False Claims Act &
Qui Tam
False Claims Act (FCA) investigations and litigation can be among the most consequential matters faced by companies and their boards. Paul, Weiss has successfully represented a wide range of clients in FCA and other matters involving allegations of government fraud. Our team offers an unparalleled combination of litigation expertise and senior government experience.
In addition to reputational harm, a successful FCA lawsuit can result in treble damages, penalties, and suspension or debarment. Even if no government agency is involved at the outset of an FCA action, private qui tam lawsuits often trigger government investigations—whether by the Department of Justice, state Attorneys General pursuing potential violations of state-level FCA statutes, or other agencies—that can result in additional civil claims or criminal charges.
The enforcement landscape is also likely to become more challenging and complex as new oversight authorities, including a new Inspector General and a Congressional Oversight Panel, created by the CARES Act flex their muscles as they examine loans, grants, and contracting opportunities. And, with strong financial incentives for whistleblowers, the private relator bar is highly active. As scrutiny of potential government fraud and abuse intensifies, Paul, Weiss is focused on counseling clients on how to mitigate their FCA-related risks and defending them vigorously in the event of an investigation or lawsuit.
Our team offers an unparalleled combination of litigation expertise and senior government experience, giving us a sophisticated understanding of the increasingly aggressive theories and approaches employed by both private and public enforcers in this space. Our FCA team includes: a former U.S. Attorney General and former U.S. Attorney for the Eastern District of New York; a former Secretary of the Department of Homeland Security and former Department of Defense General Counsel; a former Chief of the Criminal Division of the U.S. Attorney’s Office for the Southern District of New York; and more than 15 former Assistant U.S. Attorneys from the Southern and Eastern Districts of New York and the District of Columbia. The team also includes former senior members of the U.S. Department of the Treasury and the New York Attorney General’s Office.
When interfacing with government agencies, we are often able to leverage the credibility we bring to the table and the insights gained from our extensive government service to achieve favorable outcomes for our clients, such as by persuading government investigators to decline to bring a case or, in the case of a whistleblower action, to decline to pursue or intervene in the matter. Where an action is filed, our team of courtroom veterans is prepared to aggressively defend the matter and has successfully defended such actions on behalf of numerous clients. We are also well equipped to assist clients in navigating the intense media scrutiny, and occasional congressional hearings, triggered by allegations of government fraud, as well as related regulatory and litigation fallout, including the defense of shareholder and other litigation.
Recent
Experience
Recent Engagements
- Automatic Data Processing, Inc. (ADP) in a successful motion to dismiss a major federal False Claims Act case that challenged three companies', including ADP’s, practice of retaining the interest earned on funds held from their clients that were ultimately due, and timely paid, to the government as tax payments.
- Bank of New York Mellon in allegations under state False Claims Acts and its investigations by Attorneys General of New York, Massachusetts and Virginia relating to Foreign Currency Exchange fees in custodial accounts.
- Carolina Liquid Chemistries (CLC), a leading provider of chemistry analyzers and reagents for drug testing and general chemistry testing, in winning summary judgment of a long running False Claims Act litigation brought by two whistleblowers who alleged that CLC engaged in “upcoding”—overbilling Medicare and Medicaid by claiming that its urine drug test machines are capable of performing high-complexity quantitative drug testing, which is reimbursed at higher amounts, when instead the machines could perform only basic qualitative testing—thus costing the government millions of dollars. The defense won the dismissal of two earlier versions of the complaint, and following extensive discovery on the third amended complaint, the court granted CLC’s summary judgment motion, a rare outcome in a federal FCA case.
- Citigroup in securing the dismissal of a qui tam action brought in Florida state court under the Florida False Claims Act in connection with two synthetic fixed-rate transactions with a notional value of $1 billion entered into by the Central Florida Expressway Authority with Citibank and several other banks. The relator alleged that the defendant banks fraudulently induced the Authority to enter into the at-issue swap agreements and claimed that all payments made to the defendant banks constituted “false claims.”
- Citigroup Global Markets, Barclays Capital, and RBC Capital Markets in the dismissal of California, Illinois and New Jersey False Claims Act claims asserted in California state court against Citigroup, in Illinois state court against Citigroup and Barclays, and in New Jersey state court against Barclays, Citigroup and RBC. The whistleblowers alleged that the banks made misrepresentations in underwriting state municipal bonds and brought qui tam lawsuits on behalf of each state under each state’s false claims act, alleging that the banks defrauded the states by falsely representing that the state would obtain the best price and lowest yield for the bonds the banks underwrote back to 2006, and that the banks would prioritize their marketing efforts to retail investors to obtain higher prices.
- Gilead Sciences in connection with responding to a Civil Investigative Demand issued by the U.S. Attorney’s Office in the Eastern District of Washington and the DOJ Commercial Litigation Branch at Main Justice related to False Claims Act allegations around the marketing of a chronic hepatitis B medication.
- Invitation Homes (IH), a single-family home leasing company, in the favorable settlement of a False Claims Act whistleblower lawsuit brought on behalf of 35 California municipalities alleging that IH systematically failed to obtain required building permits for renovations undertaken at the single-family homes it owns, and that IH avoided potentially millions of dollars in permitting fees and property taxes.
- JM Eagle, the world’s largest plastic pipe manufacturer, in the successful defense of federal qui tam litigation brought on behalf of dozens of state and local water districts asserting over $1 billion in potential damages regarding allegations that JM Eagle misrepresented that its PVC pipe complied with industry standards. Paul, Weiss was retained after JM Eagle was found liable on False Claims Act claims during the liability phase of the trial. At the conclusion of evidence in a bellwether damages jury trial, the court limited plaintiff’s recovery from $58 million (before trebling) to, at most, $1.2 to $2.1 million, and ultimately declared a mistrial. JM Eagle subsequently moved for judgment as a matter of law and the court granted the motion and dismissed the case.
- KKR & Co. Inc. in False Claims Act litigation currently pending in the Central District of California related to billing practices at a KKR-affiliated healthcare company.
- Pfizer in the settlement of a False Claims Act suit brought by the Department of Justice alleging that one of its subsidiaries, Wyeth, sold Protonix Oral and Protonix IV through a bundled sales arrangement that resulted in a higher price paid by Medicaid.
- Regeneron Pharmaceuticals as lead trial counsel in a civil False Claims Act/Anti-Kickback Statute lawsuit brought by the DOJ.
- The Regents of the University of California in a whistleblower action brought by a former employee alleging that the UC violated the California False Claims Act by fraudulently retaining and overcharging state funds for financial aid and research grants, and that the UC retaliated against the plaintiff for reporting and opposing their unlawful conduct.
- A major equipment manufacturer in a civil False Claims Act investigation by the Department of Justice and the General Services Administration Office of Inspector General, and a related Department of Justice criminal fraud investigation.
- Multiple corporations regarding False Claims Act advice in connection with applying for and retaining Small Business Administration Paycheck Protection Program loans.
