On May 19, 2025, Deputy Attorney General Todd Blanche issued a memorandum concerning a “Civil Rights Fraud Initiative” and announcing it would “utilize the False Claims Act to investigate and, as appropriate, pursue claims against any recipient of federal funds that knowingly violates federal civil rights laws.” The FCA is the U.S. government’s primary enforcement tool in connection with recipients of federal funds. FCA liability can be enormous, with treble damages and significant per claim penalties. Employers who receive federal funding, whether directly or indirectly and whether by contract or grant, need to be thoughtful before signing any certification of compliance with federal laws that may be viewed to include an expressed or implied certification of compliance with federal civil rights laws. Read the full Alert on the Duane Morris website.
DOJ Announces Aggressive Use of False Claims Act as Part of Civil Rights Fraud Initiative
On May 19, 2025, Deputy U.S. Attorney General Todd Blanche announced that the U.S. Department of Justice will use the False Claims Act (FCA) to enforce the administration’s policies concerning diversity, equity and inclusion (DEI) practices and antisemitism. The FCA is a powerful tool, and its invocation by the DOJ is a signal to federal-funding recipients that they will face increased scrutiny, and likely more aggressive enforcement actions, if they continue to engage in DEI practices that are or may be deemed unlawful by the administration. Read the full Alert on the Duane Morris website.
Justice Department Files Civil Complaint Alleging Health Insurers and Brokers Violated False Claims Act Via Kickbacks and Discrimination Against Disabled Americans
In a 217-page complaint filed on May 1, 2025, the U.S. Department of Justice (DOJ) brought civil claims under the False Claims Act against major health insurers—Aetna, Elevance Health (previously known as Anthem) and Humana—alleging they paid hundreds of millions of dollars in kickbacks to some of the country’s largest insurance brokers to steer Medicare beneficiaries into their Medicare Advantage plans. Medicare Advantage—a $450 billion program through which private insurers deliver federal health benefits to seniors and people with disabilities—is a critical revenue driver for the nation’s largest health insurers. Read the full Alert on the Duane Morris website.
Replay: Navigating the False Claims Act for Government Contractors
A replay of Navigating the False Claims Act for Government Contractors is now available for viewing.
Webinar: Navigating the False Claims Act for Government Contractors
Duane Morris will present a webinar, Navigating the False Claims Act for Government Contractors, on Wednesday, May 7, at 12:30 p.m. Eastern.
Companies, universities and nonprofit organizations doing business with the government must comply with a broad range of contractual, regulatory and statutory obligations. Recipients of federal funds must navigate continuously changing rules, guidance, interpretations and enforcement priorities, and how to anticipate and mitigate potential compliance risks. The government’s reliance on the False Claims Act as a primary tool for enforcement of those obligations creates significant risks in a rapidly changing environment. REGISTER FOR THE WEBINAR
How to Respond to Department of Education Investigations
The Department of Education recently announced two sets of investigations stemming from the administration’s application of the U.S. Supreme Court’s 2023 decision in Students for Fair Admissions v. Harvard. The announced investigations are focused on institutional compliance within the context of the Supreme Court opinion and subsequent guidance from the Department of Education in the February 14, 2025, “Dear Colleague Letter.” Based on our experience and the regulatory requirements, institutions subject to an investigation should carefully evaluate the scope of the investigation or inquiry, consider the legal rights and remedies available to OCR, as well as identify the procedural framework, including, but not limited to, agency hearings and appeals. Read the full Alert on the Duane Morris website.
Federal Judge Issues Preliminary Injunction Blocking Specific Provisions of Executive Order on DEI
In Nat’l Assoc. of Diversity Officers in Higher Ed. v. Trump, D. Md, the United States District Court for the District of Maryland issued a preliminary injunction that blocks, at least for now, some of the more salient provisions of President Donald Trump’s executive order on diversity, equity and inclusion (DEI) that affects federal contractors and other private sector employers. […]
Section 3(b)(iv) requires the head of each government agency to include in every contract or grant a term requiring the contractor or grantee to certify its compliance with federal anti-discrimination laws (i.e., no illegal DEI). Moreover, such certification is a material term to the government’s payment under the contract or grant for purposes of claims under the False Claim Act where penalties for violations include, but are not limited to, treble damages.
SCOTUS Focuses on Subjective Intent in Overturning False Claim Act Cases
Writing for a unanimous Supreme Court of the United States, on June 1, 2023, Justice Clarence Thomas issued a decision clarifying the knowledge requirement for cases brought pursuant to the False Claims Act (FCA). In overturning the consolidated cases of United States ex rel. Schutte et al. v. SuperValu Inc., et al. and United States ex rel. Proctor v. Safeway, Inc., the Supreme Court rejected the Seventh Circuit’s focus on the objectively reasonable interpretation of an ambiguous rule or regulation. Instead, the Court held that the FCA’s scienter requirement refers to the defendant’s subjective knowledge and belief at the time the claim is submitted. Read the full Alert on the Duane Morris website.