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In United States ex rel. Kraus v. Wells Fargo & Co., No. 18-1746 (2d Cir. Nov. 21, 2019), two employees of banks later acquired by Wells Fargo alleged a “pervasive pattern” of fraud in connection with the securitization and sale of toxic mortgages.  When the economy imploded, Wells Fargo looked for help from the Federal Reserve Banks (“FRBs”).  In their False Claims Act suit, the whistleblowers alleged that Wells Fargo lied about its financial…
On September 18, 2019, the Department of Justice announced a $21.36 million settlement to resolve a False Claims Act (“FCA”) lawsuit alleging a fraudulent kickback scheme through which a pharmaceutical company (Patient Care America, or “PCA”) induced doctors to write expensive and unnecessary prescriptions to military veterans. A False Claims Act settlement of this magnitude is not unusual, particularly in the healthcare industry (which accounted for $2.5 billion of the DOJ’s $2.8 billion in FCA…
The Supreme Court, in a unanimous decision authored by Justice Thomas, agreed with the Eleventh Circuit that the False Claims Act’s “government knowledge” statute of limitations applies regardless of whether the government chooses to intervene in a qui tam suit. Under the False Claims Act, a civil action must be filed by the later of 1) six years after the statutory violation, or  2) three years after the relevant facts are “known or reasonably…
The First Circuit recently revisited the pleading standard for retaliation claims under the False Claims Act, and reiterated its prior position that such claims are not subject to the same heightened pleading standard as direct FCA violation claims. In Guilfoile v. Shields, 913 F.3d 178 (1st Cir. 2019), a former president for a group of healthcare entities that provided specialty pharmacy services to hospitals alleged the entities offered illegal “referral fees” to a consulting group…
In a decision that could affect Massachusetts companies with employees in California, a California appellate court voided a non-solicitation clause in former employees’ agreements. It is well known that under California law, post-employment non-competition agreements are unenforceable, except in very limited circumstances. California courts have been slightly more forgiving of non-solicitation provisions, both as to employees and customers.  Employee non-solicitation provisions occasionally have been upheld when tested against a reasonableness standard. For this reason, many…