Directors and Officers
In United States v. Wells Fargo & Company, the United States Court of Appeals for the Second Circuit addressed what standard of materiality courts should use in connection with alleged violations of the False Claims Act in light of the U.S. Supreme Court’s recent decision in United Health Services, Inc. v. United States ex rel. Escobar. The court held that the U.S. Supreme Court’s decision abrogated the designation requirement for express false certification claims under the False Claims Act that the circuit previously followed. As such, the court revived a whistleblower suit alleging that two lenders made false statements about compliance with federal laws. (September 7, 2017)
In Abboud v. National Union Fire Insurance Company of Pittsburgh, PA, the Superior Court of New Jersey, Appellate Division, held that the “insured v. insured” exclusion in a directors and officers liability policy may be invoked to deny coverage to one executive sued by another executive of the same company even where there is no evidence that the lawsuit is a collusive attempt to recoup the costs of poor business judgment. (June 21, 2017)