Advocates for Justice

The Center for Investigative Reporting this weekend aired a story detailing CPM’s counterfeit screws litigation on hundreds of public radio stations around the country.  You can listen here.  The story covers a Southern California medical equipment supplier’s scheme to use private plane rides, international vacations and cash-stuffed envelopes to recruit doctors to use his company to buy spinal surgery screws – many of which were apparently counterfeit.

Defendants in federal False Claims Act (“FCA”) cases often attempt to get cases dismissed by alleging that the whistleblower’s claims are based on information that was “publicly disclosed.” This type of defense is commonly referred to as a “public disclosure bar” defense. 

When a company charges the government for goods or services that were provided in a manner that violates laws, regulations, rules, or contractual provisions, those charges may violate the False Claims Act. This type of violation is often characterized as a “false certification” violation. As described by a California Court of Appeals, under the California False Claims Act, “a vendor impliedly certifies compliance with its express contractual requirements when it bills a public agency for providing goods or services.” San Francisco Unified School Dist. ex rel. Contreras v. Laidlaw Transit, Inc. (2010) 182 Cal.App.4th 438, 442. In Laidlaw, for example, the defendant—a school bus company—was found to have violated the California False Claims Act because it failed to comply with maintenance standards and pollution controls that were required in its contract with the government.

Op-Ed Columnist Nicholas Kristof wrote an important piece in today’s New York Times about the correlation between increasing economic inequality and the decline in union membership.  In addition to the article’s substance, what was noteworthy was Mr. Kristof’s mea culpa for previously “disdain[ing]” unions for their perceived corruption and nepotism.  See http://www.nytimes.com/2015/02/19/opinion/nicholas-kristof-the-cost-of-a-decline-in-unions.html?ref=opinion.  He admitted that he was wrong.

On December 23, 2014, Judge Troy L. Nunley of the Eastern District of California ruled in plaintiffs’ favor, denying defendants’ motion to dismiss. See United States ex. rel. Dalitz v. AmSurg Corporation, No. 2:12-cv-02218-TLN-CKD, 2014 U.S. Dist. LEXIS 177374 (E.D. Cal. 2014). This effectively allowed plaintiffs’ False Claims Act (FCA) case to continue.  

Last summer, Governor Jerry Brown signed AB-2053, which requires California employers with 50 or more employees to provide workforce bullying training in addition to the required sexual harassment training.  This training is now mandated for employers beginning January 1, 2015.  

Earlier this month, the federal Fourth Circuit Court of Appeals issued a landmark decision broadening liability for False Claims Act violations. The decision, United States ex rel. Badr v. Triple Canopy, Inc., No. 13-2190, -- F.3d -- (4th Cir. 2015), is particularly important, given that the Fourth Circuit covers areas surrounding Washington D.C. that are replete with government contractors.

This past week, the United States Supreme Court made District Courts’ decisions relevant again as they relate to the field of patent cases.  The law that had developed out of the Federal Circuit related to Markman heairngs (hearings regarding claim construction/scope of the patent) held that the standard of review on Markman hearings was de novo.  This was the law, even if the basis of the District Court’s ruling was founded on evidence presented by witnesses.  Under the Teva Pharmaceuticals USA, Inc. v. Sandoz, Inc. decision, where the claim construction was based on evidentiary underpinnings, those factual disputes are now to be reviewed under a “clear error” standard.

Procurement fraud—overcharging the government on some of the millions of products and services that government agencies purchase from private companies every year—is one of the most common schemes giving rise to whistleblower cases under the False Claims Act. On the federal side, an agency called the General Services Administration, or GSA, oversees the procurement of many goods and services on behalf of the federal government. Companies that want to sell their goods to federal agencies go through an application process to get their products listed on the federal GSA “schedule.” Many successful cases have been brought under the False Claims Act based on fraud committed on the GSA. For example, in one of the biggest recoveries, the software company Oracle paid $199.5 million to settle claims that it overcharged the government on the purchase of software products listed on the GSA schedule.

Save Our Juries launched in July 2014, becoming ABOTA's first public awareness campaign. Its mission is to "uphold the jury system provided by the Seventh Amendment to the U.S. Constitution by educating the American public about the current issues, the history and the value of the right to trial by jury." In 1958, my father, ABOTA's first National President, built ABOTA on this one mission - to preserve our civil justice system. It's vital that we always use his founding purpose as the anchor of this organization.