False Claims Act (Litigator Series)

THIS CASEBOOK contains a selection of 228 U. S. Court of Appeals decisions that analyze, interpret and apply provisions of the False Claims Act. The selection of decisions spans from 2005 to the date of publication.

Under the False Claims Act, 31 U.S.C. §§ 3729-3733, a private person can bring an action on behalf of the government (and herself) alleging that a third party submitted a false or fraudulent claim for payment to the government. See generally Vt. Agency of Nat. Res. v. United States ex rel. Stevens, 529 U.S. 765 (2000). The plaintiff is known as a "relator," and her action is called a "qui tam" action. If the action succeeds, the relator can share in the government's recovery. 31 U.S.C. § 3730(d). US Ex Rel. Burke v. Record Press, Inc., (DC Cir. 2016).

Under the current version of the statute, each false claim exposes the perpetrator to "a civil penalty of not less than $5,000 and not more than $10,000 . . . plus 3 times the amount of damages which the Government sustains because of the act of that person." 31 U.S.C. § 3729(a)(1). Qui tam relators are eligible to receive up to 30% of the government's total recovery, in addition to any expenses, fees, or costs incurred in bringing the suit. 31 U.S.C. § 3730(d)(2). Bishop v. Wells Fargo & Company, (2nd Cir. 2016).

The goal of the FCA's qui tam provisions is to prevent and rectify frauds by government contractors, by incentivizing private individuals to uncover and prosecute FCA claims. See, e.g., United States ex rel. Dick v. Long Island Lighting Co., 912 F.2d 13, 18 (2d Cir. 1990); United States ex rel. Ritchie v. Lockheed Martin Corp., 558 F.3d 1161, 1168 (10th Cir. 2009) ("Ritchie"); United States ex rel. Green v. Northrop Corp., 59 F.3d 953, 963-65 (9th Cir. 1995) ("Green"), cert. denied, 518 U.S. 1018 (1996). USA Ex Rel. Ladas v. Exelis, Inc., (2nd Cir. 2016).

"The False Claims Act, even in its broadest application, was never intended to be used as a back-door regulatory regime to restrict practices that the relevant federal and state agencies have chosen not to prohibit through their regulatory authority." Polansky II, 914 F. Supp. 2d at 266. US Ex Rel. Polansky v. Pfizer, Inc., (2nd Cir. 2016).

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One barrier to bringing a qui tam action under the FCA, however, is its "public disclosure bar." [ ] Congress amended the public disclosure bar in 2010. May, 737 F.3d at 914-18. (discussing the pre-2010 version of the public disclosure bar.) US Ex Rel. May v. Purdue Pharma LP, 811 F. 3d 636 (4th Cir. 2016).

A claimant may establish eligibility to bring a qui tam lawsuit on one of two grounds: (1) that the factual premise of its claim was not publicly disclosed before it filed the lawsuit, or (2) even if it was, that the claimant was the original source of the information. 31 U.S.C. § 3730(e)(4). Here's how the statute defines a prior public disclosure: "if substantially the same allegations or transactions as alleged in the action or claim were publicly disclosed . . . (i) in a Federal criminal, civil, or administrative hearing in which the Government or its agent is a party; (ii) in a congressional, Government Accountability Office, or other Federal report, hearing, audit, or investigation; or (iii) from the news media." Id. § 3730(e)(4)(A). Here's how the statute in relevant part defines someone who is an original source: one "who has knowledge that is independent of and materially adds to the publicly disclosed allegations or transactions." Id. § 3730(e)(4)(B). US Ex Rel. Advocates For Basic Legal Equality, Inc. v. US Bank, NA, (6th Cir. 2016).

For purposes of the public disclosure bar, [ ] "[t]he substance of the disclosure . . . need not contain an explicit 'allegation' of fraud, so long as the material elements of the allegedly fraudulent 'transaction' are disclosed in the public domain." Found. Aiding, 265 F.3d at 1014; see also A-1 Ambulance Serv., 202 F.3d at 1243. [Footnote omitted.] US Ex Rel. Mateski v. Raytheon Co., (9th Cir