Results matching “"qui tam"”

ABA Journal on qui tam expansion - PointOfLaw Forum

Last year, as part of the Deficit Reduction Act of 2005, Sen. Chuck Grassley (R-Iowa), patron saint of qui tam/False Claims Act lawyers from coast to coast, inserted a provision "to prod states into passing their own false claims acts with incentives to increase their share of recoveries in Medicaid fraud cases. The inducements would allow states to up their takes by 10 percentage points, provided their false claims acts follow the federal model. By involving more states and more lawyers, supporters hope to increase recovery amounts across the board." The ABA Journal has now published an article surveying the early results. Janet L. Goldstein, a plaintiffs lawyer from Washington, D.C., tells the journal �I think you'll see a real shift in focus toward state cases. We've got state attorneys general who are very excited about these cases.�

In addition to quoting supporters of the expansion, the ABA Journal also gives some space to the less enthusiastic "tort reform arguments from some quarters" concerning the new developments. For example, "Washington, D.C., defense lawyer John T. Boese, author of one of the leading texts on the federal act and co-chair of this past June�s ABA national institute on qui tam enforcement", is heard from:

Boese says that qui tam plaintiffs lawyering in recent years has come to resemble what he describes as the �franchise model� of the highly criticized 1990s state tobacco litigation, where the handful of plaintiffs firms in control spread their costs and made billions of dollars in fees by farming out much of the actual work to local counsel.

Boese says he regularly encounters plaintiffs lawyers in false claims cases who appear to use a similar tag-team approach. �Will this become tobacco?� Boese asks. �It already has.�

...[Also of] concern to Boese is a separate provision in the Deficit Reduction Act that requires nearly every provider to conduct employee education programs on fraud and how to file false claims complaints. Besides their potential for increasing the number of new cases, Boese says such programs also undermine the stricter internal company compliance plans and financial controls that have become hallmarks of post-Enron corporate self-accountability.

Worker training in the False Claims Act could become the functional equivalent of a company hiring a plaintiffs lawyer and suing itself, Boese complains.

More on qui tam here and here, and, at Overlawyered, here and here.

New York Sun readers got two Point of Law posters for the price of one in a Feb. 23 Josh Gerstein piece on a United Seniors suit seeking qui tam reimbursement of Medicare expenses by tobacco companies, quoting both me and Walter. If you think this suit sounds dreadfully similar to a lawsuit the Clinton administration already lost in 2000, you'd be right, and the relevant portion of the statute hasn't changed any, notwithstanding claims to the contrary by the plaintiffs.

(To wit: under 42 U.S.C. �1395y(b)(2)(A) & (3)(A) a private party or the government can seek reimbursement on behalf of Medicare from a primary or self-insured "plan," which, under 42 C.F.R. �411.21, is an "arrangement" for health insurance. Needless to say, a smoker cannot go to Philip Morris and make an arrangement for health insurance, which is why every court to study the issue has thrown out these claims as not substituting for the tort system. See U.S. v. Philip Morris USA, 116 F.Supp.2d 131, 145 (D.D.C.2000). The Grassley amendment discussed in the article is Section 301 of P.L. 108-173, which didn't change the definition of "plan," which is the stumbling block for these lawsuits.)

Charles Jarvis shows charming naivete in the New York Sun when he suggests that his request for a federal district court to open the floodgates of Medicare-reimbursement litigation would be limited to the specific circumstances of tobacco companies. If United Seniors were to prevail on their theory of interpretation, plaintiffs' lawyers would have no hesitation in expanding litigation from Big Tobacco to Big Food, Big Auto, Big Chemical, Big Energy, and Big Pharma.

I'll be debating Jarvis on Fox News' Your World with Neil Cavuto, Tuesday, February 28; the five days between now and then will give me time to think of a sound bite better than "Your lawsuit contradicts 42 C.F.R. �411.21's interpretation of �1395y(b)(3)(A)!"

Roberts, fee-shifting, and the balance of sympathy - PointOfLaw Forum

Some critics have assailed John Roberts for the majority opinion he wrote in Taucher v. Brown-Hruska, a case decided by a D.C. Circuit panel in January. The Taucher case pitted the Commodity Futures Trading Commission against publishers of commodities newsletters which sought to resist, on First Amendment grounds, CFTC's contention that they were obliged by statute to register as investment advisors and undertake various other regulatory burdens. A judge eventually agreed with the publishers' First Amendment argument and the CFTC appealed, but the case was mooted when the commission dropped its attempt to regulate the newsletters. The question then arose whether the publishers were entitled to recover attorneys' fees from the commission under the Equal Access to Justice Act (EAJA), which provides that certain litigants can recover fees from the government when the position it has taken in litigation is not reasonably based in law or fact. Reversing the trial court, Roberts ruled that the government's position had not been unreasonable because the relevant law had been unsettled, and that the publishers therefore could not recover fees. Judge Karen LeCraft Henderson concurred, while Judge Harry Edwards dissented.

Why should anyone take alarm at this ruling? Well, according to the self-proclaimed People for the American Way (PfAW), it's a question of "access to justice": EAJA "is important in opening access to the courts to persons who might otherwise not be able to challenge unlawful or unconstitutional government action." The enviro-left legal strike force EarthJustice (EJ) likewise claims the ruling (PDF) raises "concerns about his philosophy on access to courts". Both PfAW and EJ mention that the newsletter publishers were represented by a "public interest law firm". The implication, one supposes, is that Roberts is the kind of judge who would take crumbs (in this case $182,425.55) from the mouths of public interest lawyers, who need to eat too if they are to go on filing their publicly interested lawsuits. (Ironically, the next entry in PfAW's sidebar list of anti-Roberts categories is entitled "Defending the Treasury"; its sole entry at present is a case in which Roberts was allegedly not sympathetic enough to qui tam whistleblower complaints).

Both PfAW and EJ coyly refrain from informing readers exactly which "public interest law firm" was representing the newsletters, but a glance at the opinion shows that the attorneys were none other than Scott Bullock and William ("Chip") Mellor of the Institute for Justice (IJ), the very widely known conservative/libertarian law firm that frequently goes to bat (as in Kelo v. New London, the eminent-domain case) for property owners and businesses faced with excessive government regulation. Not only is IJ immensely popular on the Right, but the cause in which it was acting in this case -- protecting the free-speech rights of investment newsletters -- is a long-time favorite in conservative/libertarian circles. In other words, the case is one in which Judge Roberts ruled against the side that probably commanded his sympathies (assuming he's much of a conservative) and in favor of an intrusive regulatory agency as well as, incidentally, the taxpayers. Is there any real doubt that, had he come down on the other side, the case would turn up on some list of his rulings supposedly proving that he sides with business against government regulation?

There remains, of course, the central issue in the case, namely whether the particular dispute fell within the legislated bounds of EAJA's fee entitlement (since EAJA is not a general fee-shifting statute but rather one whose application is triggered only by certain situations). After reading the case, I can only say -- as someone whose instinctive sympathies on the underlying merits are 100% with the newsletter publishers and 0% with the CFTC's -- that I find it hard to argue with Roberts's conclusion that the state of the law on the relevant matters was indeed unsettled, precluding EAJA's application. To reiterate, then: by all appearances, Roberts set aside his likely sympathies as to the parties in the case and ruled according to his honest view of the statute's reasonable application. No wonder they want to fry him!

Incidentally, Baseball Crank covered the original decision at the time, concentrating on an important (if secondary) side issue it raised, namely whether agencies are duty bound to defend the constitutionality of their statutes under any circumstances (Judge Roberts wisely thought not). And Edward Whelan discussed the case in a post on NRO's "Bench Memos" (& welcome Jonathan Adler, Stephen Bainbridge readers).

Health-care whistleblowers - PointOfLaw Forum

They're cashing in millions in qui tam recoveries in league with the semi-autonomous Health Care Fraud Unit, which operates within the U.S. Attorney's office for Massachusetts. According to renowned Boston attorney Harvey Silverglate, however, the success in white-collar enforcement is based in part on "in terrorem misuse of some of the nation's broadest -- and vaguest -- criminal statutes and regulations". It hasn't always met with success:

Last July, the U.S. Attorneys lost a prosecution in Boston when 10 employees of TAP Pharmaceuticals refused to plead guilty and instead went to trial contesting the unit's claim that their discounted sales and promotional practices--common in the industry--constituted illegal kick-backs and bribes.

The employees' case initially seemed doomed: The company itself had pled guilty and agreed to pay a then-record $885 million. TAP agreed to cooperate with prosecutors, waived its attorney-client privilege, and provided prosecutors with statements made by employees to company lawyers during an internal investigation.

Topping that, both the government's star witnesses, a former TAP employee and a physician in a managed-care practice that bought TAP drugs, had received "whistle-blower" bonanzas of $77 million and $17 million (the latter split with the HMO), respectively. The former TAP employee banked $47.5 million more for whistle-blowing in a related federal prosecution of drug maker AstraZeneca.

A jury wasn't impressed and acquitted the defendants.

P.S. More from the American Spectator.

  1 2 3