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The Whistlerblower Blog

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Presented by Hodgson Russ, the Whistleblower Blog is written by a team of lawyers experienced in successfully guiding both whistleblowers and companies accused by whistleblowers of wrongdoing through the False Claims Act process.

Photo of The Whistlerblower Blog Reetuparna (Reena) Dutta
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Reena specializes in white collar criminal defense and government and internal investigations. She has extensive experience representing clients in state and federal …

Showing 17 posts by Reetuparna (Reena) Dutta.

Government Asserts Right to Final Say in FCA Settlements

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A recent decision from the U,S. District Court for the District of Columbia illustrates the power of the government to block False Claims Act settlements between relators and defendants. United States ex rel. Landis v. Tailwind Sports Corp., 2015 U.S. Dist. LEXIS 46140 (D.D.C. April 9, 2015) involves former professional cyclist Floyd Landis, who brought FCA violations against Lance Armstrong and other defendants, including Armstrong’s agents and their company, called Capital Sports and Entertainment. The case was based on Landis’s allegations that defendants submitted claims for sponsorship payments to the U.S. Postal Service while knowing that the team had been using performance-enhancing drugs in violation of the sponsorship agreement.  

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FCA Retaliation Claim Not Subject to Employment Agreement Arbitration Clause, According to Sixth Circuit

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Relators alleging a retaliation claim under the False Claims Act scored a big win in the recent Sixth Circuit decision United States ex rel. Paige v. BAE Systems Technology Solutions & Services, Inc., 2014 U.S. App. LEXIS 9676 (6th Cir. May 22, 2014), which held that a False Claims Act retaliation claim was not subject to an employment agreement’s arbitration clause.

Relators in that case alleged that the defendant employer retaliated against them for cooperating with the government and filing a whistleblower case. Relators alleged that throughout their employment they complained to management about fraud, but, despite their complaints, the perpetrators of the unlawful conduct were left in place and their attempts to correct the problems were rebuffed. Ultimately, one of the relators was forced to quit due to the retaliation and the other was laid off. The district court dismissed the retaliation claim in favor of arbitration due to a clause in relators’ employment agreements.

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Relators Win Right to Share of Proceeds Under False Claims Act

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In a recent False Claims Act case from the Eighth Circuit, Rille v. PricewaterhouseCoopers LLP, 2014 U.S. App. LEXIS 6597 (8th Cir. April 10, 2014), the relators won an important victory against the government relating to their right to obtain a portion of the settlement proceeds of a claim under the act. Specifically, according to the act, if the government “intervenes” in a case brought by relators, relators are entitled to a portion “of the proceeds of the action or settlement of the claim.” 31 U.S.C. 3730(d)(1). But in Rille, the relators had to fight not only defendants, but also the government to get the recovery they were entitled to under the act. The Eighth Circuit – in no uncertain terms – sided with the relators.

Another Banner Year for Recoveries Under the False Claims Act

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According to a press release from the Department of Justice, in fiscal year 2013, the government recovered $3.8 billion in settlements and judgments involving the False Claims Act. This is the second-largest annual recovery in history and brings total recoveries under the False Claims Act since January 2009 (when the act was significantly amended) to $17 billion. Additionally, the number of qui tam (or whistleblower) cases increased to 752 in 2013, which was 100 more than in fiscal year 2012. Recoveries in qui tam cases this year totaled $2.9 billion, with whistleblowers recovering $345 million.

How Risperdal Whistleblowers Made Millions From Johnson & Johnson

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In the article “How Risperdal Whistle-Blowers Made Millions From J&J,” Bloomberg News profiles a few of the whistleblowers involved in the government’s investigation of claims that pharmaceutical giant Johnson & Johnson illegally marketed the drug Risperdal for off-label uses. In November, the U.S. Department of Justice announced that Johnson & Johnson settled the investigation for $2 billion, a portion of which went to the whistleblowers profiled. Dan Oliverio, who contributes to this blog and is quoted in the Bloomberg article, leads a team of Hodgson Russ attorneys that represents two of those whistleblowers.

Reetupama (Reena) Dutta is a senior associate in the Business Litigation Practice at Hodgson Russ LLP. You can reach her at rdutta@hodgsonruss.com.

Old Fraud Claims May Still Be Actionable Under Wartime Suspension of Limitations Act

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Relators who have claims based on frauds that extend farther than the False Claims Act’s statute of limitations are in for good news—a recent decision regarding the Wartime Suspension of Limitations Act may mean that claims that would have been time-barred under the False Claims Act may still be actionable.

Government Intervention Rights Broadly Interpreted

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A False Claims Act case can be brought by a whistleblower (relator) to recover funds on behalf of the federal government. The government then has the option to “intervene” and proceed with the action. If the government does intervene, it has the primary role in prosecuting the action, although the relator remains entitled to a percentage of any recovery. Even if the government declines to intervene initially, it can later intervene upon a showing of “good cause.”

The Dodd-Frank Act and Whistleblowers: Broader Protection Than You Might Think

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The Dodd-Frank Wall Street Reform and Consumer Protection Act of 2010 included a whistleblower program allowing individuals who report original information to the SEC leading to a recovery exceeding $1 million to obtain between 10 percent and 30 percent of the recovery. It also included a prohibition on retaliation.

It has been about one year since the SEC established its Office of the Whistleblower, and according to Sean X. McKessy, the chief of that office, the SEC has received almost 3,000 securities law violation tips, or about eight tips per day.

Ninth Circuit Decision Is, Oddly, Good News for Both Relators and Defendants

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With respect to relators, in a matter of first impression before the U.S. Court of Appeals for the Ninth Circuit, the court held that knowingly false underbidding can support False Claims Act liability.

In Hooper v. Lockheed Martin, No. 11-55278 (9th Cir. Aug. 2, 2012), the relator was an engineer working for Lockheed, and he claimed that Lockheed defrauded the Air Force under a government contract by knowingly underbidding the contract. Lockheed argued that the estimates in its bid could not predicate liability because an estimate is merely an opinion or prediction, as opposed to a false statement. The relator, however, produced evidence that Lockheed employees were told to lower their bids without regard to actual cost. This evidence, according to the Ninth Circuit, raised a genuine issue as to whether Lockheed had the requisite knowledge when it submitted its bid for the contract. Thus, the court held that summary judgment for Lockheed on this claim was inappropriately granted and, in light of this decision, relators should be on the lookout for bids based on lower-than-actual costs as a potential basis for liability.

State False Claims Acts: It’s Not Just the Federal Government Anymore

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While the federal False Claims Act gets the big headlines and the correspondingly big recoveries, it is important not to forget that a number of states have their own false claims acts under which relators can bring claims that also have the potential for significant monetary recoveries. States with these acts tend to fall into two categories: states with generally applicable false claims acts (like the federal law) and states that limit their acts to health care fraud.

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Hodgson Russ is one of only a few major law firms that represents both whistleblowers and companies accused by whistleblowers of wrongdoing. This unusual perspective means we are exceptionally well positioned to advise whistleblowers about potential claims.

We are not a "whistleblower mill" that pays little attention to the needs of its clients or the factual nuances of complex cases. Rather, we are a team of highly experienced lawyers that selects only the best cases, affording us the time and focus to become fully immersed in the factual and legal details necessary to bring cases to successful resolution.