The U.S. Department of Justice announced a $9 million settlement with federal government contractor Aerojet Rocketdyne, Inc. for alleged violations of the False Claims Act (FCA) in a case pending in the Eastern District of California. The settlement results from alleged false statements by Aerojet related to compliance with Department of Defense cybersecurity requirements described in DoD Federal Acquisition Regulation Supplement (DFARS) clause 252.204-7012 and National Aeronautics and Space Administration Federal Acquisition Regulation Supplement (NFARS) clause 1852.204-76.

The settlement further underscores DOJ’s commitment to FCA enforcement actions involving cybersecurity considerations related to its Civil Cyber-Fraud Initiative announced in October 2021. To that end, the settlement serves as a clear reminder to contractors that DOJ and the plaintiffs’ qui tam bar are taking the Cyber-Fraud

The Office of Massachusetts Attorney General Maura Healey announced on June 21 that Pathways of Massachusetts, which was an “outpatient behavioral health provider,” and its former corporate parent Molina Healthcare, Inc., will pay $4.6 million to resolve allegations of False Claims Act violations. Four whistleblowers spurred the case with a qui tam lawsuit filed in the U.S. District Court of Massachusetts, U.S. ex rel. Collins, et al. V. Molina Healthcare, Inc., et al.

The qui tam provisions of the False Claims Act enable private citizens to file lawsuits on behalf of the government if they know of an individual or company defrauding the government. Qui tam whistleblowers are eligible to receive between 15 and 30% of the government’s recovery, if one occurs.

The whistleblowers, who were all former employees at Pathways and worked there between 2014 and 2018, alleged in their lawsuit

On June 21, the U.S. Supreme Court granted certiorari in United States, ex rel. Polansky v. Executive Health Resources, Inc. The Court agreed to hear the case which concerns the issue of whether or not the U.S. government can dismiss False Claim Act whistleblowers’ qui tam suits after initially declining to intervene in them. The case also concerns what standard applies to such a dismissal if the DOJ does have such authority. There is currently a clear and intractable conflict in the circuits on this important statutory question.

Under the False Claims Act, individual whistleblowers may bring qui tam lawsuits against fraudsters on behalf of the U.S. government. The Department of Justice (DOJ) has the opportunity to intervene in qui tam suits and take over the proceeding. However, when DOJ declines to intervene in and litigate the qui tam case the statute permits the whistleblower to pursue the case in the name of the United States and to litigate the case against the defendant in federal court.