False Claims Act Defense

Overview

Even the most diligent companies are vulnerable to False Claims Act investigations and litigation, which can derail business goals and create a public-relations crisis. Crowell’s nationally recognized FCA Practice includes more than 40 lawyers and provides clients with practical and strategic advice at all stages of FCA matters.

With an interdisciplinary approach to FCA issues, Crowell assembles a team that is tailored to best handle your specific matter, leveraging our experience across diverse industries. Chambers proclaims that Crowell clients benefit from our “institutional expertise in regulatory matters,” especially when matters involve complex issues in government contracting, healthcare, and other industries.

Seasoned counsel for high-stakes challenges

Our deep bench combines the investigatory and trial experience of former prosecutors and civil litigators with deep subject matter knowledge of the regulatory regimes under which FCA cases frequently arise. Our firm has earned a reputation with the Department of Justice and relators’ counsel as not only formidable, but credible in our approach to every FCA case we handle. In addition, our practice includes a Chambers-ranked partner who focuses on FCA trial and appellate work.

While we resolve most FCA cases long before trial, our team has successfully tried cases to jury verdict and overturned unfavorable rulings on appeal, obtaining landmark victories for our clients. Recent matters include:

  • Successfully represented major airline in qui tam suit involving a $1.4 billion Air Force contract for the maintenance of C-17 aircraft engines. The district court granted the motion to dismiss with prejudice, and the Fourth Circuit affirmed the dismissal of the substantive FCA counts.
  • Won dismissal of a qui tam suit filed against a drug manufacturer alleging fraudulent pharmaceutical testing methods.
  • Successfully defended pump manufacturer during two-week jury trial and on appeal in an intervened qui tam case in which the DOJ sought more than $220 million in damages.
  • Persuaded DOJ not to intervene in qui tam action alleging that company had transshipped product to evade customs duties.
  • Negotiated favorable settlement for construction company in FCA investigation involving allegation that the company had improperly obtained set-aside contracts.

A proven track record in offering strategic advice

For nearly four decades, Crowell attorneys have helped clients navigate the full range of complex issues that can arise in connection with the FCA. We assist clients at every phase of the FCA lifecycle with services such as:

  • Advising clients on how to manage strategic responses to Civil Investigative Demands as well as subpoenas from grand juries, federal agencies, and inspectors general.
  • Developing and executing sensitive internal investigations.
  • Counseling clients on litigation risks, self-reporting and mandatory disclosure requirements and considerations, and potential steps for remediation.
  • Counseling on employment policies and personnel issues, including interactions with whistleblowers to mitigate the risk of an employment discrimination or retaliatory discharge action.
  • Providing FCA risk management strategies including employee training, assessing potential FCA noncompliance, and developing procedures and controls to help prevent compliance failures.

Insights

Client Alert | 1 min read | 03.12.24

The Top FCA Developments of 2023

2023 brought many important False Claims Act developments for companies with business involving government funds.  While overall recoveries remained down compared to pre-2022 levels, the total number of settlements and judgments exceeded any prior year.  Those settlements and judgments also highlight areas of particular focus for the Government, including cybersecurity compliance, pandemic fraud, and small business fraud, among others.  Of particular note, 2023 saw the U.S. Supreme Court issue decisions concerning the Government’s authority to dismiss qui tam actions and the critical element of scienter/knowledge that will have wide-reaching impact.  The courts of appeals also issued significant decisions on damages, materiality, and more.  Crowell attorneys discuss these highlights and others in a "Feature Comment" published in The Government Contractor....

Representative Matters

  • FCA claims against defense contractor. Successfully represented defense contractor in DOJ investigation of alleged FCA violations based on failure to comply with and false certifications related to Qualified Product List requirements; case settled on favorable terms.
  • Trade Agreement Act. Obtained dismissal of qui tam suit alleging that contractors marketed and sold products that were not compliant under the Trade Agreements Act. The dismissal was affirmed by the Seventh Circuit on appeal. 
  • Billing fraud allegations. Obtained dismissal of a qui tam suit against a national partnership of physicians alleging that the defendant was “upcoding” when billing CMS.
  • FCA retaliation claim: Successfully represented publicly chartered corporation in defense of FCA retaliation claim alleging fraud related to the promotion of U.S. tourism. After filing a motion to dismiss, the case settled and was dismissed.
  • False Claims Act. Grant of summary judgment dismissing with prejudice qui tam action alleging fraudulent review of Veteran’s medical records (C.D. Cal).
  • False Claims Act Settlement. Crowell & Moring represented a construction company in a Department of Justice driven False Claims Act investigation related to set-aside contracts. With the threat of the government intervening in the case and suing for tens of millions of dollars, the company engaged C&M. Our lawyers took the lead in interacting with DoJ, negotiating with the government and making several rounds of additional presentations to the government to frame the issues, defenses, and arguments that an important employer in an economically depressed region should not be forced to defend against such a case. The company settled with the Department of Justice for a modest amount, paid over time, and without admitting or denying fault. This preserved the company’s ability to remain in business.
  • Export-Import Bank Financing of Pumping and Irrigation Equipment. Judgment for defendant, overturning jury verdict on appeal. Initial judgment of zero damages (penalties only) after two-week jury trial in the U.S. District Court for the District of Columbia in an intervened False Claims Act/qui tam case in which the Department of Justice sought in excess of $220 million. The case involved allegations of excessive commissions paid to and bribery of foreign officials by defendant's sales representative in connection with sales of pumping and irrigation equipment to Nigerian states where Ex-Im’s loans were repaid in full plus interest and fees. The government appealed the damages judgment and MWI cross-appealed on liability. The D.C. Circuit overturned the jury verdict and remanded with instructions to enter judgment for MWI, finding that MWI was not liable because it had reasonably interpreted an ambiguous regulation. The government’s petition for rehearing en banc was denied.
  • Department of State and Department of Homeland Security allegations. 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. The verdict and summary judgment rulings were upheld on appeal by the United States Court of Appeals for the Fourth Circuit.
  • U.S. Embassy construction fraud allegations. Affirmed summary judgment on all claims against a foreign construction company in a qui tam suit alleging fraud in connection with building the U.S. Embassy in Iraq.
  • Medicare, Medicaid, and TRICARE false claims. 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."
  • Grand jury investigation. Successfully defended a U.S. aerospace company in a grand jury investigation in Florida alleging collaboration with an Israeli Air Force general who stole millions in U.S. aid funds. By contract, our client's principal competitor pleaded guilty and paid $69 million in damages and fines.
  • Defective pricing. After a three-week bench trial, the court ruled in favor of our client on virtually every issue in a case based on defective pricing and awarded a judgment less than half that originally offered by the company in settlement of related non-fraud claims.
  • State Department administrative charges. Defended a major U.S. aerospace company against State Department administrative charges arising from the alleged unauthorized transfer of technical data and performance of defense services in connection with satellite launch in China.
  • False Claims Act. Successfully defended defective-pricing-based False Claims Act case (in federal district court - one of the few tried to conclusion) principally involving alleged nondisclosure of changes to a bill of materials.
  • Breach of "dual source" commitment. Established that the Navy breached a "dual source" commitment that Pratt & Whitney would share in Navy jet engine awards, soliciting and accepting a competitor's 100% "buy-or" offer, leading to recovery of $150 million in common law damages, including lost profits.
  • Subcontractor Claim. Sustained a subcontractor's "changes" claim for the cost of testing a stream turbine generator, testing not contemplated by the prime contract but required by the Corps of Engineers.
  • Latent Defects. Defeated a $45 million Army latent defect claim that helicopters did not meet fatigue life requirements by establishing that no contract requirements supported the claim.
  • Conspiracy and monopolization claims. Obtained summary judgment on behalf of aircraft engine manufacturer against conspiracy and monopolization claims by would-be distributor of aeroengine aftermarket services.
  • Product liability claims. Participated in briefing that persuaded the Supreme Court to approve and define the "government contractor defense" against product liability claims.
  • Common law claims. Represented a major technology company in litigation arising out of the disappearance of a Navy pilot during the Gulf War, Speicher-Harris v. Motorola, No. 98-1008-Civ-J-20B (M.D. Fla.). The Complaint asserted common law claims of negligent product design and manufacture, failure to warn and strict liability. The plaintiff voluntarily dismissed her claims with prejudice during the initial discovery phase.

Insights

Client Alert | 1 min read | 03.12.24

The Top FCA Developments of 2023

2023 brought many important False Claims Act developments for companies with business involving government funds.  While overall recoveries remained down compared to pre-2022 levels, the total number of settlements and judgments exceeded any prior year.  Those settlements and judgments also highlight areas of particular focus for the Government, including cybersecurity compliance, pandemic fraud, and small business fraud, among others.  Of particular note, 2023 saw the U.S. Supreme Court issue decisions concerning the Government’s authority to dismiss qui tam actions and the critical element of scienter/knowledge that will have wide-reaching impact.  The courts of appeals also issued significant decisions on damages, materiality, and more.  Crowell attorneys discuss these highlights and others in a "Feature Comment" published in The Government Contractor....

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Professionals

Insights

Client Alert | 1 min read | 03.12.24

The Top FCA Developments of 2023

2023 brought many important False Claims Act developments for companies with business involving government funds.  While overall recoveries remained down compared to pre-2022 levels, the total number of settlements and judgments exceeded any prior year.  Those settlements and judgments also highlight areas of particular focus for the Government, including cybersecurity compliance, pandemic fraud, and small business fraud, among others.  Of particular note, 2023 saw the U.S. Supreme Court issue decisions concerning the Government’s authority to dismiss qui tam actions and the critical element of scienter/knowledge that will have wide-reaching impact.  The courts of appeals also issued significant decisions on damages, materiality, and more.  Crowell attorneys discuss these highlights and others in a "Feature Comment" published in The Government Contractor....