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New York Settles False Claims Act Suit for $540 Million


The state and city of New York have agreed to pay a total of $540 million to resolve allegations of Medicaid fraud.  The suit, originally brought under the qui tam provisions of the False Claims Act, alleged that between 1990 and 2001 the state of New York knowingly submitted claims for reimbursement to the federal government for school-based health care services that did not qualify for Medicaid reimbursement.  The whistleblower who exposed the fraudulent billing practices will receive $10 million as his relators’ share of the settlement proceeds.  To learn more about The Employment Law Group® law firm’s False Claims Act Practice, click here.

Law 360 Quotes The Employment Law Group® Law Firm on the Prospects of Whistleblower Litigation under the Obama Administration

In an article titled, “Whistleblowers May Do Better Under Obama Administration,” Law 360 reports that the Department of Labor (“DOL’) continues to side with employers in its investigation of whistleblower retaliation claims filed under the Sarbanes-Oxley Act (“SOX”).  Despite the discouraging statistics, Jason Zuckerman of The Employment Law Group® law firm has expressed optimism about the prospects of prevailing in whistleblower retaliation actions before DOL under the Obama Administration.  According to Zuckerman, “Merit findings will increase with President Barack Obama in office and Secretary of Labor Hilda Solis running the DOL.”  Zuckerman explained that as written, SOX is potent, but it has been narrowly construed, and the defense bar has been able to create loopholes Congress never contemplated and that “during the Bush administration, the DOL went out of its way to limit whistleblower protection laws, but now, the department will focus less on protecting employers and instead “enforce whistleblower protection laws as mandated by Congress.”  Recently, the DOL’s Administrative Review Board issued a landmark decision in favor of a SOX whistleblower in Kalkunte v. DVI Financial Services, Inc., a case litigated by The Employment Law Group® law firm.  For information on The Employment Law Group® law firm’s Whistleblower Practice, click here.

ARB Rules that Attorney Fee Award Need Not be Proportional to Damages Award

The Department of Labor’s Administrative Review Board (“ARB”) has affirmed an Administrative Law Judge’s decision to award a whistleblower nearly $70,000 in attorney fees and costs in a case where the whistleblower recovered $50,000 in back pay and compensatory damages.  In Collins v. Village of Lynchburg, Ohio, the Village argued that the Board should reverse the fee award of nearly $70,000 “[b]ecause the amount of the award is so large in comparison to the actual loss to [the] Complainant.”  The ARB expressly rejected this argument, concluding that “the fee in [a] whistleblower case need not be proportional to the recovery for the Complainant.”  For information on The Employment Law Group® law firm’s Whistleblower Practice, click here.

Seventh Circuit Clarifies that False Claims Act Retaliation Claims Do Not Preclude Subsequently Filed Qui Tam Claims

The Seventh Circuit has held that the outcome of a False Claims Act retaliation claim does not preclude a plaintiff from filing a subsequent qui tam action.  In Lusby v. Rolls-Royce Corporation, Curtis Lusby filed a complaint against his former employer Rolls-Royce alleging that Rolls-Royce terminated him for raising concerns about the company’s misrepresentation of the quality of engine parts it sold to the U.S. military.  The retaliation claim was dismissed, and Lusby filed a qui tam action.  Rolls-Royce moved to dismiss the qui tam claim on the basis that the dismissal of his retaliation claim barred him from bringing a related qui tam action.  The Seventh Circuit reversed the district court’s dismissal of the qui tam action, holding that “the resolution of personal employment litigation does not preclude a qui tam action, in which the relator acts as a representative of the public.”  In reaching its decision, the Seventh Circuit concluded that the United States would be prejudiced by the dismissal of the relator’s qui tam action and thus, as a practical matter “ a private [retaliation] suit never precludes a qui tam action.”  The Seventh Circuit also clarified the pleading requirement for qui tam claims.  According to the court, a relator need not exclude all possibility of innocence in the complaint but rather, an employee must “show, in detail, the nature of the charge, so that vague and unsubstantiated accusations of fraud do not lead to costly discovery and public obloquy.”  Thus, the Seventh Circuit reversed the district court’s dismissal of the relator’s qui tam claim under section 3739(a)(1).  For more information about the False Claims Act and The Employment Law Group® law firm’s False Claims Act Practice, click here

The Employment Law Group® Law Firm Publishes Article on Representing Whistleblowers in Wrongful Discharge Actions

The Maryland Bar Journal has published an article by Scott Oswald and Jason Zuckerman of The Employment Law Group® law firm on Adler wrongful discharge actions.  The article provides an overview of the Adler common law wrongful discharge tort and provides practical tips for representing whistleblowers under Adler, including maximizing damages; selecting the appropriate theme; and naming a supervisory employee in the Adler complaint.  To read the article, click here.  Additional information on The Employment Law Group® law firm’s Wrongful Discharge Practice is available here.