False Claims Act Cases Are Piled Up at SCOTUS: What to Watch
Here's a snapshot of a handful of pending FCA cases and a significant, but different type of whistleblower issue under the Dodd-Frank Act that the justices have already agreed to decide.
September 29, 2017 at 11:34 AM
17 minute read
Legal fees, pleading requirements and disputes over timing—the False Claims Act is providing the U.S. Supreme Court with myriad issues as companies and whistleblowers pitch the justices on cases to take for the new term. Time will tell if the justices are willing to bite.
At least four False Claims Act disputes are pending before the high court—creating a good chance the law will generate a case or two for the justices, who start their fall term on Oct. 2. The court has shown an interest in exploring the contours of the False Claims Act, a decades-old law through which the U.S. Justice Department annually recovers billions of dollars in settlements and judgments.
The False Claim Act's financial penalties for company violations are stiff. In August 2016, the civil penalties nearly doubled to between $10,781.40 and $21,562.80 per claim, plus three times the amount of damages that the federal government sustains because of the false claim. The pending petitions each have important implications for companies doing business with the government.
Here's a snapshot of a handful of pending FCA cases and a significant, but different type of whistleblower issue under the Dodd-Frank Act that the justices have already agreed to decide.
In U.S. ex rel. Harper v. Muskingum Watershed Conservancy District, a “reverse false claim” is center stage. The whistleblower asks whether he had to plead that the water district subjectively knew that it was violating the terms of a land deed from the government and had not committed a mistake of law. Thomas Connors of Black McCuskey Souers & Arbaugh in Canton, Ohio, represents Leatra Harper; Jennifer Armstrong of Cleveland's McDonald Hopkins is counsel to the water district.
Victaulic Co. v. United States ex rel. Customs Fraud Investigations challenges the U.S. Court of Appeals for the Third Circuit's interpretation of a civil procedure rule that requires a whistleblower's complaint to “state with particularity the circumstances constituting fraud.” Victaulic's counsel is Thomas Hill if Pillsbury Winthrop Shaw Pittman. Customs Fraud is represented by Jonathan Tycko of Washington's Tycko & Zavareei. The National Association of Manufacturers and the American Association of Exporters and Importers filed amicus briefs for Victaulic. “NAM has a particular concern about the proliferation of unfounded qui tam FCA cases, the number of which has increased dramatically over just the past few years,” Douglas Baruch of Fried, Frank, Harris, Shriver & Jacobson wrote in the brief for the manufacturer trade association.
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