. 1:08-cv-01244 (E.D. Va. 2011) (verdict in favor of defendant after an eight day jury trial involving allegations of overbilling the Department of State on security contract in Iraq and Afghanistan; dismissals of other allegations against five other corporate and individual defendants and involving myriad other allegations, including all claims asserted concerning another security contract with the Department of Homeland Security in the aftermath of Hurricane Katrina, were obtained prior to trial).
United States ex rel. Patricia Howard v. USA Environmental, Inc., 2009 WL 652433 (M.D. Fla. March 12, 2009) (district court dismissed all of the relator's claims with prejudice prior to discovery; we are currently defending the client on appeal in the Eleventh Circuit).
United States ex rel. Robert Purcell v. Moving Water Industries, Inc., Case No: 1:98-CV-02088 (D.D.C.) (case is presently pending and involves allegations by a qui tam relator against Moving Water Industries related to the dealings that it had with the Export-Import Bank of the U.S.)
United States ex rel. Drake v. Norden Systems, Inc., 2009 WL 806764 (2d Cir. March 30, 2009) (in our longest running case (14 years), already twice dismissed and a third motion to dismiss pending, we have yet to file an answer to any of the relator's many amended complaints).
United States ex rel. Swift-Freeman v. Bon Secours Baltimore Health Systems, Inc., Civ. No. AMD 04-3017, Memorandum Op. Granting Motion to Dismiss (D. Md. March 31, 2008) (Despite a 65 page amended complaint alleging Medicare, Medicaid, and TRICARE false claims from services either not provided or performed by unqualified personnel, the court dismissed the case with prejudice, noting that "the time for…investigation was before the case was instituted in the first place.").
United States ex rel. Rory Mayberry v. Custer Battles, LLC, Case No. 1:06-cv-364 (E.D. Va. 2008) (this case involved allegations of fraud by qui tam relators against numerous high-profile defendants related to contracts with the Coalitional Provisional Authority in Iraq. The Government declined to intervene, and the case was dismissed in its entirety).
United States ex rel. DRC, Inc. v. Custer Battles, LLC, 472 F. Supp. 2d 787 (E.D. Va. 2007), aff'd, U.S. ex rel. DRC, Inc., et al. v. Custer Battles, LLC, et al., 562 F.3d 295 (4th Cir. 2009) (the court determined the relator failed to establish "presentment" of claims to the United States in connection with a battlefield securing contract with the Coalition Provisional Authority in Iraq).
United States ex rel. Monda v. Sikorsky Aircraft Corp., 2005 WL 1925903 (D. Conn. Aug. 11, 2005), aff'd, No. 05-4977 (2d Cir. 2006) (Case brought by Government auditor dismissed under Fed R. Civ. Proc. 9(b)).
United States ex rel. Werner v. Fuentez Systems Concepts, 319 F. Supp. 2d 682 (N.D. W. Va. 2004) (granting summary judgment where the FCA's scienter requirement is negated by the Government's knowledge and approval. The Fourth Circuit affirmed.)
United States ex rel. Nelson v. CSX Transportation, Inc., Case No. 1:02-CV-319 (N.D. Ga. 2004) (granting our motion dismiss based on Rule 9(b)).
United States ex rel. Peoples v. Eagle-Pitcher, Inc., Case No. 96-5009 (W.D. Mo. 2003) (after the Government declined to intervene, the case was dismissed for failure to prosecute).
United States v. Valenzuela Engineering, Inc., (E.D. Cal. 2002) (involving allegations related to engineering and construction contracts between Valenzuela Engineering and the Air Force and the U.S. Army Corp of Engineers. Our client was initially central to the Government's investigation but was entirely vindicated. It was not indicted and did not enter into a civil settlement with the Government.)
United States ex rel. Harrison v. Westinghouse Savannah River Company, 176 F.3d 776 (4th Cir. 1999) (limiting the definition of "claim" under the False Claims Act).
United States ex rel. Ackley v. IBM Corp., 76 F. Supp. 2d 654 (D. Md. 1999) (holding that to qualify as an "original source," a relator must voluntarily provide the information on which the allegations are based to the Government before, not contemporaneously with, the filing of the suit).
United States v. United Technologies Corp., Sikorsky Aircraft Division, 51 F. Supp. 2d 167 (D. Conn. 1999) (rejecting the Government's theory of collective knowledge as a basis for imposing liability).
United States ex rel. Body v. Blue Cross and Blue Shield of Alabama, 156 F.3d 1098 (11th Cir. 1998) (summary judgment for a fiscal intermediary in a qui tam suit relating to the allowability of hospital costs. The Eleventh Circuit affirmed the dismissal, holding that fiscal intermediaries under the Medicare Act are immune from FCA liability.).
United States ex rel. Thistlethwaite v. Dowty Woodville Polymer, et al., 6 F. Supp. 2d 263 (S.D.N.Y. 1998) (denying retroactive effect to enhanced penalties, damages and statute of limitations provisions of the 1986 amendments to the False Claims Act, and refusing to apply the "date of discovery" statute of limitations extension to a relator).
United States v. Krizek, 111 F.3d 934 (D.C. Cir. 1997), on remand, 7 F. Supp. 2d 56 (D.D.C. 1998) (narrowly defining "claims" subject to penalties under the False Claims Act).
United States ex rel. Foust v. Group Hospitalization and Medical Services, et al, 26 F. Supp. 2d 60 (D.D.C. 1998) (granting summary judgment on grounds of public disclosure).
United States ex rel. Findley v. FPC-Boron Employees' Club, 105 F.3d 675 (D.C. Cir.), cert. denied, 522 U.S. 865 (1997) (interpreting the public disclosure bar of the False Claims Act).
United States ex rel. Kreindler & Kreindler v. United Technologies Corp., 985 F.2d 1148 (2d Cir.), cert. denied, 508 US 973 (1993) (limiting the extent to which qui tam relators may be deemed "original sources" qualified to bring suit).
United States v. Target Rock Corp., 1992 US Dist. LEXIS 9858 (E.D.N.Y. 1992) (denying retroactive effect of the 1986 amendments to the False Claims Act).
United States ex rel. ____ v. ____ , (under seal) (D. Mass.) (involving allegations of fraud and conspiracy related to an alleged agreement between a large national managed care organization and several pharmaceutical manufacturers to circumvent Medicaid provisions. Our client was successfully vindicated and was neither indicted nor did it enter into a civil settlement with the Government.)
United States ex rel. ____ v. ____ , (under seal) (S.D. Ohio) (a case involving allegations of fraud related to certifications made by a durable medical equipment manufacturer-supplier in conjunction with sales of medical equipment through Medicaid. The Government did not intervene and the case was dismissed).
United States ex rel. ____ v. ____ , (under seal) (S.D. Ohio) (involving allegations of fraud related to a contract between a manufacturer of armored vehicles and the U.S. Department of Defense. The Government did not intervene and the case was dismissed.)
United States ex rel. ____ v. ____ , (under seal) (D.D.C.) (a case involving fraud allegations related to a contract between a large, non-profit humanitarian relief NGO and the U.S. Agency for International Development. The Government did not intervene and the case was dismissed.)