False Claims Act (31 U.S.C. §§ 3729–3733)

Under the False Claims Act, “knowingly” covers three specific mental states. A person acts knowingly if they have actual knowledge that information is false, or if they act in deliberate ignorance of the truth, or if they act in reckless disregard of the truth. The law does not require proof of specific intent to defraud.

– Actual knowledge means the person knew the claim was false
– Deliberate ignorance covers intentionally avoiding the truth
– Reckless disregard means ignoring obvious problems with the claim

No specific intent is required because Congress wanted to catch those who look the other way or ignore red flags, not just those who set out to defraud the government.

The FCA has two statutes of limitations. A case must be filed within six years of the violation, or within three years after the government knew or should have known the relevant facts, but in no event more than ten years after the violation.

– When the government intervenes, its complaint “relates back” to the relator’s original filing date. This protects the government’s claims from being time-barred even if it joins the case later
– Whether a relator can use the 3-year government-discovery period when the government declines to intervene has been the subject of circuit splits. In 2019, the Supreme Court held in Cochise Consultancy that relators can invoke it even in non-intervened cases

The public disclosure bar prevents whistleblowers from bringing FCA cases based on fraud already publicly disclosed through news media, congressional hearings, or court proceedings. It exists to prevent parasitic lawsuits.

An “original source” exception applies. To qualify, a whistleblower must have direct and independent knowledge of the allegations and must voluntarily provide that information to the government before filing.

– For already-disclosed fraud, the whistleblower must also materially add to the public information
– Information provided only in response to a subpoena or investigation does not qualify

Under the FCA, the government holds broad authority to dismiss a qui tam action, even over the relator’s objection. This power is codified at 31 U.S.C. § 3730(c)(2)(A).

– The government can move to dismiss at any stage, even after initially declining to intervene
– The relator must receive notice and an opportunity for a hearing
– Courts apply Federal Rule of Civil Procedure 41(a) and grant substantial deference to the government’s decision

Under the FCA, a whistleblower must prove retaliation occurred “because of” protected activity. This statutory language has created a circuit split over the correct causation standard.

– Contributing factor standard: A more employee-friendly test, requiring only that the protected activity played some role in the adverse action. The D.C. and Eighth Circuits have applied this standard
– But-for causation standard: A stricter test, requiring the whistleblower to prove the adverse action would not have occurred without the protected activity. The First, Third, Fourth, Fifth, and Eleventh Circuits now apply this standard

In Universal Health Services v. United States ex rel. Escobar, the Supreme Court recognized that liability under the False Claims Act can attach under an “implied false certification” theory. This means a defendant can be liable for submitting a claim that implicitly certifies compliance with a legal requirement, even if no explicit false statement is made.

However, the Court also held that for liability to attach, the violation must be “material” to the government’s payment decision. Materiality is a demanding standard; it is not enough that the government would have the option to reject payment. The defendant’s noncompliance must be central to the government’s decision to pay.

A reverse false claim is a type of liability under the False Claims Act that targets the improper avoidance of paying money owed to the government. It is codified at 31 U.S.C. § 3729(a)(1)(G) and prohibits knowingly making a false record or statement to conceal, avoid, or decrease an obligation to pay the government. An “obligation” is broadly defined to include duties arising from contracts, statutes, regulations, or the retention of an overpayment.

The key difference lies in the direction of the fraud:

– A traditional false claim involves a defendant wrongfully obtaining money from the government. For example, submitting a bill for services not rendered
– A reverse false claim involves a defendant wrongfully withholding money or property from the government. For example, a contractor who receives an overpayment but knowingly conceals it to avoid repayment