United States ex rel. Wall v. Circle C Construction LLC
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Sixth Circuit Hits Federal Government with $450,000+ in Legal Fees to be Paid to FCA Defendant Under the Equal Access to Justice Act

In an unusual ruling on August 18, 2017, the US Court of Appeals for the Sixth Circuit reversed the Middle District of Tennessee’s denial of the defendant’s motion for attorneys’ fees, and remanded the case for an award of legal fees and expenses related to defending against the government’s “excessive” damages demand, as well as fees incurred during the appeal and remand process.  The case is United States ex rel. Wall v. Circle C Construction, LLC, and as we have previously reported, last year the government suffered a major loss when the Sixth Circuit dramatically reduced the damage award in this False Claims Act (FCA) litigation by over 95 percent (from $762,894.54 to $14,748), which resulted in damages of less than 1 percent of the $1.66 million originally claimed by the government.  At the time, the Sixth Circuit called the government’s so-called “tainted goods” damage calculation “fairyland rather than actual.” Following the Sixth Circuit’s ruling...

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In Calculating FCA Damages, Another Court Rejects Government Windfalls Based on Purportedly “Tainted Claims”

Last month, the US District Court for the District of Columbia delivered another blow to the “tainted claims” theory of False Claims Act (FCA) damages frequently espoused by the government and qui tam relators. From the 1990s through 2004, the US Postal Service sponsored a professional cycling team led by Lance Armstrong, who won the Tour de France seven consecutive times during that span shortly after surviving metastatic cancer. It was later revealed that Armstrong and his teammates had used performance enhancing drugs (PEDs) during the relevant time period. Armstrong ultimately was stripped of his titles and banned from the sport permanently. After years of denials, Armstrong publicly admitted his PED use in a 2013 interview with Oprah Winfrey. In 2010, former Armstrong teammate Floyd Landis filed a qui tam FCA suit under seal against Armstrong, the team’s owner (Tailwind Sports Corporation) and others. United States ex rel. Landis v. Tailwind Sports...

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Sixth Circuit Slashes “Tainted Goods” FCA Damages Award by over 95%

The United States Court of Appeals for the Sixth Circuit issued a dramatic reduction to an False Claims Act (FCA) damages award on February 4, 2016, reducing the award from  $762,894.54 to a mere $14,748, and labeling the government’s “tainted goods” damage calculation as “fairyland rather than actual.” The Sixth Circuit’s ruling in United States ex rel. Wall v. Circle C Construction, LLC highlights the importance of evaluating the actual value of goods received by the government in calculating FCA damages, and presents a forceful rejection of “tainted goods” damage theories in cases where the value of the injury to the public interest is precisely ascertainable. The suit alleged that government contractor Circle C Construction, LLC had violated the FCA by knowingly submitting payroll certifications to the United States Army, falsely stating that the company had met the minimum wage requirements of the Davis-Bacon Act while building military warehouses. ...

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