Health Law Checkup

You’re Fired: What Impact Will Sally Yates’ Departure Have on the DOJ’s Fraud Enforcement?

Feb 08, 2017
Andrew Sniegowski,
Associate
As most of the world now knows, President Trump fired acting Attorney General Sally Yates last week after she declined to defend the President’s travel ban. Dana Boente has replaced Ms. Yates, but he may not be long for the job.  In fact, it is possible that by the time you are reading this, Alabama Republican Jeff Sessions will have been confirmed as Attorney General of the United States.  The Senate Judiciary Committee advanced Mr. Sessions to the full Senate along party lines and a confirmation is expected any day.

While the rest of the world watches the political drama unfold and anticipates the immediate impact on existing travel ban litigation, those who do business with the Federal Government cannot help wondering about the enduring legacy of the infamous “Yates Memo,” named for its now-former acting Attorney General author. Although its application is often nuanced, the purpose and crux of the Yates Memo is that absent special permission based on extraordinary circumstances, the Department of Justice must pursue individuals in corporate fraud and abuse cases.  Until a new policy is announced, the Yates Memo’s mandate remains in effect.

Mr. Sessions did not directly address the issue during confirmation hearings, but suggested that he intends to not only enforce the Yates Memo, but increase the Obama Administration’s already record-setting False Claims Act enforcement. In response to a question from Senator Hirona (D-Hawaii), Mr. Sessions said: “Sometimes, it seems to me, Senator Hirona, that the corporate officers who caused the problem should be subjected to more severe punishment than the stockholders of the company who didn’t know anything about it.”

While this statement is somewhat ominous for hospital executives and others who may find themselves under the DOJ’s investigatory microscope, Mr. Sessions has also implied that he would bring new transparency and expediency to FCA whistleblower cases and investigations. Which Mr. Sessions stated, in his experience are sometimes under seal “an awfully long time.”  This aspect of the presumptive Attorney General’s approach to enforcement may be a breath of fresh air to companies who have been pressured into settlement largely by the duration and extent of DOJ investigations.

Only time will determine the ultimate fate of the Yates Memo. If history is any indicator, however, the new Attorney General and his deputy will make at least some impact on executive charging and fraud and abuse enforcement.  Those who bill the government for goods and services are well advised to keep a close eye on these developments and to have counsel with a strong understanding of the DOJ investigation process who can guide them in the event they find themselves the subject of Government scrutiny.

Media Contact

Olivia Nguyen-Quang

Associate Director of Communications
media@swlaw.com 714.427.7490