In a per curiam, unpublished decision in In re Fluor Intercontinental, Inc., issued on March 25, 2020, the Fourth Circuit has provided some valuable guidance concerning how companies may avoid waivers of the attorney-client privilege when making disclosures to the government after privileged internal investigations. While the decision is non-precedential even within the Fourth
The Gang That Couldn’t Shoot Straight: Post-Escobar Application of the Materiality Standard in the Fourth Circuit
On January 26, 2017, the Fourth Circuit heard oral argument in United States ex rel. Omar Badr v. Triple Canopy, one of four False Claims Act decisions that the Supreme Court vacated and remanded for further consideration in light of the Court’s June 2016 holding regarding the implied certification theory in Universal Health Servs. v. United States ex rel. Escobar, 136 S. Ct. 1989 (2016). In Triple Canopy, the relator alleges that a security contractor responsible for ensuring the safety of an air base in a combat zone knowingly employed guards who allegedly falsified marksmanship scores, and presented claims to the government for payment for those unqualified guards. The defendant prevailed on a motion to dismiss at the district court after demonstrating that the government failed to plead that it ever reviewed — and therefore ever relied on — the allegedly false scorecards. United States ex rel. Badr v. Triple Canopy, Inc., 950 F. Supp. 2d 888 (E.D. Va. 2013). The Fourth Circuit reversed, explaining: “Common sense strongly suggests that the Government’s decision to pay a contractor for providing base security in an active combat zone would be influenced by knowledge that the guards could not, for lack of a better term, shoot straight … If Triple Canopy believed that the marksmanship requirement was immaterial to the Government’s decision to pay, it was unlikely to orchestrate a scheme to falsify records on multiple occasions.” 775 F.3d 628, 637–38 (4th Cir. 2015).
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Solicitor General Addresses Standard for Rule 9(b) in FCA Cases, Asks Supreme Court Not to
The government has reiterated in no uncertain terms its proposed standard for particularity under the FCA: “a qui tam complaint satisfie[s] Rule 9(b) if it contains detailed allegations supporting a plausible inference that false claims were submitted to the government, even if the complaint does not identify specific requests for payment.” Brief for United States as Amicus Curiae, United States ex rel. Nathan v. Takeda Pharmaceuticals, Petition for Certiorari No. 12-1349 (U.S. 2013). While opining at some length about the state of case law in the lower courts, the Solicitor General ultimately asked the Supreme Court not to hear the case.
Many of us thought that Nathan was a good opportunity for the Supreme Court to resolve an apparent split among the circuits (an issue we discussed in posts from February and March of last year). The point of contention is the particularity required in an FCA complaint under Rule 9(b): is it enough to allege a fraudulent scheme, or must a plaintiff also furnish details about the claims themselves? The government finds concerns about this circuit split to be somewhat overstated. See Br. at 10 (“[T]hose circuits that initially endorsed the per se rule [requiring identification of specific claims] have issued subsequent decisions that appear to adopt a more nuanced approach.”). The government thus finds the extent of inter-circuit disagreement to be “uncertain,” suggesting that it “may be capable of resolution without the Court’s intervention.” Id. at 10, 14.
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