Category: Persons subject to FCA

Eighth Circuit Rejects Sovereign Immunity Defense to FCA Qui Tam Action

Betsy Sellers

Last month the Eighth Circuit considered and rejected an Eleventh Amendment sovereign immunity defense to a qui tam action under the False Claims Act.  In United States ex rel. Fields v. Bi-State Development Agency, No. 16-3783, 2017 U.S. App. LEXIS 13925 (8th Cir. August 1, 2017), a former employee of Bi-State alleged that the defendant interstate compact entity raised funds and required its employees to...

Construction Subcontractor Settles FCA Allegations for $2.8 Million

Shannon McNeal

A recent settlement illustrates the broad reach of the FCA and the substantial liability that “mere retention” of an overpayment can impose on contractors several steps removed from a government contract.  The dispute involved alleged overpayments made to Bartlett Holdings Inc. (d/b/a BHI Energy/Sun Technical Services) during its performance as a subcontractor on a Federal project.  Bartlett is a supplier of radiological protection services and...

Ninth Circuit holds that Fannie Mae and Freddie Mac are not officers, employees, or agents of the United States under 31 U.S.C. § 3729(b)(2)(A)(i) of the False Claims Act

Christina Hanson

On February 22, the Ninth Circuit affirmed the dismissal of an FCA claim brought by relators alleging that various lenders and loan servicers made false certifications to Fannie Mae and Freddie Mac, concluding that claims presented to Fannie Mae or Freddie Mac could not give rise to liability under § 3729(b)(2)(A)(i) of the FCA. See U.S. ex rel. Adams v. Aurora Loan Servs., Inc., No....

University of Massachusetts Medical School Not a “Person” Under FCA; 1st Circuit Adopts “Arm-of-the-State” Test

Alex Hontos

In an opinion issued on January 27, 2016, the United States Court of Appeals for the First Circuit affirmed the dismissal of a qui tam lawsuit against the University of Massachusetts, holding that the University was “indistinguishable” from a state agency and, therefore, not a “person” subject to potential liability under the False Claims Act, 31 U.S.C. 3729(a)(1)(A). Relator Michael Willette, an employee of the University’s...

Sixth Circuit Joins Sister Circuits In Using Arm-Of-The-State Analysis To Define “Person” Under The False Claims Act

Mike Rowe

The FCA imposes liability on “any person” that makes a false statement in violation of the Act, 31 U.S.C. § 3729(a)(1).  Although the Act itself does not define “person,” the Supreme Court has said only that a person cannot include a state or state agency.   See Vermont Agnecy of Natural Resources v. Stevens, 529 U.S. 765, 784-85, 788 (2000) (observing that § 3733(l)(4) defines person...

Judge Dismisses FCA Claim Against City of Chicago; Concludes that “Subsequent Nonperformance of a Future Commitment” Was Not a Falsehood Under FCA

T. Augustine Lo

On September 16, 2015, the U.S. District Court for the Northern District of Chicago dismissed a False Claims Act (FCA) case against the City of Chicago, because the qui tam complaint did not satisfy the relevant pleading standard.   In an opinion issued by District Judge Andrea Wood, the court found that the complaint failed to allege facts with particularity as required under Federal Rule of...

Ninth Circuit Holds that Indian Tribes are not “Persons” subject to FCA

Alex Hontos

In a brief unpublished memorandum opinion released on June 15, 2015, the Ninth Circuit affirmed the district court’s dismissal of an FCA claim brought against a tribe, holding that tribes do not fit within the FCA’s definition of “persons.”  See Thomas Howard and Robert Weldy, ex rel. United States v. Shoshone Paiute Tribes of the Duck Valley Indian Reservation, No. 13-16118 (9th Cir. June 15, 2015).  Whistleblowers Howard and Berg, former tribal employees, alleged that the tribes...