Getnick Law Comments on Proposed Amendments to False Claims Act
A bipartisan group of Senators – including Senators Chuck Grassley (R-Iowa), Dick Durbin (D. Ill.), Roger Wicker (R-Miss.), Pat Leahy (D-Vt), and John Kennedy (R-La.) – have introduced new amendments to the federal False Claims Act (“FCA”). The Amendments cover four key issues relating to the scope of the FCA.
First, the amendments would address the FCA’s materiality standard, which requires that liability for false claims submitted to the government can only attach if the claims were “material” to the government’s decision to pay or receive money or property. In United Health Services v. United States ex rel. Escobar, 136 S. Ct. 1989 (2016), the Supreme Court held that one factor courts should consider when deciding whether fraud was “material” to the government’s decision to pay was whether the government “pays a particular claim in full despite its actual knowledge that certain requirements were violated.” Responding to the interpretation by some lower courts that Escobar’s “government knowledge” factor be dispositive, the proposed amendments shift the burden of proof to the defendant to prove by “clear and convincing evidence” that government conduct – such as continued payment – meant that the false claims were not material. According to a press release from Senator Grassley, this change “will reduce instances in which fraudsters can successfully argue that the government’s continued conduct made what would otherwise be a serious violation void.”
Second, the amendments would clarify that in order for the Department of Justice to dismiss a relator’s claim, a hearing must be held in which a judge makes a determination and then gives the relator an opportunity to demonstrate why such a dismissal would be arbitrary and capricious.
Third, the amendments would clarify that the FCA’s existing anti-retaliation provisions apply to post-employment retaliation.
Finally, the amendments would establish a mechanism, upon a Department of Justice motion, for the defendant to reimburse the government for costs associated with irrelevant, disproportional, or unduly burdensome discovery sought by the defendant.
Read the full text of the Amendments here, and a summary here.
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