Foreign Corrupt Practices Act

Stephen McBrady, a Washington, D.C.-based partner in the firm's Government Contracts Group talks with Compliance Week about new requirements for government contractors to disclose previous violations of labor and employment laws when submitting a bid. Under the proposed rules, contractors would need to obtain data about their sub-contractors. "That brings up a whole host of other issues," said McBrady. For example, it's not unusual for one company to have a sub-contractor that is its competitor on the next contract up for bid. That raises concerns about confidentiality. Among the other concerns, McBrady notes, "Is it reasonable to expect that a small business prime contractor will be able to analyze and collect the labor law compliance information from its large sub-contractor?"

Stephen J. McBrady, a Washington, D.C.-based partner in Crowell & Moring's Government Contracts Group, discusses trends in government contracts litigation and their potential impacts. In particular, he notes that a recent Federal Circuit decision upholding the dismissal of an $80 billion overbilling suit against Sikorsky Aircraft Corp. may affect strategy for contractors and the government, as they can now potentially agree to toll the statute of limitations for the Contract Disputes Act, which establishes the procedures for handling claims related to federal government contracts. "Because the statute of limitations was jurisdictional, it could not be waived, or tolled my mutual agreement," McBrady said. "In that respect, Sikorsky is a game-changer."

Washington, D.C.-based partners, Terry Rea, of Crowell & Moring's Intellectual Property Group, and Keith J. Harrison, of the firm's Labor & Employment and Litigation groups, weigh in on two important cases in the life sciences arena. Harrison discusses Teva Pharmaceuticals USA, Inc.'s challenge of a California appellate decision that a generic-drug manufacturer can be held liable for failing to warn consumers of the side effects listed on the equivalent brand-name drug, which may potentially be taken up by the U.S. Supreme Court. "This is going to be a case that is going to further define the scope of federal preemption," Harrison said. Additionally, Rea talks about the Cuozzo Speed Technologies LLC suit, which argues that the Patent Trial and Appeal Board uses the incorrect standard during America Invents Act (AIA) proceedings, making it difficult for inventors to retain their patents. "Everybody is going to be very, very careful how they handle this [case]," Rea said of the suit, which may upend new IPR standards.

Washington, D.C.-based White Collar & Regulatory Enforcement Group partner, Philip T. Inglima, speaks to Global Investigations Review regarding his experience with subpoenas being blocked by a judge, even when it appears that all the appropriate steps have been taken to avoid a waiver or broad disclosure of the privileged materials. "These types of subpoena requests are becoming routine now, so companies are having to be ever more careful in making disclosures or presenting evidence to the DOJ so as not to waive attorney-client privilege and work product protection," states Inglima. "Delivering limited presentations orally is one way of reducing the risk."

Washington, D.C.-based International Trade Group partner, Cari N. Stinebower, is quoted in New York Times cover story that offers in depth analysis on the workings of Russian President Vladimir Putin's inner circle and their financial transactions. In particular, the article notes that Bank Rossiya, an entity subject to U.S. sanctions, was created for what the Obama administrations calls the "personal bank" of the Putin inner circle. The article notes that this bank, like many others, is webbed into a shell of companies – but that the ownership structure for these companies is not readily identifiable. The lack of transparency into ownership structure says Stinebower, who advises clients on compliance with sanctions, raises "red flags" and corresponding enhanced due diligence requirements. Treasury has clarified that any entity 50 percent or more owned by a sanctioned person is also blocked by operation of law. With regard to CTC Media (CTC), a company with several television channels that was partially owned by a subsidiary of Bank Rossiya, Video International and an agreement CTC had with the subsidiary, Stinebower comments, "The way the law works, it's incumbent on CTC to understand the beneficial ownership of the company they are doing business with" to ensure that there is not "some sanctioned entity at the end of the chain." It has been reported that Video International was able to maneuver around Russian law and placed CTC at risk for violating American sanctions.

Los Angeles-based Antitrust Group partner and head of the firm's Los Angeles office, Jason C. Murray, spoke with The Recorder for a piece examining the increasing number of large firms working on opt-out antitrust cases. Antitrust lawyers say the appetite for opt-outs is growing because recent Supreme Court decisions, including Comcast v. Behrend, have made it more difficult and costly to reach class certification. Because of the risks involved with opting-out, firms conducting plaintiffs-side work are often asked to employ alternative billing arrangements. "Our [plaintiffs] antitrust recovery practice is a traditional plaintiffs practice," Murray said. "We share risk with our clients." Murray, who spends a majority of his time focusing on opt-out cases, attests that "it was really about being entrepreneurial," he said. "It was about finding ways to talk to clients about other opportunities."

Washington, D.C.-based Government Contracts Group attorneys, Angela B. Styles and Stephen J. McBrady, discuss how President Obama might soon issue an executive order making it tougher for corporations that move overseas for tax purposes to win federal contracts. "How hard they will make it to do business with the U.S. government is anyone's guess," Styles said. The order requires contractors to disclose violations of more than a dozen state and federal labor laws and regulations. McBrady added that, "As a result, contractors should review labor law compliance and current arbitration agreements, as well as submit comments on any proposed regulations."

Los Angeles-based Antitrust Group partner, Jason C. Murray, discusses a California federal judge's ruling that the National Collegiate Athletic Association's (NCAA) ban on paying elite football and men's basketball players broke antitrust laws could incite anti-competition suits from other divisions and sports teams in the NCAA. Murray argues that the decision could spur challenges under Title IX, which bars sex discrimination in athletics programs that receive federal funding. "That could be the next big issue in these cases, since the ruling could open up larger 'scholarship' opportunities for men than women athletes, raising the specter of unequal treatment under Title IX," said Murray.

Government Contracts Group counsel Stephen McBrady discusses how over the past few years prosecutors have attempted to halt contractors' appeals before the Armed Services Board of Contract Appeals (ASBCA) because of alleged similarity to litigation taking place in district court. McBrady says, "when the government seeks to suspend contract claims pending the outcome of criminal or civil cases, the board, following Supreme Court's decision in Landis v. North American Co., 299 U.S. 248, 57 S. Ct. 163, 81 L. Ed. 153 (1936), requires the government to 'make out a clear case of hardship or inequity in being required to go forward'" if the stay may cause harm.

Washington, D.C.-based counsel and member of the firm's Government Contracts Group, Steve McBrady, discusses the recent decision released by the GAO that, according to the article, the Department of Veterans Affairs held misleading discussions because it failed to identify a critical quotation deficiency. McBrady says the case is, "a reminder to all contractors considering their protest options that simply because the agency characterizes an exchange (or in this case, numerous exchanges) as 'clarifications', that does not mean that GAO will necessarily agree."

New York-based partner Daniel Zelenko discusses what cases will be the ones to watch for in the coming year. Specifically, he says that both the DOJ and SEC will, "likely launch scores of new insider trading actions in the coming year." Continuing, he notes, "Insider trading cases are very appealing to prosecutors. They can be investigated quickly without a huge commitment of resources, and often the motives for the trading are very apparent to potential jurors."

Washington, D.C.-based International Trade Group attorneys Dan Cannistra and Josh Kallmer discuss how a government shutdown will impact U.S. trade policy, the Commerce Department, and other crucial agencies and facets involved in U.S. Trade.

Washington, D.C.-based attorneys partner Andy Liu and counsel Jonathan Cone, provide insight as to why government contractors sometimes have a tough decision on whether to settle a case or go to trial, and why it may have less to do with what side of the law the contractors are on, and more to do with cost-benefit analysis. The attorneys note, "investigative and legal costs alone can reach into the hundreds of thousands of dollars before a case even gets to trial. Plus, contractors can risk debarment or suspension." Liu explains, "attorneys always insist upon provisions in any settlement deal indicating that the client contractor denies the allegation that gave rise to the case."

New York-based, White Collar and Regulatory Enforcement partner Daniel L. Zelenko, who is a former federal prosecutor and enforcement lawyer at the U.S. Securities and Exchange Commission (SEC), shares his perspectives on the departure of Scott Hammond from the U.S. Department of Justice. Hammond served in the agency for decades and is departing on October 1, 2013.

Crowell & Moring's White Collar & Regulatory Enforcement Group has been named as one of Law360's 10 "FCPA Powerhouses" for its prowess handling Foreign Corrupt Practice Act (FCPA) matters. The Law360 editors noted, "With Foreign Corrupt Practices Act experience tracing back to the firm's founding in the late 1970s, Crowell & Moring LLP has continued to make its mark in the arena, recently guiding Ralph Lauren Corp. and a Lindsey Manufacturing Co. executive to successful outcomes in FCPA cases." The factors considered in selecting the winners included the number of attorneys at the firm working on FCPA matters and contributions to this developing area of law, including working on landmark FCPA cases, as well as client representations and outcomes.

Washington, D.C.-based associate, Tiffany Wynn, spoke with Law360 regarding a recent decision in Virginia's federal court could alter the way companies team up to win federal contracts, by invalidating preaward subcontracting agreements as unenforceable "agreements to agree" in the future. Wynn believes that basing agreements on other state laws, or litigating them in other jurisdictions that may be more forgiving about allowing the consideration of extrinsic evidence, could allow subcontractors to avoid being cut out of a planned team. "Moving forward, contractors need to be really careful about looking at the choice of law and choice of forum," Wynn said.

New York-based White Collar & Regulatory Enforcement Group partner, Kelly T. Currie, served as a key source for several media outlets during their coverage of the events related to the accused Boston Marathon bomber, Dzhokhar Tsarneav. Based on his 11 years of experience as an Assistant U.S. Attorney in the Eastern District of New York, including serving as Deputy Chief of the Criminal Division and as Chief of the Violent Crimes and Terrorism Section, Currie provided his insights on the criminal investigation, collection of evidence, indictment process, civilian and military courts, enemy combatants, and other issues related to the legal process that unfolded after Tsarneav was in custody. Currie was interviewed by print and broadcast media including: Associated Press, Bloomberg, New York Times, Wall Street Journal, National Law Journal, and MSNBC, among others.

Tom Hanusik, chair of Crowell & Moring's White Collar & Regulatory Enforcement Group, and the firm are cited as representing Ralph Lauren Corporation in the unprecedented parallel non-prosecution agreements announced with the SEC and DOJ resolving allegations concerning violations of the Foreign Corrupt Practices Act (FCPA) in Argentina. Coverage of this agreement has been reported in the New York Times, Bloomberg News, The Wall Street Journal, Corporate Crime Reporter [4.22.13]; [5.8.13], Financial Times [sub. req.], and other major media outlets.