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September 2014 Archives

D.C. Circuit Court Upholds Dismissal of Verizon FCA Suit

In this qui tam action, Relator, Stephen Shea ("Shea"), alleged that Verizon Communications, Inc. ("Verizon") overbilled the United States General Services Administration ("GSA"), in violation of the False Claims Act ("FCA"). Judge Gladys Kessler of the United States District Court for the District of Columbia ruled that Shea, who has previously brought a qui tam case against Verizon, was prevented from bringing this second case against the company by the "first-to-file" rule.1 The first-to-file rule holds that if a person brings an action under the FCA, no other person or entity may intervene other than the Government to "bring a related action based on the facts underlying the pending action."2 The District Court held that this rule does, in fact, apply "to the same relator who later files a second related action."3 The D.C. Circuit Court agreed.

Is lack of paid medical leave driving women out of the workplace?

Employment law is constantly changing, and one aspect of employment that has lately received increased attention is paid leave. The White House Council of Economic Advisers has reported that paid leave is offered to only 59 percent of employees in the United States, and the U.S. is the only developed country whose federal policy doesn't offer paid maternity leave.

Second Circuit Favors Porsche in Application of Morrison Rule

In Parkcentral Global Hub v. Porsche, Automobile Holdings SE, et al., No. 11-397-cv, the United States District Court for the Second Circuit Court of Appeals held that the plaintiff did not state a securities action against Porsche Automobile Holdings SE ("Porsche") because none of the relevant conduct was domestic and the Securities and Exchange Act does not apply extraterritorially. The plaintiffs argued that Porsche violated Section 10(b) of the Securities and Exchange Act by acquiring stock in Volkswagen AG ("VW") while simultaneously denying that it wanted to acquire VW. When Porsche owned 74% of VW, the price of VW stock rose, causing the plaintiffs to lose significant sums due to security swaps they engaged in that referenced VW's price.1

Suit against Walmart seeks class action over toxic exposure

In late August, an Indiana warehouse used to process Walmart merchandise was evacuated because of a toxic contamination, and one worker has brought a negligence claim against the mega-retailer. The lawsuit seeks class action status.

Class action targets major studios over non-solicitation agreements

Serious allegations have been leveled in a class action lawsuit against a slew of major studios and digital animation companies. According to the suit, which was brought on behalf of a former effects artist at DreamWorks Animation, "some of the most recognizable names in the American entertainment and technology industries" conspired to establish "non-poaching" agreements that effectively deprived class members of millions in compensation.

Chase Bank Settles TCPA Class Action Suit for $34 Million

Judge Gary Feinerman of U.S. District Court for Northern District of Illinois has approved a settlement between Chase Bank ("Chase") and a class of mortgage customers that received automated messages regarding their loans from the bank without their express consent. There are two subclasses: the first that received phone calls and the second that received either voice alerts or text messages from Chase.  Despite the settlement, the bank continues to deny any wrongdoing.

Former Tax Lawyer Faces Tough Battle Against Vanguard Group

He was a tax lawyer for the biggest mutual fund group in the U.S., though he says the company's tax strategy was illegal. In a whistleblower lawsuit filed in New York, Vanguard Group Inc. is accused of a number of wrongful practices, including fraudulently failing to report a "Contingency Reserve" of $1.5 billion and sending salespeople and marketers throughout the country without keeping proper records for taxes. According to the suit, state and federal governments have lost in excess of $1 billion as a result of Vanguard's illegal tax practices.

The Whistleblower Provision is Working: The Story of Bill Lloyd

The Dodd-Frank Financial Reform Act gives protection from retaliatory firings by employers and anonymity to whistleblowers who give the government information regarding instances of possible financial fraud. In cases where the government finds a company liable for financial fraud, the whistleblower receives a portion of the fine that the company must pay to the government. Bill Lloyd ("Lloyd") worked as an agent for Mass Mutual Insurance Company ("Mass Mutual") for 22 years. He forged many good relationships with Mass Mutual employees and clients. Lloyd is not a stereotypical whistleblower, as he is not a disgruntled employee looking to get back at a company. He very much liked working for Mass Mutual, and he was respected by the company and touted for his high marks. In 2007, Mass Mutual came out with two new retirement annuity products "that guaranteed that the annuity income stream would grow to a predetermined cap regardless of how the investment itself performed."1 The way the investment vehicles work is complicated, but the problem with these vehicles boiled down to the fact that when the market fell in 2008, the annuity income stream could no longer be guaranteed. Lloyd discovered that these products would not work as guaranteed only after customers had invested over $2.5 billion into them.2 Lloyd worked extensively with Mass Mutual to attempt to resolve the issue internally for his clients. However, the attempt fell apart when his documents regarding this issue were stolen from his office one day and given to the Financial Industry Regulatory Authority ("FINRA"). The issue having been publicized, Mass Mutual stopped working with Lloyd to solve the problem internally, and the false guarantee became a bigger problem when FINRA decided that it did not want to pursue the issue. It was then that Lloyd decided to reach out to the Securities and Exchange Commission ("SEC") as a whistleblower. The SEC can protect whistleblowers from retaliatory firing by employers, but it could not stop employees and clients from treating Lloyd differently and essentially avoiding him. Additionally, out of fear that Mass Mutual was hatching a plan to fire him, he left the company in 2011. While he became a whistleblower to force Mass Mutual to fix a major problem and to help investment customers, his own life had come under hardship.3 Eventually, the SEC forced Mass Mutual to pay a $1.6 million fine, $400,000 of which Lloyd received for providing the government with invaluable information. Most importantly, Mass Mutual has fixed the investment vehicles that guarantee their annuity income stream. And all ended well for Lloyd, who finds himself working at a new investment company. If you have any questions regarding this subject or this posting, please contact James E. Miller ([email protected]) or Michael Ols ([email protected]). We can also be reached toll-free at (866) 540-5505. Shepherd Finkelman Miller & Shah, LLP is a law firm with offices in California, Connecticut, Florida, New Jersey, New York, Pennsylvania and Wisconsin. SFMS also maintains an affiliate office in London, England and is an active member of Integrated Advisory Group (, which provides us with the ability to provide our clients with access to excellent legal and accounting resources throughout the globe. For more information about our firm, please visit us at

Department of Justice Intervenes In False Claims Case Against Symantec

The government has decided to join a false claims case against Symantec in an attempt to recover up to $145 million lost due to Symantec's allegedly dishonest execution of a contract with the Government Services Agency ("GSA"). The suit was initially brought by Lori Morsell, a Symantec employee in charge of executing GSA contracts. Ms. Morsell also alleges that Symantec defrauded the states of California, New York and Florida. The Justice Department was able to join the case through the "Qui Tam" provision of the False Claims Act ("FCA").1