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The "Super Committee" Failed – What Now?

Client Alert | 2 min read | 11.22.11

The budget "Super Committee" failed to reach any agreement on federal deficit reduction yesterday, missing its deadline and leaving Congress with no clear alternative to the $1.2 trillion in automatic spending cuts slated to take effect January 2, 2013. Members of Congress and the President, however, appear to be setting the stage for continuation of the debate into 2012, leaving federal agencies and contractors with little certainty about how their programs will be affected.

Under the Budget Control Act of 2011 ("BCA"), $1.2 trillion of automatic budget cuts will be implemented through a process of "sequestration" if Congress does not act. The automatic reductions will take the form of equal cuts (in dollar terms) in defense and nondefense spending accounts, starting in fiscal year 2013. Those cuts will be achieved by lowering the caps on discretionary budget authority specified in the BCA and by automatically cancelling budgetary resources for some programs and activities financed by mandatory spending. For a detailed analysis of the sequestration process, click the link to Crowell & Moring's September 2011 webinar below.

Congress still has time to act. Before the automatic spending cuts go into effect, Congress still may reach an agreement on specific budget cuts or may even amend the BCA. Some members of Congress already have suggested increasing the number of programs exempt from sequestration, particularly to reduce the impact of cuts at the Department of Defense. President Obama, however, has indicated that he will veto any such attempt by Congress to rewrite the BCA. It also appears unlikely that either the President or Congress will abandon the requirement for $1.2 trillion in total deficit reduction.

Continuing uncertainty about these budget cuts will mean substantial challenges for planning and procurement by federal agencies in FY 2012. Crowell will continue to monitor the budget process and provide updates as events merit.

Crowell & Moring Webinar: The Deficit Reduction "Super Committee"-- What it Means for Government Contractors and Healthcare Plans and Providers [PDF].

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Client Alert | 4 min read | 08.07.25

File First, Facts Later? Eleventh Circuit Says That Discovery Can Inform False Claims Act Allegations in Amended Complaints

On July 25, 2025, the Eleventh Circuit Court of Appeals issued its decision in United States ex. rel. Sedona Partners LLC v. Able Moving & Storage Inc. et al., holding that a district court cannot ignore new factual allegations included in an amended complaint filed by a False Claims Act qui tam relator based on the fact that those additional facts were learned in discovery, even while a motion to dismiss for failure to comply with the heightened pleading standard under Federal Rule of Civil Procedure 9(b) is pending.  Under Rule 9(b), allegations of fraud typically must include factual support showing the who, what, where, why, and how of the fraud to survive a defendant’s motion to dismiss.  And while that standard has not changed, Sedona gives room for a relator to file first and seek out discovery in order to amend an otherwise deficient complaint and survive a motion to dismiss, at least in the Eleventh Circuit.  Importantly, however, the Eleventh Circuit clarified that a district court retains the discretion to dismiss a relator’s complaint before or after discovery has begun, meaning that district courts are not required to permit discovery at the pleading stage.  Nevertheless, the Sedona decision is an about-face from precedent in the Eleventh Circuit, and many other circuits, where, historically, facts learned during discovery could not be used to circumvent Rule 9(b) by bolstering a relator’s factual allegations while a motion to dismiss was pending.  While the long-term effects of the decision remain to be seen, in the short term the decision may encourage relators to engage in early discovery in hopes of learning facts that they can use to survive otherwise meritorious motions to dismiss....

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