The court found that the defendant and their counsel were bound by a settlement reached during mediation in a False Claims Act case, despite later claims of insufficient authority and unagreed terms. The government argued that the defendants had defrauded it by submitting inflated bills. The court upheld the district court’s ruling that the oral agreement constituted a valid contract, affirming that terms discussed encompassed all essential aspects of the settlement.
United States v. Ma, United States Court of Appeals, Fifth Circuit, No. 25-50067
- Background – In February 2022, the government sued the defendant for allegedly submitting inflated reimbursement claims tied to services provided to veterans through the Veterans Affairs Department. Following a mediation session on September 13, 2023, the parties reached an agreement on payment terms totaling $2.3 million. Subsequently, the government moved to enforce the settlement, prompting the defendant to contest its validity, claiming they did not authorize their counsel to agree to the settlement amount.
- Authority to Settle – The defendants initially challenged whether their counsel had the authority to settle at mediation. The district court ruled that, as the attorney of record, the counsel had presumptive authority, and the defendants didn’t not rebut that presumption. On appeal, the court concluded that the defendants forfeited this argument by failing to require the government to prove that the defendant’s counsel had “specific authority to settle, treating the presumption of authority as conclusive, and disregarding unrequited evidence that no such authority existed.”.
- Material Terms of Settlement – The court assessed whether the defendants and the government had reached a binding agreement on all material terms at mediation. The district court found that they had agreed on payment amounts, the schedule, and other essential aspects. The appellate court affirmed this decision, noting that all critical terms were established, thus creating a binding settlement.
- Finality of the Agreement – It was argued by the defendants that the oral agreement was not intended to be final until written confirmation was provided. However, the court found no error in the district court’s ruling that the mediation resulted in a final and enforceable agreement. No evidence was presented to indicate that the parties explicitly required a signed agreement for the settlement to take effect, supporting the validity of the oral agreement.
- Anticipatory Repudiation – The defendants attempted to argue that the government breached the agreement by enforcing additional terms not discussed during mediation. However, this argument was raised too late in the appeals process and was forfeited. The appellate court determined that the defense did not meet the standard for raising new arguments, thereby upholding the original ruling to enforce the settlement.