Commercial Litigation Update

The U.S. Court of Appeals for the First Circuit recently provided important clarity—and welcome relief—for clinical laboratories facing False Claims Act (“FCA”) allegations based on a lack of medical necessity for processing tests ordered by a physician. In a case of first impression, United States ex rel. OMNI Healthcare, Inc. v. MD Spine Solutions LLC,[1] the First Circuit held that clinical laboratories may rely on an ordering physician’s determination that lab tests billed to Medicare are medically necessary. The First Circuit held that laboratories need not second-guess a physician’s certification absent red flags or suspected improper conduct. While the First Circuit’s decision does not relieve clinical laboratories of their existing obligation under the FCA to ensure they are not submitting a false claim to government payors, it provides much-needed clarity for clinical laboratories across the country on what constitutes the knowing submission of false claims to the government and highlights several practical takeaways for managing compliance risk.

The SCOTUS Today series doesn’t usually report on U.S. Supreme Court opinions relating to its interim orders, e.g., orders dealing with stays.

However, given the newsworthiness of the President’s efforts at deploying State National Guard units in areas of increasing civil unrest, yesterday’s decision by a sharply divided Court in Trump v. Illinois is worthy of mention.

Thus, we note that the Court has refused to allow President Trump to deploy National Guard troops in Chicago, dealing a setback to his attempts to use the military in U.S. cities. 

On October 4, 2025, the President called 300 members of the Illinois National Guard into active federal service to protect federal personnel and property in and around Chicago. He supplemented that contingent on the next day with members of the Texas National Guard. President Trump claimed reliance on 10 U.S.C. §12406(3), which empowers him to federalize members of the Guard if he is “unable with the regular forces to execute the laws of the United States.” The Illinois District Court, later essentially affirmed by the U.S. Court of Appeals for the Seventh Circuit, issued a temporary restraining order barring the federalization and deployment of the Guard in Illinois.

In denying a stay of the orders below, the Supreme Court focused on the meaning of the term “regular forces” in §12406(3). The government argued “that the term refers to civilian law enforcement officers, such as those employed by Immigration and Customs Enforcement or the Federal Protective Service.” The respondents, tracking the Illinois District Court, argued that the term refers to the regular forces of the U.S. military.

Mass arbitration has quickly evolved into a major pressure point for companies, with filings surging into the hundreds of thousands each year. In a May 2025 infographic, the American Arbitration Association (AAA) reported receiving 82 consumer mass arbitrations that involved 247,327 individual filings. Only a small percentage of these individual claims—about 10% for consumer cases and 1% for employment cases—advanced through the AAA’s updated mass arbitration process. The top industries where mass arbitrations arose in the year 2024 were gaming and entertainment, telecommunications, healthcare, financial services, and tech. Projections for 2025 are expected to increase as mass arbitrating has become a growing litigation strategy, aimed at overwhelming companies with high volumes of filings. 

Although the window for filing lawsuits under the Child Victims Act (CVA) closed over four years ago, thousands of cases remain pending in courts throughout New York State.  Many of those cases involve public school districts. 

While we U.S. Supreme Court practitioners and observers await decisions in several already-argued cases of great significance regarding the separation of powers and executive authority, the Court this morning issued a per curiam opinion in the somewhat obscure case of John Doe v. Dynamic Physical Therapy, LLC.

To plead securities fraud, a plaintiff must allege that the defendant made a false statement or omitted a material fact, did so with scienter, and that the plaintiff relied on that misrepresentation and suffered injury. Many cases rise or fall on the scienter element—did defendant have the requisite “intent to deceive, manipulate, or defraud”?  That’s where a familiar refrain often surfaces:  “My lawyer said it was fine.”  The so-called advice-of-counsel defense can be a powerful shield.  When a defendant has laid out all the facts for their lawyer and acted with the lawyer’s blessing, it becomes harder for a plaintiff to prove the intent required under §10(b) of the Securities Exchange Act and related provisions.

Yet this defense carries a significant cost.  As Oklahoma Firefighters Pension & Retirement System v. Musk et al., 22-cv-03026 (S.D.N.Y. 2022), illustrates, asserting an advice-of-counsel defense is likely to trigger an implied waiver of the attorney-client privilege—effectively exposing confidential communications with counsel to discovery.  The rationale is simple: a defendant who claims a good-faith belief in the lawfulness of their conduct necessarily places at issue the communications that shaped that belief.

The U.S. Supreme Court has several highly contentious matters under consideration, or soon to be argued, including whether various presidential executive orders can survive separation-of-powers analysis.

Yesterday, however, the Court began the flow of this term’s decisions with two per curiam opinions (that is, unsigned rulings of a unanimous Court) that reached easily predictable conclusions.

That is not to say that these decisions are unimportant. Indeed, for those of us who, if only occasionally, defend criminal cases, the two decisions provide useful procedural advice. Given the tenor of recent arguments, though, this term’s early harmony is unlikely to last. So, let’s revel in the peace of the day.

New episode of our video podcast, Speaking of Litigation: This Veterans Day, Speaking of Litigation brings you a special episode featuring Epstein Becker Green attorneys Stuart Gerson, Jack Fernandez, Ron Green, and Ken Kelly, who share their unique journeys from military service to impactful legal careers.

Discover how their military experiences shaped their leadership, resilience, and approach to the practice of law. This episode also celebrates the service of the broader Epstein Becker Green community, including employees and their families.

In Summer 2025, the U.S. Court of Appeals for the Sixth Circuit issued a strongly worded decision in In Re: FirstEnergy Corporation (No. 24-3654)—confirming the core concept that internal investigations conducted by counsel and in anticipation of litigation are privileged and protected from disclosure. When securities plaintiffs in the case sweepingly sought all documents “related to the internal investigation,” the district court incorrectly ordered their production. After much legal wrangling, the Sixth Circuit rebuked the district court on August 7, 2025, and reaffirmed in a per curiam opinion filed October 3, 2025. 

The U.S. Court of Appeals for the Eleventh Circuit held in United States ex rel. Sedona Partners LLC v. Able Moving and Storage Inc., No. 22-13340 (11th Cir. Jul. 25, 2025), that while a district court has the discretion to dismiss a relator’s complaint before or once discovery has begun, it may not disregard the allegations of qui tam relators at the motion to dismiss stage solely because those allegations reflect information obtained in discovery.