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Just in Time for Halloween: DOJ Launches Cyber Enforcement Initiative Using False Claims Act

Client Alert | 1 min read | 10.08.21

On October 7, 2021, the Department of Justice (DOJ) announced its new Civil Cyber-Fraud Initiative, focused on civil enforcement against government contractors that fail to follow cybersecurity contract requirements.  The Initiative, led by the Civil Division’s Commercial Litigation Branch and Fraud Section, will utilize the False Claims Act to combat cyber threats to sensitive information and critical systems by enforcing the government’s contractual cybersecurity standards.  The Initiative will hold accountable contractors that knowingly: 1) provide deficient cybersecurity products or services; 2) misrepresent cybersecurity compliance; or 3) fail to monitor and report cybersecurity incidents in accordance with contract requirements. 

In addition to contractor accountability, the benefits of the new Initiative are intended to include:

  • Building broad resiliency against cybersecurity intrusions across the public and private sectors;
  • Ensuring contractors that meet cybersecurity requirements are not at a competitive disadvantage;
  • Reimbursing government and taxpayer losses incurred when contractors fail to satisfy their cybersecurity obligations; and
  • Supporting efforts to timely issue patches for vulnerabilities in information technology products and services.

The Initiative formalizes what has for several years now been a stated priority area by DOJ for False Claims Act enforcement, as we have previously reported.  In accord with the new Initiative, we expect to see an uptick in False Claims Act investigations, settlements, and litigation concerning cybersecurity issues, increased coordination among government agencies, and increased interest by those in the relator’s bar for qui tam actions.

Insights

Client Alert | 6 min read | 03.26.24

California Office of Health Care Affordability Notice Requirement for Material Change Transactions Closing on or After April 1, 2024

Starting next week, on April 1st, health care entities in California closing “material change transactions” will be required to notify California’s new Office of Health Care Affordability (“OHCA”) and potentially undergo an extensive review process prior to closing. The new review process will impact a broad range of providers, payers, delivery systems, and pharmacy benefit managers with either a current California footprint or a plan to expand into the California market. While health care service plans in California are already subject to an extensive transaction approval process by the Department of Managed Health Care, other health care entities in California have not been required to file notices of transactions historically, and so the notice requirement will have a significant impact on how health care entities need to structure and close deals in California, and the timing on which closing is permitted to occur....