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CIVIL FALSE CLAIMS ACT: D.C. Circuit Reinforces SAIC Decision in False Certification Case, Rejecting FCA Damages Claim in Case Based on Lack of Supporting Documentation



by Douglas W. Baruch
Fried, Frank, Harris, Shriver & Jacobson LLP - Washington Office

John T. Boese
Fried, Frank, Harris, Shriver & Jacobson LLP - Washington Office

May 25, 2012

Previously published on May 23, 2012

In late 2010, the United States Court of Appeals for the D.C. Circuit issued a seminal decision rejecting the government’s damages theory in a civil False Claims Act “false certification” case. In United States v. Science Applications International Corp. (“SAIC”), while affirming false certification (there was an alleged violation of conflict of interest rules) as a basis for falsity under the FCA, the appellate court nonetheless ruled that the district court erred in instructing the jury, in assessing damages, not to place any value on the actual services SAIC provided under the contract.See SAIC, 626 F.3d 1257 (D.C. Cir. 2010).See also FraudMail Alert No. 10-12-06. In SAIC, the Justice Department argued, and the jury agreed, that the FCA damages were three times the full amount paid under the contract ($1,973,839.61), even though the actual breach of contract damages were only $78. This groundbreaking decision essentially held that the Supreme Court’s decision inUnited States v. Bornstein, 423 US. 303 (1976) governs all FCA damages calculations, even in cases based on false certifications.


 

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