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False Claims Act Defense

Skadden, Arps, Slate, Meagher & Flom LLP and affiliates (“Skadden”) has significant experience in advising and defending clients in matters involving the federal False Claims Act (FCA) and various state and municipal equivalents. The firm’s reach, depth and experience provide the ready capability to perform fact-finding and analysis in connection with complex business matters in any jurisdiction in which our clients deal with the government. Skadden is uniquely positioned to assist clients in navigating the legal landscape when business conduct results in concurrent criminal, civil and/or administrative proceedings that require a strategically coordinated response.

In recent years, at the request of Congress, the Department of Justice (DOJ) has undertaken a more robust enforcement of the FCA.  The FCA’s treble damages provision, coupled with a statutory penalty for each false claim, provides the government with a very powerful tool to extract lucrative settlements or to win sizeable judgments.  Since January 2009, the DOJ has recovered more than $17 billion under the False Claims Act, with health care-related actions accounting for approximately $12.1 billion of the total figure.

Although FCA litigation once was almost the exclusive province of the federal government, the Deficit Reduction Omnibus Reconciliation Act of 2005 provided financial incentives for states to adopt their own versions of the FCA. At least 27 states now have false claims statutes, with many focusing on health care. In addition, at least three cities and the District of Columbia have adopted versions of the FCA. Many of these state and municipal FCA equivalents carry significant sanctions and have been used successfully to obtain large recoveries. For example, one case based on California’s FCA resulted in a $241 million settlement.

Moreover, qui tam litigants — “whistleblowers” who bring FCA suits on behalf of the federal or state government — are combining federal, state and municipal FCA causes of action in their suits to extract higher recoveries for governmental units and themselves. On the federal front, nearly 25 percent of all FCA cases filed since the 1986 amendments were initiated by whistleblowers, and in fiscal year 2013 alone, qui tam litigants filed 752 suits.  These cases have resulted in recoveries of more than $26 billion since 1986.

Skadden represents companies, their boards and management, and individuals in all aspects of FCA matters, including internal investigations, transactional due diligence, the implementation of remedial measures and compliance programs, and the defense of government investigations, enforcement actions, and criminal and civil proceedings. Skadden has numerous former assistant United States attorneys in our Boston, Chicago, Los Angeles, New York and Washington, D.C. offices. Our powerful combination of former prosecutors and experienced civil litigators enables the firm to anticipate and respond to the many demands created by the joint investigations and proceedings routinely pursued in connection with FCA matters. Skadden handles such matters from the time that the allegations first arise through final resolution, whether the matter is concluded with a declination, an agreed upon settlement, or, if necessary, trial and appeal.

Experience has shown that by conducting a prompt and thorough internal investigation, clients are better positioned to influence the government’s approach to the matter. In this regard, after conducting internal investigations, Skadden has successfully resolved matters through settlements favorable to our clients. In addition, we have negotiated favorable settlements of complex parallel proceedings involving criminal, civil and administrative issues without the need for costly and public litigation.