Terence J. Lynam, left, and Robert S. Salcido, right, partners with Akin Gump Strauss Hauer & Feld.

In recent months, we've seen a series of False ogan

laims Act plaintiffs swing for the fences—and miss spectacularly, coming up empty-handed in cases with hundreds of millions of dollars on the line.

Take a decision by the U.S. Court of Appeals for the Eleventh Circuit last week, denying a $320 million FCA claim against hospice provider Chapters Health System, represented by Carlton Fields.

Or the week before, when lawyers from Skadden, Arps, Slate, Meagher & Flom and Akin Gump Strauss Hauer & Feld won judgment as a matter of law, wiping out a $350 million jury verdict against a nursing home provider in Ruckh v. Salus Rehabilitation.

And in October, the largest FCA judgments ever of its kind—a $682 million penalty against Dallas-based Trinity Industries—was reversed and remanded by the U.S. Court of Appeals for the Fifth Circuit.

These cases all have something in common: the government declined to intervene. Unfazed, the whistleblowers (eying potentially huge payouts) went it alone.  

But a FCA sea change may be coming. Not only have (non-DOJ) plaintiffs been losing at trial, but last week, my colleague Cogan Schneier reported that the government plans to make it harder for qui tam relators to bring cases on their own. Michael Granston, the director of the commercial litigation branch at the DOJ's Fraud Section, issued a memo calling for government lawyers to seek to have “meritless” False Claims Act cases dismissed.

Is this the end of the FCA as we know it?

I spoke last week with two FCA experts, Akin Gump partners Robert Salcido and Terence Lynam, about what's behind the plaintiffs' losses and what lies ahead.

The biggest factor, they agreed, is Universal Health Services v. Escobar. The 2016 U.S. Supreme Court decision has made it “much more difficult for the relators at the end of the day to prevail,” Salcido said.

“What we've seen in the last five to 10 years are cases where the relators are making substantial recoveries in cases in which the government did not intervene. I think that's what has emboldened them—it's the settlements,” he said. “But we're still living in the aftermath of Escobar. Some of the cases that were settled for eight figures, nine figures five years ago may not be coming in at that dollar amount currently.”

As for the new DOJ policy memo, he calls it a good step—but his memory is long enough to recall that DOJ in the past has not always followed through with FCA enforcement reform, as with the so-called Holder guidance.

Read the full Q&A here.

 

An Unexpected Win for Covington in a Trade Case with Big Implications

Bombardier C-Series jet assembly line.

In what the Washington Post called a “surprise” decision, the International Trade Commission on Friday struck down a planned 300 percent tariff on narrow-body Canadian jetliners by Bombadier.

Behind the win: lawyers from Covington & Burling, who argued on behalf of Bombadier that the planes do not materially injure a U.S. industry—namely, The Boeing Co.

“The unanimous decision in our favor was particularly rewarding,” said Covington partner Peter Lichtenbaum. “Trade cases are always challenging to defend, and this case was even more challenging because of the unique and unprecedented issues associated with multibillion dollar aircraft programs that operate over many decades. Covington's team sought to focus the ITC on the implications of these issues.”

The Covington team was led by partners Shara Aranoff, Brian Smith, and William Isasi, and included Maureen Browne, John Veroneau, James M. Smith, Victor Ban, Marta Cook, Ruchi Gill, Doron Hindin, Minwoo Kim, Ingrid Price, Isaac Belfer, Vivian Choi, Shelby Anderson, and Elena Postnikova.

The Post reported that the decision removes a major sticking point as the U.S. and Canada seek to renegotiate NAFTA.

The ITC decision was a victory as well for the government of Canada, represented by Steptoe & Johnson LLP, and Delta Airlines, which had struck a deal with Bombadier to buy 75 of its CS100 planes. Delta turned to counsel from Dentons.

On the losing side: Boeing, represented by Wilmer Cutler Pickering Hale and Dorr lawyers including Robert Novick, the firm's co-managing partner and former a general counsel for the Office of the U.S. Trade Representative.

 

Winston & Strawn Shoots and Scores in Soccer Bribery Case

A federal judge in Florida on Friday kept alive soccer channel GolTV Inc.'s suit against Fox Sports Latin America and other defendants alleging that they bribed South American soccer federation officials to obtain the rights to televise soccer matches.

U.S. District Judge Cecilia Altonaga of the Southern District of Florida sustained GolTV's claims for violations of civil RICO and for tortious interference with prospective economic advantage, while dismissing related antitrust and state law claims against Fox.

Represented by Winston & Strawn, GolTV said it offered as much as four times more money for television rights to soccer tournaments than the Fox-aligned company, but lost out because of bribery.  Two former officials of Conmebol, the South American soccer federation, were criminally convicted in the U.S. District Court for the Eastern District of New York for related RICO violations.  

GolTV is seeking compensation for the harm suffered from the loss of the television rights it otherwise would have been able to obtain in a fair and competitive market.

The defendants, represented by Williams & Connolly and Stearns Weaver Miller Weissler Alhadeff & Sitterson, argued GolTV's 11-count complaint should be dismissed for failure to state a claim or lack of standing.

But Altonaga kept much of it alive. “Plaintiffs sufficiently allege a plausible direct injury flowing from defendants' bribery scheme,” she wrote.

GolTV is represented by Winston partner Julissa Reynoso (the former United States Ambassador to Uruguay), the firm's white-collar practice co-chair Seth Farber, and partners George Mastoris and Marcelo Blackburn, as well as Peter Levitt of Shutts & Bowen.

 

Lateral Watch

Mark Trigg, who co-chaired Greenberg Traurig's Atlanta business litigation practice, has jumped to Dentons. His clients have included the City of Atlanta, Walmart and Snapchat, as well as singer Whitney Houston and NFL football players, according to Lit Daily affiliate The Daily Report.

“We don't have anybody like him in Atlanta or maybe nationally, who has tried such a broad range and depth of cases,” said Sharon Gay, Dentons' Atlanta managing partner.

For more, see Dentons Lures Top Trial Lawyer From Greenberg Traurig

 

What I'm Reading

BNP Paribas Pleads to Antitrust Conspiracy, Agrees to $90M Fine

It's the sixth major bank to plead guilty as part of an ongoing investigation into the foreign exchange market.

The Psychology of White-Collar Crime, and Why It Matters

A thought-provoking essay by Nicolas Bourtin, the managing partner of Sullivan & Cromwell's criminal defense and investigations group.

Fee Tracker: Michigan State's Legal Bills Surge Amid Sex Scandal

In less than a year, Michigan State has paid at least $4.1 million for (discounted) services from Skadden counsel including litigation partner Patrick Fitzgerald.

Nixon Peabody Disqualification Based on Swiftly Aborted Hire Reversed on Appeal

“Automatically finding that Selesnick's very short tenure at Nixon Peabody is sufficient to impute knowledge to the entire firm, including attorneys working on the matter in a different office, places form over substance.”

Federal Jury Finds Atlanta Lawyer Engaged in Racketeering Enterprise

Millard Farmer made his name challenging the death penalty, but has now been found guilty of attempting to bribe a judge, intimidate a court reporter, witness tampering, extortion and more—all over a child custody petition.  

Appeals Court Nixes $147M Jury Award for Owners of Flooded Mall

Sorry, the insurance policy was capped at $50 million—a win for Dentons.

Federal Appeals Judge: Don't End Nationwide Injunctions. (But Here's a Plan for Them.)

Fifth Circuit Judge Gregg Costa suggests steering such cases to a three-judge panel with direct review by the U.S. Supreme Court.