Difference between revisions of "False Claims Act"

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A September 2018 Third Circuit decision in ''Pharamerica'' clarifies that the FCA’s public disclosure bar is not triggered when a relator relies upon non-public information to make sense of publicly available information, where the public information — standing alone — could not have reasonably or plausibly supported an inference that the fraud was in fact occurring.  Similarly, the D.C. Circuit has held that the public disclosure bar is not triggered where the relator “supplied the missing link between the public information and the alleged fraud” by “rel[ying] on nonpublic information to interpret each [publicly disclosed] contract,” and where “[w]ithout [relator’s] nonpublic sources . . . there was insufficient [public] information to conclude” that the defendant actually engaged in the alleged fraud.  ''United States ex rel. Shea v. Cellco P’ship'', 863 F.3d 923, 935 (D.C. Cir. 2017).
A September 2018 Third Circuit decision in ''Pharamerica'' clarifies that the FCA’s public disclosure bar is not triggered when a relator relies upon non-public information to make sense of publicly available information, where the public information — standing alone — could not have reasonably or plausibly supported an inference that the fraud was in fact occurring.  Similarly, the D.C. Circuit has held that the public disclosure bar is not triggered where the relator “supplied the missing link between the public information and the alleged fraud” by “rel[ying] on nonpublic information to interpret each [publicly disclosed] contract,” and where “[w]ithout [relator’s] nonpublic sources . . . there was insufficient [public] information to conclude” that the defendant actually engaged in the alleged fraud.  ''United States ex rel. Shea v. Cellco P’ship'', 863 F.3d 923, 935 (D.C. Cir. 2017).
='''Scienter Under the False Claims Act Does Not Require Proof of Specific Intent'''=
An ordinary breach of a government contract caused by an honest mistake ordinarily does not give rise to False Claims Act liability.  To prevail in a ''qui tam'' action, a ''relator must prove the defendant acted knowingly, i.e., that the defendant'' “(i) has actual knowledge of the information; (ii) acts in deliberate ignorance of the truth or falsity of the information; or (iii) acts in reckless disregard of the truth or falsity of the information.”  31 U.S.C. § 3729(b).  But '''proof of specific intent to defraud is not required.'''  Therefore, a person who acts in deliberate ignorance or reckless disregard of a false or fraudulent claim can be liable under the False Claims Act.
As amended by the Fraud Enforcement and Recovery Act of 2009, a person is liable under the False Claims Act if he “knowingly makes, uses, or causes to be made or used, a false record or statement material to a false or fraudulent claim.”  '''There is no requirement to prove that a false statement was made with the intent that it would result in the federal government paying the claim.'''
=='''False Claims Act Qui Tam Relators Need Not Demonstrate Intent'''==
The Department of Justice takes the position that qui tam relators need not prove intent.  In a Statement of Interest filed on September 19, 2017 in ''United States ex rel. Daniel Hamilton, Plaintiff, v. Yavapai Community College District, et al.'', CV-12-08193-PCT-GMS, the Department argued:
'''Despite defendants’ endorsement of an intent requirement, no such requirement exists.''' Instead, the FCA provides an action for “knowing” violations and defines “the terms ‘knowing’ and ‘knowingly’ [to] mean that a person, with respect to information has actual knowledge of this information; acts in deliberate ignorance of the truth or falsity of the information; or acts in reckless disregard of the truth or falsity of the information; and require no proof of specific intent to defraud[.]” 31 U.S.C. § 3729(b)(1) (emphasis added). This is made clear not only by the FCA itself, but also by several Ninth Circuit cases. See Hooper v. Lockheed Martin Corp., 688 F.3d 1037, 1049 (9th Cir. 2012) (district court applied the wrong standard in requiring relator to show defendant acted with “the intent to deceive”); see also U.S. v. Bourseau, 531 F.3d 1159, 1167 (9th Cir. 2008); U.S. ex rel. Plumbers and Steamfitters Local Union No. 38 v. C.W. Roen Const. Co., 183 F.3d 1088, 1092-93 (9th Cir. 1999); U.S. ex rel. Hagood v. Sonoma County Water Agency, 929 F.2d 1416, 1421 (9th Cir. 1991).


='''The False Claims Act Protects Whistleblowers from Retaliation'''=
='''The False Claims Act Protects Whistleblowers from Retaliation'''=