New Department of Justice and Department of Labor Regulations Increase Monetary Penalties for False Claims Act, Anti-Kickback Act and OSHA Violations

Federal agencies are increasing civil monetary penalties for the violation of numerous federal laws for the first time since the 1990’s.[1] Of particular concern to government contractors are recent interim final rule changes issued by the U.S. Departments of Justice (“DOJ”) and Labor (“DOL”) that have increased the maximum penalties for violation of the False Claims Act and Anti-Kickback Act by a whopping 96%, and increased the maximum penalties for certain OSHA violations by an equally astounding 78%. The changes are effective August 1, 2016. DOJ and DOL have applied these substantial “catch up adjustments” to civil penalties based on
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High Court Hands Down Highly Anticipated “Implied Certification” False Claims Act Ruling.

The United States Supreme Court issued its certiorari decision in Escobar (579 U.S. __ (2016), No. 15-7; 2016 WL 3317565, slip op. (June 16, 2016)) on Thursday regarding the viability and application of the “implied certification” theory of legal falsity under the Federal False Claims Act (“FCA”). Yesterday, the Court set a “materiality” standard for lower courts to follow when considering allegations of implied falsities under the FCA. Unfortunately, this standard will likely (continue) to yield disharmony in its application amongst the Circuits. With respect to the two questions on review, the High Court ruled that: (1) Implied certification is
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New Regulation Results In Doubling Up False Claims Act Penalties

While many corporations in the federal contracting arena have been expecting regulations to further limit Federal False Claims Act (FCA) liability, those expectations have been called into question by a new federal regulation released last week aimed at doubling False Claims Act penalties. Raised by the obscure Railroad Retirement Board, which infrequently generates FCA cases involving fraudulent benefit claims, the board issued a ruling adjusting penalties. Under the new rule, minimum per claim penalties would jump from $5,000 to $10,781, and maximum per-claim penalties would rise from $11,000 to $21,563. We can anticipate a similar increase from the U.S. Department
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Groff Murphy Successfully Receives 6-month Stay on behalf of Government Contractor pending Supreme Court’s certiorari review of First Circuit ruling in Escobar regarding the “implied certification” theory of legal falsity under the Federal False Claims Act

As most government contracts litigants are now well-aware, in December 2015, the United States Supreme Court granted certiorari[1] in the First Circuit case of Universal Health Services, Inc. v. Escobar, 780 F.3d 504 (1st Cir. 2015) regarding its “implied certification” theory of legal falsity under the FCA.  In Escobar, the defendant operated a mental health clinic that received reimbursement through Medicaid. The qui tam relators’ family member died while receiving treatment from the clinic.  The First Circuit held that the relators plausibly alleged that the clinic failed to employ adequate staff and supervise staff in violation of state health regulations
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