Category: Supreme Court

Supreme Court Declines to Hear “Willfulness” Case

On Monday, October 7, 2024, the U.S. Supreme Court declined to consider a petition for certiorari in United States ex rel. Hart v. McKesson Corp., Case No. 23-1293, where relator, Adam Hart (“Relator”), sought review of a Second Circuit decision upholding the dismissal of Relator’s complaint against pharmaceutical distributor, McKesson Corporation (“McKesson”).

The case involved allegations that McKesson violated the Anti-Kickback Statute (“AKS”), which prohibits offering, paying, soliciting, or receiving remuneration to induce the purchase of goods and services paid for by a federal health program. Relator, a former McKesson employee, filed a qui tam action, claiming McKesson provided valuable business management tools—valued at over $150,000—to oncology practices at no cost, in order to induce them to purchase oncology pharmaceuticals from McKesson.

The Second Circuit dismissed Relator’s federal claims, reasoning that the allegations failed to meet the mens rea (intent) element under the AKS. The Court held that, to act willfully under the AKS, a defendant must know that its conduct is unlawful, either under the AKS or other law. Since Relator’s allegations did not plausibly suggest McKesson acted with knowledge of illegality, his federal False Claims Act claims based on the federal AKS were dismissed.

The Supreme Court’s refusal to hear Relator’s case preserves the existing circuit split regarding the interpretation of “willfulness” under the AKS. The Second Circuit, along with the Eleventh Circuit, has adopted the view that the AKS is violated when a defendant intends to violate a legal standard. This contrasts with the Fifth Circuit, which interprets the mens rea element to prohibit acts done knowingly and willfully, as opposed to by mistake or accident, and the Eight Circuit, which requires intent to commit an act known to be wrongful, but not necessarily known to be unlawful.

As it stands, the unresolved split among the circuits on this critical issue remains, and providers should be mindful that, at least in the Second and Eleventh Circuits, the stricter interpretation of “willfulness” under the AKS will continue to apply.

© Polsinelli PC, Polsinelli LLP in California
For more news on Anti-Kickback Litigation, visit the NLR Health Law & Managed Care section.

Supreme Court Holds Life Insurance Proceeds Paid to Closely-Held Corporation to Fund Buy-Sell Agreement Increases Estate Tax on Deceased Shareholder’s Estate

In Connelly v. U.S., 144 S.Ct. 1406 (June 6, 2024), the United States Supreme Court upheld an estate tax deficiency of $889,914 in a decision that will impact many families and closely-held businesses. A Buy-Sell Agreement is often used to ensure that a closely-held company will remain within the family after the deaths of its owners or otherwise ensure the continuity of the business after an owner’s death. Many Buy-Sell Agreements, such as the one in Connelly, provide that upon the death of an owner, the surviving owner has the option to purchase the deceased owner’s interest in the company, and if the surviving owner declines, the company must redeem the deceased owner’s interest. To ensure that the company will have funds for the redemption, the company will often obtain life insurance for its owners. For years, planners thought it possible to structure such an arrangement so that life insurance proceeds would not increase the value of the company for estate tax purposes. However, in Connelly, the Court held that the life insurance proceeds paid to a corporation upon the death of a shareholder do increase the value of the corporation’s stock for estate tax purposes and that the corporation’s obligation under a Buy-Sell Agreement to redeem the deceased shareholder’s shares does not offset the life insurance proceeds. Under the Court’s decision, the type of entity does not appear to be relevant, and the holding will equally apply to partnerships and limited liability companies. Thus, if any Buy-Sell Agreement is structured as a redemption funded with entity-owned life insurance, the insurance proceeds may increase the value of the deceased business owner’s interest for estate tax purposes.

In Connelly, two brothers, Michael and Thomas Connelly, owned a business supply corporation. Michael owned 77.18% of the company, and Thomas owned 22.82% of the company. The brothers entered into a Buy-Sell Agreement as described above. The brothers ignored provisions under the agreement that required them to value the company annually and obtain an appraisal upon a shareholder’s death. After Michael’s death in 2013, Thomas and Michael’s son simply agreed to a redemption price of $3 million for Michael’s shares. The company used $3 million of life insurance proceeds to redeem Michael’s shares, and Thomas, as Michael’s executor, reported the value of Michael’s shares as $3 million on Michael’s estate tax return without completing an appraisal. Upon audit of the estate tax return, Thomas belatedly obtained an appraisal that determined the fair market value of 100% of the company at Michael’s death to be $3.86 million, excluding the life insurance proceeds. Based on the valuation of the company at $3.86 million, Thomas argued that the value of Michael’s ownership interest was $3 million ($3.86 million x 77.18%).

Connelly rejects the position of the 11th Circuit Court of Appeals in Blount v. Comm’r., 428 F. 3d 1338 (CA11 2005), that the life insurance proceeds paid to a company are offset by the company’s contractual obligation to redeem a deceased owner’s interest. Rather than allowing an offset for the redemption obligation, the Court focused on the value of the company before and after the redemption. If the entire company was worth $3.86 million, as claimed in Connelly, the value of Michael’s 77.18% would be $3 million and the value of Thomas’ 22.82% would be $860,000. The Court reasoned that upon redemption of Michael’s shares, Michael’s estate would receive $3 million, leaving Thomas with 100% ownership of a company worth $860,000. However, Thomas’ argument meant that post-redemption, 100% of the company that Thomas owned was worth $3.86 million. The Court refused to accept that a company which pays out $3 million to redeem shares was worth the same overall amount before and after the redemption. The Court found that the company’s value should be increased from $3.86 to $6.86 million, accounting for the insurance proceeds, increasing the value of Michael’s ownership from $3 to approximately $5.3 million ($6.86 million × 77.18%). The net result was an additional estate tax of $889,914.

Although the implications of Connelly are wide, there are limitations to the Court’s decision. Connelly will have little impact on a business owner whose estate is well under the estate tax exemption, which is currently $13.61 million for each individual and scheduled to be decreased by 50% in 2026. In addition, the Court did not address the application of Section 2703 of the Internal Revenue Code, which provides in relevant part that the value of a deceased owner’s interest in a business may be established by a Buy-Sell Agreement if certain requirements are met. Perhaps the Court did not review Section 2703 because the shareholders did not follow the valuation terms of the Buy-Sell Agreement and arbitrarily determined the redemption price instead. But because Section 2703 was not addressed in Connelly, it may yet be possible to avoid its impact with a properly structured and adhered to, Buy-Sell Agreement.

The Court also explicitly stated in a footnote that the holding does not mean that a redemption obligation can never decrease a corporation’s value. The Court implies that if a company is required to sell an operating asset to redeem shares, the redemption obligation might reduce the company’s value.

The Court acknowledged that a differently structured Buy-Sell Agreement can avoid the risk that insurance proceeds would increase the value of a deceased shareholder’s shares. Specifically, the Court referenced a “cross-purchase agreement” in which business owners, rather than the company, agree to purchase the others’ ownership upon death using proceeds from non-company owned policies. In addition to avoiding the Connelly result, a cross-purchase agreement provides an increased tax basis for the surviving owners who purchase a deceased owner’s interests. However, the more owners a business has, the more complicated a life insurance-funded cross-purchase will be. Other options to avoid the Connelly result may include a life insurance partnership or limited liability company or creatively structured split-dollar arrangements.

After Connelly, all business owners with Buy-Sell Agreements funded with entity-owned life insurance, or with other entity-owned insurance vehicles (split-dollar plans, key-person life insurance, etc.) should evaluate and consider restructuring their arrangements. In some cases, the restructuring of a Buy-Sell Agreement may require the transfer of life insurance policies which raises other tax issues, such as in-kind corporate distributions, S corporation elections, transfer-for-value rules, and incidents of ownership.

© Polsinelli PC, Polsinelli LLP in California
For more news on Life Insurance and Estate Taxes, visit the NLR Estates & Trusts section.

In Rare Summer Opinion, Supreme Court Follows Sixth Circuit’s Lead

In Department of Education v. Louisiana, the Supreme Court issued a rare August opinion to maintain two preliminary injunctions that block the Department of Education’s new rule.  That rule expands Title IX to prevent sexual-orientation and gender-identity discrimination.  State coalitions brought challenges; district courts in Louisiana and Kentucky enjoined the rule during the litigation; the Fifth and Sixth Circuits denied the government’s requests to stay the injunctions, nor would the Supreme Court intercede for the government.

All the Justices agreed that aspects of the rule warranted interim relief, most centrally the “provision that newly defines sex discrimination” to include sexual-orientation and gender-identity discrimination.  But because the district courts enjoined the entirety of the rule, the scope of relief proved divisive.  A narrow majority agreed to leave the broad injunctions in place, while four Justices in dissent argued to sever the suspect aspects of the rule and allow the remainder of the rule to take effect.  With emphasis on the “emergency posture,” the majority explained that the government had not carried its burden “on its severability argument.”

Justice Sotomayor’s dissent proposed limiting the injunctions to just the three challenged aspects of the rule.  The dissent focused on the “traditional” limits on courts’ power to fashion “equitable remedies.”  That Justice Gorsuch joined Justices Sotomayor, Kagan, and Jackson should come as no surprise.  Justice Gorsuch has harped on limiting equitable remedies to party-specific relief (e.g. Labrador v. Poe); cast doubt on severability doctrine (Barr v. AAPC (opinion concurring in part and dissenting in part)); and, of course, authored the landmark Bostock v. Clayton County decision that interpreted Title VII to protect against sex discrimination in much the same way the Department wishes to interpret Title IX.

This decision is an unreliable forecast of the Court’s view of what Title IX sex discrimination encompasses.  The Court unanimously agreed to table the debate over the Department’s new definition of sex discrimination while the lower courts proceed “with appropriate dispatch.”  The case concerned the status of the rest of the rule as that litigation continues.

A truer tell on the merits is the Sixth Circuit panel’s order denying the government’s stay request.  The panel found it “likely” “that the Rule’s definition of sex discrimination exceeds the Department’s authority.”  Preliminarily at least, the court thought it unlikely that Title IX—last amended in 1972—addresses sexual-orientation and gender-identity discrimination.  The Sixth Circuit has been reluctant “to export Title VII’s expansive meaning of sex discrimination to other settings”—and so it was here.

If “past is not always prologue,” still sometimes it is.  The Sixth Circuit panel divided on the injunction’s scope just like the Supreme Court.  Chief Judge Sutton and Judge Batchelder formed the majority, finding that the three “central provisions of the Rule . . . appear to touch every substantive provision.”  Saddling school administrators with new regulatory requirements on the eve of the new schoolyear tipped the equities toward enjoining the full rule.  Judge Mathis dissented because the injunction disturbed provisions of the rule “that Plaintiffs have not challenged.”

For now, the Department’s new rule yields to the old one.  That rule, too, is being litigated in the Sixth Circuit because guidance documents say the Department will interpret Title IX the same way Bostock interpreted Title VII.  See Tennessee v. Dep’t of Educ. and this coverage at the Notice & Comment blog.  To close out with some Supreme Court trivia—this marks its first mid-summer opinion since Alabama Association of Realtors v. DHHS in 2021, where the Court ended the Biden Administration’s Covid-era moratorium on evictions.  Before that may be the Court’s September 2012 decision Tennant v. Jefferson County Commission involving a challenge to West Virginia’s congressional districts.

© Copyright 2024 Squire Patton Boggs (US) LLP
For more news on SCOTUS Decision in Department of Education v. Louisiana, visit the NLR Public Education Services section.

Top Questions Health Care Providers Should Consider in a Post-Chevron World – A Polsinelli Round Table Discussion

Health Care is one of the most regulated industries in the country, and for many years, one of the key administrative agencies overseeing health care in the United States, the Department of Health and Human Services’ (“HHS”) Centers for Medicare & Medicaid Services (“CMS”), has enjoyed broad authority to regulate health care under the “Chevron doctrine.” Under this doctrine, CMS and other federal agencies were granted broad discretion to interpret and implement the law, thus allowing them to drive how care is delivered and paid for in the United States. It was difficult for providers to successfully challenge agency rulemaking in federal court, even if they thought the agency’s interpretation of the law was incorrect. The Supreme Court’s dismantling of Chevron doctrine will have a significant impact on health care providers, which we may begin to see as we move into CMS’s annual rulemaking cycle.

The Supreme Court’s decision to overturn Chevron was expected, but it is still too soon to truly understand the full impact of the decisions on the health care industry. A round table of attorneys and policy advisors from Polsinelli’s Health Care, Public Policy and Government Investigations Department discussed the potential short and long-term implications of the decision and offer the following insights for health care providers across this ever-changing industry for navigating the web of statutes, rules and other sub-regulatory guidance post-Chevron.

1. What do the Loper/Relentless Decisions Change for Health Care Organizations in the Short-Term? Has CMS’s Authority to Regulate Health Care Gone Away or Been Substantially Limited?

“Likely, not. Many of the health care regulations are based on clear statutory language and will continue to give providers the rules for the road from a compliance standpoint. More controversial rules – like mental health parity, payment cuts, surprise billing, antidiscrimination, etc. – may be further delayed or even tabled for the short term while we learn more about how these challenges will be viewed by the courts. To the extent health care providers are struggling with a rulemaking negatively impacting them, it is worth beginning to evaluate whether challenging it may be warranted.” – Bragg Hemme

“CMS’s authority to regulate today is just like yesterday and probably tomorrow. Without a challenger to a rule, any rule continues unchanged – at least for the short-term. We have already seen; however, some regulated entities challenge a particular rule to a federal court and get some immediate regulatory relief. Members of Congress who want to see large scale changes to regulatory authority may well pursue identification of rules that were upheld in lower courts citing Chevron with an eye towards vitiating those rules with broad Congressional action. There are thousands of such cases and potentially impacted rules.” – Jennifer Evans

“Where the crux of Loper Bright unravels the courts’ existing practice of deferring to regulators’ interpretation of a statute that is unclear or ambiguous, we can expect to see increased litigation that challenges agency action arguing that the foundational law for such action was ambiguous and the agency has exceeded its statutory authority. It is unlikely we will see any change in regulator action or regulatory enforcement unless and until courts begin to overturn agency action on the basis that a statute is ambiguous and the agency that interpretated the statute was incorrect. We can also expect to see increased legislation explicitly delegating more authority to agencies.” – Meredith Duncan and Sara Avakian

2. What are Some Specific Areas of Health Care Regulation that may be Impacted?  

Health Care Fraud, Waste, and Abuse Laws

“The overruling of Chevron may have a significant effect on the application of the health care fraud and abuse laws, particularly the Physician Self-Referral Law (“Stark Law”) and Anti-Kickback Statute (“AKS”). Over the years, agencies including the HHS Office of Inspector General (“OIG”) and CMS have published hundreds of pages of rules, preamble language, and explanatory sub-regulatory guidance regarding the application of these laws. Some of these interpretations favor regulated entities, while others favor enforcers. To the extent Loper Bright represents a fundamental change in the role of agencies in clarifying or refining the scope and effect of statutory language, these implementing regulations and, thus, some longstanding health care industry practices could be impacted.” – Neal Shah

Reimbursement

“Coverage and payment rules from CMS (Medicare and Medicaid) and DHA (TriCare) may be ripe for attack. It will be interesting to see if the agencies are able or willing to engage in active negotiations to avoid or settle litigation that they did not face with Chevron deference.” – Jennifer Evans

“I anticipate that many of the routine Medicare reimbursement-related rulemakings (e.g., IPPS, OPPS, Physician Fee Schedule) will continue as they have in the past. Certain aspects of those rules or any controversial rulemakings may now be up for challenge. For instance, rules related to Disproportionate Share Hospitals have already been challenged since the Loper Bright decision. Any type of payment cut or agency effort to rein in health care costs, like Medicare drug pricing rules, surprise billing, mental health parity will also be closely scrutinized and likely challenged.” – Bragg Hemme

FDA

“Immediate impact is likely to be felt by the Lab Developed Test rule FDA is trying to finalize. Congress tried, but failed, to give the FDA statutory authority in this space via the VALID Act. The FDA went ahead and went through the rulemaking process in one year. This was lightspeed for the FDA. The rule was challenged prior to the reversal of Chevron. I expect to see the plaintiff amending their complaint now.”  – Michael Gaba

Surprise Billing

“I expect the Loper/Relentless decisions will impact the continued rollout of the regulations implementing the No Surprises Act. Since the law went into effect in 2022, regulations and guidance implementing the No Surprises Act have been vacated following challenges under the Administrative Procedures Act on four separate occasions – and that was under the prior Chevron standard, which of course was more deferential to agency decisions. But there are more rules that the Agencies are expected to issue – both as a result of the prior lawsuits and as part of their ongoing obligation to implement the law – that will have a significant impact on how the No Surprises Act functions in practice. These rules will also likely depend on the Departments’ interpretation of the No Surprises Act, and such interpretation will now not be afforded the deference that existed in the pre-Loper/Relentless landscape.” – Josh Arters

3. What Areas of Health Care Regulation are less Likely to be Impacted?

HIPAA

“From an HHS data privacy/security/breach perspective, the Jarkesy and Chevron decisions will arguably have very little impact unless parties are willing to challenge HHS HIPAA decisions in court. In other words, HHS OCR is proceeding as normal, and will continue to do so, particularly given that the HIPAA Rules were codified and specifically modified by Congress in the HITECH Act in 2009. However, to the extent a client would like to appeal a civil money penalty directly to a district court (Jarkesy) or attack a specific provision of sub regulatory guidance post-Chevron (Loper Bright), we could certainly attempt to do so.” – Iliana Peters

Long-Term Care

“Long term care providers are unlikely to see any immediate changes in regulation or enforcement. In most authorizing statutes, Congress delegated authority to CMS to develop and implement conditions of participation, and the guidance that has been provided interpreting those rules. It is unlikely the Loper Bright decision will cause CMS to change its survey process or the remedies imposed therefrom. However, any regulation or sub-regulatory guidance, such as the State Operations Manual, which is not expressly authorized by statute or otherwise interprets an ambiguous statute could be ripe for litigation to challenge CMS’ authority and/or CMS’ interpretation of the statute. To determine whether specific regulations and guidance is subject to challenge will require careful consideration of the Social Security Act and the deference, if any, afforded to CMS for rulemaking.” – Meredith Duncan and Sara Avakian

State Licensing & Practice Rules

“Many of the laws that impact health care providers, such as professional or facility licensing requirements and corporate practice of medicine prohibitions, are state laws that are unlikely to be immediately impacted by Loper Bright. However, Loper Bright may become a catalyst for new challenges to state-level administrative actions, which could create uncertainty related to state agency actions, such as Medical Board rules or guidance.”  – Kathleen Sutton

4. What Issues Should Health Care Organizations Anticipate in the Long-Term?

“It is unclear if there will be rule/no rule ‘chaos’ for health care organizations. When we think of all of the arrangements that default to ‘compliance with laws’ those provisions may lose meaning and effectiveness if the underlying legal rule-structure is threatened” – Jennifer Evans

“With the rise of litigation to combat potentially adverse rulemakings, we may see disagreement within the provider community to the extent some providers are ’winners’ and others are ‘losers.’ Further, we could see the same rulemaking get treated differently by courts depending on where the rules are being challenged. This will be very difficult to navigate for national providers. Hopefully, this ruling will cause regulatory agencies to take more shareholder feedback in their rulemaking. We will likely see more work needed at a Congressional level, however, if a statute is required for things that have historically been dealt with at a regulatory level, causing a slowdown.  This will be a challenge, particularly for innovative providers that are changing care models or adopting new technology, for instance. Health care rules often were behind the evolution of health care. Requiring Congressional action may present some opportunities but will not make things move faster.” – Bragg Hemme

“In the long-term, health care organizations should anticipate an increased opportunity to challenge unlawful regulations that run afoul of Congressional action. That is generally a good thing. But a negative consequence of the Loper Bright decisions is the likely impact on the agency rulemaking process, and the time it might take for agencies to issue regulations. Agencies are likely to move a bit slower when issuing new regulations in light of the dramatic change to how their rulemaking will be scrutinized by the courts going forward.” – Josh Arters

“It is likely that Congress will carefully craft new statutes and delegate more clear authority to the administrative agencies charged with enforcement. We also anticipate agencies taking more time to carefully craft their rules and guidance to mitigate the challenges that could arise based on these decisions. For providers, this will only further delay an already backlogged process.” – Meredith Duncan and Sara Avakian

“Loper Bright creates opportunities for health care organizations to challenge agency actions, but this opportunity comes at the expense of clarity and certainty that came from deference to agencies. The health care regulatory landscape is already complex and ever-changing, but the lack of uniformity that may result from different courts interpreting the same set of rules is going to create further complexity and confusion. The aftermath of Loper Bright may create a chilling effect for innovation or growth for health care businesses. Health care organizations will have to be strategic and stay up-to-date on the changing laws to maintain and grow their businesses while navigating this uncertainty.” – Kathleen Sutton

5. What can Health Care Organizations do if a CMS Rulemaking Has a Significant Impact on their Organization?

“If a rule isn’t working and there is a reasonable interpretation that the statue enabling the rule offers a better outcome, it may be time for health care organizations to start their engines and challenge rules that don’t match specific statutory requirements and fundamental principles. For example, think about adequate reimbursement and access to care. Does this reopen a provider’s ability to litigate payment rules that do not ensure access to care? Maybe.” – Jennifer Evans

“When faced with rulemaking that has a significant impact on operations, health care organizations might be presented with an opportunity to work with federal agencies to find a resolution without having to resort to litigation. Now that agencies understand that their rulemaking may be challenged under a less deferential standard, and, at least for now, most courts have held that a district court may vacate unlawful rules nationally, agencies might be more willing to find more creative and/or individualized solutions to the unique impact their rules might have on a particular health care organization.” – Josh Arters

6. Does this Decision Provide a Greater Ability for Health Care Providers to Advocate for Laws and Regulations to CMS and/or Congress?

“Providers have always had the opportunity to make a contribution in the public policy process; Loper means it is even more important. Engagement in the public policy process does not guarantee success, but lack of involvement almost certainly means a loss.  Both the legislature and agencies may be more open to negotiated laws and regulations. These processes will take longer, however.” – Julius Hobson

“Being part of the debate in the US Congress on health care legislation (and any legislation for that matter) is now more crucial than ever. Members of Congress will no longer be able to write laws that are ambiguous, which would give the agency of jurisdiction the authority to legislate through regulatory fiat. Congress now will be required to be more prescriptive in their laws, outlining specifically in statute the intent of the law. Congress currently relies on ‘report language’ that accompanies legislation, which expresses the legislative intent; however, the report language is not the black letter of the law and more often than not, the agency of jurisdiction ignores report language.  Finally, now that the Congress will need to be more prescriptive in its drafting of legislation Congress will be required be even more deliberative in crafting a bill. This will mean that laws will require more consensus to get the bills it works on approved.”  – Harry Sporidis

“In 2019, when the Supreme Court issued the Azar v. Allina Health Services decision, every component in CMS was tasked with reviewing, analyzing, and verifying that all the guidance materials had regulatory and/or statutory support. For a few years after the decision, CMS went through the rulemaking process for any guidance/policy that was not clearly articulated or supported by regulation. Now that the Supreme Court has overturned Chevron, CMS will likely conduct a similar exercise to determine all of the policy areas where the law is ambiguous, and the Agency has made the determination on how best to carry out the law. CMS will also likely consult with its legislative arm to work with Congress to clarify such laws. This undertaking will take CMS several years to complete. While CMS is engaged its review, there is an opportunity for health care organizations to engage with CMS to review policy position that result from an ambiguous statute and reconsider a more favorable interpretation on of the law.” – Ronke Fabayo

Sara Avakian, Iliana L. Peters, Kathleen Snow Sutton, Julius W. Hobson, Jr., Harry Sporidis, and Ronke Fabayo also contributed to this article.

© Polsinelli PC, Polsinelli LLP in California
by: Bragg E. Hemme, Jennifer L. Evans, Meredith A. Duncan, Neal D. Shah , Michael M. Gaba, and Joshua D. Arters of Polsinelli PC

For more news on the Health Care Industry Post-Chevron, visit the NLR Health Law & Managed Care section.

In Trio of Decisions, Supreme Court Resolves Circuit Splits on Arbitration

Three recent Supreme Court Decisions—Coinbase v. Suski, Smith v. Spizzirri, and Bissonnette v. LePage Bakeries—based on consumer and employment disputes have resolved significant circuit splits over arbitration. These cases were all decided by a unanimous Court, with Justices Jackson, Sotomayor, and Roberts authoring the three opinions.

Supreme Court Considers Arbitrability Based on Conflicting Contracts

In Coinbase v. Suski (May 23, 2024), the Supreme Court held that where there is a conflict between one or more contracts between same parties regarding the arbitrability of a dispute, a court alone (and not the arbitrator) must decide which contract governs. The appeal arose from a sweepstakes dispute wherein the official rules of the sweepstakes conflicted with the defendant’s user agreement.

After the plaintiff consumers brought a class action in California federal court, the defendant sought a motion to dismiss based on an arbitration provision in the user agreement. The district court denied the defendant’s motion based on the forum selection clause in a contract detailing the sweepstakes’ rules. The Ninth Circuit affirmed, agreeing that the forum selection clause, which gave sole jurisdiction over sweepstakes-related disputes to California courts, superseded the arbitration provision in the user agreement.

In a unanimous decision, the Supreme Court agreed with the Ninth Circuit that courts, not arbitrators, must decide the threshold question of whether a subsequent agreement supersedes an arbitration provision, dismissing concerns that the holding would invite challenges to delegation clauses that empower arbitrators to decide disputes concerning arbitrability.

Prior to the decision in Suski, there was no precedent in the First Circuit addressing the question of who resolves conflicting dispute resolution clauses. However, the Court’s decision accords with the approach of the First Circuit to related questions.

In Biller v. S-H OpCo Greenwich Bay Manor, LLC (2020), the First Circuit held that for parties to agree to have an arbitrator decide gateway questions of arbitrability, they must do by “clear and unmistakable evidence,” safeguarding a court’s jurisdiction to decide questions of arbitrability. Similarly, in McKenzie v. Brennan (2021), the First Circuit held that the court holds the decision-making power to decide whether parties intend to arbitrate a dispute when a new contract between the parties does not contain a broad arbitration clause, but an earlier contract does.

District Courts May Not Dismiss Cases Referred to Arbitration Upon a Request to Stay

In Smith v. Spizzirri (May 16, 2024), the Supreme Court interpreted 9 U.S.C. § 3 to mean that when a district court finds that a contract compels arbitration and a party has requested a stay of court proceedings pending arbitration, the court lacks jurisdiction to dismiss the suit. Instead, the Supreme Court determined that a lower court must stay the proceedings until the dispute is resolved in arbitration or the dispute is brought back before the court.

The decision arose from a California class action alleging delivery drivers had been misclassified as independent contractors and denied required wages and paid leave. While the Ninth Circuit affirmed the lower court’s discretion to dismiss the action referred to arbitration on a motion by the defendant, the Supreme Court unanimously reversed and remanded. Spizzirri may be understood as the complement to an earlier decision also involving Coinbase, Coinbase v. Bielski (June 23, 2023) (see our prior alert here), which held that a district court must stay its proceedings while an interlocutory appeal on the question of arbitrability is ongoing.

The First Circuit (as well as the Fifth, Eighth, and Ninth Circuits) had previously held that a district court has discretion to either dismiss litigation without prejudice or stay the proceedings. Dismissal following a referral to arbitration provided plaintiffs with an opportunity to appeal that final, adverse ruling, with the Supreme Court’s decision now requiring plaintiffs to wait until the arbitration has been completed.

While the First Circuit has not yet passed a decision under following Spizzirri, a recent decision by the Rhode Island District Court may indicate how post-Spizzirri questions will be decided. In De Simone v. Citizens Bank (June 17, 2024) the court directly cited to Spizzirri to conclude that the proceedings in that case must be stayed pending arbitration. At the appellate level, the Ninth Circuit (which previously, like the First Circuit, held that courts have discretion to stay or dismiss) amended its opinion in Herrera v. Cathay Pacific Airways Ltd. (March 11, 2024; amended June, 24, 2024) to reflect the decision in Spizzirri, writing that “Spizzirri made clear that a district court does not have discretion to dismiss the action when granting a motion to compel arbitration under 9 U.S.C. § 3.”

Supreme Court Holds Workers in Any Industry May Benefit from Arbitration Exemption

In Bissonnette v. LePage Bakeries Park St. LLC (May 14, 2024), the Supreme Court unanimously held that the Federal Arbitration Act’s exemption for transportation workers at 9 U.S.C. § 1, which protects workers in foreign or interstate transportation from having their employment claims referred to mandatory arbitration, may apply to workers in any industry.

In LePage Bakeries, the defendant companies argued that baked goods delivery drivers were not protected from the exemption because they were not transportation industry employees. The district court and Second Circuit agreed, compelling arbitration of the parties’ dispute. The Supreme Court reversed, noting that the Second Circuit has created a transportation-industry requirement without any basis in the text of the statute.

The decision resolves a split among the First and Second Circuits in favor of workers seeking to bring class action claims. In two 2023 cases, Canales v. CK Sales Co. and Fraga v. Premium Retail Servs., Inc., the First Circuit explicitly rejected the Second Circuit’s reading of the Federal Arbitration Act that a worker must be employed in the transportation industry to benefit from the exemption to mandatory arbitration. Instead, the First Circuit focused on the worker’s role instead of the employer’s business, a test that the Supreme Court has now embraced. The Court’s decision follows New Prime, Inc. v. Oliveira (2019) and Southwest Airlines Co. v. Saxon (2023) wherein the Court held the exemption applies to independent contractors and airplane cargo loaders.

Recent Decisions Reflect Critical Questions on Jurisdiction Over Arbitration Disputes

The Supreme Court’s trio of unanimous arbitration decisions outline three areas in which district courts retain jurisdiction over arbitration disputes. The rulings reflect the outer limits of a multi-decade trend in which the Supreme Court has consistently issued arbitration-friendly decisions, encouraging the resolution of arbitrable matters without involving the courts.

It is likely that challenges to arbitrability based on conflicting contracts and transportation work will remain flashpoints in federal court litigation for years to come, with federal courts retaining jurisdiction over disputes referred to arbitration, hearing fewer appeals of orders compelling arbitration, and resolving matters that arise during those proceedings. The decisions serve as reminders to businesses that they should work with experienced counsel to draft and regularly review dispute resolution clauses in consumer and employment contracts to ensure that, if disputes do ultimately arise, they will be resolved via the intended procedure.

* * *

Thank you to firm summer associate Jonathan Tucker for his contribution to this post.

©2024 Pierce Atwood LLP. All rights reserved.
For more on Arbitration, visit the NLR ADR Arbitration Mediation section.

Michigan Supreme Court Expands Employer Exposure to Public Policy Retaliation Claims

In Michigan, various state employment laws prohibit employers from retaliating against employees. But can an employee pursue a public policy retaliation claim against the employer in addition to a statutory retaliation claim?

On July 22, 2024, the Michigan Supreme Court ruled that anti-retaliation provisions in two important workplace safety laws—the federal Occupational Safety and Health Act (“OSHA”) and Michigan’s Occupational Safety and Health Act (“MIOSHA”)—do not preclude a plaintiff from also asserting a violation of public policy in court. Stegall v. Resource Technology Corp (Case No. 165450, decided July 22, 2024).

Cleveland Stegall, an IT specialist working at FCA through the staffing agency Resource Technology, complained internally about asbestos insulation issues at the assembly plant and threatened to file complaints with the government. He was subsequently terminated. Stegall sued both entities for wrongful discharge under OSHA and MIOSHA’s anti-retaliation provisions, as well as termination in violation of public policy.

At-will employees generally may be terminated for any reason (or no reason at all). But one exception to this rule is that certain terminations violate public policy and therefore create an actionable legal claim. This includes firings for “failure or refusal to violate a law” or exercising a right conferred by the Michigan Legislature.

Both the trial court and the Court of Appeals dismissed Stegall’s public policy claim because they concluded that the OSHA and MIOSHA laws already forbid retaliation. The Michigan Supreme Court reversed. It reasoned that the remedies under OSHA and MIOSHA are insufficient, pointing to the truncated 30-day period to file a complaint with the relevant government agency, the discretion granted to the respective investigating agency, and the employee’s lack of control over what occurs after a complaint has been filed. See 29 U.S.C. §660(c)(2) and MCL 408.1065(2).

What does this case mean for employers? The Michigan Supreme Court’s decision provides another avenue for employees to pursue retaliation claims, particularly where the employee raises workplace safety concerns. It is unclear, however, whether courts will extend this ruling and allow employees to pursue public policy wrongful discharge claims if the employee is also seeking relief under another anti-retaliation statute.

© 2024 Miller, Canfield, Paddock and Stone PLC
For more news on Employer Anti-Retaliation Lawsuits, visit the NLR Labor & Employment section.

Full Steam Ahead: NLRB Top Lawyer Signals Continued Focus On Injunction Actions

Last month, the U.S. Supreme Court issued a decision in Starbucks v. McKinney clarifying the standards courts must use when evaluating requests by the National Labor Relations Board (NLRB) for injunctive relief under Section 10(j) of the National Labor Relations Act (NLRA). Many view this as, at least in some jurisdictions, heightening the standard the agency must meet in these cases.

NLRB General Counsel Jennifer Abruzzo issued a memo on July 16 noting this ruling will not affect how her office views Section 10(j) cases. According to the press release, “General Counsel Jennifer Abruzzo reaffirmed her commitment to seeking Section 10(j) injunctions after the Supreme Court’s recent decision in Starbucks Corp. v. McKinney, which set a uniform four-part test applicable to all Section 10(j) injunction petitions.”

The statement then goes on to note, “General Counsel Abruzzo explained that, while the Supreme Court’s decision in Starbucks Corp. provides a uniform standard to be applied in all Section 10(j) injunctions nationwide, adoption of this standard will not have a significant impact on the Agency’s Section 10(j) program as the Agency has ample experience litigating injunctions under that standard and has a high rate of success in obtaining injunctions under the four-part test — a success rate equivalent to or higher than the success rate in circuit courts that applied the two-part test.”

Employers should take note, as the NLRB does indeed have a high success rate when seeking these injunctions against employers. For example, in fiscal year 2020, the agency prevailed in every 10(j) case it brought. These actions can be costly from a time and resources perspective for companies, as they are then forced to defend against alleged labor violations before both the NLRB and in federal court simultaneously.

Accordingly, while the recent Supreme Court ruling did offer a uniform standard and clarity around the legal framework for 10(j) cases, it appears this won’t cause a dip in the amount of such matters the NLRB brings.

© 2024 BARNES & THORNBURG LLP
For more news on NLRB Injunction Actions, visit the NLR Labor & Employment  section.

Supreme Court Holds That the Eighth Amendment Does Not Prevent Enforcement of Local Camping Bans, Authorizing a Significant Shift in Local Policies on Homelessness

Until recently, local policies on homelessness have been guided by two controversial rulings from the Ninth Circuit Court of Appeals: Martin v. Boise (9th Cir. 2019) 920 F.3d 584 and Johnson v. City of Grants Pass (9th Cir. 2022) 50 F.4th 787.[1] However, the Supreme Court’s decision in City of Grants Pass v. Johnson(2024) 603 U.S. ____, is likely to transform local jurisdictions’ policy approaches to managing homelessness. In a 6-3 decision, the Supreme Court upheld the city’s ban on camping and parking overnight on public property.

By way of background, in Martin, the Ninth Circuit held that the Eighth Amendment’s restriction against cruel and unusual punishment barred cities from imposing criminal penalties for violations of public-camping ordinances whenever the number of homeless individuals exceeds the number of “practically available” shelter beds in a jurisdiction. In Johnson, the Ninth Circuit expanded on Martin and held that a city cannot enforce its camping ban or impose fines or civil penalties unless the city has enough shelter beds for its entire population. Since then, affected cities and states have widely criticized these two Ninth Circuit rulings, which effectively blocked the enforcement of local ordinances prohibiting or regulating camping and sleeping outdoors.

In the Supreme Court’s decision in Johnson, the Court rejected the Ninth Circuit’s rulings and held that ordinances prohibiting camping, overnight parking, or sleeping outdoors do not violate the Eighth Amendment’s protections against cruel and unusual punishment because these ordinances regulate “conduct” and “actions”, rather than “mere status.”

The Court focused on the practical implications of Martin and Johnson, finding that the Ninth Circuit created an unworkable and confusing test to evaluate public camping ordinances, based on subjective and vague determinations of who is “involuntarily” homeless. The Court also criticized judicial injunctions prohibiting the enforcement of public camping ordinances, finding that these determinations are “public policy responses” best handled by local governments and the legislature (not courts).

In doing so, the Court agreed with local jurisdictions that complained that the Ninth Circuit inappropriately limited available policymaking tools and “undermined” local efforts to address homelessness. The Court emphasized that local governments have “broad power” over the substance and enforcement of their laws and must be afforded “wide latitude” and “flexibility” to address homelessness.

Although the Court’s ruling authorizes the enforcement of public camping ordinances, it does not grant unfettered power to local jurisdictions. The Court acknowledges that public camping ordinances could still implicate other constitutional concerns, including potential violations under the Due Process Clause. The Court further notes that local governments are not required to adopt public camping ordinances, and may choose to narrow such laws by imposing relevant time, place, and manner restrictions.

Even with these limitations, the Court’s decision is likely to significantly alter the future of local policies on homelessness, especially throughout California. Local governments are now authorized to take more aggressive actions to enforce existing ordinances (or enact new ones) prohibiting or otherwise regulating overnight camping and parking on public property. Ordinances that include relevant time, place and manner restrictions (e.g., regulating when, where, and how people sleep in public) are likely to be particularly insulated from constitutional challenges.

We will continue to monitor updates to local policies on the homeless in response to this decision and provide updates as they become available.

FOOTNOTES

[1] See prior article here.

Listen to this post

Copyright © 2024, Sheppard Mullin Richter & Hampton LLP.

by: Alexander L. Merritt, Kathryn C. Kafka of Sheppard, Mullin, Richter & Hampton LLP

For more news on the Supreme Court’s decision in City of Grants Pass v. Johnson, visit the NLR Real Estate section.

The End of Chevron Deference and the Anticipated Impact on Withdrawal Liability

The U.S. Supreme Court recently overturned the decades-old Chevron doctrine of judicial deference to a federal agency’s interpretation of an ambiguous statute. (See “Go Fish! U.S. Supreme Court Overturns ‘Chevron Deference’ to Federal Agencies: What It Means for Employers”) Following the decision in Loper Bright Enterprises v. Raimondo, courts must exercise independent judgment in reviewing the agency’s interpretation of the statute. Courts may apply the standard set forth in Skidmore v. Swift & Co., 323 U. S. 134 (1944), in which a court can uphold a regulation if it finds the agency’s interpretation of the statute persuasive.

The Loper Bright decision could prove to have an immediate impact on the actions of the Pension Benefit Guaranty Corporation (PBGC). The PBGC is a federal agency with regulatory authority over the withdrawal liability provisions in Title IV of ERISA. Two recent actions taken by the PBGC that are under current scrutiny figure to be challenged under Loper Bright: the Special Financial Assistance (SFA) plan asset phase-in and withdrawal liability interest rate assumption regulations.

Conditions for MEPPs Receiving Special Financial Assistance (SFA)

The American Rescue Plan Act of 2021 (ARPA) provided for SFA for troubled multiemployer pension plans (MEPPs). The SFA program will provide between $74 and $91 billion in assistance to eligible MEPPs. Pursuant to ARPA, Congress delegated authority to the PBGC to issue “reasonable conditions” for SFA applications and for withdrawal liability calculated by SFA recipients. On July 8, 2022, the PBGC published a final rule detailing the eligibility criteria, application process, and restrictions and conditions associated with a MEPPs’ use of SFA funds.

As previously discussed in “More Bad News for Employers in the PBGC Final Rule,” the final rule expresses PBGC’s opinion that “payment of an SFA was not intended to reduce withdrawal liability or to make it easier for employers to withdraw.” Consistent with these concerns, the PBGC’s final rule mandated that recipient MEPPs “phase-in” the SFA as a plan asset over a 10-year period. This interpretation will significantly (and arguably artificially) increase the amount of many employers’ withdrawal liability. It is anticipated that the final rule will be challenged in the near future.

Withdrawal Liability Interest Rate Assumption

The interest rate assumptions used by an MEPP to calculate withdrawal liability can have a massive impact on the amount of an employer’s liability. In 1980, when amending Title IV of ERISA by enacting the Multiemployer Pension Plan Amendments Act (MPPAA), Congress delegated authority to the PBGC to issue regulations relating to these critical interest rates assumptions. To date, PBGC has not done so.

Specifically, in response to several recent court rulings (See “Withdrawal Liability Interest Rate Must Reflect Projected Investment Return, D.C. Circuit Holds”), the PBGC issued a proposed regulation to allegedly “make clear that use of 4044 rates [the settlement interest rate], either as a standalone assumption or combined with funding interest assumptions represents a valid approach to selecting an interest rate assumption to determine withdrawal liability in all circumstances.” Even more problematic, the proposed rule states that a “plan’s actuary would be permitted to determine withdrawal liability under the proposed rule without regard to section 4213(a)(1) [including foregoing the reasonableness and actuarial best estimate requirements].” The proposed rule directly contradicts recent judicial interpretations of the referenced statute that was enacted as part of MPPAA over 44 years ago.

Further, the PBGC’s proposed rule ignored the critical issue of whether the selection of an interest rate that ignores the statutory reasonableness and best estimate requirements satisfies other provisions of ERISA, such as Section 4221(a)(3)(B)(i). In this regard, and consistent with Loper Bright, several Circuit Courts of Appeal have already exercised their independent judgment to interpret the statutory “best estimate of anticipated experience under the plan” language as referring to the “unique characteristics of the plan” such as the plan’s investment asset mix and the expected rate of return on such assets. These recent Circuit Court decisions therefore directly contradict the PBGC’s proposed regulations. Any final regulation promulgated by PBGC that follows the proposed regulations would inevitably be challenged and resolved under the less-deferential standard established under Loper Bright.

Final Thoughts

The exact impact of Loper Bright on agency actions in general and the PBGC actions discussed above remains to be seen. Since Skidmore is still good law, a court that is sympathetic to an agency’s position could still opt to defer to that interpretation. Courts will no doubt be busy with a plethora of suits challenging administrative actions. The two current hot-button topics discussed above seem destined to be challenged and resolved by judges in a post-Chevron world. The resolution of these issues will have massive implications for employers with significant potential withdrawal liability exposure.

Jackson Lewis P.C. © 2024
For more news on the impact of Loper Bright on the Pension Benefit Guaranty Corporation (PBGC), visit the NLR Labor Employment section.

Petition for Certiorari Filed in Supreme Court in False Claims Act Case Seeking Review of Whether “Willful” Under the Anti-Kickback Statute Requires Knowledge that the Conduct is Unlawful

The Supreme Court now has the opportunity to define “willfulness” under the federal criminal Anti-Kickback Statute (AKS). In a declined qui tam case filed against McKesson Corporation, a pharmaceutical wholesaler, the relator, Adam Hart, a former McKesson employee, filed a petition for certiorari seeking Supreme Court review of a Second Circuit decision that upheld the dismissal of relator’s complaint asserting claims under the civil False Claims Act (FCA) premised on alleged violations of the AKS. U.S. ex rel. Hart v. McKesson Corp., 96 F.4th 145 (2d Cir. 2024). A violation of the AKS requires as the scienter element that the defendant “knowingly and willfully” offered or paid remuneration to induce the recipient of the renumeration to purchase goods or items for which payment may be made under a federal health care program. 42 U.S.C. § 1320a-7b(b)(2). The Second Circuit held that a defendant does not act “willfully” within the meaning of the AKS unless that defendant “act[s] knowing that his conduct is unlawful.” United States ex rel. Hart, 96 F.4th at 154.

The AKS is enforced both as a criminal statute and, as in this case, is frequently used by the government or relators as a predicate violation to support an alleged violation of the civil FCA. Since 2010, Congress has specified that a claim that includes items or services “resulting from” an AKS violation is a false or fraudulent claim under the FCA. 42 U.S.C. § 1320a-7b(g). Though the evidentiary standard in criminal and civil cases differs, the government or relator in civil cases must adequately plead the “knowingly and willfully” scienter element of the AKS.

Hart alleged in his Second Amended Complaint that McKesson offered physician oncology practices two valuable business tools, the Margin Analyzer and the Regimen Profiler, to induce those practices to purchase oncology pharmaceuticals from McKesson. Hart alleged that these business tools were prohibited remuneration, and that McKesson acted “knowingly and willfully” in offering these two tools to its customers in violation of the AKS. Hart’s basis for alleging “willfulness” included: (1) alleged document destruction during the litigation; (2) Hart informed his supervisor during compliance training about the potential AKS violation, yet McKesson continued to provide these tools, worth about $150,000, to medical practices free of charge in exchange for commitments to purchase drugs from McKesson; and (3) Hart’s discussions with other employees that McKesson was inappropriately exploiting the business tools.

After the government declined to intervene, the District Court dismissed the FCA claims in a Second Amended Complaint (after dismissing the prior complaint as well) by ruling that Hart failed to plausibly allege sufficient facts to suggest McKesson acted “willfully”. The Second Circuit upheld the dismissal and agreed that a defendant acts “willfully” under the AKS only if the defendant knows “that its conduct is, in some way, unlawful.”

The Second Circuit rejected the relator’s proposed approach, a looser standard that would meet the “willfully” standard of the scienter element if (a) the company provided something of value in connection with the sale of pharmaceuticals reimbursed by the government, and (b) knew, even through general compliance training, that it is illegal to provide things of value to induce sales. Hart filed a petition for a writ of certiorari, presenting the question: “[t]o act ‘willfully’ within the meaning of the [AKS], must a defendant know that its conduct violates the law?”

There is no dispute, under the law, that a defendant does not need “specific intent” to violate the AKS. 42 U.S.C. § 1320a-7b(h). However, the petition raises questions about how certain sister Circuits interpret “willfully” when addressing violations of the AKS:

  • The Second Circuit held in this case that a defendant does not act “willfully” within the meaning of the AKS unless that defendant “act[s] knowing that his conduct is unlawful, even if the defendant is not aware that his conduct is unlawful under the AKS specifically.” United States ex rel. Hart v. McKesson Corp., 96 F.4th 145,154 (2d Cir. 2024).
  • The Eleventh Circuit, in accord with the Second, has also held that a defendant must know that its conduct is unlawful in order to violate the AKS. United States v. Sosa, 777 F.3d 1279, 1293 (11th Cir. 2015) (“[T]o find that a person acted willfully in violation of § 1320a-7b, the person must have acted voluntarily and purposely, with the specific intent to do something the law forbids, that is with a bad purpose, either to disobey or disregard the law.”) (internal quotations omitted)).
  • The relator argues in the petition that the Fifth and Eighth Circuits are split with the Second Circuit. Relator relies on a Fifth Circuit case holding that “willfully” requires that a “defendant willfully committed an act that violated the . . . Statute” without a requirement that a defendant know its conduct is unlawful. United States v. St. Junius, 739 F.3d 193, 210 & n.19 (5th Cir. 2013). However, a more recent Fifth Circuit case, which was cited by the Second Circuit, defines “willfully” to mean “the act was committed voluntarily or purposely, with the specific intent to do something the law forbids; that is to say, with bad purpose either to disobey or disregard the law.” United States v. Nora, 988 F.3d 823, 830 (5th Cir. 2021) (citation omitted).
  • The relator cites an Eighth Circuit case holding a defendant’s conduct is willful if a defendant “knew that his conduct was wrongful,” but asserts the Eighth Circuit has not “require[d] proof that [the defendant] . . . knew it violated ‘a known legal duty.’” United States v. Jain, 93 F.3d 436, 441 (8th Cir. 1996). However, a more recent Eighth Circuit relied on Jain to uphold a jury instruction stating, “[a] defendant acts willfully if he knew his conduct was wrongful or unlawful.” United States v. Yielding, 657 F.3d 688, 708 (8th Cir. 2011).
  • The Second Circuit did recognize a circuit split, but described its view as in “align[ment] with the approach to the AKS taken by several of our sister courts [including the Third, Fifth, Sixth, Seventh, Eighth, and Eleventh Circuits], which have held or implied that to be liable under the AKS, defendants must know that their particular conduct was wrongful.” United States ex rel. Hart, 96 F.4th at 154-55.

It is important to remember that the AKS is a felony statute subject to criminal fines and up to 10 years of imprisonment. It also criminalizes conduct that, in other industries, is not illegal. Further, due to the breadth of the statute and its complexity, Congress and the U.S. Department of Health and Human Services’ Office of Inspector General (OIG) have developed a complicated set of guidance to help attorneys and compliance professionals understand and provide counsel with respect to AKS compliance, including statutory exceptions, regulatory safe harbors, advisory opinions, and an enormous body of sub-regulatory guidance. The Second Circuit understood this and noted that its “interpretation of the AKS’s willfulness requirement thus protects those (and only those) who innocently and inadvertently engage in prohibited conduct.” Id. at 155-56.

If the Supreme Court takes an interest in this case, it likely will invite the view of the Solicitor General. Any Supreme Court interest in granting this petition will likely attract a wide range of amici participation at the certiorari stage by health care industry groups and associations, pharmaceutical company associations, other business groups, as well as associations of whistleblower counsel and other supporters of the private action qui tam provisions of the FCA. Though the range of holdings by the Courts of Appeal are often nuanced, Supreme Court consideration of the issue would be viewed as very significant, and a decision that creates a rigorous standard for “willfulness,” or alternatively, a lenient one, could considerably impact the Department of Justice (DOJ) and relators’ ability to successfully plead, and prove, an AKS violation as a predicate to an alleged FCA violation.

©1994-2024 Mintz, Levin, Cohn, Ferris, Glovsky and Popeo, P.C. All Rights Reserved.
For more news on Criminal Anti-Kickback Statutes, visit the NLR Criminal Law & Business Crimes section.