Category Archives: False Claims

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Could You Be The “Beneficiary” Of The “Inadvertent” Submission Of A False Claim?

By Charles L. Kreindler and Barbara E. Taylor Are you a parent corporation with a subsidiary that does business with a state or local government? Are you a manufacturer or supplier whose products end up down the distribution chain with a state or local government? If so, you could be the “beneficiary” of a false claim and … Continue Reading

Size Does Matter – Impacts Of The Small Business Jobs Act Of 2010

By David S. Gallacher On September 27, 2010, President Obama signed into law the Small Business Jobs and Credit Act of 2010 (Pub. L. No. 111-240). The Act is intended to free up capital by providing tax cuts for small businesses (some of which are temporary) and to promote exports of U.S. products, all with a … Continue Reading

Implied False Certification Theory Gains Support In Ninth Circuit

By Robert M.P. Hurwitz Last month, the U.S. Court of Appeals for the Ninth Circuit extended the breadth of the False Claims Act for actions brought within that Circuit by accepting the implied false certification theory of liability. This is a significant development that increases the risk of doing business with the government and enhances the … Continue Reading

Amendments To New York State False Claims Act Encourage Qui Tam Actions

By Anthony N. Moshirnia On August 13, 2010, effective August 27, 2010, the New York legislature enacted Chapter 379, turbo-charging the New York False Claims Act (“FCA”), N.Y. State Fin. Law § 187 et seq., and providing would-be whistleblowers with powerful new incentives to file qui tam actions. The revised New York FCA generally adopts the provisions … Continue Reading

Ninth Circuit Weakens Rule 9(b) In False Claims Act Litigation

By Robert M.P. Hurwitz The U.S. Court of Appeals for the Ninth Circuit recently weakened the impact of Federal Rule of Civil Procedure 9(b) in False Claims Act (“FCA”) cases. The FCA allows whistleblowers (called “relators”) to bring lawsuits against contractors on behalf of the federal government. Relators can receive up to 30 percent of the government’s … Continue Reading

Meanwhile, Sixth Circuit Remains Firm On Rule 9(b) In False Claims Act Litigation

By Christopher E. Hale This article continues discussion of Rule 9(b) in False Claims Act litigation from Ninth Circuit Weakens Rule 9(b) in False Claims Act Litigation, also published today. While the Ninth Circuit has joined the minority position on fraudulent scheme complaints, the Sixth Circuit has reiterated the standard adopted in Bledsoe II, requiring … Continue Reading

Finally, A Ruling That Applies Some Common Sense To The False Claims Act

By Jonathan S. Aronie and Christopher M. Loveland Search for the phrase False Claims Act on the Internet, and you will be hit with a barrage of websites telling you how easy it is to bring a fraud case against a Government contractor. Sadly, these websites are right. The bar to bringing FCA claims has been lowered to … Continue Reading

The Supreme Court Signals It Will Resolve FCA Original Source and Rule 9(b) Issues

Where is the line between a legitimate False Claims Act whistleblower and an opportunistic parasite? How detailed do a whistleblower’s allegations have to be to survive a motion to dismiss and subject a defendant to expensive discovery? These questions have split the federal courts. The Supreme Court recently invited the Solicitor General to offer the government’s opinions on … Continue Reading

Ninth Circuit Decision Emphasizes the Importance of a Well-Crafted FCA Settlement Agreement

With its recent decision in Cell Therapeutics Inc. v. Lash Group Inc., 9th Cir., No. 08-35619, Nov. 18, 2009, the United States Court of Appeals for the Ninth Circuit took a dramatic step towards preserving the rights of False Claims Act (FCA) defendants. The court’s ruling permits FCA qui tam defendants to seek recovery against third … Continue Reading

You Want a Piece of Stimulus Spending? How Much Risk Are You Willing to Accept?

Stimulus projects are likely to come with a thick string of transparency and accountability requirements, along with potentially severe financial penalties and, in some cases, possible prison time. These conditions may be extended not only to U.S. government contractors, but to companies undertaking federally funded projects for state and local governments. Companies that plan to … Continue Reading

New FCA Materiality Definition Enters Time Warp, Influences Interpretation of 1986 Statute

The civil False Claims Act (FCA) prohibits using false statements related to a false claim. (Other types of FCA liability include presenting a false claim, concealing an obligation to pay money to the government, and conspiring to violate the FCA.) In the recent FCA amendments, Congress explicitly added materiality as an element of FCA false statement liability. … Continue Reading

Federal Court Limits Retroactive Application of FCA Amendments

Congress recently expanded contractors’ liability under the civil False Claims Act (FCA). The substantive changes include eliminating the presentment requirement, adding liability for claims seeking non-United States funds, expanding the scope of reverse false claims and conspiracy liability, and eliminating the intent requirement for conspiring to violate the FCA and for using false statements material to … Continue Reading

New FCA Rules Put Lenders and Brokers Directly in Their Gun Sights

I.  INTRODUCTION Without a doubt, the False Claims Act ("FCA") has been dramatically changed in the last few months. As will be discussed in more detail herein, it certainly appears that the FCA has been retooled so that the playing field is now stacked in favor of the government and qui tam plaintiffs. There is also every … Continue Reading

Working Like a Highway Road Crew — Government Finally Amends SF 1443 to Eliminate References to “Paid Cost Rule,” a Mere Seven Years After the Fact

In November 2002, the FAR Councils eliminated the so-called "paid cost" rule from the FAR, which had previously prevented federal prime contractors other than small businesses from recognizing incurred subcontractor costs for purposes of progress billing until "payment by cash, check, or other form of actual payment" had actually been made. See 67 Federal Register 70520 … Continue Reading

Render Unto Caesar What Is Caesar’s … Or Else: The Expansion of False Claims Act Liability to the Retention of Overpayments

On May 29, 2009, President Obama signed into law the Fraud Enforcement and Recovery Act of 2009 ("FERA").[1] FERA implements a number of sweeping changes to the False Claims Act ("FCA"), including a provision that expands significantly the circumstances under which a contractor may be held liable under the so called "reverse false claims" theory.  … Continue Reading

Proposed False Claims Act Amendments Increase Contractor Liability By Further Empowering Whistleblowers

Currently before Congress are at least two bills that could significantly increase government contractors’ liability and strengthen whistleblowers’ power to sue on behalf of the government. Senators Chuck Grassley (R-Iowa) and Patrick Leahy (D-Vermont) are spearheading a bipartisan effort to revise the False Claims Act (FCA), the government’s primary tool to recover damages for fraud related … Continue Reading

Stimulation Has Its Price – The Audit and Oversight Provisions of The 2009 Stimulus Bill Are Unlike Anything Most Funding Recipients Have Ever Seen

On February 17, 2009, President Obama signed into law the American Recovery and Reinvestment Tax Act of 2009 ("the Act" or "the Stimulus Bill") (P.L. 111-5) (H.R. 1). As widely reported in the media, the Stimulus Bill includes approximately $787 Billion in government spending and tax cuts. With regard to the government spending provisions (Division A of … Continue Reading

Allison Engine – More Unanswered Questions

With its recent decision in Allison Engine Co. v. U.S. ex rel. Sanders, the Supreme Court has resolved the conflict among the circuits over whether plaintiffs must show "presentment" of a false claim to establish liability under two False Claims Act (FCA) provisions, 31 USC §§3729(a)(2) and (a)(3).  Finding no requirement that a claim be … Continue Reading

Unanticipated Consequences of the “Contractors and Federal Spending Accountability Act”

On April 23, 2008, the U.S. House of Representatives passed H.R. 3033, "Contractors and Federal Spending Accountability Act," agreeing by voice vote that GSA would maintain a centralized database of government contractors.  The GSA database would collect information on contract defaults, suspensions, and debarments, as well as "any civil or criminal proceeding, or any administrative … Continue Reading

DOJ Does Not Support Recent Proposed FCA Amendments – Why Then Do Some In Congress Still Think Changes Are Required?

On February 27, 2008, the Senate Judiciary Committee held hearings debating whether the civil False Claims Act, 31 U.S.C. §§ 3729-3733, should be expanded – potentially creating additional liability for companies receiving any government money, reducing the ability of any such company to defend itself against claims of fraud, and creating significant hurdles for companies in … Continue Reading
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