Stuart Gerson, a Member of the Firm in the Litigation and Health Care & Life Sciences practices in the Washington, DC, and New York offices, was quoted in an article titled "5 Tips for Crafting Multistate FCA Settlements." (Read the full version – subscription required.)
Following is an excerpt:
As states become more active in False Claims Act litigation, health care companies are increasingly facing suits in multiple jurisdictions and grappling with ever tougher choices in settlement talks.
Just in the last six months, eight states have enacted new false claims statutes that more closely mirror federal law as they seek to take advantage of enhanced Medicaid fraud recoveries stemming from FCA litigation, and two others have legislation pending. While some states have beefed up their individual litigation efforts, many have also banded together in federal lawsuits over inflated average wholesale prices on pharmaceuticals and other issues, complicating companies' efforts to resolve the disputes. …
Epstein Becker & Green PC member Stuart Gerson acknowledged that clients generally want to get as many of the claims off the table as quickly as possible, but global multistate settlements can easily stall when one or two states decide to hold out for a greater chunk of the settlement pie. In those cases, he warned against meeting over-the-top demands just for the sake of global peace.
"No two trials are exactly the same," he said. "No two negotiations are exactly the same. The capable, clever lawyer is going to look for the kinds of advantages in bargaining that will get to a yes." …
Regardless of whether a company decides to seek global or smaller FCA settlements, attorneys must always be prepared to move forward with a trial as part of their leverage in discussions with state governments. Without that bargaining chip, attorneys told Law360 that their clients could be pushed into a corner and forced to accept stiffer penalties. …
Leverage is going to vary," Gerson said. "When you're dealing with a public company whose value is going to be represented in the stock market, that client is very concerned about getting the whole thing off the table."
