The False Claims Act’s Liability Provisions (Part 1 of 7): False Claims
The False Claims Act has seven liability provisions. Some are used by attorneys in almost every case, while others are rarely used. In a series of posts, each provision will be discussed.
The Act’s primary liability provision is 31 U.S.C. § 3730(a)(1)(A), which provides that any person who “knowingly presents, or causes to be presented, a false or fraudulent claim for payment or approval . . . is liable to the United States . . . .”
Simplified Example 1: A contract between Corporation and the United States requires widget spare parts to be tested before shipment to the United States. The Corporation does not test the widgets. Corporation submits a claim for payment anyway.
Simplified Example 2: Federal regulations condition payment of Medicare claims on certain prerequisites. A physician violates a prerequisite and submits claims for Medicare reimbursement anyway.
A claim is false under section (a)(1)(A) “when it rests on a false representation of compliance with an applicable federal statute, federal regulation, or contractual term.” United States v. Sci. Applications Int’l Corp., 626 F.3d 1257, 1266 (D.C. Cir. 2010).
A § 3729(a)(1)(A) claim has three elements: “(1) the defendant presented or caused to be presented to an agent of the United States a claim for payment; (2) the claim was false or fraudulent; and (3) the defendant knew the claim was false or fraudulent.” United States ex rel. Piacentile v. Sanofi Synthelabo, Inc., 2010 U.S. Dist. LEXIS 137895 *17 (D.N.J. Dec. 31, 2010) (quoting United States ex rel. Schmidt v. Zimmer, Inc., 386 F.3d 235, 242 (3d Cir. 2004)).
The claim itself does not need to contain a false statement, rather, it must be shown that the claim is false. Pickens v. Kanawha River Towing, 916 F. Supp. 702, 707 (S.D. Ohio 1996) (quoting United States ex rel. Fallon v. Accudyne Corp., 1995 U.S. Dist. LEXIS 11931 *45 (W.D. Wisc. June 19, 1995), Ab-Tech Construction v. United States, 31 Fed. Cl. 429, 434 (Ct. Cl. 1994), S. Rep. No. 345, 99th Cong., 2d Sess. 9 (1986), reprinted in 1986 U.S.C.C.A.N. 5266, 5274).
A false claim is actionable under the Act if the “claim” is presented either to the United States or to a “contractor, grantee, or other recipient” to the United States, when factors described in 31 U.S.C. § 3729(b)(2)(A)(ii) are met.
Also note that while the 2009 amendments to the False Claims Act added materiality as an express element of other of the False Claims Act’s liability provisions, Congress did not add materiality as an element to § 3729(a)(1)(A). “[Where] Congress includes particular language in one section of a statute but omits it in another section of the same Act, it is generally presumed that Congress acts intentionally and purposely in the disparate inclusion or exclusion.” Russello v. United States, 464 U.S. 16, 23 (1983) (alterations in original) (citations omitted). Therefore, materiality is not an element of an (a)(1)(A) claim.
Some of this discussion was originally included in James B. Helmer, False Claims Act: Whistleblower Litigation, chp. 3 § XII.A. (BNA 6th ed. 2012) and more information can be found there.
Attorney Erin M. Campbell has represented clients in federal False Claims Act cases with the firm since 2005. She is the author or co-author of several publications about the False Claims Act. In 2010, Erin M. Campbell was selected as a Rising Star Superlawyer by Law & Politics magazine.