False Claims Act Legal Developments
On December 9, 2020, the US Court of Appeals for the First Circuit held as a matter of first impression that "the causation standard for retaliation claims under the False Claims Act is a 'but-for' standard," joining the Third, Fourth, Fifth, and Eleventh Circuits.
In Lestage v. Coloplast Corp., 2020 WL 7238287, --- F.3d --- (1st Cir. 2020), the plaintiff filed suit against her employer Coloplast Corporation in 2016 alleging that the employer retaliated against her in violation of the False Claims Act's anti-retaliation provision, 31 U.S.C. § 3730(h). After the employer learned that the plaintiff filed a qui tam action against it and one of its largest customers, the employer allegedly retaliated against the plaintiff by placing her on indefinite administrative leave. After the employer settled the qui tam suit, and the employee allegedly returned from administrative leave, the employer allegedly retaliated against her again by giving her an inferior slate of account assignments. After a five-day jury trial, the plaintiff was awarded a $762,525 verdict.
On appeal, the employer argued, in part, that the district court's jury instruction that the protected conduct had to be a "substantial motivating factor" giving rise to the retaliation was erroneous and that "but for" causation was required. The First Circuit agreed with the employer that "but for" causation was required, reasoning that the Supreme Court had applied this standard in age-discrimination and Title VII retaliation contexts, which involved similar statutory language as the False Claims Act's anti-retaliation provision. Nevertheless, the First Circuit affirmed the judgment, observing that the employer did not object to the erroneous jury instruction at the district court, and the district court's error did not satisfy the plain-error standard of review since the issue had been one of first impression in the First Circuit. The court also found that the evidence was sufficient to sustain the jury verdict.
FCPA & Anticorruption News
DOJ Unseals Superseding Indictment in Venezuela Foreign Currency Exchange Bribery & Money Laundering Case
On December 16, 2020, DOJ announced that a grand jury in the Southern District of Florida returned a superseding indictment against a former Venezuelan National Treasurer and her spouse for their alleged participation in a previously indicted billion-dollar currency exchange and money laundering scheme. Each of the defendants was charged with one count of conspiracy to commit money laundering and two counts of money laundering. The previous indictment had charged an alleged co-conspirator, Venezuelan billionaire businessman Raul Gorrin Belisario, who owns Globovision news network, with money laundering conspiracy and money laundering counts. The superseding indictment alleges that Gorrin paid millions of dollars in bribes to two former Venezuelan national treasurers to corruptly secure the rights to conduct foreign currency exchange transactions for the Venezuelan government at favorable rates. According to DOJ, Gorrin remains a fugitive in Venezuela. Another defendant previously pled guilty in connection with the alleged scheme, admitting that he received over $1 billion in bribes, and was sentenced to 10 years in prison.
The DOJ press release can be found here.
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