Acting Associate Attorney General Jesse Panuccio delivered remarks on June 14 in Washington DC at the American Bar Association’s 12th National Institute on the Civil False Claims Act and Qui Tam Enforcement. Mr. Panuccio highlighted the US Department of Justice’s recent False Claims Act recoveries, emphasized the department’s priorities for False Claims Act enforcement, and reinforced a number of the department’s new enforcement policies and reforms related to the False Claims Act.
Mr. Panuccio opened his remarks by noting that a significant number of presidential nominees to top leadership positions in the US Department of Justice (DOJ) remained unconfirmed by the Senate, and urging the Senate to act quickly to confirm the nominees, including Joseph “Jody” Hunt, President Donald Trump’s nominee to serve as the assistant attorney general for the Civil Division. Mr. Panuccio also lauded Chad Readler, the acting assistant attorney general for the Civil Division, on his nomination to the US Court of Appeals for the Sixth Circuit.
Mr. Panuccio highlighted a number of statistics relating to False Claims Act enforcement including the opening of over 800 new matters within the last year, 675 of which were brought under the statute’s qui tam provisions. He cited to the more than $56 billion in False Claims Act recoveries since 1986. Mr. Panuccio additionally provided specific examples of recent False Claims Act resolutions as indicative of the DOJ’s enforcement priorities and efforts.
Mr. Panuccio also emphasized two of the DOJ’s major enforcement priorities: combating the opioid crisis, and protecting senior citizens from fraud and abuse. In discussing the opioid abuse crisis, Mr. Panuccio cited statistics on deaths caused by opioids and stated that the department would use the False Claims Act, among other tools, “against any entities involved in the opioid distribution chain who engaged in the abuse and illegal diversion of opioids—from pharmaceutical manufacturers and distributors, to pharmacies, to pain management clinics and physicians.”
Mr. Panuccio dedicated a large portion of his remarks to reinforcing a number of recent pronouncements by the DOJ pertaining to enforcement policy initiatives related to the False Claims Act:
1. Qui Tam Dismissals
While stressing that the DOJ “appreciates the risks that relators may take in coming forward to expose fraudulent conduct,” Mr. Panuccio cited the department’s focus on more consistently exercising its prosecutorial discretion to dismiss qui tam actions that “lack merit or are otherwise contrary to the interests of justice,” explaining that such cases “consume limited resources” and “can lead to bad case law.” (See our January 25, 2018 LawFlash).
While noting that guidance documents issued by federal agencies “can be helpful in educating the public about statutes, regulations, and legal developments,” Mr. Panuccio reiterated a November 2017 announcement by the attorney general that the department “will no longer issue any kind of binding sub-regulatory guidance”. Mr. Panuccio further stated that DOJ attorneys have been instructed “not to use their enforcement authority to convert sub-regulatory guidance into rules that have the force or effect of law.” (See our January 26, 2018 LawFlash).
While noting that the department is undertaking a project to formalize and consolidate its policies and that the project “will result in modification to past practices,” Mr. Panuccio nonetheless assured his audience that the department will continue to “expect and recognize genuine cooperation of corporate entities accused of wrongdoing in both civil and criminal matters,” and that “False Claims Act investigations are no exception to this policy.” Mr. Panuccio reminded the audience that “the Department has tremendous enforcement discretion with respect to structuring settlements that make the government whole while also providing a material discount based on a defendant’s cooperation.”
Expressing empathy for the challenges that large organizations face with compliance, Mr. Panuccio noted the department’s continued policy of “reward[ing] companies that invest in strong compliance measures.” He also stressed the important role that compliance counsel can play in protecting taxpayer funds.
5. Piling On
Mr. Panuccio also reiterated the department’s recently announced “no piling on” policy, (see our May 2018 LawFlash), which discourages “piling on”—or inflicting multiple penalties from different enforcement agencies—by directing DOJ (for instance, criminal and civil assistant US attorneys) to coordinate with one another in parallel investigations in order to ensure fair outcomes proportionate to the wrongdoing at hand. In the same vein, Mr. Panuccio reiterated the department’s policy to not use the threat of criminal prosecution to persuade a company to pay a larger settlement in a civil case, including in the context of parallel investigations involving the False Claims Act.
Mr. Panuccio concluded his remarks by inviting feedback: “I have no doubt that during the course of this conference, these and other issues will be debated by you and that Department attorneys in attendance will report back with suggestions on how we can better do our job. We welcome that. Indeed, that is the great value in gatherings such as these.”
Mr. Panuccio’s remarks serve to reiterate the administration’s focus on streamlining its enforcement of the False Claims Act and reinforce the importance of effective compliance programs.
Read Mr. Panuccio’s full remarks.