Results matching “"qui tam"”

Senate: no limit on whistleblowing bounties - PointOfLaw Forum

The same Senators who favor tough regulation of bonuses for financial execs seem to believe that when it comes to the bounties made available to relators under the False Claims Act, $50 million (carved out directly from taxpayer recovery) just isn't enough to incentivize them:

The Senate rejected a bid Thursday to impose new limits on whistleblower awards as it moved toward passage of legislation to beef up the government's ability to combat financial fraud.

By 31-61, the Senate rejected an amendment by Jon Kyl, R-Ariz., that sought to set a $50 million maximum on the amount that a whistleblower could receive through a False Claims Act lawsuit to recoup taxpayer funds lost to fraud. Currently, awards can reach 30 percent of the total recovered for the federal government, if a judge approves that much.

Max Kennerly offers a different view.

More: Recent House Judiciary testimony (predominantly supportive, of course) on qui tam expansion.

Northrop Grumman qui tam settlement - PointOfLaw Forum

And a plaintiff "whistleblower" walks away with $48.7 million.

Housekeeping: New categories at Point of Law - PointOfLaw Forum

We've created some new categories at Point of Law to make it easier to find similar posts and use the archives for research. Among those already populated with old posts are:


  • Labor Law has posts on card check and the Employee Free Choice Act and other controversies relating to the legal status of labor unions and the National Labor Relations Act. Wage-and-hour litigation remains for the moment grouped with Employment Law, but at some point will get its own category.
  • Whistleblower/Qui Tam pulls together posts on both employee whistleblowing protections and bounty-hunting qui tam actions under the federal False Claims Act and similar statutes;


Other categories are on the way as well, including Administered Compensation, Preemption, and several more.

"Off-label" drug use and pre-emption - PointOfLaw Forum

Despite perennial hints from some quarters that off-label use of prescription drugs or medical devices is somehow subterranean or illicit, it's in fact a perfectly recognized and appropriate thing for doctors to do across much of medical practice, and there's no reason why off-label use should ordinarily deprive drugmakers of an otherwise available preemption defense, argue Beck & Herrmann.

P.S. In a second post, they discuss the current vogue for entrepreneurial qui tam lawsuits demanding vast sums to compensate for moneys states laid out for off-label uses of drugs -- and never mind that the uses may in fact have been medically beneficial to patients.

Around the web, June 22 - PointOfLaw Forum

All-blog edition:

  • "If you don't practice in courts where the "blind strike" [juror selection] method is used, you've probably never heard of it." [Deliberations, with great use of stock art]
  • Bruce Carton [ex-Securities Litigation Watch] is back blogging on class action and corporate governance themes [Unusual Activity]
  • Top marginal tax rate on income to rise to 60% in next administration? [Kaus]
  • Those who follow qui tam/False Claims Act issues should be sure to take a look at the recent Martin Redish paper on private government counsel [Beck & Herrmann]
  • New Jersey edging away from its reputation as a pro-plaintiff jurisdiction for pharmaceutical suits? [Beck & Herrmann again]
  • Prof. Cass Sunstein not far enough to the left to make a proper Obama legal adviser, think some [TalkLeft]
  • New sex and race harassment lawsuit against NASCAR -- was your first thought, "yeah, they're probably guilty", and if so is that stereotyping? [Schwartz]

Around the web, May 19 - PointOfLaw Forum

  • Another Scruggs ripple: Judge Senter disqualifies two Missouri lawyers (widely nicknamed the "Trailer Lawyers") from representing Rigsby sisters against State Farm in Katrina qui tam action [Sun-Herald via YallPolitics, more, Rossmiller with link to opinion]
  • "To recap the trial lawyer logic: Polls are great for calculating damages in large billion-dollar consumer fraud class action claims, but they're not appropriate for creating a ranking system for legal fairness." [Adomite/MC Record]
  • Scott Greenfield is bemused by the incivility at Ann Bartow's Feminist Law Professors site: "There is no doubt in my mind that I don't get it." [Simple Justice]
  • "We don't want a litigation industry," says head of largest German shareholder-protection body, of class action proposals [The Economist]
  • Vermont the next Roman Catholic diocese headed for bankruptcy? [Boston Globe] Plus: Albany lawprof Timothy Lytton has a new book hailing the church abuse litigation as a "remarkable success" of the tort system, not a view that passes entirely uncontested as readers here know ["Holding Bishops Accountable"]
  • By 2-1 margin, Second Circuit panel gives relatively broad reading to CAFA's scope in directing class actions to federal courts [NYLJ]
  • What if female underrepresentation in the hard sciences has something to do with women's own preferences? Who do we sue then? [Elaine McArdle, Boston Globe]

Around the Web, May 2 - PointOfLaw Forum

  • The Wall Street Journal knocks Sen. Chuck Grassley's attempts to rewrite the False Claims Act in an editorial, "False Claims Gold Rush": "This reform would greatly expand the universe of false-claim targets. Today, individuals file qui tam suits against entities that directly take money from the U.S. government. Under Mr. Grassley's rewrite, lawsuits could be leveled against anyone on the ultimate receiving end of federal funds. Scientists who get federal grants via a university; artists who get endowment money; homeless shelters that receive block grants - all could be targets of disgruntled citizens looking to lodge a federal "fraud" case."
  • The Atlanta Journal-Constitution reports: "A Fulton County judge has struck down the cap on monetary awards in a medical malpractice case, a decision that if upheld on appeal could undercut a major component of Georgia's tort reform laws.Superior Court Judge Marvin Arrington wrote in an order released Wednesday that the legislative cap of $350,000 for noneconomic damages such as pain and suffering was unconstitutional because it gave special protections to the medical profession."
  • Judge Arrington has been in the news lately for having kicked white people out of his courtroom so he could lecture the black defendants. He has since apologized and joined forces with Bill Cosby to reach out to black youth.
  • Chris Manning of Manning & Sossamon -- who represented the Chungs in the $54 million lost pants lawsuit -- was in Jefferson City, Mo., Wednesday to help launch a statewide campaign for reforms to the state's consumer protection statutes. Supporters in the Missouri Justice Alliance called for passage of HB 2241. Missourinet has the story.

  • From the law offices of Robert H. Weiss comes a news release announcing a billion-dollar consumer class action against the leading baby bottle manufacturers (Avent America, Evenflo, Gerber, Handi-Craft (Dr. Brown's) and Playtex) for their use of Bisphenol A in polycarbonate plastic baby bottles and toddler training cups. The lawsuit was filed in the United States District Court for the Western District of Missouri pursuant to Missouri Consumer Protection Laws..."Now where have heard about those laws before?
  • Much excess going on in the handling of BPA, including Howard County, Md., no longer giving out BPA-containing baby bottles in the WIC program, and Senate Democrats introducing a federal bill. The bill is S. 2928. The Milwaukee Journal-Sentinel takes credit for the legislation.
  • Amazon sues New York State over its new tax on interstate sales over the Internet. Previous point on the topic here.
  • New York Governor David Paterson did sign the Libel Terrorism Protection Act (mentioned below), which protects U.S. citizens against libel suits by those using other countries more expansive laws. U.S. Rep. Peter King (R-NY) has introduced a federal version, H.R. 5814.

Ideas for narrowing qui tam - PointOfLaw Forum

Congress seems if anything more interested in expanding the bounty-hunting law and its liability for federal contractors, but should it reverse direction at some point, Todd Canni (McKenna Long & Aldridge) has some ideas in this new paper for WLF (via Heritage Insider):

Private plaintiffs' enforcement of the federal False Claims Act through qui tam actions have proliferated significantly over the past two decades. While such lawsuits have their merits, because of the relaxed pleading standards, a large number of such cases are dismissed or, even if successful, are overturned on appeal. Speculative qui tam suits impose damage on government contractors and the contracting process. In order to reduce the number of baseless suits and the cost of defending against them, the False Claims Act should require that qui tam plaintiffs demonstrate that they had actual, proven knowledge of a fraud committed against the government, and that such allegations are detailed with particularity in the plaintiff's complaint.

On the same general topic, on Apr. 18, the Federalist Society is holding a lunchtime panel discussion in Washington, D.C. to discuss proposed Congressional expansion of the False Claims Act. Panelists include Jonathan Diesenhaus (Hogan & Hartson), Andrew Grosso (Andrew Grosso & Associates), Marcia Madsen (Mayer Brown), Shelley Slade (Vogel, Slade & Goldstein), and moderator R. Christopher Cook (Jones Day).

"False Claims Act Corrections Act" - PointOfLaw Forum

Briefly alluded to last month in this space, S. 2041, sponsored by Grassley and Leahy, would substantially expand the federal qui tam bounty-hunting statute to encourage more suits by purported whistleblowers. Some analysis: Powell Goldstein PDF, CCH, Overcriminalized, Anne S. Kimbol (U. of Houston, PDF).

False Claims Act before the U.S. Supreme Court - PointOfLaw Forum

In Allison Engine Co. v. United States ex rel. Sanders, the high court is being asked to expand the coverage of the bounty-hunting statute from contractors paid by the federal government to the potentially much larger class of contractors paid with federal money -- e.g. by state governments, universities, etc. carrying out federally supported programs. Jenner & Block's Linda Listrom writes that the case "could extend the False Claims Act to almost any company in any industry". Sen. Grassley, inevitably, is waiting in the wings with new legislation to help out the whistleblower/qui tam bar should they lose this one. More coverage: Cincinnati Enquirer.

The criminalization of science - PointOfLaw Forum

For all you hear about the so-called Republican war on science, one should be more concerned about the left's and trial bar's war on science, which has actually cost lives. In today's Wall Street Journal, AEI's Scott Gottlieb discusses the prosecution of off-label promotion of truthful scientific claims—and, if anything, understates the problem, by focusing on Department of Justice abuses to the omission of the parasitical qui tam and plaintiffs'-bar litigation against the pharmaceutical industry and doctors over similar off-label use.

(The AEI Legal Center for the Public Interest is commissioning research into the law, economics, and public policy of off-label prescriptions and marketing. If you are interested, please contact me.)

The False Claims Act, which permits bounty-hunting qui tam recovery by those who whistle-blow against fraud against the government (Jun. 2, Feb. 9), has a number of protections to prevent trial lawyers from swooping in and parasitically laying claim to government recovery when the government was already aware of the alleged fraud. In the latest Congressional earmark for trial lawyers, Senator Grassley (Oct. 2006) is attempting to undo many of these protections. But since the False Claims Act already permits meritorious bounty-hunting in spades (the vast majority of government recovery comes from a small fraction of suits brought, with gigantic jackpots paid to private litigants and their attorneys), the only effect of the amendments will be to increase meritless qui tam actions (e.g., Oct. 26, Feb. 2006, Jul. 2005, OL Aug. 2006, OL May 2006).

Former Acting Attorney General Stuart Gerson has an excellent analysis of the legislation for the Washington Legal Foundation.

Around the web, October 26 - PointOfLaw Forum

  • Annals of qui tam law: Justice Department says drug co. "whistleblower" merits no bounty because he "personally planned and initiated the fraudulent scheme" he later sued on [Meier, NYT]
  • Law firm somewhat grandly billing itself as "National Legal Scholars" includes stars like Erwin Chemerinsky, Richard Lazarus, and Stephen Saltzburg, but you defendants are out of luck -- it only takes plaintiff's work [website via Childs]
  • Many docs asking patients to sign binding arbitration agreements, and trial lawyers naturally want to shut down that trend [American Medical News]; Chamber-led Coalition to Preserve Arbitration is trying to fend off Litigation Lobby attacks in areas ranging from financial services to agriculture [Investment News]
  • Plea deal by expert witness who falsely exaggerated his experience to bolster his credibility [OL Sept. 26] renews calls for hired-testifier reform [White Coat Rants via KevinMD]
  • Trial-bar allies at FTCR already stoking anti-insurer sentiment on California wildfires [CNN Money]
  • Welcome Glenn Reynolds readers [Instapundit linking this post]
  • More on "Texarkana Triangle" (w/Marshall, Tyler) as forum-shopping magnet for auto product-liability claims [Southeast Texas Record; earlier]

Department of truly bad ideas - PointOfLaw Forum

"Private attorney generals" as the tax farmers of tomorrow? The IRS whistleblower program was recently expanded to make the role of informant significantly more lucrative. Now American University law professor Dennis J. Ventry, Jr. (via Caron) proposes to expand the program still further to authorize qui tam private lawsuits accusing others of tax underpayment, with the entrepreneurial complainant getting to keep a portion of the spoils.

United States v. Dickie Scruggs - PointOfLaw Forum

The special prosecutors in the criminal contempt of court case against prominent Mississippi lawyer Dickie Scruggs have unveiled more of their evidence against Scruggs in federal court filings in Alabama. Prosecutors accuse Scruggs of willfully violating the terms of federal judge William Acker's injunction in a civil case brought against his clients, Kerri and Cori Rigsby, who took 5,000 to 15,000 pages of State Farm Hurricane Katrina claims files and gave them to Scruggs. The civil case, for breach of their confidentiality agreements, was brought by the employer of the Rigsby sisters, E.A. Renfroe and Co., a State Farm claims contractor.

Prosecutors accuse Scruggs of devising a "sham" strategy of pretending to misinterpret the injunction so he wouldn't have to return the documents as ordered. Instead of sending them back to Renfroe's attorneys, he had at least two conversations with Mississippi Attorney General Jim Hood, a close friend, right after Acker entered the injunction, about fears that Renfroe's attorneys would violate a protective order accompanying the injunction and tell Renfroe and State Farm of the documents' contents. So Scruggs sent Hood the documents, even though the Rigsby sisters had previously provided copies of all the documents to Hood. Scruggs allegedly was trying to find safe harbor in an exception in the injunction for cooperating with law enforcement.

Scruggs did not represent the Rigsby sisters in the civil action, which is ongoing. Instead, the basis of their attorney-client relationship was the documents, as well as a qui tam "whistleblower" claim the sisters brought against several insurance companies, and a wrongful discharge suit they brought against Renfroe, which was filed and then voluntarily dismissed a short time later. Unusually for an attorney-client relationship, Scruggs also hired the two as litigation consultants, after they quit their jobs at Renfroe, at salaries of $150,000 a year. Prosecutors claim Scruggs' motive in violating the injunction was profit -- the documents were valuable to him in litigation and as leverage, particularly as long as he could keep State Farm in the dark about which documents they were and what they said. For recent posts I've written at Insurance Coverage Law Blog on prosecutors' filings, click here and here.

Around the web, September 6 - PointOfLaw Forum

  • Class-actioneer Michael Hausfeld steers $5.1 million antitrust cy pres payout to fund new Center for Competition Law at George Washington U.'s law school; from the description, sounds like the center will furnish policy ammo for antitrust plaintiffs' bar [GWU press release]

  • PoL contributor David Rossmiller slices and dices a naively credulous Bloomberg News report on insurance bad faith [Insurance Coverage Blog, here and (scroll) here]

  • Blawg Review #124 is a Labor Day special at George Lenard's [Employment Blawg; and check out other recent editions of the carnival]

  • Qui tam bar eyes False Claims Act suit against University of Phoenix as possible kickoff of college-suing bonanza [The Recorder]

  • Profile of a NYC birth-injury case [NY Mag, earlier this year]

  • Milberg Weiss, Grant & Eisenhofer, and Schiffrin Barroway Topaz & Kessler want $600 million -- $560 million in fees, $40 million in expenses -- for representing Tyco shareholders [Union Leader/U.S. Chamber]

"The strange cult of the Washington whistle-blower" - PointOfLaw Forum

Eve Fairbanks at the New Republic (sub) is invited to drink the qui tam/retaliation-suit Kool-Aid, but doesn't seem to have partaken:

...as the week goes on, it becomes clear that Whistleblower Week is more than a rally. It's a chance for people who have long been miserable lone gunmen to come together and rejoice in whistle-blowing's transformation into a full-fledged personal identity -- a scene with its own specialized lawyers, therapists, 40-odd advocacy groups, a publishing imprint, swag, and even a timeless philosophy.

Amusingly, there has arisen a group of dissidents who've turned against the whistleblowing establishment itself, including its best-known entity, the Government Accountability Project (GAP): "'We're on a crusade to embarrass and enlighten GAP,' says a whistle-blower friend, detailing their plan to expose the group to its donors." Fairbanks describes their mission as "blowing the whistle on the whistle-blowers."

The golden whistle, cont'd - PointOfLaw Forum

And the qui tam jackpots just keep coming:

A onetime Illinois HMO was hammered with a $334 million judgment [last month], the largest of its kind ever in northern Illinois and an amount almost equal to the company's profits since it was founded....

The case, brought by a civil whistleblower and then joined by federal authorities and the state attorney general's office, charged that Amerigroup cherry-picked "healthies" and purposely avoided women in their third trimester of pregnancy because they cost more to insure....

The verdict nearly equals the $384 million in profit that Amerigroup has made since it was founded in 1994, Jenkins [company spokesman Kent Jenkins, Jr.] said....

Whistleblower Cleveland Tyson of Buffalo Grove, former vice president of government relations, will get 15 percent to 25 percent of the total award -- a benefit allowed under the Fraud Claims Act, designed to encourage whistleblowers.

Those of us who are not fond of qui tam/whistleblowing laws note that they reward informants and their lawyers far in excess of any plausible desert. In this case, Tyson would get $50 million to $83 million if the reported numbers hold up.

State-level False Claims Acts - PointOfLaw Forum

The federal False Claims Act allows private litigants to file bounty-hunting actions against federal contractors for alleged overcharges, pocketing a share of the winnings if the actions succeed. It's developed into a prized cash cow for the emergent qui tam bar, which in turn eagerly urges states to adopt mini-False Claims Acts of their own. The Colorado Civil Justice League has been monitoring such a bill in Colorado, HB 1144, which as drafted would actually have gone significantly farther than the federal version of the law. ("CCJL Under the Dome", Feb. 2, currently on main page of CCJL site). Per the CCJL's fact sheet on the bill (PDF format), the drafted version would weaken defendants' due process protections compared with the federal law; eliminate specific intent to defraud for some violations; create a new claim for treble damages in cases of "inadvertent receipt" of funds with no intent to defraud; and allow copycats to collect bounties over alleged frauds already brought to light in another state. Following protests from the League, the bill's sponsor is said to have agreed to amend the bill so that it goes no farther than its federal equivalent. But what happens in states where the critics of this sort of thing are less well organized?

More on qui tam/False Claims Act litigation here.

David Hyman and Charles Silver have a lengthy attack on malpractice reform rhetoric and caps in the Vanderbilt Law Review. The paper, aside from equivocation on the term "frivolous", is largely effective in criticizing some of the oversimplifications of politicians advocating for reform (a problem that Hyman and Silver themselves have been guilty of in the other direction), but ignores four critical and interrelated aspects of the more subtle case for reform.

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