Litigation Practice Group Podcast
If you do business with the federal government, when does violating a statute, regulation, or contract provision become fraud? This question was answered by the U.S. Supreme Court on June 16 in Universal Health Services v. United States ex rel. Escobar, which examines the scope of the False Claims Act (FCA). The FCA provides for treble damages and civil fines for anyone submitting false claims for payment to the federal government. Violations of the FCA must involve a “false or fraudulent claim” or “a false record or statement material to a false or fraudulent claim.” Traditionally, the falsity element of an FCA claim required a “factual falsehood” (e.g., submitting a claim for payment for 10 computers when only 5 were delivered) or an express false certification (e.g., certifying to a lack of organizational conflicts of interest when such conflicts exist). Circuit Courts had split on this question, but the Supreme Court ruled today that a party can be held liable under the implied false certification theory when the party “fails to disclose noncompliance with material statutory, regulatory, or contractual requirements that make those representations misleading with respect to goods and services.” This decision has significant implications for anyone doing business with the federal government and could substantially increase contractors’ exposure to the FCA’s punishing statutory regime.
Criminal Law & Procedure Practice Group Podcast
- Shane B. Kelly, Associate, Wiley Rein LLP
- Mark B. Sweet, Partner, Wiley Rein LLP
On September 15, 2015, Deputy Attorney General Sally Yates issued a much-talked about memo, directing federal prosecutors to focus their efforts on individual corporate wrong-doers, not just corporate entities. Unclear in the minds of many is just how much effort will now be expended on corporate entities vs. individuals. Some assert that prosecution of corporate entities is rarely a good idea, since the punishment negatively effects the shareholders, who were often the victims of the initial wrongdoing. Others note that it can be near impossible to prove what should be a required guilty state of mind in an individual operating within a corporate structure. More complications arise when individuals rely in good faith on legal advice from in-house or outside counsel.
Corporations, Securities & Antitrust Practice Group Podcast
- James R. Copland, Director, Center for Legal Policy, Manhattan Institute for Policy Research
- Paul J. Larkin, Senior Legal Research Fellow, Edwin Meese III Center for Legal and Judicial Studies, The Heritage Foundation
- Moderator: John G. Malcolm, Director, Edwin Meese III Center for Legal and Judicial Studies, and Ed Gilbertson and Sherry Lindberg Gilbertson Senior Legal Fellow, The Heritage Foundation
On October 2, 2015, the United States Supreme Court denied certiorari in United States v. Newman, a high-profile case dealing with the prosecution of two hedge fund managers for alleged insider trading. The Second Circuit Court of Appeals overturned their convictions, and the Department of Justice urged the Supreme Court to take the case and claimed the Second Circuit’s approach to insider trading would greatly reduce the government’s ability to prosecute insider trading. What is the current state of insider trading law? Will the Supreme Court eventually be forced to intervene and provide clarity?
Criminal Law & Procedure Practice Group Podcast
- James M. Burnham, Associate, Jones Day
- Peter M. Thomson, Special Counsel, Stone Pigman Walther Wittmann LLC
Is Clay v. United States, currently pending in the 11th Circuit, a case study of overcriminalization and abusive federal prosecution? The case raises basic notions of due process, fair notice, the rule of lenity, mens rea, and actus reus. What began as a highly publicized raid by some 200 FBI agents on a Florida health care company over an accounting dispute of how to interpret a provision in Florida’s Medicaid reimbursement statute with no clarifying administrative regulations, ended in the indictment, conviction, and prison sentences for the company’s top executives for fraud. This case is particularly important for all regulated industries, where there are numerous and ambiguous laws and complex regulations governing conduct subject to administrative, civil, and criminal enforcement. John Lauro, counsel in the case, discussed the lawsuit, with Paul Kamenar joining to offer questions and comments.
- Paul D. Kamenar, Washington, D.C. Attorney and Senior Fellow, Administrative Conference of the United States
- John F. Lauro, Principal, Lauro Law Firm
- Moderator: John G. Malcolm, Director and Ed Gilbertson and Sherry Lindberg Gilbertson Senior Legal Fellow, Edwin Meese III Center for Legal and Judicial Studies, The Heritage Foundation
On February 25, 2015, the Supreme Court issued its decision in Yates v. United States. This case concerns whether Mr. Yates’ order to his crew to throw undersized fish back into the Gulf of Mexico during the course of a government wildlife investigation violated the "document shredding provision" of the Sarbanes-Oxley Act, which makes it a crime for anyone who “knowingly alters, destroys, mutilates, conceals, covers up, falsifies, or makes a false entry in any record, document, or tangible object” with the intent to impede or obstruct an investigation.
Justice Ginsburg announced the judgment of a divided Court, and delivered a plurality opinion concluding that for purposes of the Sarbanes-Oxley Act, a "tangible object" refers to an object used to record or preserve information. Justice Alito concurred, on somewhat narrower grounds.
Justice Ginsburg was joined by Chief Justice Roberts, and Justices Breyer and Sotomayor. Justice Alito filed an opinion concurring in the judgment. Justice Kagan filed a dissenting opinion, which Justices Scalia, Kennedy, and Thomas joined. The judgment of the Eleventh circuit was reversed and the case remanded for further proceedings.
To discuss the case, we have Todd Braunstein who is Counsel at WilmerHale.