On Wednesday, May 11, President Obama signed the Defend Trade Secrets Act (“DTSA”) into law. The DTSA revolutionizes trade secrets practice at the federal level. Its passage will likely multiply the number of trade secrets cases litigated in federal court.
We provide a few highlights:
First, the DTSA allows the owners of trade secrets to bring a civil action for misappropriation in federal court. Thus federal jurisdiction—premised on federal law—now exists for trade secrets claims. Before the DTSA, trade secret misappropriation was mainly a matter of state law, as Pennsylvania had adopted its own version of the Uniform Trade Secrets Act.
The DTSA subjects claims to a three-year statute of limitations, while plaintiffs can secure punitive damages of up to two times the amount of actual damages in the event of willful and malicious misappropriation. Likewise, reasonable attorney’s fees are available for the prevailing party if the trade secret was willfully and maliciously misappropriated or if the claim of misappropriation was made in bad faith.
Second, the DTSA provides the remedy of ex parte seizures. This allows a seizure to occur without advance notice to defendants and is the DTSA’s most controversial provision. Intended as a way to stop the dissemination of a trade secret, especially overseas, before its value has been lost through public disclosure, seizure is available only in extraordinary circumstances.
Third, the DTSA gives immunity to whistleblowers who disclose trade secrets to the government or in a sealed court filing. Employers must now provide notice of the DTSA’s immunity to their employees in any employee contract that governs the use of a trade secret or other confidential information. Importantly, the DTSA bars employers that do not provide this notice from recovering the exemplary damages or attorney’s fees otherwise available under the Act.
Fourth, the DTSA explicitly clarifies that “improper means” “does not include reverse engineering, independent derivation, or any other lawful means of acquisition. Read More
Marc S. Raspanti and Pamela C. Brecht will speak at the False Claims Act/Qui Tam Whistleblowers Litigation Involving Health Care Providers CLE Program at the South Carolina Bar Conference Center in Columbia, SC. Marc Raspanti will speak on “False Claims Act Pleading Issues” and Pamela Brecht will speak on “Private Causes of Action Accompanying FCA Qui Tam Cases.” Both will then discuss Health Care FCA Qui Tam Cases and hot topics on a panel with other attorneys. Read More
On Thursday, April 28, 2016 Assistant Attorney General Leslie Caldwell addressed the American Bar Association’s Institute on Internal Corporate Investigations regarding the Department of Justice’s Voluntary Disclosure Program. In a room full of defense attorneys, this pilot program was surely received with some skepticism. This new initiative is aimed to encourage corporate counsel to report potential wrongdoing under the Foreign Corrupt Practices Act. The Department assumes that counsel will have conducted an internal investigation and implemented remedial procedures when it received notice of potential violations. But instead of shelving the report of the investigation in the hopes that the government never finds out, the Voluntary Disclosure Program provides an incentive for prompt disclosure.
The prize for a company participating in this program could be fines cut in half from the lowest amount recommended by the federal sentencing guidelines, as well as a dispensation from hiring an expensive compliance monitor. Assistant Attorney General Caldwell was clear to point out that reporting potential violations on the eve of a government investigation is not sufficient. However, the government will not punish companies for failing to report potential violations that were unknown – for example, if a whistleblower reported directly to the government without notifying the company first.
The defense bar has been on guard following the so-called Yates Memo written by Deputy Attorney General Sally Quillian Yates directing the government’s civil and criminal attorneys to pursue individuals and discouraging corporate settlements in exchange for immunity for executives. How does a company self-disclose and cooperate fully knowing the government would like to prosecute individual executives? How is a company to cooperate while maintaining the sanctity of the attorney-client privilege? Assistant Attorney General Caldwell acknowledged these issues during her remarks. And although she was not in a position to propose specific solutions, Assistant Attorney General Caldwell credited the defense bar and its skilled attorneys with the capacity to structure cooperation in a way that does not waive the privilege. Read More
The United States indicted twenty-five defendants in three Medicare Fraud cases, recently filed in the U.S. District Court for the Southern District of Florida. William Maddalena, Assistant Special Agent in Charge of the FBI’s Miami Division, dubbed South Florida “ground zero” for health care scams.
These indictments detail two purported schemes involving Medicare Part D, the voluntary prescription drug benefit. In the first, alleged in U.S. v. Hevia et al. (Case No. :16-cr-20267) and U.S. v. Fernandez (Case No. :16-cr-20268), the government claims that two defendants hired co-conspirators to run pharmacies and employed other co-conspirators as “patient recruiters.” The recruiters referred Part D beneficiaries to the pharmacies, which filled prescriptions that were not medically necessary and submitted false and fraudulent claims for the prescriptions to Medicare. Twenty-two defendants are charged with various offenses, including Conspiracy to Commit Health Care and Wire Fraud, in violation of 18 U.S.C. § 1349; Health Care Fraud, in violation of 18 U.S.C. § 1347; Conspiracy to Pay and Receive Kickbacks, in violation of 18 U.S.C. § 371; and Receipt of Kickbacks from a Health Care Provider, in violation of 18 U.S.C. § 1320a-7(b)(1)(A). In addition to the criminal charges, the government filed notices of forfeiture seeking in excess of $16 million from the defendants. The government claims that figure represents the total loss to the Medicare program resulting from the conspiracy, and it seeks to hold the defendants jointly and severally liable for the sum.
The second scheme, alleged in U.S. v. Diaz (Case No. 1:16-cv-20251), involves similar, though unrelated, claims that a pharmacy owner and co-conspirators bilked Medicare for beneficiaries’ medically unnecessary prescriptions. Three defendants are charged with Conspiracy to Commit Health Care and Wire Fraud; Health Care Fraud; and Money Laundering, in violation of 18 U.S.C. § 1957. The government seeks forfeiture of approximately $10.5 million. Read More
Marc Raspanti is one of the few lawyers in the country who has an active white collar criminal defense practice along with an active False Claims Act whistleblower practice.
Half the time he spends defending corporate crime cases. And half the time he spends suing corporations on behalf of whistleblowers to recover millions stolen from the U.S. government. Raspanti is a partner at Pietragallo Gordon Alfano Bosick & Raspanti in Philadelphia. The Pietragallo firm’s work is about 80 percent defense side and 20 percent plaintiffs side. But Raspanti’s practice is about half and half. He likes working both sides of the aisle.
And sometimes, working a False Claims Act case opens the door to criminal referrals.
“It opens the door to relationships,” Raspanti told Corporate Crime Reporter in an interview last week. “If you get a chance to work with us, you see that we can do two things at the same time. And I’ve been lucky enough to get referrals from some of the same large firms that I have had many years of litigation with. I have had professional relationships with all of my adversaries. That’s just the way I operate.”
“Then I get referrals of individual executives. The last five or six years, we have started to get involved with a fair number of Foreign Corrupt Practices Act (FCPA) cases. Those are international cases. There are former executives and current executives. I do tend to get referrals from foreign companies who have divisions in the United States. I have represented a number of German, Japanese, French, Swedish and Italian executives. I also get referrals from professionals who know we have a particular expertise in a certain area.”
“For example, over the last ten years, I have handled close to two dozen dermatology fraud cases in the United States. Read More
PHILADELPHIA, PA – Pamela Coyle Brecht, partner at the law firm Pietragallo Gordon Alfano Bosick & Raspanti, LLP, will speak at the “False Claims Act/Qui Tam Whistleblower Litigation Involving Health Care Providers” seminar at the South Carolina Bar Conference Center in Columbia, SC on Friday, May 6, 2016. She will be accompanied by esteemed local and national panelists.
Ms. Brecht will present on “Private Causes of Action Accompanying FCA Qui Tam Cases”and will also be part of a panel discussion on “Hot Topics from the Plaintiff’s Perspective.” The seminar will focus on federal False Claims Act litigation and the health care industry. It’s designed to inform attendees on emerging issues arising out of False Claims Act lawsuits involving the clinical health care industry including hospitals, hospices, pharmaceuticals, ambulance companies and laboratories. The program is hosted by the South Carolina Bar Health Care Law Section, South Carolina Bar CLE Division and the South Carolina Federal Bar Association Qui Tam Section.
Ms. Brecht is a vibrant member of the Qui Tam Practice Group at Pietragallo. She is also experienced in employment law, internal investigations, white collar criminal litigation, and complex health care litigation. She litigates some of the most complex Qui Tam cases filed in the United States. Her cases have included alleged fraud by a large multi-state Medicaid managed care contractor, FCA violations by three of the largest hospital corporations in the country, and complex financial relationships among healthcare providers, clinical laboratories as well as myriad pharmaceutical fraud.
Ms. Brecht is a 1988, cum laude, graduate of Villanova University and a 1991 graduate of Temple University School of Law. While attending Temple University School of Law, Ms. Brecht served as a member of the Temple Law Review and received honors for Distinguished Class Performance. Ms. Brecht is a member of the Philadelphia Bar Association, the American Health Lawyers Association, the Health Care Compliance Association, and the Federal Bar Association Qui Tam Section. Read More
PHILADELPHIA, PA – Marc Stephen Raspanti, partner at the law firm Pietragallo Gordon Alfano Bosick & Raspanti, LLP, will speak at the “False Claims Act/Qui Tam Whistleblower Litigation Involving Health Care Providers” seminar at the South Carolina Bar Conference Center in Columbia, SC on Friday, May 6, 2016.
Mr. Raspanti will present on “False Claims Act Pleadings & Related Issues” and will also be a part of a panel discussion on “Hot Topics from the Plaintiff’s Perspective.” The seminar will focus on federal False Claims Act litigation and the health care industry. It’s designed to inform attendees on emerging issues arising in the context of False Claims Act lawsuits involving health care industries including hospitals, hospices, pharmaceuticals, ambulance companies and laboratories. The program is hosted by the South Carolina Bar Health Care Law Section, South Carolina Bar CLE Division and the South Carolina Federal Bar Association Qui Tam Section.
Mr. Raspanti, who is a former prosecutor, is recognized as one of the most successful, skilled and experienced qui tam attorneys in the United States. Since 1989, Mr. Raspanti has litigated many of the most complex and important cases in the history of the federal False Claims Act. He has served as lead counsel for whistleblowers in false claims cases that have resulted in over $2 billion in recoveries for federal and state taxpayers. He practices in the areas of federal and state qui tam litigation, federal and state white collar litigation; criminal and civil health care fraud defense; and complex commercial litigation.
Mr. Raspanti received his B.A. from Villanova University in 1979 and his J.D. from Temple University School of Law in 1984. Mr. Raspanti was selected by his peers as one of Pennsylvania’s Super Lawyers from 2004 through 2015 in the field of White Collar Criminal Defense, an honor reserved for 5% of the Pennsylvania Bar. Read More
Frank E. Pipak will speak at “Handling the Workers’ Compensation Case from Start to Finish” seminar hosted by the National Business Institute. He will present on “Preparing Your Case: Procedures for Claimant and Defendant” and “Settlement Options (Including MSA Considerations).” The event takes place at the Crowne Plaza Pittsburgh South on April 18th, 2016. CLE credit is available. Read More
Michael A. Morse and Pamela C. Brecht will present at the Healthcare Compliance Association’s 20th Annual Compliance Institute. Mr. Morse will present on “False Claims Act Developments” and Ms. Brecht will present on “Managed Care Fraud: Enforcement and Compliance.” Read More
The first few months of 2016 have witnessed a rash of investigations, and even indictments, involving compounding pharmacies throughout the United States. Previously beset by contamination scandals, the industry now faces widespread allegations of fraud.
Significant Recent Developments
On January 26, the Federal Bureau of Investigations, the U.S. Postal Inspection Service, the U.S. Department of Defense Criminal Investigation Service, and state authorities conducted joint raids of nine compounding pharmacies in Mississippi. The agencies reported a seizure of more than $15 million in assets and reams of documents. Search warrants pertaining to the investigation were also issued in Florida, Alabama, and Utah.
Then, on February 5, the Dallas Morning News reported that federal authorities had begun investigating a compounding pharmacy, RXpress, and related entities in the Dallas-Ft. Worth (Texas) area. The investigation involved potential violations involving pay-for-prescription arrangements to sales reps.
Two weeks later, on February 18, the United States indicted Robert Cesario and John Paul Cooper, in the Northern District of Texas on one count of conspiracy to commit health care fraud, seven counts of illegal receipt of remuneration, and six counts of illegal payment of remuneration. According to the indictment, Cesario and Cooper, who marketed pain and scar creams for various compounding pharmacies, conspired with others to defraud the military healthcare program, TRICARE, by (1) receiving payments from pharmacies in exchange for referring TRICARE beneficiaries for prescription of their creams; (2) paying TRICARE beneficiaries to induce them to fill prescriptions for the creams; and (3) paying physicians in exchange for prescribing the creams.
These matters follow a 2015 federal investigation of compounding pharmacies in the Middle District of Florida for violations of the Anti-Kickback Statute and other allegedly fraudulent conduct. Numerous pharmacies and individuals, most in the Jacksonville area, reached settlements with the United States in order to avoid civil suit under the False Claims Act. Read More
