Commercial Litigation Update

The Highlights

• Accelerated FCA Investigative Timeline: The U.S. Department of Justice (DOJ) is taking new steps to implement the directives of Executive Order 14395 of March 16, 2026, “Establishing the Task Force To Eliminate Fraud,” by expediting the review for newly filed False Claims Act (FCA) qui tam actions involving federally funded state-administered benefits programs. The May 27, 2026, memorandum from Assistant Attorney General Brett A. Shumate (“Shumate Memo”) states that all newly filed state-administered benefits program fraud qui tam actions will now be reviewed by DOJ in 60 to 120 days after filing to determine if the government will continue its investigation, permit the whistleblower to proceed, or act to dismiss the case.
• DOJ Reaffirmation of Relator Authority: The Shumate Memo reaffirms DOJ’s position that whistleblowers may “stand in the shoes” of the government and indicates that the agency will let relators lead litigation subject to DOJ’s “oversight and ultimate control.”
• Automatic Criminal and Administrative Referrals: New benefits program fraud qui tam matters will be automatically referred to the Criminal Division and/or the National Fraud Enforcement Division for evaluation of potential criminal violations and to the affected agency for potential administrative action, including payment suspension.

A recent amendment to Washington’s Commercial Electronic Mail Act (CEMA), scheduled to take effect on June 11, 2026, has prompted a surge of class action filings. The amendment revises the statutory standard for actionable violations and reduces statutory damages, spurring plaintiffs to file under the current, more plaintiff-friendly framework before the change becomes law.

[This material was presented as part of Epstein Becker Green’s Counsel to Counsel Roundtable on Monday, May 4, 2026. Co-presenters were Professor Kathleen M. Boozang and Professor David W. Opderbeck of Seton Hall School of Law.]

In 2026, several federal cases are poised to shape regulatory risk, reimbursement, and False Claims Act exposure, as well as innovation pathways across the health care and life sciences sectors. These include cases decided in 2024 and 2025 that continue to have ongoing impacts, as well as more recent cases involving cutting-edge technology. This article highlights five cases to monitor (or their progeny), why these cases matter to in-house legal teams, and practical steps for health care and life sciences general counsel (GC) to consider.

Restrictive covenants entered in connection with the sale of a business occupy a different place than ordinary employment noncompetes. In a sale transaction, the buyer is not simply trying to limit a former employee’s next job. The buyer is paying for goodwill, customer relationships, confidential information, and the seller’s promise not to immediately undermine the value of what was sold.

When a key business relationship shows signs of financial distress, your next move could protect you—or cost you.

Key Takeaways

• Early Action Is Everything: Whether you're owed money or need a supplier to survive, proactive conversations with legal and financial advisors dramatically expand your options before problems become crises.
• Know Your Toolkit: From security interests and guarantees to debtor-in-possession financing and critical vendor programs, knowing which tools apply and when depends entirely on whether a distressed party is pre-bankruptcy or already in a proceeding.
• Legal Strategy Can Only Take You So Far: Deciding whether to keep doing business, renegotiate terms, extend credit, or walk away entirely comes down to business judgment and open communication with your counterparty—no legal strategy can replace either.

In this episode of Speaking of Litigation, Epstein Becker Green attorneys Ryan Cochran, Wendy Marcari, and Bob Mendes discuss strategies healthy companies can implement when they find themselves doing business with a financially distressed or insolvent partner—whether that's a slow-paying customer, a critical supplier, or a struggling tenant.

On April 10, the U.S. Department of Justice (DOJ) announced the first settlement to resolve False Claims Act (FCA) allegations regarding a private employer’s failure to comply with anti-discrimination requirements in contracts with the federal government. The settlement with IBM comes just two weeks after the March 26 signing of a new executive order called “Addressing DEI Discrimination by Federal Contractors” (EO 14398), curbing diversity, equity, and inclusion (DEI) programming (read more here). 

• Several areas of federal criminal prosecution, including health care fraud, have been pulled under the umbrella of the new National Fraud Enforcement Division (“NFED”) of the Department of Justice (“DOJ”), with the stated goal of “rapidly and substantially” increasing resources and creating a robust litigating division.
• DOJ is centralizing enforcement priorities by deputizing local U.S. Attorney’s Offices, and encouraging state and local governmental fraud-fighting authorities to align with the NFED.
• Priority areas of the NFED are yet to be announced, although we expect them to align with the priorities targeted by the Trump Administration in its other enforcement capacities, including “illegal” DEI, weaponization, and others.

Key Takeaways: 

• State Attorneys General (AGs) Are Stepping Up: With reduced federal enforcement staffing, state AGs are expanding their budgets, hiring former federal prosecutors, and taking the lead in health care fraud investigations.
• Medicaid Takes Center Stage: As federal enforcement focuses on Medicare, state Medicaid Fraud Control Units are prioritizing Medicaid fraud, creating a shift in enforcement focus and risk profiles for health care companies.
• Proactive Compliance Is Critical: Companies must prioritize internal complaint management, monitor their external reputation, and engage experienced local counsel to navigate the complexities of state and federal enforcement.

In this episode of Speaking of Litigation, Epstein Becker Green attorneys Zachary Taylor, Sarah Hall, and Jeremy Avila discuss the implications for general counsel regarding the expansion of state-level health care enforcement and explore how companies can proactively manage risk in this evolving environment.

On March 10, 2026, the Department of Justice (“DOJ”) announced its “first ever” department-wide Corporate Enforcement and Voluntary Self-Disclosure Policy (“CEP”) for all criminal cases.

On March 4, 2026, Nippon Life Insurance Company of America (“Nippon Life”) filed suit against OpenAI Foundation and OpenAI Group PBC in U.S. District Court for the Northern District of Illinois—claiming that a covered employee’s zealous use of the artificial intelligence (“AI”) tool, ChatGPT, for pro se litigation caused the chatbot to engage in tortious interference with a contract, abuse of process, and the unlicensed practice of law.