In his recent New York Review article, “Sentenced by Algorithm,” a review of former SDNY judge Katherine Forrest’s book, “When Machines Can be Judge, Jury and Executioner: Justice in the Age of Artificial Intelligence,” current SDNY Judge Jed Rakoff evaluates the many shortcomings of existing AI products intended to predict recidivism rates of past criminal offenders. These products are designed to guide judges in determining whether a defendant’s sentence should be extended on a theory of “incapacitation”—essentially, to protect the general public from the potentiality that the defendant will continue his pattern of criminality in the future. As Rakoff succinctly explains, the current products available have unacceptably high error rates, mostly leaning towards over-predicting future criminality. Moreover, their “black box” design raises concerns regarding the assumptions underlying the algorithm, and the defendant’s ability to effectively challenge the algorithm’s output. Continue reading “What’s Really Making Us Uncomfortable—the Use of AI in Evaluating the Likelihood of Recidivism, or the Policy of Sentencing Based on the Likelihood of Recidivism?”
Companies have long sought to prevent their competitors — particularly in skilled fields like life sciences, health care, software development and engineering — from benefiting from the talents and training of their employees.
Examples of such efforts include noncompete agreements between employers and employees, and carefully worded joint venture agreements that prohibit one partner from insourcing the know-how of another partner.
Although noncompete agreements between employers and employees have been subject to scrutiny for years, agreements between employers to restrict solicitation of each other’s employees or to fix employee wages have largely flown under the radar.
In fact, it was not until a little over four years ago that federal antitrust enforcers signaled that such agreements could be presumed illegal and criminally prosecuted. And even that policy change, significant though it was, did not bring an immediate uptick in enforcement activity.
That wait now appears to be over. The U.S. Department of Justice’s Antitrust Division has recently been aggressively bringing enforcement actions against labor market collusion, with more cases on the horizon.
In an order dated May 3, 2021, the Securities and Exchange Commission charged sports apparel company Under Armour, Inc. with securities violations for allegedly misleading its investors about the bases of its revenue growth and failing to disclose known uncertainties about its ability to meet future revenue projections. In particular, the order charged Under Armour with violating the antifraud provisions of Section 17(a)(2) and (3) of the Securities Act of 1933, as well as Section 13(a) of the Securities Exchange Act of 1934 and various other reporting rules. Notably, the charged violations do not require scienter. Rather, a showing of negligence is sufficient. Continue reading “SEC Charges Under Armour with Misleading Investors”
The appeal of a 2016 murder conviction in Contra Costa County Superior Court, California has brought front and center a new problem facing trial courts: the constitutionality of peremptorily striking jurors who indicate their support of the Black Lives Matter movement. Continue reading “Constitutionality of Peremptorily Striking Jurors Who Support the Black Lives Matter Movement”
Since the outbreak of the COVID-19 virus, law enforcement officials throughout the country have publicly committed to aggressively combatting pandemic-related fraud. Those pronouncements have translated into action focused, at least at this early stage, upon frauds which might impact consumers’ health and safety. The first federal civil enforcement action took place on Saturday, March 21, 2020. On that date, the U.S. Department of Justice, in coordination with the U.S. Attorney for the Western District of Texas, filed the first civil enforcement action against a COVID-19 related fraud. Prosecutors sought an injunction shutting down a website, which purportedly offered to provide “free” coronavirus “vaccine kits” for a $4.95 shipping and handling fee. This request for injunctive relief, which resulted in a temporary restraining order pursuant to 18 U.S.C. § 1345, is likely an omen of more to come. Continue reading “U.S. Department of Justice Files Civil Complaint for COVID-19-Related Fraud”
Sheldon Silver, former speaker of the New York State Assembly, was convicted of a number of political corruption crimes in 2015, namely accepting bribes in exchange for favorable “official acts” that benefited some bribe payors. He appealed his conviction to the Second Circuit on two grounds: first, that the trial court erred by failing to require that the prosecution establish that he and the bribe payor had a “meeting of the minds” on the specific official act to be performed in exchange for the bribes; and second, that the trial court erred by allowing the prosecution to proceed on a theory that allowed conviction based on a “nonspecific promise to undertake official action on any future matter beneficial to the payor.” (Emphasis added.)
On January 21, 2020, the United States Court of Appeals for the Second Circuit partially reversed Silver’s conviction and remanded the case for resentencing. The court’s logic and findings are significant and merit close attention.
In an October 2016 guidance document, the United States Department of Justice Antitrust Division (DOJ) and the Federal Trade Commission alerted human resources professionals to potential violations of the antitrust laws in hiring and compensation decisions. The guidance included the announcement that, “Going forward, the DOJ intends to proceed criminally against naked wage-fixing or no-poaching agreements.” A naked agreement is one that is not ancillary to a broader, legitimate collaboration between businesses.
The DOJ’s decision to proceed criminally against such agreements is significant. Although the Sherman Act allows the DOJ to proceed either criminally or civilly against antitrust violators, before the guidance was issued the DOJ had treated agreements between competitors not to solicit each other’s employees as merely civil violations. Following the guidance, companies and individuals suddenly had to worry about criminal fines and potential jail sentences for entering into such agreements. Nevertheless, three years have now passed without a single such indictment being filed.
In a concise, six-page discovery order, a federal judge in Minneapolis may have just started the proverbial shifting of tectonic plates undergirding routine defense procedures in False Claims Act (FCA) litigation by requiring a defendant in an FCA lawsuit to produce the information provided to the Department of Justice (DOJ) during the DOJ’s process of determining whether to pursue the matter.
The FCA creates liability for persons or entities found to have knowingly submitted false claims to the government or having caused others to do so. Like some other federal laws, the FCA creates a private right of action; under the act, a private party—a whistleblower or “relator”—may bring a qui tam action on behalf of the government. When initially filed, the court seals the complaint pending the government’s investigation of the case. If the government chooses, it may intervene and pursue the matter. If not, the relator may pursue the case on its own. (In either case, the relator is entitled to a percentage of the government’s recovery.)
Genetic testing and telemedicine targeting senior citizens and individuals with disabilities have been the subject of growing government scrutiny. Most recently, on September 27, 2019, the United States Department of Justice announced charges against nearly three-dozen individuals—across numerous federal judicial districts—allegedly responsible for more than $2.1 billion in Medicare billing losses, all of which stem from misconduct in the provision of genetic testing and telemedicine services.
According to the DOJ’s press release, the federal investigation uncovered a scheme in which cancer genetic testing laboratories paid kickbacks and bribes to healthcare providers in exchange for the referral of medically unnecessary services for Medicare beneficiaries. The government alleges that, in many instances, the tests were ordered by physicians who had no treating relationship with the patients and the results of the unnecessary tests were often withheld from the beneficiaries or their actual treating physicians. The DOJ also alleges that the defendants targeted seniors and individuals with disabilities. According to the government, the patients often received scripts for genetic testing from physicians with whom they had never interacted or had had only brief telephone conversations.
In early 2018, the U.S. Department of Justice announced a new policy encouraging prosecutors handling False Claims Act (FCA) cases to seek dismissal of qui tam complaints that threaten the government’s interests. However, it was unclear how and to what extent prosecutors would carry out that directive. Now a year later, federal prosecutors appear to be embracing the new policy—and it is already having an effect on one case involving a drug manufacturer.
The January 2018 Granston memorandum outlined the Department’s new approach to handling FCA prosecutions in “in light of the government’s limited resources.” Under the new policy, prosecutors are encouraged to move to dismiss qui tam claims as a way to “advance the government’s interests, preserve limited resources, and avoid adverse precedent.” This marked a departure from the Department’s previous policy of rarely exercising its statutory authority to dismiss such claims. To guide prosecutors, the memorandum offered a nonexhaustive list of factors as to when a motion to dismiss a qui tam claim is proper. Those factors include: (1) “curbing meritless qui tams”; (2) “preventing parasitic or opportunistic qui tam actions”; (3) “preventing interference with agency policies and programs”; (4) “controlling litigation brought on behalf of the United States”; (5) “safeguarding classified information and national security interests”; (6) “preserving government resources”; and (7) “addressing egregious procedural errors.” Overall, the memorandum instructed prosecutors to seek dismissal when the litigation does not serve the government’s interests.