More and more federal appeals courts are rejecting restrictive interpretations of the False Claims Act and are allowing the government to proceed with FCA claims where the connection between the fraud and the claim for payment is more tenuous. The recognition of implied certification theories of liability are on the rise across the circuits, including in the Fourth Circuit, and is providing an expanded basis for the government to pursue claims against federal contractors.
This article by TELG managing principal R. Scott Oswald and TELG principal & general counsel Nicholas Woodfield was published by Westlaw Journal Government Contract on August 3, 2015.
Pulling back the ‘Triple Canopy’ on implied-certification claims under the False Claims Act
Widely recognized as the first whistleblower protection law in the United States, the False Claims Act, 31 U.S.C. § 3729, dates back to the Civil War. President Abraham Lincoln, in visiting the battlefield front lines, found that contractors had sold diseased mules and munition crates full of sawdust to his Union Army. Soon after, Congress enacted the FCA and its qui tam provision, which allows private citizens to bring lawsuits on behalf of the U.S. government if they discover that their employers have engaged in fraudulent conduct.
Although the FCA has proven to be an invaluable tool to combat fraud, courts have historically allowed defendants to avoid liability by showing that their conduct was unrelated to the government’ decision to pay for their products or services. In other words, unless the government established an ironclad link between the fraudulent conduct and the request for payment, courts have often let the defendant off the hook.