Federal Circuit Court of Appeals Issues Trade Agreements Act Decision in Acetris Health, LLC v. U.S.

On February 10, the U.S. Court of Appeals for the Federal Circuit issued an opinion in Acetris Health, LLC v. United States, regarding the sourcing of a drug’s active pharmaceutical ingredient (“API”) from a non-designated country under the Trade Agreements Act (TAA).  The Federal Circuit decision indicated that pharmaceutical companies can source the API from non-designated countries, such as India or China, and still offer the end product for sale to the U.S. Government as “TAA-compliant,” as the TAA analysis turns on where a product is manufactured, versus where the API is sourced. Based on this analysis, the Court held that a pill manufactured in the United States was TAA-compliant even though the pill’s API was sourced from India.

For pharmaceutical and medical/surgical suppliers, alike, this decision could open up additional sources of supply once considered non-TAA-compliant. However, suppliers will still need to assess where a product is “substantially transformed” for purposes of the TAA before seeking to sell the product to the Government.

McDonnell Decision and the FCPA

On June 27, 2016, in the last decision of the 2015–2016 term, the U.S. Supreme Court, in McDonnell v. United States, No. 15-474, narrowed the type and character of “official acts” that could underpin corruption charges against a public official. Federal prosecutors contended that former Governor of Virginia Robert McDonnell was guilty of a variety of corruption charges for accepting $175,000 worth of loans, gifts and other benefits in exchange for what the government termed “official acts.” After being found guilty by a jury, McDonnell’s conviction was upheld on appeal, but ultimately reversed by the Supreme Court, which held that the jury instructions too broadly defined “official acts” as “acts that a public official customarily performs.” Instead, the Court concluded that it is impermissible to accept payment only for an “official act,” which it defined as a “decision or action” on a pending “question, matter, cause, suit, proceeding, or controversy,” and not a routine political action, such as setting up a meeting, call or event. The Court’s decision provides much-needed clarification to politicians and stakeholders alike regarding the scope of federal anti-corruption law.

To read the full text of the Alert, please visit www.duanemorris.com.

OFCCP Issues Final Rule Updating Federal Contractor Sex Discrimination Guidelines

In an effort to bring its sex discrimination guidelines “from the ‘Mad Men’ era to the modern era,” on June 14, 2016, the U.S. Department of Labor’s Office of Federal Contract Compliance Programs (OFCCP) issued a Final Rule containing sex discrimination guidelines for federal government contractors and subcontractors.

While many provisions in the updated guidelines simply bring the guidelines up to speed with current law, the guidelines contain important pronouncements of which every federal contractor should be aware – from pay discrimination and pregnancy accommodation to sex stereotyping and protections for transgendered employees.

To read the full text of this Duane Morris Alert, please visit www.duanemorris.com.

U.S. Supreme Court Unanimously Holds That Veterans Are Entitled to Full Set of Competitive Bidding Opportunities Congress Enacted in 2006 Veterans Act

In a ruling affecting billions of dollars of government contracts, and impacting tens of thousands of veteran-owned small businesses across the United States, the U.S. Supreme Court unanimously upheld expanded competitive bidding opportunities for veteran-owned small businesses in Kingdomware Technologies v. United States, 14-916.

To read the full text of this Duane Morris Alert, please visit www.duanemorris.com.

U.S. Supreme Court Concludes That Implied False Certification Is Allowed but Limited; FCA Liability Is Expanded

A business may now not know whether it committed fraud until the government chimes in. There are thousands of regulations with which businesses need to comply. If you recklessly (or perhaps worse, intentionally) miss one—regardless of which one—and it proves to be material to the government’s decision to pay you, you might be on the hook for fraud. The analysis used to turn on whether the government had labeled that regulation a “condition of payment.” However, with today’s Supreme Court’s decision in Escobar, the analysis has shifted to whether there was an intent to mislead and whether it was material to the government’s decision to pay. In its unanimous decision, the Supreme Court concluded that what matters is not what label the government attaches to a particular requirement, but whether a party knowingly violated a requirement they know to be material to the government’s decision to pay.

To read the full text of this Duane Morris Alert, please visit www.duanemorris.com.