A contract is defined as a promise or set of promises with legal consequences. Normally, contractual promises are enforceable in a court of law. The law gives official recognition of the written contractual promises and offers remedies when the promises are not fulfilled.
The Supreme Court of Texas has noted that every contract includes an element of confidence and trust that the parties will faithfully perform their obligations. There is no duty of good faith and fair dealing unless the duty is created by express language in the contract or a special relationship of trust and confidence exists between the parties to the contract.
In Texas, the requirements for a valid written contract are: 1) an offer; 2) an acceptance in strict compliance with the terms of the offer; 3) a meeting of the minds (which is actually a subpart of the accepted elements, not an independent element; 4) each party’s consent to the terms; 5) consideration; and 6) execution and delivery of the contract with the intent that it be mutual and binding.
A basic element of the contract is the promise, which may be an express or implied promise made by one party for the purpose of assuring another person that a particular action or restraint from a particular action will occur. This is objectively determinable from the parties’ words or actions and not from either party’s subjective intentions.
Contracts may be unilateral or bilateral. A unilateral contract has only one promisor; the promisee makes no commitment. Mutuality of obligation is not essential for a unilateral contract to be formed. A unilateral contract is completed by the promisee’s performance of the act or acts called for by the promisor, not by the promisee’s making of any reciprocal promises. The promisor becomes bound to provide the promised benefit when the promisee delivers the bargained-for performance. There is no binding unilateral contract unless the promisee performs, or at least partly performs the acts requested by the promisor. Until such time, the promisor may revoke its offer. An option agreement is a common unilateral contract. An option agreement is a promise, or offer, by the optionor that the optionee may accept or reject. Until the option is exercised in accordance with the offer, the contract remains unilateral. The contract becomes binding when the option is properly exercised.
A bilateral contract is one in which there are mutual and/or bilateral promises made between the parties. If the parties have entered into a bilateral contract in which their promises are the only consideration for the agreement, their obligations must be mutual and binding for the contract to be valid. A common example of a bilateral contract is one in which one party promises to deliver goods to the other, and the other party promises to pay the specified purchase price.
There must be an offer, an acceptance and consideration for a contract to be recognized and enforceable. To prove a valid offer a party must show 1) the offeror intended to make an offer, 2) the terms of the offer were clear and definite, and 3) the offeror communicated the essential terms of the offer to the offeree.
The offer may dictate the manner, time and place of acceptance of the offer. Under such circumstances, an offer not accepted in a timely or proper manner lapses. When an offeree rejects an offer, the offer is terminated
An acceptance must be identical to the offer or there is no binding contract. Generally, an acceptance must not change or qualify the terms of the offer or the offer is rejected. When an offer prescribes the manner of acceptance, its terms must be followed in such manner of acceptance in order to create a contract. If an offeree fails to accept in the prescribed manner and attempts to accept in some other manner, a contract is formed only if the offeror waives strict compliance with provisions concerning the manner of acceptance.
An oral offer may be accepted by execution of a written instrument that embodies the terms of the agreement. Further, a written offer may, in some circumstances, be accepted orally. Acceptance may also be shown by conduct.
An acceptance is valid only if made before an offer is revoked or lapsed. An acceptance takes effect and creates a contract when it is communicated to the offeror. Acceptance is not effective when some abstract conduct other than communication to the offeror occurs. The accepting party may change his or her mind until the act of acceptance is actually communicated to the offeror.
Although an acceptance is effective only when communicated to the offeror, when an offer may be validly accepted by mail, the “mailbox” rule provides that the communication has been made and the contract is binding when the offeree deposits a properly addressed letter of acceptance in the mail, regardless of whether it is actually received by the offerror.
Mutual assent is often described as a “meeting of the minds.” Evidence of mutual assent in written contracts generally consists of the parties’ signing the contract and delivery of the contract with the intent to bind. To determine whether a meeting of the minds existed, a court reviews what the parties actually said and did. The parties’ failure to agree on a material term precludes a meeting of the minds necessary for a valid contract.
In some cases, what appears to be a valid offer and acceptance results in only a voidable contract because one party’s consent was, in fact, procured by fraud, undue influence, duress, or mistake.
Under Texas law, a party must protect personal interests by reading a contract before signing it. Absent fraud, the person is not excused from the consequences of failing to meet this obligation. If a person signs a contract without knowledge of its contents, they are presumed to have consented to the terms of the contract. Claims of belief that provisions differed from those plainly set out in the written contract are not generally admissible.
Wednesday, November 4, 2009
Tuesday, November 3, 2009
ADOPTION IN TEXAS
Who May Adopt and Be Adopted.
(a) Subject to the requirements for standing to sue under Chapter 102 of the Texas Family Code, an adult may petition to adopt a child who may be adopted.
(b) A child residing in Texas may be adopted if:
(1) the parent-child relationship as to each living parent of the child has been terminated or a suit for termination is joined with the suit for adoption;
(2) the parent whose rights have not been terminated is presently the spouse of the petitioner and the proceeding is for a stepparent adoption;
(3) the child is at least two years old, the parent-child relationship has been terminated with respect to one parent, the person seeking the adoption has been a managing conservator or has had actual care, possession, and control of the child for a period of six months preceding the adoption or is the child's former stepparent, and the nonterminated parent consents to the adoption; or
(4) the child is at least two years old, the parent-child relationship has been terminated with respect to one parent, and the person seeking the adoption is the child's former stepparent and has been a managing conservator or has had actual care, possession, and control of the child for a period of one year preceding the adoption.
(c) If an affidavit of relinquishment of parental rights contains a consent for the Department of Protective and Regulatory Services or a licensed child-placing agency to place the child for adoption and appoints the department or agency managing conservator of the child, further consent by the parent is not required and the adoption order shall terminate all rights of the parent without further termination proceedings.
Prerequisite to Filing Petition for Adoption
Texas Family Code Sec. 162.002 states:
(a) If a petitioner is married, both spouses must join in the petition for adoption.
(b) A petition in a suit for adoption or a suit for appointment of a nonparent managing conservator with authority to consent to adoption of a child must include:
(1) a verified allegation that there has been compliance with Subchapter B ; or
(2) if there has not been compliance with Subchapter B, a verified statement of the particular reasons for noncompliance.
Pre-adoptive and Post-placement Social Studies
In a suit for adoption, pre-adoptive and post-placement social studies must be conducted as provided in Chapter 107 of the Texas Family Code.
Preferential Setting
The court shall grant a motion for a preferential setting for a final hearing on an adoption and shall give precedence to that hearing over all other civil cases not given preference by other law if the social study has been filed and the criminal history for the person seeking to adopt the child has been obtained.
Preparation of Health, Social, Educational, and Genetic History Report
(a) This section does not apply to an adoption by the child's:
(1) grandparent;
(2) aunt or uncle by birth, marriage, or prior adoption; or
(3) stepparent.
(b) Before placing a child for adoption, the Department of Protective and Regulatory Services, a licensed child-placing agency, or the child's parent or guardian shall compile a report on the available health, social, educational, and genetic history of the child to be adopted.
(c) The report shall include a history of physical, sexual, or emotional abuse suffered by the child, if any.
(d) If the child has been placed for adoption by a person or entity other than the department, a licensed child-placing agency, or the child's parent or guardian, it is the duty of the person or entity who places the child for adoption to prepare the report.
(e) The person or entity who places the child for adoption shall provide the prospective adoptive parents a copy of the report as early as practicable before the first meeting of the adoptive parents with the child. The copy of the report shall be edited to protect the identity of birth parents and their families.
(f) The department, licensed child-placing agency, parent, guardian, person, or entity who prepares and files the original report is required to furnish supplemental medical, psychological, and psychiatric information to the adoptive parents if that information becomes available and to file the supplemental information where the original report is filed. The supplemental information shall be retained for as long as the original report is required to be retained.
Contents of Health, Social, Educational, and Genetic History Report
(a) The health history of the child must include information about:
(1) the child's health status at the time of placement;
(2) the child's birth, neonatal, and other medical, psychological, psychiatric, and dental history information;
(3) a record of immunizations for the child; and
(4) the available results of medical, psychological, psychiatric, and dental examinations of the child.
(b) The social history of the child must include information, to the extent known, about past and existing relationships between the child and the child's siblings, parents by birth, extended family, and other persons who have had physical possession of or legal access to the child.
(c) The educational history of the child must include, to the extent known, information about:
(1) the enrollment and performance of the child in educational institutions;
(2) results of educational testing and standardized tests for the child; and
(3) special educational needs, if any, of the child.
(d) The genetic history of the child must include a description of the child's parents by birth and their parents, any other child born to either of the child's parents, and extended family members and must include, to the extent the information is available, information about:
(1) their health and medical history, including any genetic diseases and disorders;
(2) their health status at the time of placement;
(3) the cause of and their age at death;
(4) their height, weight, and eye and hair color;
(5) their nationality and ethnic background;
(6) their general levels of educational and professional achievements, if any;
(7) their religious backgrounds, if any;
(8) any psychological, psychiatric, or social evaluations, including the date of the evaluation, any diagnosis, and a summary of any findings;
(9) any criminal conviction records relating to a misdemeanor or felony classified as an offense against the person or family or public indecency or a felony violation of a statute intended to control the possession or distribution of a substance included in Chapter 481, Health and Safety Code; and
(10) any information necessary to determine whether the child is entitled to or otherwise eligible for state or federal financial, medical, or other assistance.
Filing of Health, Social, Educational, and Genetic History Report
(a) This section does not apply to an adoption by the child's:
(1) grandparent;
(2) aunt or uncle by birth, marriage, or prior adoption; or
(3) stepparent.
(b) A petition for adoption may not be granted until the following documents have been filed:
(1) a copy of the health, social, educational, and genetic history report signed by the child's adoptive parents; and
(2) if the report is required to be submitted to the bureau of vital statistics under Section 162.006(e), a certificate from the bureau acknowledging receipt of the report.
(c) A court having jurisdiction of a suit affecting the parent-child relationship may by order waive the making and filing of a report under this section if the child's biological parents cannot be located and their absence results in insufficient information being available to compile the report.
Criminal History Report Required
(a) In a suit affecting the parent-child relationship in which an adoption is sought, the court shall order each person seeking to adopt the child to obtain that person's own criminal history record information. The court shall accept under this section a person's criminal history record information that is provided by the Department of Protective and Regulatory Services or by a licensed child-placing agency that received the information from the department if the information was obtained not more than one year before the date the court ordered the history to be obtained.
(b) A person required to obtain information under Subsection (a) shall obtain the information in the manner provided by Section 411.128, Government Code.
Residence with Petitioner.
(a) The court may not grant an adoption until the child has resided with the petitioner for not less than six months.
(b) On request of the petitioner, the court may waive the residence requirement if the waiver is in the best interest of the child.
Consent Required
(a) Unless the managing conservator is the petitioner, the written consent of a managing conservator to the adoption must be filed. The court may waive the requirement of consent by the managing conservator if the court finds that the consent is being refused or has been revoked without good cause. A hearing on the issue of consent shall be conducted by the court without a jury.
(b) If a parent of the child is presently the spouse of the petitioner, that parent must join in the petition for adoption and further consent of that parent is not required.
(c) A child 12 years of age or older must consent to the adoption in writing or in court. The court may waive this requirement if it would serve the child's best interest.
Revocation of Consent
At any time before an order granting the adoption of the child is rendered, a consent required by Section 162.010 may be revoked by filing a signed revocation.
Attendance at Hearing Required
(a) If the joint petitioners are husband and wife and it would be unduly difficult for one of the petitioners to appear at the hearing, the court may waive the attendance of that petitioner if the other spouse is present.
(b) A child to be adopted who is 12 years of age or older shall attend the hearing. The court may waive this requirement in the best interest of the child.
Sec. 162.015. RACE OR ETHNICITY.
(a) In determining the best interest of the child, the court may not deny or delay the adoption or otherwise discriminate on the basis of race or ethnicity of the child or the prospective adoptive parents.
(b) This section does not apply to a person, entity, tribe, organization, or child custody proceeding subject to the Indian Child Welfare Act of 1978
Adoption Order
(a) If a petition requesting termination has been joined with a petition requesting adoption, the court shall also terminate the parent-child relationship at the same time the adoption order is rendered. The court must make separate findings that the termination is in the best interest of the child and that the adoption is in the best interest of the child.
(b) If the court finds that the requirements for adoption have been met and the adoption is in the best interest of the child, the court shall grant the adoption.
(c) The name of the child may be changed in the order if requested.
Effect of Adoption
(a) An order of adoption creates the parent-child relationship between the adoptive parent and the child for all purposes.
(b) An adopted child is entitled to inherit from and through the child's adoptive parents as though the child were the biological child of the parents.
(c) The terms "child," "descendant," "issue," and other terms indicating the relationship of parent and child include an adopted child unless the context or express language clearly indicates otherwise.
(d) Nothing in this chapter precludes or affects the rights of a biological or adoptive maternal or paternal grandparent to reasonable possession of or access to a grandchild, as provided in Chapter 153.
(a) Subject to the requirements for standing to sue under Chapter 102 of the Texas Family Code, an adult may petition to adopt a child who may be adopted.
(b) A child residing in Texas may be adopted if:
(1) the parent-child relationship as to each living parent of the child has been terminated or a suit for termination is joined with the suit for adoption;
(2) the parent whose rights have not been terminated is presently the spouse of the petitioner and the proceeding is for a stepparent adoption;
(3) the child is at least two years old, the parent-child relationship has been terminated with respect to one parent, the person seeking the adoption has been a managing conservator or has had actual care, possession, and control of the child for a period of six months preceding the adoption or is the child's former stepparent, and the nonterminated parent consents to the adoption; or
(4) the child is at least two years old, the parent-child relationship has been terminated with respect to one parent, and the person seeking the adoption is the child's former stepparent and has been a managing conservator or has had actual care, possession, and control of the child for a period of one year preceding the adoption.
(c) If an affidavit of relinquishment of parental rights contains a consent for the Department of Protective and Regulatory Services or a licensed child-placing agency to place the child for adoption and appoints the department or agency managing conservator of the child, further consent by the parent is not required and the adoption order shall terminate all rights of the parent without further termination proceedings.
Prerequisite to Filing Petition for Adoption
Texas Family Code Sec. 162.002 states:
(a) If a petitioner is married, both spouses must join in the petition for adoption.
(b) A petition in a suit for adoption or a suit for appointment of a nonparent managing conservator with authority to consent to adoption of a child must include:
(1) a verified allegation that there has been compliance with Subchapter B ; or
(2) if there has not been compliance with Subchapter B, a verified statement of the particular reasons for noncompliance.
Pre-adoptive and Post-placement Social Studies
In a suit for adoption, pre-adoptive and post-placement social studies must be conducted as provided in Chapter 107 of the Texas Family Code.
Preferential Setting
The court shall grant a motion for a preferential setting for a final hearing on an adoption and shall give precedence to that hearing over all other civil cases not given preference by other law if the social study has been filed and the criminal history for the person seeking to adopt the child has been obtained.
Preparation of Health, Social, Educational, and Genetic History Report
(a) This section does not apply to an adoption by the child's:
(1) grandparent;
(2) aunt or uncle by birth, marriage, or prior adoption; or
(3) stepparent.
(b) Before placing a child for adoption, the Department of Protective and Regulatory Services, a licensed child-placing agency, or the child's parent or guardian shall compile a report on the available health, social, educational, and genetic history of the child to be adopted.
(c) The report shall include a history of physical, sexual, or emotional abuse suffered by the child, if any.
(d) If the child has been placed for adoption by a person or entity other than the department, a licensed child-placing agency, or the child's parent or guardian, it is the duty of the person or entity who places the child for adoption to prepare the report.
(e) The person or entity who places the child for adoption shall provide the prospective adoptive parents a copy of the report as early as practicable before the first meeting of the adoptive parents with the child. The copy of the report shall be edited to protect the identity of birth parents and their families.
(f) The department, licensed child-placing agency, parent, guardian, person, or entity who prepares and files the original report is required to furnish supplemental medical, psychological, and psychiatric information to the adoptive parents if that information becomes available and to file the supplemental information where the original report is filed. The supplemental information shall be retained for as long as the original report is required to be retained.
Contents of Health, Social, Educational, and Genetic History Report
(a) The health history of the child must include information about:
(1) the child's health status at the time of placement;
(2) the child's birth, neonatal, and other medical, psychological, psychiatric, and dental history information;
(3) a record of immunizations for the child; and
(4) the available results of medical, psychological, psychiatric, and dental examinations of the child.
(b) The social history of the child must include information, to the extent known, about past and existing relationships between the child and the child's siblings, parents by birth, extended family, and other persons who have had physical possession of or legal access to the child.
(c) The educational history of the child must include, to the extent known, information about:
(1) the enrollment and performance of the child in educational institutions;
(2) results of educational testing and standardized tests for the child; and
(3) special educational needs, if any, of the child.
(d) The genetic history of the child must include a description of the child's parents by birth and their parents, any other child born to either of the child's parents, and extended family members and must include, to the extent the information is available, information about:
(1) their health and medical history, including any genetic diseases and disorders;
(2) their health status at the time of placement;
(3) the cause of and their age at death;
(4) their height, weight, and eye and hair color;
(5) their nationality and ethnic background;
(6) their general levels of educational and professional achievements, if any;
(7) their religious backgrounds, if any;
(8) any psychological, psychiatric, or social evaluations, including the date of the evaluation, any diagnosis, and a summary of any findings;
(9) any criminal conviction records relating to a misdemeanor or felony classified as an offense against the person or family or public indecency or a felony violation of a statute intended to control the possession or distribution of a substance included in Chapter 481, Health and Safety Code; and
(10) any information necessary to determine whether the child is entitled to or otherwise eligible for state or federal financial, medical, or other assistance.
Filing of Health, Social, Educational, and Genetic History Report
(a) This section does not apply to an adoption by the child's:
(1) grandparent;
(2) aunt or uncle by birth, marriage, or prior adoption; or
(3) stepparent.
(b) A petition for adoption may not be granted until the following documents have been filed:
(1) a copy of the health, social, educational, and genetic history report signed by the child's adoptive parents; and
(2) if the report is required to be submitted to the bureau of vital statistics under Section 162.006(e), a certificate from the bureau acknowledging receipt of the report.
(c) A court having jurisdiction of a suit affecting the parent-child relationship may by order waive the making and filing of a report under this section if the child's biological parents cannot be located and their absence results in insufficient information being available to compile the report.
Criminal History Report Required
(a) In a suit affecting the parent-child relationship in which an adoption is sought, the court shall order each person seeking to adopt the child to obtain that person's own criminal history record information. The court shall accept under this section a person's criminal history record information that is provided by the Department of Protective and Regulatory Services or by a licensed child-placing agency that received the information from the department if the information was obtained not more than one year before the date the court ordered the history to be obtained.
(b) A person required to obtain information under Subsection (a) shall obtain the information in the manner provided by Section 411.128, Government Code.
Residence with Petitioner.
(a) The court may not grant an adoption until the child has resided with the petitioner for not less than six months.
(b) On request of the petitioner, the court may waive the residence requirement if the waiver is in the best interest of the child.
Consent Required
(a) Unless the managing conservator is the petitioner, the written consent of a managing conservator to the adoption must be filed. The court may waive the requirement of consent by the managing conservator if the court finds that the consent is being refused or has been revoked without good cause. A hearing on the issue of consent shall be conducted by the court without a jury.
(b) If a parent of the child is presently the spouse of the petitioner, that parent must join in the petition for adoption and further consent of that parent is not required.
(c) A child 12 years of age or older must consent to the adoption in writing or in court. The court may waive this requirement if it would serve the child's best interest.
Revocation of Consent
At any time before an order granting the adoption of the child is rendered, a consent required by Section 162.010 may be revoked by filing a signed revocation.
Attendance at Hearing Required
(a) If the joint petitioners are husband and wife and it would be unduly difficult for one of the petitioners to appear at the hearing, the court may waive the attendance of that petitioner if the other spouse is present.
(b) A child to be adopted who is 12 years of age or older shall attend the hearing. The court may waive this requirement in the best interest of the child.
Sec. 162.015. RACE OR ETHNICITY.
(a) In determining the best interest of the child, the court may not deny or delay the adoption or otherwise discriminate on the basis of race or ethnicity of the child or the prospective adoptive parents.
(b) This section does not apply to a person, entity, tribe, organization, or child custody proceeding subject to the Indian Child Welfare Act of 1978
Adoption Order
(a) If a petition requesting termination has been joined with a petition requesting adoption, the court shall also terminate the parent-child relationship at the same time the adoption order is rendered. The court must make separate findings that the termination is in the best interest of the child and that the adoption is in the best interest of the child.
(b) If the court finds that the requirements for adoption have been met and the adoption is in the best interest of the child, the court shall grant the adoption.
(c) The name of the child may be changed in the order if requested.
Effect of Adoption
(a) An order of adoption creates the parent-child relationship between the adoptive parent and the child for all purposes.
(b) An adopted child is entitled to inherit from and through the child's adoptive parents as though the child were the biological child of the parents.
(c) The terms "child," "descendant," "issue," and other terms indicating the relationship of parent and child include an adopted child unless the context or express language clearly indicates otherwise.
(d) Nothing in this chapter precludes or affects the rights of a biological or adoptive maternal or paternal grandparent to reasonable possession of or access to a grandchild, as provided in Chapter 153.
Monday, November 2, 2009
Texas Law and Post-Divorce Spousal Maintenance
Under Section 8.051 of the Texas Family Code, a court shall order maintenance for either spouse only if:
1. the spouse for whom maintenance is requested was convicted of or received deferred adjudication for a criminal offense that also constitutes an act of family violence under Title 4 and the offense occurred:
a. within two years before the date on which a suit for dissolution of marriage is filed; or
b. while the suit is pending; or
2. the duration of the marriage was 10 years or longer, the spouse seeking maintenance lacks sufficient property, including property distributed to the spouse under this code, to provide for the spouse’s minimum reasonable needs, as limited by Section 8.054, and the spouse seeking maintenance:
a. is unable to support himself or herself through appropriate employment because of an incapacitating physical or mental disability;
b. is the custodian of a child of the marriage of any age who requires substantial care and personal supervision because a physical or mental disability makes it necessary, taking into consideration the needs of the child, that the spouse not be employed outside the home; or
c. clearly lacks earning ability in the labor market adequate to provide support for the spouse’s minimum reasonable needs, as limited by Section 8.054.
Section 8.052 of the Texas Family Code states that a court shall determine the nature, amount, duration, and manner of periodic spousal maintenance payments by considering all relevant factors, including the following:
1. the financial resources of the spouse seeking maintenance, including the community and separate property and liabilities apportioned to that spouse in the dissolution proceeding, and that spouse’s ability to meet the spouse’s needs independently;
2. the educational and employment skills of the spouses, the time necessary to acquire sufficient education or training to enable the spouse seeking maintenance to find appropriate employment, the availability of that education or training, and the feasibility of that education or training;
3. the duration of the marriage;
4. the age, employment history, earning ability, and physical and emotional condition of the spouse seeking maintenance;
5. the ability of the spouse from whom maintenance is requested to meet that spouse’s personal needs and to provide periodic child support payments, if applicable, while meeting the personal needs of the spouse seeking maintenance;
6. acts by either spouse resulting in excessive or abnormal expenditures or destruction, concealment, or fraudulent disposition of community property, joint tenancy, or other property held in common;
7. the comparative financial resources of the spouse, including medical, retirement, insurance, or other benefits, and the separate property of each spouse;
8. the contribution by one spouse to the education, training, or increased earning power of the other spouse;
9. the property brought to the marriage by either spouse;
10. the contribution of a spouse as homemaker;
11. marital misconduct of the spouse seeking maintenance; and
12. the efforts of the spouse seeking maintenance to pursue available employment counseling as provided by Chapter 304, Labor Code.
Section 8.053 states that except as provided by Subsection (b), it is presumed that maintenance under Section 8.051(2) is not warranted unless the spouse seeking maintenance has exercised diligence in:
1. seeking suitable employment; or
2. developing the necessary skills to become self-supporting during a period of separation and during the time the suit for dissolution of the marriage is pending.
This section does not apply to a spouse who is not able to satisfy the presumption in Subsection (a) because the spouse:
1. has an incapacitating physical or mental disability;
2. is the custodian of a child of the marriage of any age who requires substantial care and personal supervision because a physical or mental disability makes it necessary, taking into consideration the needs of the child, that the spouse not be employed outside the home.
Except as provided in subsection (b), a court:
1. may not order maintenance that remains in effect for more than three years after the date of the order; and
2. shall limit the duration of a maintenance order to the shortest reasonable period that allows the spouse seeking maintenance to meet the spouse’s minimum reasonable needs by obtaining appropriate employment or developing an appropriate skill, unless the ability of the spouse to provide for the spouse’s minimum reasonable needs through employment is substantially or totally diminished because of:
a. physical or mental disability;
b. duties as the custodian of an infant or young child; or
c. another compelling impediment to gainful employment.
If a spouse seeking maintenance is unable to support himself or herself through appropriate employment because the spouse has an incapacitating physical or mental disability or because the spouse is the Custodian of a child of the marriage of any age who has a physical or mental disability, the court may order maintenance for as long as the disability continues.
A court may not order maintenance that requires an obligor to pay monthly more than the lesser of:
1. $2,500; or
2. 20 percent of the spouse’s average monthly gross income.
The court shall set the amount that an obligor is required to pay in a maintenance order to provide for the minimum reasonable needs of the oblige, considering employment or property received in the dissolution of the marriage or otherwise owned by the oblige that contributes to the minimum reasonable needs of the oblige.
Department of Veterans Affairs service-connected disability compensation, social security benefits and disability benefits, and workers’ compensation benefits are excluded from maintenance.
1. the spouse for whom maintenance is requested was convicted of or received deferred adjudication for a criminal offense that also constitutes an act of family violence under Title 4 and the offense occurred:
a. within two years before the date on which a suit for dissolution of marriage is filed; or
b. while the suit is pending; or
2. the duration of the marriage was 10 years or longer, the spouse seeking maintenance lacks sufficient property, including property distributed to the spouse under this code, to provide for the spouse’s minimum reasonable needs, as limited by Section 8.054, and the spouse seeking maintenance:
a. is unable to support himself or herself through appropriate employment because of an incapacitating physical or mental disability;
b. is the custodian of a child of the marriage of any age who requires substantial care and personal supervision because a physical or mental disability makes it necessary, taking into consideration the needs of the child, that the spouse not be employed outside the home; or
c. clearly lacks earning ability in the labor market adequate to provide support for the spouse’s minimum reasonable needs, as limited by Section 8.054.
Section 8.052 of the Texas Family Code states that a court shall determine the nature, amount, duration, and manner of periodic spousal maintenance payments by considering all relevant factors, including the following:
1. the financial resources of the spouse seeking maintenance, including the community and separate property and liabilities apportioned to that spouse in the dissolution proceeding, and that spouse’s ability to meet the spouse’s needs independently;
2. the educational and employment skills of the spouses, the time necessary to acquire sufficient education or training to enable the spouse seeking maintenance to find appropriate employment, the availability of that education or training, and the feasibility of that education or training;
3. the duration of the marriage;
4. the age, employment history, earning ability, and physical and emotional condition of the spouse seeking maintenance;
5. the ability of the spouse from whom maintenance is requested to meet that spouse’s personal needs and to provide periodic child support payments, if applicable, while meeting the personal needs of the spouse seeking maintenance;
6. acts by either spouse resulting in excessive or abnormal expenditures or destruction, concealment, or fraudulent disposition of community property, joint tenancy, or other property held in common;
7. the comparative financial resources of the spouse, including medical, retirement, insurance, or other benefits, and the separate property of each spouse;
8. the contribution by one spouse to the education, training, or increased earning power of the other spouse;
9. the property brought to the marriage by either spouse;
10. the contribution of a spouse as homemaker;
11. marital misconduct of the spouse seeking maintenance; and
12. the efforts of the spouse seeking maintenance to pursue available employment counseling as provided by Chapter 304, Labor Code.
Section 8.053 states that except as provided by Subsection (b), it is presumed that maintenance under Section 8.051(2) is not warranted unless the spouse seeking maintenance has exercised diligence in:
1. seeking suitable employment; or
2. developing the necessary skills to become self-supporting during a period of separation and during the time the suit for dissolution of the marriage is pending.
This section does not apply to a spouse who is not able to satisfy the presumption in Subsection (a) because the spouse:
1. has an incapacitating physical or mental disability;
2. is the custodian of a child of the marriage of any age who requires substantial care and personal supervision because a physical or mental disability makes it necessary, taking into consideration the needs of the child, that the spouse not be employed outside the home.
Except as provided in subsection (b), a court:
1. may not order maintenance that remains in effect for more than three years after the date of the order; and
2. shall limit the duration of a maintenance order to the shortest reasonable period that allows the spouse seeking maintenance to meet the spouse’s minimum reasonable needs by obtaining appropriate employment or developing an appropriate skill, unless the ability of the spouse to provide for the spouse’s minimum reasonable needs through employment is substantially or totally diminished because of:
a. physical or mental disability;
b. duties as the custodian of an infant or young child; or
c. another compelling impediment to gainful employment.
If a spouse seeking maintenance is unable to support himself or herself through appropriate employment because the spouse has an incapacitating physical or mental disability or because the spouse is the Custodian of a child of the marriage of any age who has a physical or mental disability, the court may order maintenance for as long as the disability continues.
A court may not order maintenance that requires an obligor to pay monthly more than the lesser of:
1. $2,500; or
2. 20 percent of the spouse’s average monthly gross income.
The court shall set the amount that an obligor is required to pay in a maintenance order to provide for the minimum reasonable needs of the oblige, considering employment or property received in the dissolution of the marriage or otherwise owned by the oblige that contributes to the minimum reasonable needs of the oblige.
Department of Veterans Affairs service-connected disability compensation, social security benefits and disability benefits, and workers’ compensation benefits are excluded from maintenance.
Sunday, October 25, 2009
Sealing the Deal – Contracts (A Smart Investment) - Part II
There are two primary types of contracts: express contract and implied contract. The express contract is formal, and stated either verbally or in writing. The implied contract is one that is not written down, but considered to be understood between the parties. It is a matter of inference and deduction.
Though most oral contracts are not legally binding, they are undertaken on ethical principles. In the United States every contract for that sale of goods that involves an amount that exceeds $500.00 must be written to be legally enforceable. The courts generally recognize any defined meeting of the minds of competent persons with a like purpose and intent to undertake some common task as a contract. The Statute of Frauds mandates for some contracts to be enforceable they must be in writing.
There are three ways a term may be implied into a contract:
1. By custom – A contract may incorporate as an implied term any relevant custom. The custom must be well known within a particular trade and business and be generally accepted within such trade or business.
2. By statute – The most common terms implied by statute are those relating to the sale and supply of goods and services. The Sale of Goods Act of 1979 provides for implied terms in respect of: 1) that the seller has the right to sell the goods 2) that goods sold are of satisfactory quality; 4) that goods sold are reasonably fit for the purpose they were bought; and 5) that goods sold by sample correspond with the sample. The Supply of Goods and Services Act of 1982 states with regard to implied terms in a contract that the service will be carried out with reasonable care and skill, within a reasonable time and for a reasonable price.
3. By the Court – Courts do not like to interfere in the construction of contracts. They will only imply terms into a contract under certain circumstances and with certain pre-conditions. Terms can be implied in fact or in law.
A contract implied in fact is one in which the circumstances imply the parties have reached an agreement even though they have not done so expressly.
A contract implied in law (the quasi-contract) is not an actual contract, but a means for the courts to remedy situations in which one party would be unjustly enriched were he or she not required to compensate the other. If one party has agreed to a term, but the other party has not, it will not be implied into a contract. Further, terms will not be implied into a rigorous contract with detailed written terms where any omission would be deemed to be deliberate.
Express terms of a contract outline the primary obligations of the parties. Distinction has been made among the various types of express terms. This distinction is important as it sets apart the remedies available to the innocent party in the event of a breach. Such terms fall into three categories:
1. Conditions – the major terms of the contract.
2. Warranties – the minor terms of the contract.
3. Miscellaneous terms – neither conditions or warranties.
An implied term cannot contradict an express term. However, it may widen or narrow an express term when necessary if the express term is flexible.
The basic rule is that parties to contracts must perform as specified in the contract unless (1) the parties agree to the change in the contract's terms, or (2) the actions of the party who deviates from the terms of the contract are implicitly accepted ("ratified") by the action or non-action of the other party. If there is no acceptance of deviation from the terms of the contract, and the deviation is serious enough to make any real difference in the intended result of the contract, then the deviating party is said to have breached the contract. His justified prevention or interference with the performance of the other party is also a breach. Of course if one party fails more or less entirely to perform the contract, or totally prevents the performance of the contract by the other party, the situation is straightforward. The situation becomes more complex where the argument is over specific terms such as the quality of materials or the timing of work. Breach of contract leaves the non-performing or improperly performing party open to a claim for damages by the other party. If the breach is a material breach, the non-breaching party is relieved of his obligations under the contract by the other party's breach. There are many possible ways for performance of a contract to give rise to dissatisfaction. The courts have been forced to analyze the matter in much more subtle terms than "breached" or "not breached." The doctrine of "substantial performance" saves a party who has largely fulfilled his obligations under a contract from suffering major loss merely because he has unintentionally fallen short in some particular manner which does not affect the essence of the contract.
A breach is not defined as promises laid out explicitly in a contract, rather a breach of contract is defined as any violation of law, principal or obligation. It is this definition of breach that leaves room for parties to file suits involving breaches of implied contracts.
Though most oral contracts are not legally binding, they are undertaken on ethical principles. In the United States every contract for that sale of goods that involves an amount that exceeds $500.00 must be written to be legally enforceable. The courts generally recognize any defined meeting of the minds of competent persons with a like purpose and intent to undertake some common task as a contract. The Statute of Frauds mandates for some contracts to be enforceable they must be in writing.
There are three ways a term may be implied into a contract:
1. By custom – A contract may incorporate as an implied term any relevant custom. The custom must be well known within a particular trade and business and be generally accepted within such trade or business.
2. By statute – The most common terms implied by statute are those relating to the sale and supply of goods and services. The Sale of Goods Act of 1979 provides for implied terms in respect of: 1) that the seller has the right to sell the goods 2) that goods sold are of satisfactory quality; 4) that goods sold are reasonably fit for the purpose they were bought; and 5) that goods sold by sample correspond with the sample. The Supply of Goods and Services Act of 1982 states with regard to implied terms in a contract that the service will be carried out with reasonable care and skill, within a reasonable time and for a reasonable price.
3. By the Court – Courts do not like to interfere in the construction of contracts. They will only imply terms into a contract under certain circumstances and with certain pre-conditions. Terms can be implied in fact or in law.
A contract implied in fact is one in which the circumstances imply the parties have reached an agreement even though they have not done so expressly.
A contract implied in law (the quasi-contract) is not an actual contract, but a means for the courts to remedy situations in which one party would be unjustly enriched were he or she not required to compensate the other. If one party has agreed to a term, but the other party has not, it will not be implied into a contract. Further, terms will not be implied into a rigorous contract with detailed written terms where any omission would be deemed to be deliberate.
Express terms of a contract outline the primary obligations of the parties. Distinction has been made among the various types of express terms. This distinction is important as it sets apart the remedies available to the innocent party in the event of a breach. Such terms fall into three categories:
1. Conditions – the major terms of the contract.
2. Warranties – the minor terms of the contract.
3. Miscellaneous terms – neither conditions or warranties.
An implied term cannot contradict an express term. However, it may widen or narrow an express term when necessary if the express term is flexible.
The basic rule is that parties to contracts must perform as specified in the contract unless (1) the parties agree to the change in the contract's terms, or (2) the actions of the party who deviates from the terms of the contract are implicitly accepted ("ratified") by the action or non-action of the other party. If there is no acceptance of deviation from the terms of the contract, and the deviation is serious enough to make any real difference in the intended result of the contract, then the deviating party is said to have breached the contract. His justified prevention or interference with the performance of the other party is also a breach. Of course if one party fails more or less entirely to perform the contract, or totally prevents the performance of the contract by the other party, the situation is straightforward. The situation becomes more complex where the argument is over specific terms such as the quality of materials or the timing of work. Breach of contract leaves the non-performing or improperly performing party open to a claim for damages by the other party. If the breach is a material breach, the non-breaching party is relieved of his obligations under the contract by the other party's breach. There are many possible ways for performance of a contract to give rise to dissatisfaction. The courts have been forced to analyze the matter in much more subtle terms than "breached" or "not breached." The doctrine of "substantial performance" saves a party who has largely fulfilled his obligations under a contract from suffering major loss merely because he has unintentionally fallen short in some particular manner which does not affect the essence of the contract.
A breach is not defined as promises laid out explicitly in a contract, rather a breach of contract is defined as any violation of law, principal or obligation. It is this definition of breach that leaves room for parties to file suits involving breaches of implied contracts.
Monday, October 19, 2009
The Whistleblower - Pharmaceutical Fraud
In September of 2007, Bristol-Myers Squibb Company and its wholly owned subsidiary, Apothecon, Inc. agreed to pay over $515 million to resolve a broad array of civil allegations involving their drug marketing and pricing practices. In December 2007 the Corporate Crime Reporter reported Merick to pay $670 million to settle federal and state charges that it violated the False Claims Act by engaging in nominal pricing fraud. In 1986, more than $20 billion was paid out in fraud lawsuits brought by whistleblowers.
Pharmaceutical fraud cases represent the largest percentage of False Claims Act recoveries by the United, and qui tam relator whistleblower lawsuits. The False Claims Act Is a federal whistleblower law which has its roots in the civil war era and allows private citizens to file actions against federal contractors and corporations who conduct fraud against the government and the public. It is the United States’ most powerful tool for rooting out fraudulent government contracts. With the advent of the Medicare prescription plan, even more federal tax dollars will flow into the pockets of large ruling companies illegally and in violation of current law. In an industry with great power and profitability, there are lots of pressures upon companies to ignore federal laws designed to prevent fraud and curb costs.
Pharmaceutical fraud can take a variety of forms and involve complex issues. The following are some example:
Charging the government for drugs not used and returned to pharmacy providers;
Marketing, promoting, and selling drugs for use other than those approved by the FDA;
Paying kickbacks and inducements to physicians, hospitals and pharmacists to prescribe or otherwise favor a drug; Engaging in off-label marketing; and Providing false data to the FDA or withholding negative data from FDA about the efficacy of a pharmaceutical drug or medical device in clinical research trials to get approval to sell and market the pharmaceutical drug or medical device.
Currently, the United States Government, along with the governments of 15 states and the District of Columbia, have joined with two whistleblowers who allege that drug manufacturer Wyeth defrauded U.S. taxpayers out of hundreds of millions of dollars. According to the Wall Street Journal, Wyeth is accused of overcharging Medicare and Medicaid programs nationwide for purchases of it’s acid-reflux drug Protonix. Under federal law, drug companies are required to offer prescriptions to federal aid programs at the lowest possible price. The Wyeth suit alleges that Wyeth was offering Protonix at a 90% discount to a private hospital, while charging the federal government much higher rates.
Other drug companies that have settled qui tam lawsuits include Pfizer, TAP Pharmaceuticals, Bayer, and Schering-Plough Corp. A federal official recently said the government has approximately 150 pharmaceutical fraud cases pending involving over 500 different drugs.
Pharmacy benefits management companies have also come under increasing scrutiny as a result of the False Claims Act. In one of the most prominent whistleblower cases reported, Phillips & Cohen represented two whistleblowers whose qui tam lawsuits resulted in a settlement of $875 million to settle the lawsuits and related criminal charges.
If you believe you have discovered fraud, you should try to assess the magnitude of the fraud and gather whatever documentary or electronic evidence is lawfully available. Be sure you do not violate the law or the terms of your employment agreement. Write down the details of any meetings or events where fraud was discussed, who was present and what documents may exist that memorialize the event. This documentation should be given to your attorney.
Keep in mind, you cannot recover in a qui tam action if another whistleblower has already filed an action based on the same documentation and information.
Pharmaceutical fraud cases represent the largest percentage of False Claims Act recoveries by the United, and qui tam relator whistleblower lawsuits. The False Claims Act Is a federal whistleblower law which has its roots in the civil war era and allows private citizens to file actions against federal contractors and corporations who conduct fraud against the government and the public. It is the United States’ most powerful tool for rooting out fraudulent government contracts. With the advent of the Medicare prescription plan, even more federal tax dollars will flow into the pockets of large ruling companies illegally and in violation of current law. In an industry with great power and profitability, there are lots of pressures upon companies to ignore federal laws designed to prevent fraud and curb costs.
Pharmaceutical fraud can take a variety of forms and involve complex issues. The following are some example:
Charging the government for drugs not used and returned to pharmacy providers;
Marketing, promoting, and selling drugs for use other than those approved by the FDA;
Paying kickbacks and inducements to physicians, hospitals and pharmacists to prescribe or otherwise favor a drug; Engaging in off-label marketing; and Providing false data to the FDA or withholding negative data from FDA about the efficacy of a pharmaceutical drug or medical device in clinical research trials to get approval to sell and market the pharmaceutical drug or medical device.
Currently, the United States Government, along with the governments of 15 states and the District of Columbia, have joined with two whistleblowers who allege that drug manufacturer Wyeth defrauded U.S. taxpayers out of hundreds of millions of dollars. According to the Wall Street Journal, Wyeth is accused of overcharging Medicare and Medicaid programs nationwide for purchases of it’s acid-reflux drug Protonix. Under federal law, drug companies are required to offer prescriptions to federal aid programs at the lowest possible price. The Wyeth suit alleges that Wyeth was offering Protonix at a 90% discount to a private hospital, while charging the federal government much higher rates.
Other drug companies that have settled qui tam lawsuits include Pfizer, TAP Pharmaceuticals, Bayer, and Schering-Plough Corp. A federal official recently said the government has approximately 150 pharmaceutical fraud cases pending involving over 500 different drugs.
Pharmacy benefits management companies have also come under increasing scrutiny as a result of the False Claims Act. In one of the most prominent whistleblower cases reported, Phillips & Cohen represented two whistleblowers whose qui tam lawsuits resulted in a settlement of $875 million to settle the lawsuits and related criminal charges.
If you believe you have discovered fraud, you should try to assess the magnitude of the fraud and gather whatever documentary or electronic evidence is lawfully available. Be sure you do not violate the law or the terms of your employment agreement. Write down the details of any meetings or events where fraud was discussed, who was present and what documents may exist that memorialize the event. This documentation should be given to your attorney.
Keep in mind, you cannot recover in a qui tam action if another whistleblower has already filed an action based on the same documentation and information.
Thursday, October 15, 2009
Whistleblower – Federal Government and Federal Government Contractor Fraud
A large percentage of the United State’s enormous annual spending goes to development and implementation of new weapons systems, facilities, equipment, supplies, and logistical and technical services through the procurement of government contracts. Such government contracts frequently involve military defense contracts such as B-1 Bombers, military tanks and vehicles, military fire power and uniforms, and extends to areas such as computer technology and food services for our troops.
Defense contractor fraud remains one of the most prominent areas of false claims litigation under the Federal False Claims Act.
In April 2009 TRW Inc.’s efforts to stop a scientist from revealing his research findings about faulty electronic components the company sold to the government for military and intelligence-gathering satellites were the basis for a whistleblower lawsuit that Northrop Grumman Corp. settled for $325 million. It was the largest settlement ever paid by a defense contractor in a whistleblower case and the second largest ever paid involving defense contractor fraud.
The whistleblower was awarded $48.7 million for his work and the work of his attorneys on the case. The Federal False Claims Act requires the government to award whistleblowers 15 to 25 percent of the amount the government recovers as a result of whistleblower cases.
A false certification of regulatory and statutory compliance, necessary to obtain a contract, can render false all claims for payment under that contract. A contractor’s failure to meet contract performance requirements and failure to provide goods and services in conformance with federal statutes and regulations may be sufficient to violate the False Claims Act.
Presentation of a claim to the Government for payment, when the failure to abide by contract requirements has not been disclosed to the Government, is deemed equivalent to false certification of compliance with such laws and regulations. Therefore, if a claim for payment is submitted and the contract requirements have not been fulfilled in all respects, if federal funding is conditioned on compliance, gives rise to a False Claims Act case. Claims may be false, even though goods or services otherwise fulfill contract specifications.
Defense contractor fraud remains one of the most prominent areas of false claims litigation. Billions of dollars have been recovered from defense contractors, mainly as a result of whistleblowers. Some common ways in which defense contractors have tried to defraud the government are as follows:
1. Cross-charging. This occurs when a defense contractor improperly shifts costs and expenses from one defense contract to another in order to boost its profits.
2. Improper Product Substitution. Contracts frequently request the contractor use a specific grade or quality of product or part. There are often requirements that the products be new or made in the United States. Defense contractors often attempt to save costs by substituting cheaper or substandard parts.
3. Improper Cost Allocation. Under this scheme the defense contractor will improperly allocate or shift cost from private businesses or foreign governments onto the cost-plus contracts they have with the United States government.
4. Worthless or Substandard Products or Services. In this case the defense contractor with knowledge or through reckless neglect, delivers products that do not perform as promised.
5. Inflation or Costs and Charges. In a cost-plus contract, the government pays the defense contractor a set price plus a percentage of the contractor’s costs for producing the product. In this scheme the contractor improperly inflates their costs and charges to increase revenue the company earns from the U.S. government.
6. Violations of the Truth-In-Negotiations Act. Weapons systems and equipment can be extremely complex. Much of the time, there is only one company in the world producing a particular weapon system or piece of equipment. The government has no choice but to purchase the particular weapon system or piece of equipment from a single supplier. Because other competitors are not bidding, the government has no way of knowing if it is paying a fair price. The Truth-In-Negotiations Act is designed to prevent this problem by requiring defense contractors to disclose all relevant information about its costs to the government in such situations. Defense contractors may sometimes attempt to inflate their costs and expenses because they have no competitor bidding for the contract.
Defense contractor fraud remains one of the most prominent areas of false claims litigation under the Federal False Claims Act.
In April 2009 TRW Inc.’s efforts to stop a scientist from revealing his research findings about faulty electronic components the company sold to the government for military and intelligence-gathering satellites were the basis for a whistleblower lawsuit that Northrop Grumman Corp. settled for $325 million. It was the largest settlement ever paid by a defense contractor in a whistleblower case and the second largest ever paid involving defense contractor fraud.
The whistleblower was awarded $48.7 million for his work and the work of his attorneys on the case. The Federal False Claims Act requires the government to award whistleblowers 15 to 25 percent of the amount the government recovers as a result of whistleblower cases.
A false certification of regulatory and statutory compliance, necessary to obtain a contract, can render false all claims for payment under that contract. A contractor’s failure to meet contract performance requirements and failure to provide goods and services in conformance with federal statutes and regulations may be sufficient to violate the False Claims Act.
Presentation of a claim to the Government for payment, when the failure to abide by contract requirements has not been disclosed to the Government, is deemed equivalent to false certification of compliance with such laws and regulations. Therefore, if a claim for payment is submitted and the contract requirements have not been fulfilled in all respects, if federal funding is conditioned on compliance, gives rise to a False Claims Act case. Claims may be false, even though goods or services otherwise fulfill contract specifications.
Defense contractor fraud remains one of the most prominent areas of false claims litigation. Billions of dollars have been recovered from defense contractors, mainly as a result of whistleblowers. Some common ways in which defense contractors have tried to defraud the government are as follows:
1. Cross-charging. This occurs when a defense contractor improperly shifts costs and expenses from one defense contract to another in order to boost its profits.
2. Improper Product Substitution. Contracts frequently request the contractor use a specific grade or quality of product or part. There are often requirements that the products be new or made in the United States. Defense contractors often attempt to save costs by substituting cheaper or substandard parts.
3. Improper Cost Allocation. Under this scheme the defense contractor will improperly allocate or shift cost from private businesses or foreign governments onto the cost-plus contracts they have with the United States government.
4. Worthless or Substandard Products or Services. In this case the defense contractor with knowledge or through reckless neglect, delivers products that do not perform as promised.
5. Inflation or Costs and Charges. In a cost-plus contract, the government pays the defense contractor a set price plus a percentage of the contractor’s costs for producing the product. In this scheme the contractor improperly inflates their costs and charges to increase revenue the company earns from the U.S. government.
6. Violations of the Truth-In-Negotiations Act. Weapons systems and equipment can be extremely complex. Much of the time, there is only one company in the world producing a particular weapon system or piece of equipment. The government has no choice but to purchase the particular weapon system or piece of equipment from a single supplier. Because other competitors are not bidding, the government has no way of knowing if it is paying a fair price. The Truth-In-Negotiations Act is designed to prevent this problem by requiring defense contractors to disclose all relevant information about its costs to the government in such situations. Defense contractors may sometimes attempt to inflate their costs and expenses because they have no competitor bidding for the contract.
Monday, September 28, 2009
Whistleblower: The False Claims Act and The Fraud Enforcement and Recovery Act of 2009 – Part I
In 2003, John Kopchinski was earning $125,000 a year selling the drug Bextra for Pfizer. He had a baby son, and his wife was pregnant with twins. The Gulf War veteran says that, "In the Army, I was expected to protect people at all costs." At Pfizer, though, he was expected to sell Bextra, even though it raised the risk of heart attacks and strokes. After Kopchinski expressed his concerns about Bextra's safety, Pfizer fired him. He eventually got a new job paying $40,000 a year.
Kopchinski hired attorney Erika Kelton of Phillips & Cohen. In 2005, Pfizer withdrew Bextra from the market. Now Pfizer is pleading guilty to felony charges of promoting Bextra for unapproved uses. Pfizer will pay penalties of $2.3 billion, and Kopchinski will get a $51.5 million share for filing the "qui tam" lawsuit under the False Claims Act (FCA) that helped the government collect these penalties. Kopchinski is one of five whistleblowers sharing in the settlement. He says that he does not expect his life to change much now, according to a news account of this settlement available from Reuters.
Crutial court decisions such as the one in the Pfizer case have assisted whistleblowers in coming forward. In 2008, there has been rapid legislative response in the enforcement arena. On May 20, 2009, President Obama signed into law the Fraud Enforcement and Recovery Act of 2009 (FERA). This act authorizes substantial new funding to the Department of Justice and other federal enforcement agencies for the investigation and prosecution of offenses. FERA amends the False Claims Act (FCA) in a manner that may increase the exposure of every company that does business with the federal government and every person or entity that supplies goods or services that are reimbursed by federal government dollars.
The FCA provides for recovery of civil penalties and treble damages from any person who knowingly submits or causes the submission of false or fraudulent claims to the United States for money or property. Under the most commonly-enforced provisions of the statute, a person is liable for “knowingly” (1) presenting or causing the presentment of a claim for payment or approval; (2) making a “false record or statement to get a false or fraudulent claim paid or approved by the Government;” or (3) conspiring to defraud the government “by getting a false or fraudulent claim allowed or paid.” The FCA also penalizes so-called “reverse false claims, “ in which a person “knowingly makes, uses, or causes to be made or used, a false record or statement to conceal, avoid or decrease an obligation to pay or transmit money or property to the Government.” The FCA defines “knowingly” as having “actual knowledge” of falsity or acting in “deliberate ignorance” or “reckless disregard” of the truth or falsity of the information. “No proof of specific intent to defraud is required.” 31 U.S.C. §3729(b).
The FCA’s qui tam provisions empower private individuals to file litigation in federal court on behalf of the government and to share in any subsequent recovery. The FCA’s qui tam provisions provide enormous incentives for qui tam Realtors (whistleblowers) to expose fraud against the government, awarding 15-30% of settlement or judgment proceeds to Realtors, who may also be entitled to reasonable attorney fees’ and costs, which may be substantial.
FCA civil damages and penalties can be severe. Defendants may be held liable for up to three times actual damages plus penalties between $5,500 and $11,000 per claim. Depending on the method in which the “claims” are calculated, civil penalties may far exceed the actual damages the government sustained.
FERA amends the definition of “claim” in a significant way. The new definition of “claim” is:
(A) any request or demand, whether under a contract or otherwise, for money or property and whether or not the United States has title to the money or property, that –(i) is presented to an officer, employee, or agent of the United States; or (ii) is made to a contractor, grantee, or other recipient, if the money or property is to be spent or used on the Government’s behalf or to advance a Government program or interest, and if the United States Government –
(I) provides or has provided any portion of the money or property requested or demanded; or
(II) will reimburse such contractor, grantee, or other recipient for any portion of the money or property which is requested or demanded.
FCA liability may now be triggered by any false claim made to any recipient of federal money so long as the money is used to “advance a Government program or interest.” FCA realtors and the Department of Justice will now be able to push to give this provision the broadest possible interpretation.
The old FCA penalized a person who “knowingly makes, uses, or causes to be made or used, a false record or statement to conceal, avoid or decrease an obligation to pay or transmit money or property to the Government.” 31 U.S.C §3729(a)(7). FERA now defines “obligation” to include the retention of any overpayment, which opens new avenues of exposure against federal contractors or grantees for knowingly retaining government “overpayments.”
In the past, the FCA afforded protection to “any employee who is discharged, demoted, suspended, threatened, harassed, or in any other manner discriminated against in the terms and conditions of employment by his or her employer because of lawful acts done by the employee on behalf of the employee.” 31 U.S.C. § 3730(h). FERA extends whistleblower protections beyond “employees” to a “contractor or agent” and no longer requires any prohibited retaliatory action be taken by an employer. The FERA now reads “any employee, contractor, or agent shall be entitled to all relief necessary to make that employee, contractor or agent whole, if that employee, contractor, or agent is discharged, demoted, suspended, threatened, harassed, or in any other manner discriminated against in the terms and conditions of employment. 31 U.S.C. § 3730(h).
An FCA action must be brought within six years of the date on which a violation was committed, or within three years of the date on which the government knew or should have known that a violation was committed, and in no event more than 10 years after the date on which the violation was committed.
Kopchinski hired attorney Erika Kelton of Phillips & Cohen. In 2005, Pfizer withdrew Bextra from the market. Now Pfizer is pleading guilty to felony charges of promoting Bextra for unapproved uses. Pfizer will pay penalties of $2.3 billion, and Kopchinski will get a $51.5 million share for filing the "qui tam" lawsuit under the False Claims Act (FCA) that helped the government collect these penalties. Kopchinski is one of five whistleblowers sharing in the settlement. He says that he does not expect his life to change much now, according to a news account of this settlement available from Reuters.
Crutial court decisions such as the one in the Pfizer case have assisted whistleblowers in coming forward. In 2008, there has been rapid legislative response in the enforcement arena. On May 20, 2009, President Obama signed into law the Fraud Enforcement and Recovery Act of 2009 (FERA). This act authorizes substantial new funding to the Department of Justice and other federal enforcement agencies for the investigation and prosecution of offenses. FERA amends the False Claims Act (FCA) in a manner that may increase the exposure of every company that does business with the federal government and every person or entity that supplies goods or services that are reimbursed by federal government dollars.
The FCA provides for recovery of civil penalties and treble damages from any person who knowingly submits or causes the submission of false or fraudulent claims to the United States for money or property. Under the most commonly-enforced provisions of the statute, a person is liable for “knowingly” (1) presenting or causing the presentment of a claim for payment or approval; (2) making a “false record or statement to get a false or fraudulent claim paid or approved by the Government;” or (3) conspiring to defraud the government “by getting a false or fraudulent claim allowed or paid.” The FCA also penalizes so-called “reverse false claims, “ in which a person “knowingly makes, uses, or causes to be made or used, a false record or statement to conceal, avoid or decrease an obligation to pay or transmit money or property to the Government.” The FCA defines “knowingly” as having “actual knowledge” of falsity or acting in “deliberate ignorance” or “reckless disregard” of the truth or falsity of the information. “No proof of specific intent to defraud is required.” 31 U.S.C. §3729(b).
The FCA’s qui tam provisions empower private individuals to file litigation in federal court on behalf of the government and to share in any subsequent recovery. The FCA’s qui tam provisions provide enormous incentives for qui tam Realtors (whistleblowers) to expose fraud against the government, awarding 15-30% of settlement or judgment proceeds to Realtors, who may also be entitled to reasonable attorney fees’ and costs, which may be substantial.
FCA civil damages and penalties can be severe. Defendants may be held liable for up to three times actual damages plus penalties between $5,500 and $11,000 per claim. Depending on the method in which the “claims” are calculated, civil penalties may far exceed the actual damages the government sustained.
FERA amends the definition of “claim” in a significant way. The new definition of “claim” is:
(A) any request or demand, whether under a contract or otherwise, for money or property and whether or not the United States has title to the money or property, that –(i) is presented to an officer, employee, or agent of the United States; or (ii) is made to a contractor, grantee, or other recipient, if the money or property is to be spent or used on the Government’s behalf or to advance a Government program or interest, and if the United States Government –
(I) provides or has provided any portion of the money or property requested or demanded; or
(II) will reimburse such contractor, grantee, or other recipient for any portion of the money or property which is requested or demanded.
FCA liability may now be triggered by any false claim made to any recipient of federal money so long as the money is used to “advance a Government program or interest.” FCA realtors and the Department of Justice will now be able to push to give this provision the broadest possible interpretation.
The old FCA penalized a person who “knowingly makes, uses, or causes to be made or used, a false record or statement to conceal, avoid or decrease an obligation to pay or transmit money or property to the Government.” 31 U.S.C §3729(a)(7). FERA now defines “obligation” to include the retention of any overpayment, which opens new avenues of exposure against federal contractors or grantees for knowingly retaining government “overpayments.”
In the past, the FCA afforded protection to “any employee who is discharged, demoted, suspended, threatened, harassed, or in any other manner discriminated against in the terms and conditions of employment by his or her employer because of lawful acts done by the employee on behalf of the employee.” 31 U.S.C. § 3730(h). FERA extends whistleblower protections beyond “employees” to a “contractor or agent” and no longer requires any prohibited retaliatory action be taken by an employer. The FERA now reads “any employee, contractor, or agent shall be entitled to all relief necessary to make that employee, contractor or agent whole, if that employee, contractor, or agent is discharged, demoted, suspended, threatened, harassed, or in any other manner discriminated against in the terms and conditions of employment. 31 U.S.C. § 3730(h).
An FCA action must be brought within six years of the date on which a violation was committed, or within three years of the date on which the government knew or should have known that a violation was committed, and in no event more than 10 years after the date on which the violation was committed.
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