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- False Claims Act
Covington helps clients in regulated industries navigate the most complex False Claims Act (FCA) investigations and litigation. The stakes are always high–companies face not only treble damages and statutory penalties, but also potential criminal liability, debarment, exclusion, reputational risk, and other consequences. Covington marries deep FCA and white collar experience with substantive expertise to solve our clients’ problems. This combination of skills has led the world’s leading companies to turn to us for sophisticated counsel at every stage of the FCA investigation and defense process.
FCA and White Collar Experience. More than a dozen partners and counsel at the firm focus their practice on FCA defense, and many have focused their practice in this area for more than 20 years. As a result, our lawyers are intimately familiar with the statute and the investigative and litigation process. We know the civil and criminal lawyers at DOJ Main Justice, and in the U.S. Attorney’s offices around the country that routinely handle FCA matters. We have helped shape the way that the statute has been enforced over the past 20 years, especially as Congress and the courts have reshaped the landscape. This deep experience translates into critical benefits for our clients–we do not need to reinvent any wheel, and our reputation with the DOJ, qui tam counsel, and the OIG community can help achieve positive results.
Substantive Expertise. We know the regulations, statutes, and contract provisions that lie at the heart of every FCA matter. Our substantive health care, FDA, government contracts, and other regulatory expertise provide a distinct advantage for our clients in FCA-related litigation. We understand the business and regulatory challenges unique to regulated industries, and the inner workings of the relevant government agencies.
Covington’s collaborative culture provides our clients with the best FCA defense team at the firm, because our front-line FCA and white collar lawyers can draw effortlessly on the substantive insights of our regulatory practitioners. This teamwork provides strategic and tactical advantages at every step, from initial fact-finding through discovery, settlement, and trial.
Results. Our lawyers have handled some of the most significant matters brought under the FCA since the statute’s reinvigoration in 1986. A lengthy track record of securing government declinations, outright dismissals, and favorable judgments and settlements in FCA matters speaks for itself. Our deep experience handling a range of FCA matters–whether initiated through qui tam actions or by the government–allows us to help our clients throughout a matter’s lifecycle and informs our strategic decision-making at each step. This storehouse of FCA experience also means that we can handle cases in a streamlined and cost-effective manner, directly inuring to the benefit of our clients. See below to further explore our FCA capabilities and experience on behalf of clients across a range of industries.
Government Dismissal of Whistleblower Suit
Successfully represented UnitedHealth Group subsidiary in the Eastern District of Pennsylvania in a closely-watched FCA case regarding hospital admission status, resulting in the Government moving to dismiss the entire case shortly before filings for partial summary judgment. The court granted the Government’s motion and granted summary judgment on a large portion of the claims.
Won Summary Judgment Against Marketing Allegations
Represented leading pharmaceutical manufacturers in two separate cases alleging improper marketing of blockbuster medications. Both cases resulted in summary judgment for the defendants, and the one that was appealed was affirmed by the First Circuit.
Declination, Dismissal, and Recovery of Defense Costs
Represented aerospace contractor accused of violating Cost Accounting Standards (CAS) violations, securing declination of DOJ investigation, dismissal of subsequent qui tam case, and recovery of allowable costs of defense, including legal fees.
Resolved Civil and Criminal Investigation of Marketing Practices
Represented Warner Chilcott Sales U.S. in criminal and civil resolution of federal and state investigation of allegations of improper conduct with respect to speaker programs, off-label promotion, prior authorizations and protected health information.
Victory in Case Alleging Massive Small Business Fraud
Represented more than fifty telecommunications defendants in a $1.2 billion False Claims Act litigation concerning representations regarding small business status when participating in Federal Communications Commission auctions; successfully excluded over half of the damages claim in a pre-trial ruling before settling matter successfully.
Global Resolution of Investigation into Manufacturing Quality Practices
Represented government contractor facing parallel criminal and civil proceedings related to alleged manufacturing quality nonconformances; secured declination of the criminal matter and extremely favorable civil settlement.
Largest Suspension and Investigation in USAID's History
A voluntary disclosure to USAID by one of its largest not-for-profits led the agency to suspend the entity for potential false claims and lack of internal controls, resulting in the board of directors forcing the resignation of the entity’s leadership team and hiring our lawyers to resolve the matters. When the agency refused to lift the suspension due to the lack of trustworthy internal controls and the entity was on the brink of shuttering its doors, our lawyers successfully negotiated a grand bargain to transfer nearly all of the programs, assets, and employees to another not-for-profit and settle the False Claims Act (FCA) investigation.
Six-Year Dispute with DOJ Ends with Declination
Our client, a major aerospace manufacturer, was accused of misrepresenting key facts to a government agency, resulting in the agency's decision to move forward with a rocket launch that eventually failed. The client enlisted Covington’s representation in what ended up being a six-year, high-stakes dispute with DOJ. Our compelling presentation and mastery of the details bolstered our arguments, and DOJ ultimately advised it would not pursue a False Claims Act case against the company.
Dismissal of Allegations Related to Security Contract
Won motion to dismiss for Tyco and ADT in a False Claims Act suit relating to security contracts with federal judiciary.
Declination in Investigation into Alleged Small Business Fraud
Convinced Department of Justice to decline intervention in qui tam action alleging false statements concerning eligibility for small business credits.
Cybersecurity FCA Victory for a Services Contractor
Represented a services contractor in obtaining DOJ declination of allegations involving adequacy of critical cyber infrastructure and negotiated small, five-figure administrative settlement with the agency.
Eight-Year FCA Investigation Ends with Declination
Press reports accusing our client of using inflated labor categories on a billion dollar contract triggered an eight year False Claims Act (FCA) investigation. Eventually, our appeal to senior attorneys at the U.S. Department of Justice’s Civil Division brought an end to the FCA investigation and cleared the way for the client to negotiate an administrative settlement with the contracting agency resulting in a net payment to the client of millions of dollars.
Declination for Alleged Trade Agreements Act Violation
Secured DOJ declination for pharma manufacturer accused of supplying federal agencies with non-conforming drugs in violation of the Trade Agreements Act.
Criminal Declination and Favorable Civil Settlement
Represented government contractor facing parallel criminal and civil proceedings related to alleged manufacturing quality nonconformances; secured declination of the criminal matter and extremely favorable civil settlement.
Dismissal of FCA and Kickbacks Allegations
Won dismissal of False Claims Act case, brought in the Eastern District of Virginia, alleging prime contractor had violated contract provisions governing the award of subcontracts.
Declination in Investigation of Pharmacy Management Software
Represented biotech company in obtaining civil declination in matter concerning pharmacy management system software.
Declination of Civil and Criminal Claims in Manufacturing Investigation
Represented biopharmaceutical manufacturer in obtaining criminal and civil declination of investigation concerning alleged cGMP violations.
Declination of Civil and Criminal Claims in Kickback Investigation
Represented pharmaceutical manufacturer in obtaining civil and criminal declination in federal investigation concerning alleged payment of kickbacks to influence formulary position.
Summary Judgment under California’s Insurance Frauds Prevention Act
Won summary judgment for a medical device manufacturer under California far-reaching law that permits qui tam claims on behalf of private insurance companies.
Defense of Whistleblower Retaliation Case
Won summary judgment and First Circuit affirmance for GlaxoSmithKline in a whistleblower retaliation lawsuit.
"Public Disclosure Bar" Dismissal for Clinical Laboratory
Represented a leading clinical laboratory in a successful motion to dismiss and Third Circuit appeal under the “public disclosure bar” in connection with qui tam allegations related to the provision of free medical supplies to the laboratory’s customers.
Declination in Reverse False Claims Investigation
Represented pharmacy chain in obtaining civil declination in federal investigation of alleged retention of overpayments under the False Claims Act.
Resolved Federal and State Investigation of Speaker Programs
Represented Salix Pharmaceuticals, Inc. in civil settlement of federal and state investigation of allegations concerning speaker programs.
Criminal Declination and Favorable First-Mover Civil Settlement
Represented major airline in industry-wide parallel civil/criminal investigation of fraud in connection with U. S Postal Services contract, securing criminal declination and favorable first-mover civil settlement.
Declination and Highly Favorable Global Resolution
Represented leading engineering contractor facing allegations of quality deficiencies and lobbying violations related to multi-billion nuclear waste treatment contract; secured a partial DOJ declination and resolved all remaining claims on highly favorable terms.
Dismissal of Medicare Overbilling Allegations
Represented McKesson Provider Technologies in Northern District of Texas case involving FCA and supplemental state law claims, securing dismissal under Rules 9(b) and 12(b)(6) of alleged submission of purportedly false medical bills.
Dismissal of Formulary-Placement Allegations
Represented Novartis Pharmaceutical Corporation in successful motion to dismiss in the District of New Jersey on allegations that the company offered discounts to influence formulary position.
Dismissal of Suit Alleging Fraud in Defense Contracts
Obtained dismissal of qui tam action alleging fraud in connection with Iraqi procurement contracts, as sanction for discovery abuse, United States ex rel. Mayberry et al. v. Custer Battles LLC et al., No. 1:06-cv-364 (E.D. Va. 2008).
Summary Judgment in Defective Pricing Suit
Won summary judgment on False Claims Act case alleging TINA violations, United States ex rel. Sanders v. Allison Engine Company, 364 F. Supp. 2d 699 (S.D. Ohio 2003).
July 6, 2020, Covington Advisory
The False Claims Act (FCA) only imposes liability on those who “knowingly” cause the submission of false claims. 31 U.S.C. § 3729. “Knowingly” is defined as having “actual knowledge,” acting “in deliberate ignorance of the truth or falsity of the information,” or, at minimum, acting “in reckless disregard of the truth or falsity of the information.” To establish ...
June 12, 2020, Covington Advisory
Next week marks the four-year anniversary of the Supreme Court’s landmark False Claims Act (“FCA”) decision in Universal Health Services, Inc. v. Escobar, 136 S. Ct. 1989 (2016). In Escobar, the Court set a high bar for demonstrating the materiality of an alleged violation to the Government’s payment decision, declaring that “if the Government regularly pays a ...
April 10, 2020, Covington Advisory
The Fourth Circuit recently rejected a trial court’s ruling that a contractor’s mandatory disclosure submission waived its attorney-client privilege over the underlying internal investigation. In re Fluor Intercontinental, Inc., No. 20-1241 (Mar. 25, 2020) (per curiam). The court granted Fluor’s mandamus petition and directed the district court to vacate its ...
March 3, 2020, Covington Advisory
On February 27 and 28, 2020, Joseph H. (Jody) Hunt, Assistant Attorney General for DOJ’s Civil Division, and Michael Granston, Deputy Assistant Attorney General, Commercial Litigation Branch, spoke about False Claims Act (“FCA”) enforcement at the Federal Bar Association’s annual Qui Tam Conference in Washington, D.C. They highlighted FCA enforcement priorities ...
Top 7 Gov't Contracting Policy Changes In 2019
December 20, 2019, Law360
Fred Levy is quoted in Law360 regarding the formation of the Procurement Collusion Strike Force, a cooperative effort among the U.S. DOJ’s Antitrust Division, in an article highlighting the top government contracts policy changes in 2019. The strike force is indicative of a broader trend in government contracts over roughly the last year: the “criminalization of ...
December 2019, Government Contracting Law Report
November 6, 2019, Covington Alert
On November 5, 2019 the Department of Justice (DOJ) announced the launch of the “Procurement Collusion Strike Force” (PCSF). The creation of the PCSF marks a significant development in the government procurement enforcement landscape. Creation of the PCSF prioritizes the DOJ’s focus on government procurement offenses. As part of that effort, DOJ has launched a ...
May 13, 2019, Law360
Michael Wagner spoke with Law360 about the Supreme Court’s ruling in Cochise Consultancy Inc. v. U.S., a case determining the statute of limitations in False Claim Act cases. Mr. Wagner says, "In theory, the Court's ruling could incentivize qui tam plaintiffs to wait years to bring their claims, in the hopes of allowing their potential recovery to increase. This ...
How Could That (Not) Be Covered? Truthiness & Coverage For False Claims Act Liability
March 1, 2019, American Bar Association, Insurance Coverage Litigation Committee
February 25, 2019, Westlaw Journal Government Contract
- Am Law Litigation Daily recognized Ethan Posner, Matthew Dunn, and Christopher Denig as "Litigators of the Week" (11/8/2019)
- 'The American Lawyer “White Collar/Regulatory Litigation Department of the Year” Finalist (2018)
- Global Investigation Review’s “GIR 30” (2017-2019)
- Chambers USA, Firm (DC, CA and NY) - Litigation: White-Collar Crime & Government Investigations (2019)
- Law360 "Practice Group of the Year," White Collar (2017, 2018)
- Law360, Government Contracts Group of the Year (2015, 2017-2018)
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