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Fourth Circuit Declines to Address Use of Stat Sampling in FCA Cases

Client Alert | 1 min read | 02.16.17

On February 14, the Fourth Circuit issued an opinion in U.S. ex rel. Michaels v. Agape Senior Cmty. Inc. on one of the two key issues that the district court had certified for interlocutory appeal under 28 U.S.C. § 1292(b): (1) whether the government possesses an unreviewable veto authority over proposed settlements and (2) whether statistical sampling is an appropriate methodology for establishing liability and damages in False Claims Act cases. On the first issue, the Fourth Circuit joined the Fifth and Sixth Circuits and held that the government has an unreviewable right to veto FCA settlements even after electing not to intervene. On statistical sampling, the district court had ruled that statistical sampling was not permissible because of the facts and available evidence in the case, but upon review, the Fourth Circuit determined that the appeal of that issue had been “improvidently granted” because the use of sampling is an evidentiary issue, not a pure question of law as required for interlocutory review. Accordingly, companies and FCA practitioners hoping for appellate-level guidance on the controversial issue of sampling will have to wait for another day.

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Client Alert | 1 min read | 07.08.26

CAS Board Publishes Final Rule Rescinding CAS 404, 408, 409, and 4117

As part of its ongoing effort to conform the Cost Accounting Standards (“CAS”) to generally accepted accounting principles (“GAAP”), the CAS Board published a final rule rescinding CAS 408 (Accounting for costs of compensated personal absence) and CAS 411 (Accounting for acquisition costs of material).  The CAS Board also rescinded CAS 404 (Capitalization of tangible assets) and CAS 409 (Depreciation of tangible capital assets) but retained certain requirements of CAS 404 and 409, which will be located in new paragraphs of CAS 405 (Accounting for unallowable costs).  Specifically, the CAS Board retained the requirements currently located at CAS 404-50(d)(1), CAS 409-50(e)(5), CAS 409-50(j)(1), and CAS 409-50(j)(4), which the CAS Board explained are necessary to protect the Government’s interests.  Otherwise, the CAS Board determined that the requirements of CAS 404, 408, 409, and 411 overlapped with GAAP such that GAAP “may be applied reasonably as a substitute for CAS to support contract cost and pricing.”...