On June 27, 2014, the D.C. Circuit granted Kellogg Brown & Root’s (“KBR’s”) petition for a writ of mandamus and vacated a federal district court order requiring KBR to produce 89 documents related to an internal investigation. Relying on Upjohn Co. v. United States, 449 U.S. 383 (1981), the
Third Circuit Adopts Less Demanding FCA Pleading Standard
Last week, the Third Circuit reversed a New Jersey district court’s decision to dismiss a False Claims Act (FCA) qui tam law suit, holding that the court applied an overly demanding pleading standard to relator Thomas Foglia’s complaint. The Third Circuit’s decision joins the growing debate that has split the circuits as to whether whistleblowers have to provide specific examples of false claims to survive a 12(b)(6) motion to dismiss.
Federal Court Ruling Raises Questions About Privileged Nature Of Certain Internal Investigations
On March 6, 2014, the United States District Court for the District of Columbia ruled that Kellogg Brown & Root Services, Inc. (“KBR”) must produce to a qui tam relator 89 documents relating to internal investigations conducted by the Company. The court held that neither the attorney-client privilege nor the attorney work-product doctrine barred production or disclosure of the documents. United States ex rel. Barko v. Halliburton Co. et al., Case No. 05-01276 (D.D.C. Mar. 6, 2014). The decision could have widespread implications for companies that conduct internal investigations of whistleblower complaints.
Expanded Whistleblower Provisions Applicable To Federal Contractors And Subcontractors Take Effect
Yesterday a significant expansion of whistleblower protections for employees of federal contractors and subcontractors took effect. The National Defense Authorization Act for 2013 (“NDAA”) extended whistleblower protections to an employee of a “contractor, subcontractor, or grantee” who makes a claim of gross mismanagement, gross waste, abuse of authority, a substantial and specific danger to public health or safety, or a violation of a law, rule, or regulation related to a federal contract. These protections do not apply to a disclosure related to an “element of the intelligence community” under the National Security Act of 1984.
$28 Million Verdict Against Illinois Nursing Home; Liable Under False Claims Act & Illinois Whistleblower Reward And Protection Act
On February 11, 2013, a jury in federal district court in Illinois found a nursing home operator (Company) liable under the False Claims Act and the Illinois Whistleblower Reward and Protection Act for fraudulent billing and certifications. U.S. v. Momence Meadows Nursing Center Inc., No. 04-cv-2289 (C.D. Ill.). The jury also found that the Company retaliated against the employees who reported the alleged misconduct. The verdict form can be accessed here.