3rd Cir. Clarifies FCA Retaliation Standard, Widens Door for Plaintiffs, Leaves Loose End

On November 30, 2022, the United States Court of Appeals for the Third Circuit revived a quality control manager’s FCA retaliation claim in United States ex rel. Ascolese v. Shoemaker Constr. Co., — F.4th —, 2022 WL 17335121 (3d Cir. 2022).

The Third Circuit’s precedential opinion addressed for the first time how Congress’s 2009 and 2010 amendments affect the False Claims Act’s retaliation standard.

Do Whistleblowers Have to be American Citizens?

The United States government has four primary whistleblower statutes and reward programs:

  • The Federal False Claims Act (“FCA”)
  • The Securities and Exchange Commission (“SEC”) Whistleblower Program
  • The Internal Revenue Service (“IRS”) Whistleblower Program
  • The Commodity Futures Trading Commission (“CFTC”) Whistleblower Program

All of these whistleblower programs are quite democratic.

6th Circuit Draws a Bright Line Between Regulatory Non-Compliance and Fraudulent Inducement in a Defense Contracting Case

Takeaway: 6th Circuit provided a path forward for a common defense contracting fraud allegation.

In United States ex rel. USN4U, LLC v. Wolf Creek Federal Services[1] the 6th Circuit overturned the lower courts dismissal of a qui tam complaint that alleged a NASA contractor knowingly inflated the prices of its labor costs in Cost Estimates for fixed price contracts.

To the Moon or To the Jail? Social Media Stock Promoters Are Back in the Government’s Crosshairs

Takeaways:

  • Stock promoters have moved from boiler rooms and stock newsletters to social media services.
  • The COVID-19 pandemic and the “meme stock” mania that accompanied it brought an influx of retail traders to public markets.
  • Those retail investors have proven to be prime fodder for social media stock promoters.

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If you are aware of any person, corporation or entity that you think may be violating the Federal False Claims Act or a State False Claims Act, contact us today.

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