Emerging Litigation Podcast

New and Improved Antitrust Whistleblowing Incentives with Julie Bracker and Dan Mogin

• Tom Hagy • Season 1 • Episode 107

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What if business insiders could accelerate antitrust enforcement as they have done with other corporate misconduct, like fraud? That’s exactly what the Department of Justice is hoping for.

In this special episode* of the Emerging Litigation Podcast, I’m joined by Julie Keeton Bracker of Bracker & Marcus and Dan Mogin of Mogin Law to dig into a new program designed to motivate antitrust whistleblowers.

They trace the roots of qui tam cases—laws that let private citizens, called relators, bring suits on behalf of the government—and why they remain one of the most powerful tools for uncovering corporate fraud and misconduct. Julie explains historical and modern False Claims Act litigation, and Dan walks us through the machinations of private and public enforcement of antitrust laws, the Sherman Act being the big dog in this fight. Together they describe the Department of Justice's aspirations to bring individuals into the antitrust enforcement game.

Along the way, Julie and Dan share lessons from their practices and insights on where whistleblower and antitrust enforcement may be headed next.

If you’ve ever wondered how whistleblowers drive billion-dollar recoveries, or what the rise of antitrust whistleblowing means for businesses and enforcers alike, this episode is worth a listen.

Thanks to Julie and Dan for sharing their insights based on decades of practice in two challenging and important areas of law. 

Tom Hagy
Host of the Emerging Litigation Podcast

P.S. You can also watch this podcast and slide presentation on the HB Litigation News YouTube Channel. 

*We produced this simultaneously as a CLE webinar, because we're just that clever. Look for it on the CeriFi LegalEdge CLE platform. 

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Tom Hagy:

Welcome to our presentation on the DOJ Whistleblower Awards program. This was recorded both as an HB webinar and an episode of the Emerging Litigation Podcast. I'm Tom Hagy, your moderator and host. I'll introduce our guests in more detail, but they are Julie Keeton Bracker of Bracker Marcus, the recognized authority on whistleblower law, and Dan Mogin, recognized authority on all things antitrust. I hope you join. Welcome to our webinar or podcast. It's the DOJ antitrust whistleblower program that was announced this summer. And it's a legal education webinar, obviously featuring two experienced lawyers who know about two issues that we're gonna establish together here, Julie Keeton and Dan Mogin, and I'm Tom Hagy. I'll do a little bit more of an introduction here. So Julie Keeton Bracker is partner and obviously founder of Bracker and Marcus. She's nationally recognized in this area of CAM and FCA cases. You can see her credentials there. You know, award-winning, highly recognized, obviously well educated. Vanderbilt University, I've heard of it. So you obviously studied as well.

Julie Bracker:

I'm from an I'm from an Auburn family, so I'm the black sheep.

Tom Hagy:

All right, I'll pretend I know what that means, but I don't. So anyway, Julie, this is our first time working with you, so thank you for for participating. It's been been fun so far.

Julie Bracker:

Yeah, my pleasure.

Tom Hagy:

All right, and it's a pleasure to work also with Dan Mogin, and I have the I get to work with Dan quite a bit in helping him out with the the Mogin Law blog on antitrust and competition law. It's a fascinating area of law. Didn't know a ton about it when I started a few years ago or a couple years ago. But now I can see um I see antitrust everywhere and its impact on on so many aspects of our society that we don't even realize sometimes. Um so Dan's got more than four decades experience in antitrust and complex litigation. He's been elite counsel of big cases. When I describe Dan, he's like I describe him as he's a real deal when it comes to antitrust, you know. Uh he's been an author, a professor, uh he's recognized by all the all the leading uh publishers out there, and uh he's got his JD from the University of San Diego, and I don't know if that makes you a black sheep or any kind of sheep, but um it's probably not so Dan, uh I get to work with you all the time, and I'm glad to be working with you on this webinar. Uh yeah, good to have you. So um you know, and my background is I'm mainly a legal journalist, always have been a legal journalist, also for over 40 years. And I've got a podcast. Uh didn't have as much uh to say in my credentials, so I made up for it with having more badges about uh about so there you have it. All right, so with that, the the agenda uh we're gonna talk about first of all, uh Julie, we're gonna talk to you, you're gonna explain some some background on whistleblower laws, litigation, and enforcement. Dan, obviously, you're the antitrust um attorney talking about uh all aspects of the uh you know the key laws and proving a case, developing a case, and then we'll jump into the the 2025 antitrust whistleblower initiative, and then got some questions for for you guys at the end. So, first of all, the whistleblower laws, and Julie, this is to you. I thought I thought we'd start off with a a quote from a highly recognized attorney in this area. If only we could get her on the webinar. Whistleblowers are courageous individuals who expose fraud against the government. What more can you say? Amen.

Julie Bracker:

Amen.

Tom Hagy:

Okay. That's that's your addition, is amen, and I'll go with that. So, Julie, over to you to talk about the whistleblower laws. I've got an honest Abe there because this kind of goes back to Lincoln's law. That's right.

Julie Bracker:

This is Lincoln's law. We we still call it that. Um the False Claims Act was brought into um came into existence during the Civil War era, which is unusual that it would be so uh uh uh uh venerable and yet still so uh volatile. But it is both of those things at this point. So honest Abe had the situation where um troops out in the field were receiving um he would the war department would contract for horses and uniforms and flour to feed the troops. You know, all sounds good so far. But what might show up would be lame mules, which of course don't breed, um flour that had weevils in it, and uniforms made of the same kind of filter paper that we use for coffee filters, and this was not working well for the Union troops. So the problem was at the time, um, as fast as things move now, not so fast then, and by the time they realized they had been defrauded by the seller, they the seller would be long gone with the money. So um the the False Claims Act prosecutes those who file a claim with the government that's false when made. It's intended to catch, you know, fraud, waste, and abuse in government funds where someone's lying about it. But the um important point there was that they they realized to catch these folks, they were gonna have to incentivize insiders who knew about the fraud. And the insiders often in those situations would be people who um were part of the fraud. And in fact, in the discussions when the law was passed, they they referred to the Cleetan provisions and said it's set a thief to catch a thief or set a rogue to catch a rogue. And this is often, you know, nowadays insiders come in many, many flavors. They don't have to be part of the fraud. When it's a giant corporation, they may not have a clue that it's fraudulent when they first begin uh working at the corporation. So even in a smaller mom and pop shop, you might hire someone to come in and do the billing who has no idea that they're billing fraudulently because they're just following the directions of someone else. So insider has a much bigger meaning now than maybe it did when it was all about testing rogues with rogues. But at the same time, um it's important to understand that the the uh uh statute does not preclude uh rogues coming in to claim a bounty on turning in, whether they've had a change of heart or whether they're just um, you know, they're just willing to do it. Uh the government wants its money back, it wants to know who the fraudsters are, and it's willing to pay that bounty to have those people come in and tell the government what it otherwise would have no way of knowing. Um we can quitam is very unusual, and I do say quii. Um some people say key. So if you're raised in the United States, you probably took Spanish or French. If you took Spanish or French, you probably learned Q U is K, you know, q sound. But think about quid pro quo in Latin. So we generally pronounce it q. Um, you will hear some folks doing it wrong. No, I'm just kidding. It it really doesn't matter. It's a dead language. Say it however you choose. But um the quizon provisions are unusual because most of the time, you know, if I want to sue um someone, I have to do, I have to sue the person that's injured me. I can't sue because someone has injured you, Tom. You know, that's not fair. Um now, this specifically empowers someone else to file suit on behalf of the government. The case still belongs to the government, the government is still the injured party, but you are relating to the government that there's been fraud, which is why you're called a relator. Okay. Um some people will say relator, and they are also Keatem and Key Tem and relator.

Tom Hagy:

Those are , those are wrong.

Julie Bracker:

Absolutely, totally wrong. So it's it's very unusual in FCA law, and we may get a chance to talk in a little while about the alleged unconstitutionality of this provision to allow someone to bring suit on behalf of the government. It was more common, interestingly enough, in the um England, merry old England, where you were the the actual phrase that starts qui tam, it says it translates to he who sues on behalf of the king and himself. And that was again positioned at a time when if you didn't have an insider reporting it, who would know who to sue? Right. So this position of relator of an insider who brings the information to the government about what has transpired and how the government's been defrauded, that goes way, way back. It's not a it's not a brand new thing by any stretch. Um, since the success of the False Claims Act and its qui tam provisions, and I should add, the government can bring its own FCA actions. So a company who's being sued under the FCA may be sued only by the government, in the in which case you'll see the suit styled, you know, U.S. um versus Smith, as opposed to if I bring a relator to file case, then it would be US XREL BRACAR versus Smith. The XREL means on behalf of, um, or are brought uh brought by the relator to fill in the blank. So that's important to understand because when a company gets notice that they're being sued under the False Claims Act, they can't necessarily assume a whistleblower is involved. Okay, so since the success of that program, and and the government has recovered north of $700 billion since the re the renaissance of this statute in the late 80s, um, there have been several similar programs. The Dodd Frank, you've got it listed there. Dodd-Frank, SEC, and IRS whistleblower programs have also uh brought some measure of success. The big difference I'll say between agency-initiated programs like the ones that are listed here and the False Claims Act itself is that the False Claims Act was initiated by Congress. And so it puts burdens on both the Department of Justice, the agency that's running the program, and the relators. So that they have uh accountability to the court. When we file something with the Department of Justice, they do have to get extensions from the court. And so we're able to stay somewhat informed about what's going on with the case. By contrast, agencies tend not to put uh obligations on themselves. So the SEC program, for example, you can file the SEC program and maybe they'll let you know that something's happening. They will let you know if something's happening, but they won't always let you know if nothing's happening. So you just kind of wander in away in a wasteland for a long time with those programs, which is which can be frustrating, very much frustrating for the the relator or the whistleblower, um, which is why I remain most fond of the FCA so far.

Tom Hagy:

Okay.

Julie Bracker:

When a when a relator brings us a case, I can are we gonna talk about retaliation here? It's totally up to you. Often an insider gets retaliated against. Um I would say that often happens before they've ever filed a case. You know, they say, Hey boss, I found out I'm not supposed to add this dash 11 to everything I'm filing here in the medical charts. Uh they said that might even be fraud. And they're like, Yeah, shut up. Do what I say. Um, and if they persist in that, then you know they often experience retaliation. A lot of times that's why they find me. They find an employment lawyer because they're worried about losing their job because of what they're seeing at their um place of business. And so they look for an employment lawyer who says, oh, this sounds more like fraud, and and hopefully point some to me or one of my colleagues.

Tom Hagy:

That's gotta be a very dicey uh time for an employee.

Julie Bracker:

Absolutely. Um, and and you know, I have whistleblowers who are very naive to why they don't even connect the fact they assume everyone wants to do the right thing, and they don't even connect their complaints to the retaliation until someone kind of helps them out with that. A good part of my speaking practice is making sure employment lawyers ask the question of, you know, what's going on with if there's government billing, what's going on with that government billing? Because it's um a lot of times someone comes in and you can see they've been treated differently and wrongly, but you can't really tell why. You know, and if like if it seems mysterious as to why, start probing whether there's you know some sort of reporting going on internally that could be causing that. But it's very dicey for relators, they uh or would-be relators. Um sometimes they are fired before they ever find us, sometimes they're not. Uh, sometimes they stay with the company even after we file, sometimes they don't. Um, you know, a wide variety of different circumstances come up. If they are retaliated against in the terms and conditions of their employment, which is key, then um they do have a retaliation claim under the anti-retaliation provisions of the False Claims Act. So I have to tell relators, are you protected? You have a claim. I can't stop them in that moment from doing whatever they're doing. If that means they are, you know, there's no great sort of righteousness that I can say, aha, you may not fire Tom. He is uh doing the right thing. They can fire you, and then we can sue them for firing you. But that is complicated by what we're about to talk about about mechanics because false claims that cases are brought under seal. So what that means, it sounds very official. I think it makes me sound super cool to say that. But they're they're brought under seal because the government gets a chance to investigate from its side the contract or or uh relationship transaction that's at issue before it approaches the defendant about it. So if you think about it, if you were gonna file suit against me for selling you something for fraud fraudulently inducing you to purchase something for me, something like that, you already know all the facts before you file the suit. The US has no clue, that's why we're coming in as a relator, right? We tell them what's going on, they get a chance to investigate and determine whether, you know, is the agency that's been harmed, are they upset by it, or do they already know about it? Is it something that maybe has been um a loophole in the regulations versus an outright, you know, disregard of the regulations? Um, how clear is it whether or not the defendants knew or should have known the right way to go about um whatever the whatever's on the table? So they they take that time first covertly, while it's under seal completely, meaning that it's on the court record, but only the court and the Department of Justice and the Relators Counsel can see it. At some point, if the case is going forward, if it's not uh determined to be not something that the U.S. will pursue early on in the covert stage, the then the investigation will go overt. And that just means they'll get a partial lift of the seal. The seal remains in place as to everyone else, but it's partially lifted as to the defendants, and the defendants are told you're being sued under the FCA. They may or may not be told at that point that there is, in fact, a relator. Um they may or may not be given a copy of the complaint, but then they are well aware they're under investigation at that point. So they may have already gotten document requests from the government, a government subpoena, it's called a civil investigative demand or a CID. They may be answering CIDs already, but they don't know what's what until that partial lift of the seal. So the role of relators is really getting everything to the government that it needs to conduct that investigation and then remaining available as questions arise during the dependency of the investigation. Um we don't have a lot of role once we've conveyed. My goal is to take everything, the bulk in mind meld, take everything from the relator's brain, share it with the government, and then stand back and assist if they need, if they need help from us with the um law, we're happy to provide support there. We might have uh as a law firm, we might provide provide support through reviewing documents that are collected through CIDs. Uh there's a lot of things the lawyers might do, but I tell my relators, put it out of your head. Um, it's gonna be a while before you hear anything else because there's I've said it before, there's like slow and then there's litigation slow, and then there's like glacier slow, and then slower than that would be FCA slow. It's a very slow process. And and then one thing that slows it down would be the criminal potential criminal investigations that go on. Uh, if you're uh being charged criminally, you have a right to a speedy trial. Um, it has to take precedence over the civil investigation if there's to be a criminal investigation. So throughout the country, when a U.S. attorney's office is served with a copy of a false claims at case at the very beginning after I file, they take a look at both the civil side and the criminal side take a look at the allegations, and the criminal side decides if they want to pursue anyone or the company itself in any kind of criminal capacity. If they do, that's going to take precedence, and we're probably gonna be stayed, like an administrative stay, until the criminal side plays out. Um, and and then once it's resolved, there may or may not be continued civil investigations. I would say that's not super common. Um, but you know, I'm going on a anecdotal felt sense of a 20, 25-year career.

Tom Hagy:

I sure that's worth something.

Julie Bracker:

I've been stayed for criminal investigations. I'm I'm my partner would probably disagree with me 20% of the time or less. Um, you know, you get a feel for cases that are maybe gonna go criminal, and it really has to do with that culpability mindset of the defendants and what they're doing and whether there's been harm, um, like physical harm to patients. You know, we we had a case in Detroit that was not my case, it was initiated by the um by the uh office itself, and it was a case, Dr. Fata, he's on our website. He was giving unnecessary cancer treatments to people so that he could bill for it, which if you think that's a fairly repulsive thing to do, you're right. And we had a big case pending at the same time against Beaumont uh health services, which was delayed significantly because the entire office was working on the Fata case instead of the Felton case. Um so I'm uh Felton wasn't stayed, but um, but the resources were all being put into the trial of Dr. Fata. So I say that just to say it's all very intertwined, and that's an another reason why things can move very slowly.

Tom Hagy:

Okay. Wow, all right. Learning a lot here. You had alerted me to this uh this article. Um you don't have to go into it, but about whistleblower programs under state securities laws. It was by uh somebody named Devon or Devon Eaton, who's uh anti-fraud advocacy fellow at the anti-fraud coalition. This is pretty fresh um accounting of uh of his article.

Julie Bracker:

Whenever we're blowing the whistle, we're trying to see who's been harmed. And sometimes that's the state government as well as the federal government. Sometimes it's just the state government. Most of the states, I think 47, don't quote me. A significant number of states have their own False Claims Act. Some of those cover only Medicaid, as opposed to all types of government spending.

Tom Hagy:

Okay.

Julie Bracker:

Um, but Devin did a great job in summarizing the securities law programs because obviously states have their own set of securities laws, some of which have whistleblower provisions.

Tom Hagy:

Here's a quote to close this out. Without uh key TAM, the federal government often would never find out about fraud at all. Is that accurate?

Julie Bracker:

I'm in.

Tom Hagy:

You're in with that. Amen.

Julie Bracker:

That's and hallelujah. There's a whole um that's the whole idea. We're bringing in um insiders, you know, people things are very this is something that's being done and deliberately concealed. So how would you know, you know, if unless someone tells you?

Tom Hagy:

Sure. Let's see. So now we're gonna move on to uh to antitrust. Uh I'm very proud of this photograph. Uh I took it myself. It's uh it's uh one of my favorite statues in Washington. It's uh I don't know if it's man or government. Man controlling commerce um is the statue, and it's right outside the F the FTC building. And Dan, you you sent me this quote uh antitrust laws in general and the Sherman Act in particular are the magna carta of free enterprise. You want to underscore that?

Dan Mogin:

That's the uh general principle that underlies the antitrust laws. It's that uh in order to protect free enterprise, we have to protect competition, in order to protect the capitalist system that the uh United States of America is uh founded upon and uh uh very much supportive of. We're the number one capitalist country in the world. If you're gonna have capitalism, you've got to have competition. And if you're gonna have competition, somebody's gotta police it, and we do it through the antitrust laws.

Tom Hagy:

There you go. And thanks to Justice Thurgood Marshall for that for that quote. So so Dan, taking it over to you, and speaking of speaking of the Sherman Act and the other acts, uh, can you give us an overview of the of the core principles?

Dan Mogin:

Uh just like the uh Keitan statutes is Lincoln's law, one could make an argument that the that this is the Sherman law, in the sense that um this is j this is John Sherman, who was uh a congressman, a senator, secretary of treasurer, secretary of state, a vice presidential candidate, etc. But he's not the one who burned Atlanta. That would be his brother, William Tecumseh Sherman. So the Sherman Act and the Sherman tank are unrelated. I just wanted to make that clear. But we do have uh common roots, I guess, with the FCA. So what are the three major uh legislative uh acts upon which antitrust uh private enforcement is based as well as public enforcement are the Sherman Acts, which are 15 U.S.C. sections one and two uh ETSEC, if you will. Section one prohibits concerted action in restraint of trade. That's your basic price fixing, bid rigging, group boycott, and those sorts of violations. So that's concerted action. Section two of the Sherman Act prohibits monopolization, attempted monopolization, conspiracy to monopolize, etc. So, yes, section one relates to unilateral action, whereas relates to concerted action, whereas section two relates more to unilateral action. So, yeah, they kind of messed up in the numbering of the statutes and one should be two and two should be one, but be that as if I always thought that, but I thought that's that's really, you know, that's just me. And then um because the courts in the uh in the beginning of the uh enforcement of the Sherman Act were so reluctant to actually apply the statute, Congress got a little angry, and uh in 1914, after Wilson and his uh band of progressives came into power, the uh they passed the Federal Trade Commission Act, which was um the primary section there is Section 5, which prohibits unfair methods of competition throughout the uh uh economy. And the FTC Act also uh provides for internal administrative courts, which the FTC can use from time to time and under some circumstances. It also gives the FTC a say in merger enforcement, uh, et cetera, et cetera. But the core principles are really when it comes to private enforcement, we sue uh for violations of the Sherman Act as authorized by the Clayton Act.

Tom Hagy:

I'm not an attorney, but I I've just written about law for uh 40 years, so I've I've picked up a few things. And um so but people ask me questions as if I'm an attorney. I always say, you know, I'm not an attorney, and I get all these questions, I'm sure you guys do too, about everything from divorce to a tree fell on my neighbor's house. One question I always get is, oh, can I sue for that? I'm like, well, I can answer that. Yes. You can sue for anything you like. Um it's all about uh what's the law say, what are the facts, you know, where were you really hurt? Uh what are the damages? Do you you know all these things. In working with you, Dan, um you've you've put together a lot of antitrust cases. And it's not a it's not as easy as, oh, somebody's acting badly, we're gonna collect um obviously you've got a you've got to build the case, prove the violation. So if you could just talk about what goes into building a solid antitrust case.

Dan Mogin:

Money. First and foremost. First and foremost, these are expensive cases. Anyone who's uh who's uh interested in a pursuing one should uh should be aware of that upfront. Um how do we build a case? Well, for those of you who are lawyers, uh when you were in law school, you probably learned a method of case analysis called IRAC, which is issue rule application conclusion. We use a similar device in building antitrust cases and in analyzing antitrust cases, but uh it's different. So first we look at context or history, if you will, to identify how it what's the context in which this particular restraint arose, and we are focusing on restraints of trade. So first we look at context, then we look at structure. Structure basically means there are two comp well, there are two components to structure. Component one is structure in the sense of how is this industry organized? Is it an oligopoly with uh say a limited number of large firms competing? Is it a monopoly, which would be which would imply that a single firm has a market share upwards of 70 percent? Is it a loose oligopoly? Is it a tight oligopoly? Is it an atomistic or competitive um industry? Those are the first things that we look at in determining structure. Second part of structure has to do with pricing. What are the dynamics of pricing and what are the dynamics of output in this particular industry? In other words, what are the primary factors that drive both of those things? Um so that's the second part of structure. Then we look to conduct or behavior, which is what is it that uh the that the party is complaining about? What is the nature of the restraint? Now, the nature of the restraint, if you're in a Section One situation, could be collusion among hor what we call horizontal competitors, that is companies that are on the same level of con of competition. By same level of contribution, we mean, for example, that they're all manufacturers or they're all uh something else. They're all distributors, they're all wholesalers. The next thing that we do is we we move on to conduct. What is the offending conduct? Is it uh collusion among horizontal competitors? Is it a situation where uh a manufacturer has imposed restraints on a wholesaler that are anti-competitive or vice versa? Are they in collusion to somehow um uh block others from entering a particular market or what have you? So then we focus on the conduct. Then we must go to what's called antitrust injury. So the the w which is pretty much a way of proving causation. That is that just because there was a violation doesn't necessarily mean that there was uh damages or antitrust injury. So the first thing we have to get to is antitrust injury, and that is is the nature of the inju injury something that was contemplated under the antitrust laws. And I'll give you an example. That seems self-evident, but let me give you an example. Once upon a time, a bowling swept the nation. Bowling alleys appeared and popped up everywhere, much as the nation was suburbanizing. And as you might and one of the reasons for this was because the Brunswick Company uh in had invented the automatic pin setting machine, which made it more feasible to have mass bowling events because the pins no longer had to be set by hand. And the company also found a way of financing the the bowling alleys purchases of their machines. So Brunswick would both manufacture the pin setting machines and would provide loans to people to buy their machines, etc. In somewhere in New Mexico, one of the bowling alleys got in trouble financially, and Brunswick came along and essentially took over operations as a secured creditor. The other bowling alleys in the New Mexico area thought this was anti competitive, and so they sued under the Sherman Act. Now the allegations or the conduct that they focused on had to do with some mergers that they viewed to be anti competitive that brought But said the Supreme Court, well, wait a minute. Your true complaint here is not about competition or anti-competitive moves. Your true complaint is about the fact that you're having to compete with a strong competitor, and that's Brunswick. And that's what's implicating your profits. Well, that's not a violation of the antitrust laws. Because there's no there's no causal effect of these mergers on the competing bowling alley's profits. And hence was born out of a kind of a unique situation, the antitrust injury requirement. Okay, which can also be traced to the statute itself, um, which uh which does have a causal element to it. So we have to prove antitrust injury. We also have to go through uh and prove antitrust standing, which is somewhat uh different from judicial standing, the typical judicial standing. And then, of course, you have to prove damages. And proving damages in an antitrust case can take several different forms. For example, if you're in a class case, typically the allegation is that the collusive conduct led to an overcharge. And therefore the damages are the difference between the overcharged amount or the supercompetitive amount and the competitive amount, which is generally calculated by economists using various forms of regression and other tools of econometrics. Hence, getting back to my very first statement about money. It's an expensive type of case to prosecute. Frequently, economists need to be brought in as early as the complaint drafting process. Um there is that. The other type of damages that are typical, of course, are lost profits. Those are typically in competitor versus competitor cases, uh, because lost profit cases are not well suited to class actions. Um and then um of course there in addition to damages, we have injunctive relief, which is also possible. I should also note that in going through the analysis of structure of context structure, conduct and injury that we also have to go through the classic elements of the case. So if you're in Section 1, there has to be some sort of agreement understanding consortive action. It must be in interstate commerce, it must be in restraint of trade, and it must have caused injury to a person's business or property. Those are the elements of a Section One case. For section two, there must be monopolization of a relevant market. Monopolization is a verb form, it is not a noun. So that implies monopolistic conduct. One can, and the uh forces of darkness are very fond of quoting this, but there are very there are many lawful ways of achieving a lawful monopoly that cannot be reached by the Sherman Act. For example, patent law grants limited monopolies, as do trademark and copyright and other forms of intellectual property. So those monopolies are essentially untouchable by antitrust law because they don't imply monopolization. Also, one can achieve a monopoly by just being a really good business. That is, you have a superior product, you have a superior management, you have a superior financial structure, all those things that are part of the competitive process. If that is how your monopoly noun was achieved, you have not monopolized verb, and therefore section two would not apply. If it does apply, however, you still, if you're in a private damages action, you're still going to have to prove antitrust injury, causation, antitrust standing, and damages as I've previously described. So that is how we build a case of context, structure, conduct, injury, and then go through the classic elements of the offenses.

Tom Hagy:

That's really no, that's uh uh excellent explanation uh of it. Even I understood it, Dan. I I I also um as I'm listening to you talk about this, I'm like, why do you do this? This is so complicated. It's a question I ask myself on regular books. But uh but um you know uh anyway, we recently had a blog post where you alerted me to a uh uh a speech given by uh Assistant Attorney General Gail Slater, who is head of the antitrust division, and he was lamenting about how difficult it is for the government to enforce uh antitrust laws against big companies like the Googles, who then go out to the big law firms, all you know, all of whom have enormous resources uh to your point about the the resources needed to bring cases. And then uh your your kind of your point to me was that's the imagine that's the government with all their power and authority, and then imagine what a private antitrust plaintiff has to go through.

Dan Mogin:

Well, we get our canoes, our little canoes, we paddle out into a mean sea, we try to slay a whale and bring it back to the village. Or we chop it up and eat for many, many moments. Okay. All right.

Tom Hagy:

Uh all right. Well, thank you. Thank you for that. Also, the market definition, I think, was that was always something as uh talking to you and working on the blog that all is always a a key factor and not an easy thing always to to establish.

Dan Mogin:

It applies in both Section 1 and Section 2 cases. And that is the need to define a market. However, there is a category of antitrust cases known as per se cases. And that is per se wrongful. It's things like price fixing violations, bid rigging, et cetera. We'll just call them naked restraints or unsubtle restraints. For those restraints, the need to uh define a market uh as a pleading standard is highly, highly relaxed. Um however, in other cases, it is not, and it is a major threshold over which a plaintiff must climb, and that is to define a relevant market. Anyone who's practicing law understands in some way, shape, or form the concept of relevance. So defining a relevant market is a way to cabin the evidence so that we're only talking about a limited market where the restraint has its bite or its effect. And we're not just talking about markets generally or the economy generally. But over time, the judiciary has narrowed or expanded, if you will, either way, but they have put more and more and more emphasis on the need to prove a relevant market or to establish a relevant market. Now, even though a relevant market is in fact, and to some people this may seem physical, but a relevant market is in fact an issue for a jury. Nonetheless, many cases uh get caught on the rocks of trying to prove relevant market or try to plead relevant market, I should say, because of ever-increasing um judicial scrutiny of that aspect of the case. And that's one of the reasons that it may be important to involve an economist at a very early stage uh in the uh proceedings. Notably, even though we must use economists and their tools to establish a relevant market, there's no such thing in the field of economics. They don't have them. So in our attempt to impose relevant economics on antitrust, we have imported a principle that the economists themselves don't recognize. Okay. So now putting that aside, and thank you very much uh to the late Professor Bork for all of this. I say that uh sarcastically. Um anyway, that's the situation with respect to relevant markets.

Tom Hagy:

This takes us over into our uh the core discussion here is uh the antitrust whistleblower initiative from from the DOJ. Now, Dan, I would I would I'm not James Earl Jones, but um you envision sort of a uh a scrolling uh slide uh like Star Wars. But I'll just read it. Long ago in a galaxy far, far away. The Supreme Court found that in complex antitrust litigation, motive and intent play leading roles. The proof is largely in the hands of the alleged conspirators, and hostile witnesses thickened the plot. Interesting uh quote from 1962. Sounds like fraud.

Dan Mogin:

There you go. So recently, several months ago, the uh Department of Justice announced a new whistleblower reports program in the antitrust division. And so this is an extension of what previously existed with respect to the leniency uh program that was authorized by statute that's called Espera. This is now a form of whistleblower protection and whistleblower incentives that focus on individuals rather than on corporate leniency applicants. So a whole host of whistleproof protections and uh incentives are now being offered for the first time directly by the DOJ for individuals who come forward with postal-related antitrust claims. The postal relation is a little bit of a puzzle, but I think that represents the fact that this is a pilot program at the moment. And over time, I believe that the postal relationship will go away and it will be a more generally targeted program. Uh but I do also think that uh as it currently stands, if one can meet some or some of the elements of mail fraud, which we frequently see overlap with in antitrust cases because of the use of the facilities of the mail as specified in that statute. Um we can get to the postal relationship fairly easily. And they're offering monetary awards of up to 30 percent of any criminal fines that are ultimately are recovered. So this is a new thing for them, but it's also an extension of an existing program. And just yesterday, the uh chief of criminal enforcement in the antitrust division talked about the relationship of these two programs and the likely expansion, including placing greater burdens on both whistleblowers and leniency applicants.

Tom Hagy:

And so, Dan, you had shared some of the uh um the lean leniency cases in action. I don't know if you want to say anything about these, but uh obviously these are some pretty high-profile cases where a leniency was granted.

Dan Mogin:

Yeah, so these are leniency actions under Espero. So um once upon a time in a little galaxy far, far away, again. Uh and not so actually it wasn't so long ago, but the uh the DOJ had a very robust program of attacking international cartels, and that was for a whole host of reasons that's truly inside baseball. But it was very successful in terms of uh breaking up international cartels that had been operating in the United States. One of the first of these cases, which involved a leniency applicant, was the vitamins case. I'm not talking about the vitamin pills that you're gonna buy at your local grocery store or drugstore. We're talking about massive boxcar loads, train car loads of vitamins at an extreme wholesale level. And this was a giant international cartel, mostly out of Europe, that was broken because uh of a leniency application to the DOJ. Huge fines, big deal, a template case for leniency. Uh fine art auction cases was Christie's and SootheB's got together to uh rig bids on bid rigging, on bidding. It was it's confusing, but uh essentially they were uh colluding in order to uh keep their auction fees up and to avoid uh higher fees to sellers. No. Uh marine construction, uh a lot of that had to do with hoses. Again, it was another international cartel that uh probably would not have uh been detected uh but for the uh leniency program. Um and then, of course, one of my favorite cases, because I was a co-lead in the private case, DRAM, uh, which involved an international cartel in an industry that uh economists had told us was not susceptible to collusion because it was moving, it moved so quickly and it was an innovation-based market. It couldn't be commoditized, and therefore prices couldn't be fixed. Nonetheless, of course, prices were fixed, of course, production was rigged in terms of throttled back artificially in order to maintain high prices, et cetera. And again, uh this prosecution and its discovery was based upon a leniency application. A little controversial because of the ringleader nature of the uh leniency applicant, but uh we'll fight that out another day.

Tom Hagy:

Okay. Good. And then uh in terms of, you know, I just put in one example of uh a whistleblower reward. Uh you know, obviously the financial incentives are are there. Uh but the one case that was was from this summer was uh against Omnicell overcharging uh the government for medical devices. Um the investigated False Claims Act uh violations and in June reached a $4.4 million settlement, and the whistleblower uh received $700,000. So uh there's just an example of uh the other type where the whistleblower uh has the incentive and and collects something recent. Um now I don't know if we want to talk about uh Julie, do you want to talk about this or uh the key considerations and litigation strategy?

Julie Bracker:

I can certainly do that. Um you know I this is I guess at the outset of the case, one of the decisions we're making is where are we going to file? And with this proliferation of new whistleblower programs, that's become a much more complicated question. Um so we've we've had for a while choices maybe to file SEC or FCA. Uh if for example, I'll take I've done a lot in the cyber fraud context. Let's say that a publicly traded company has failed to report uh that it's out of reach, then that should be that that is clearly an FCA, uh SEC um issue that can be reported to the SEC at the same time. If there have government customers, then it may very well be an FCA case as well. Um up until recently, uh we we would say elect your remedy, we're gonna need to do one or the other. Um, we don't want to create competing government investigations. And that concept for me came from the fact that when it was often, if you had a relator who had um previously reported to say OIG directly for a Medicare case and had been working with OIG, then you wanted to make sure that when you filed your FCA case and brought in the Department of Justice that the department was apprised of the fact that there was already an ongoing investigation so they could all speak. You know, it's it's actually quite possible to get pretty far down the road without that happening. And you have to wonder, will they step on each other's toes? Is this going to, you know, what kind of um problems might this create internally if you're pursuing it through two different avenues? But I would say since the um certainly since the advent of the uh DOJ's criminal pilot program, we're seeing more and more referrals to multiple programs. And I would certainly consider um I don't know that FCA or whistleblower is necessarily gonna be uh a a decision that's gonna have to be made. Um I think that that is an open question. Um they've been very receptive to it with the criminal pilot program, and I expect the same with the whistleblower program. They are um you know, the omniscience case that you just had up certainly had both. Um they may decide to the government may decide to elect its remedies and pursue one over the other. Um, and that is the case with the civil versus criminal liability. Um we don't really have any control as relators or relators counsel as to whether they're going to be pursuing the allegations we make through the criminal or the civil um mechanisms. And, you know, I talked about that a little bit before. You can get a feel for criminal liability. You know, a guy who is administering unnecessary cancer treatments to um patients and making people sick is gonna go to jail, not just pay money back. Uh, and that's going to be the the dog, and the tail will be that civil liability of making him pay the money back. But in in general, pursuing a criminal liability doesn't per again doesn't preclude also pursuing civil liability, although you may wind up with no m no money left after criminal restitution, or you may wind you will certainly wind up with a much longer uh investigation period than if you hadn't had the criminal side involved. Or although they are supposed to be speedy, you know that's a relative term. So we'll definitely slow everything down. Ethical considerations and privilege issues, uh I don't I don't know that that really falls so much under this sort of binary, do you do this or this or both? Um certainly we want to be both ethical and obey obey privilege issues, but um what can arise there, I'll I can give you an example of a a privilege issue that I'm encountering a lot right now with um the civil cyber fraud cases. When a company becomes aware, when someone within a company becomes aware that they're violating laws or regulations and they take that up the chain, you know, then the first thing they're gonna do is ask the company's lawyers, either in-house or outside counsel, are we violating the law? Um maybe, maybe it's gonna be the first thing, maybe it's not. And you'd actually be surprised a number of companies that choose not to ask for legal advice on this kind of thing. But um, but it often is, and especially when it's something as niche as cyber fraud regulations or cybersecurity regulations, because most of the time the in-house council, unless that's what the company does, may have no experience whatsoever in that, and they need to bring in outside experts to help them assess where they are and what they need to do. Well, you can imagine a situation where George the IT guy, who's been there since 99 and runs the email system, has no idea about cyber um security because that's no more so than you would would go to your GP and ask him to take out a brain tumor, right? There are different um types of IT, which I think a lot of people they don't want to deal with computers, so they just lump them all together, especially in C-suites. So you you may have uh George the IT guy who's saying, I don't know, but I don't think what you're doing is right. And they may bring may bring in, you know, Chris the cyber expert, who takes a look and says, Yeah, you're doing it wrong. And now you have two potential whistleblowers. Um, and not only do you have two potential whistleblowers, you have two potential whistleblowers who may then be told different things. Maybe the expert is told, yeah, we're gonna get right on that, and then they don't. Maybe George the IT guy is told, uh, we're not paying for that, George. You need to take on this new responsibility, which by the way is the job of a team, not a George who already had a job, presumably for which you were paying him. So so um at some point you're gonna get legal counsel involved there, and we're being extraordinarily careful. We've always been very careful, we don't want to build a case based on privileged information. Of course we don't. And the US does not want to see anything that has been uh even potentially tainted by attorney-client privilege because we we would just wind up recused, right? We would be starting from scratch, and Lord knows that's the last thing we need in the FCA is to lose all that investigative time that's gone on before we realize something has been privileged. So we have to be really careful that when we're building our case, we don't include anything that the relator, I mean, George may not know that what he's being told by Chris, the expert, is coming from legal counsel. Um, but if he does, you know, we need to be very careful about not sharing that. And we need to be exercise due diligence to make sure we understand that. Um, so that always comes up in every case. It's just an easy illustration in cyber fraud to make sure that your relator, insider, is not sharing information that properly belongs protected by the attorney client privilege.

Tom Hagy:

Gotcha. All right. So uh so we've been given a lot of information here in it in the time we have left. I I'll just kind of leave the key takeaways in there about the the critical role of uh whistleblowers and and uncover these things. And I think this slide about the amount recovered, I think we need to you know call back to Julie to your disclaimer about this, uh about these ranges, but um, and also that this new initiative does expand opportunities for reporting and account accountability, and obviously you've got to understand these whistleblower laws and trust principles uh deeply, or to work with somebody who does, if you guys know anybody, that's essential for effective litigation. And then I have some questions. We've addressed you've addressed some of these. I guess uh uh let me just tackle uh maybe just two of them here. Um uh the constitutionality of QITAM, I'm gonna say it that way now. Uh what what are your thoughts on that? I mean, there was a there was a decision uh that came out of the Middle District of Florida saying, you know, these these relators are officers of the executive branch, they have to be appointed under the constitution. Uh what are your thoughts on that, Julie? What do you think is gonna happen?

Julie Bracker:

Yeah, so a a couple of thoughts. A little inside baseball. You know how now you know I'm obsessed with pronunciation. The case is Zafiroff. A lot of people are saying Zafirov, but I know Ms. Zafiroff is Zapiro. And uh this case is being litigated by a couple of um dear friends of ours at uh Morganber Camp. And um Judge Mizel is a uh former clerk of Justice Thomas, and Justice Thomas dropped a footnote in a recent Supreme Court opinion saying, you know, if these cases are even constitutional, dot dot dot question mark. Not not literally saying that, but that was the gist. And Judge Mizelle um, you know, in what I would say is auditioning for a different job, um took the invitation to say maybe they're not, and uh and wrote this opinion that uh that has you know caused quite a lot of stir. It's in my circuit, the 11th Circuit. I sit in Atlanta. Judge Mizel's in the Middle District of Florida, we're both 11th Circuit. So we saw a rash of once her um verdict what's once her order came out, we saw a rash of moving to stay FCA cases in the um, particularly in the 11th circuit, based on this opinion, like this whole thing could be unconstitutional. We shouldn't have to spend any money um litigating these cases. Even in some other districts, they they tried that maneuver and uh largely unsuccessful. Uh for the most part, uh uh no Judge Moselle stands alone in the way she's analyzed this. Uh this was all has previously been litigated. This is not a new argument. The constitutionality was well established previously, so we're revisiting it under some different theories. But did I mention more than $700 billion returned to the IRS to the United States through the statute from bad guys who stole it? Let me emphasize that. And I'm sure there are a few people who were caught up in it accidentally. I don't know. No, really, these are these are people who stole money and they had to pay it back. So it's it's pretty bipartisan that we support this statute. Um if I think an imp important thing to note is that what she said here, and I I like reading the Mizelle opinion because you read all of these great powers that relators have, and I think, why did no one tell me I could do these things? This would be really cool. Um, you don't have anything like the powers as asserted in the Mizelle order. She's talking about um how a relator in decline litigation where the United States has declined to go forward, but the relator is pursuing the case, which does happen and and happens for good reason, not because the US said it was not a valid case or that it wasn't a worthwhile case, but maybe because of effort and time, maybe because the US has recently done a case of that sort and they try to set policy with the cases they select. You know, there are a lot of reasons. Um the return on investment, you know, the US has to use its resources wisely to pursue the bigger cases. And if it's a smaller case, it may get um declined with the idea that the Relators Council will pick up the banner and take it forward, which we frequently do. But but during the pendency of a decline litigation, Judge Mazell says we can bind the US, which is just factually not true. Um I I understand her reasoning. I'm not calling the judge a liar, you know, it's all it's all uh nuanced, but the the question is, you know, we um must we have congressional authority on an individual basis as a relator to go forward. Now we already know that relators are not allowed to uh represent themselves. There's no pro se relator, that's not permitted. Courts require you to have counsel because you represent the U.S. Um if a if a decline litigation goes forward and the U.S. wants to stop it, they can always move to dismiss the case under C2A and the statute. So they they always have the power to dismiss. So that's another check on a relator's power. But I think one thing that gets lost in this conversation is that we're only talking about decline litigation, we're not talking about the False Claims Act. We're talking about the powers exercised by a relator and their counsel in a decline litigation. So I have a couple of solutions. You know, if if to my surprise, and it would be very surprising to me, the 11th Circuit or the Supreme Court found that the contrary to the great weight of history, that there wasn't enough protection in place and that relators had to um have congressional authority on an individual basis as a designated officer of the U.S. in order to pursue these cases, then I think number one, that would only affect decline litigation, right? It wouldn't really re-jigger the whole statute. It would be focusing on this decline litigation piece. And then secondly, and and you know, importantly, uh, I don't think there's anything to preclude Congress from creating such a mechanism. You know, we managed to commission every officer in the um military forces. It it doesn't, you know, bring the government to a grinding halt. They've created a mechanism for it and it happens. I believe a mechanism could be created whereby relators are commissioned and therefore are authorized to go forward just as they're going forward now. And uh candidly, I would love that. I wouldn't mind if the Going into decline litigation, it would certainly stop the argument that defendants like to make in decline litigation that if this was really important, the government would be doing it. Or uh the often heard thing at the beginning of the trial for a while there was look who's sitting at the table. It's you know, it's Julie, not the government. And um having saying, no, no, no, I'm here because look, see, I'm commissioned by the US to do this would not hurt my feelings at all. Um, I think that would be an interesting and probably unexpected to the uh Zephyr off proponents. I think that would be an interesting and unforeseen result if we wind up with some kind of mechanism for that.

Tom Hagy:

Thanks, Julie. And Dan, I'm gonna uh using the time we have, I'll just give you, I'll give you a choice, one of two questions. You can either talk about forced arbitration and class waivers or these anti-competitive laws and regulations that the DOJ and FTC are going after. What would you like to talk about?

Dan Mogin:

Anti-competitive laws and regulations.

Tom Hagy:

Um just to spell it out, the DOJ and FTC have identified 125 laws and regulations. They believe distort markets and stifle competition. Um there's not a full list released yet, but uh COSOL, the uh is it a is it a committee uh uh in support of antitrust laws and other organizations have submitted comments during this investigation. So I guess the the general question, what what types of laws or regulations might there be that are uh distorting markets or stifling competition?

Dan Mogin:

Uh potentially hundreds of them. Well, this touches on a couple of things, one of which is the bipartisan nature of antitrust. I say bipartisan in the sense that, as you know, the uh Trump administration is a relatively conservative administration, and you would think that their antitrust policy might reflect that, but it does not. I would say that their antitrust policy, as revealed to this point, is generally in line with uh mainstream antitrust enforcement of the type that we would see from a middle-of-the-road Republican administration. And maybe even more aggressive than that, maybe a a liberal Republican administration. So um kudos to them for that. What happened is that uh a couple of years ago, the Biden administration formed an all-of-government um task force, if you will, to combat uh anti-competitive activity uh across agencies, et cetera, et cetera. And uh the Trump administration has uh reformulated that, and uh they've come up with this market distortion uh and stifling of competition regime. Um what they're doing is they're going through any number of Federal regulations to see if they have uh competitive effects. Do they stifle competition? And there are many examples of it out there. Uh for example, there's frequently tension between competition laws and the environmental laws. So that requires a certain balance. Imagine, if you will, that they are auditing the Code of Federal Regulations and trying to ferret out those regulations that they think uh distort markets and stifle competition. And it is if it's done in good faith, it is an excellent use of government resources.