Member Submission
ambiguity relating to the requirement that relators provide
the Government with a “written disclosure of substantially all
material evidence.” Before FERA, it was unclear whether the
FCA permitted qui tam relators to also assist state and local
enforcement agencies while the relator’s complaint was under
seal. Now, relators are clearly “not preclude[d]” from serving
on state or local officials the Complaint, other pleadings and
the written disclosure of substantially all material evidence. 31
U.S. C. § 3732(c). Additionally, FERA expanded the ability of
the Government to use civil investigative demands (“CIDs”).
Whereas CIDs were only occasionally used in the past, under
the Attorney General’s new power to delegate the authority to
issue such CIDs, use of such devices has become common
practice. This significant procedural expansion is now used
to aid the Government in its civil and criminal investigations
of FCA violations.
Substantively, FERA has liberalized the FCA’s prior intent
requirement. Before FERA, liability under the FCA existed
only where the individual “knowingly” made, used or caused
to be made or used, a false record or statement “to get a false
or fraudulent claim paid or approved by the Government.” 31
U.S.C. § 3729(1)(B) (1994), amended by Pub. L. No. 111-21,
§ 4, 2009 Stat. 386 (2009) After FERA, the words “to get” and
“paid or approved by the Government,” changed to “material
to a false or fraudulent claim,” simplifying the analysis to an
inquiry as to whether a false record was material and whether
the defendant knew that the record was false.
This significant change is coupled with a more expansive
definition of the term “claim,” which now means “any request
or demand, whether under contract or otherwise, for money or
property and whether or not the United States has title to the
money or property.” 31 U.S.C. § 3729(b)(2). This amendment
allows the Government to pursue false claims for payment
made upon third-party contractors or other intermediaries as
opposed to the Government directly.
“reverse false claims” provisions of the FCA. After FERA,
a reverse false claim exists where an individual “knowingly
and improperly avoids or decreases an obligation to pay or
transmit money or property to the Government.” 31 U.S.C.
§ 3729(a)(1)(G). This Provision removes the requirement
that a defendant take an affirmative act to conceal, avoid,
or decrease their obligation to pay. Now, all that is required
is that the offending party “know” that they are in receipt of
or have retained money to which they are not entitled. The
implications of this amendment are significant; if the recipient
were to discover that they received an overpayment because
of a systematic or automated flaw in their billing system, the
knowledge of this single incident of overpayment would impute
knowledge of a potential overpayment to all transactions using
that same defective system – resulting in a massive obligation
to repay, and if not repaid, a massive reverse false claim
(which may include liability for treble damages).
B.
Expansion of the FCA resulting from ACA
While FERA expanded whistleblower retaliation protections to
include not just employees, but also contractors and agents,
the bigger changes to the FCA (from the whistleblower’s
perspective) came from the ACA. The ACA softened the
“public disclosure jurisdictional bar.” Prior to the ACA, a court
would be devoid of FCA jurisdiction if the relator’s suit was
based on information publicly disclosed in a criminal, civil, or
administrative hearing, news media report, or government
report, audit or investigation, of either the state or federal
government.
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Perhaps most significantly, FERA also expanded the
The Official News Publication of the Atlanta Bar Association
April 2014
THE ATLANTA LAWYER
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