FCA Does Not Authorize In-House Counsel/Relator to Reveal Client Confidences
Client Alert | 1 min read | 11.18.13
In Fair Lab. Practices Assocs. v. Quest Diagnostics (Oct. 25, 2013), the Second Circuit affirmed the dismissal of a qui tam suit that was brought by a general partnership formed for the purpose of bringing the suit because (1) the partnership included the defendant's former general counsel, and (2) the former general counsel violated his ethical obligations by divulging confidential client information in pursuit of the litigation, notwithstanding that a non-lawyer member of the partnership initiated the suit. While the Second Circuit did not create a bright-line rule barring all in-house lawyers from using client information in FCA cases, it did strike a balance between a lawyer's ethical obligations to the client and the government's competing interest in encouraging "whistleblowers" to report fraud, finding that the disclosure exceeded what was necessary to prevent the client from committing a crime.
Insights
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On October 16, 2026, the U.S. Centers for Medicare and Medicaid Services (CMS) issued a proposed rule implementing key sections of the Consolidated Appropriations Act (CAA) of 2026, Section 6224 (“Modernizing and Ensuring Pharmacy Benefit Manager Accountability”). The agency also proposes a conforming change mandated by section 6219 of the CAA (“Adjustments to Medicare Part D Cost-Sharing Reductions for Low-Income Individuals”) that would reduce the generic-drug copayment from $1 to $0 for full-benefit dual eligible individuals. Comments to the proposed rule are due December 15, 2026.
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