• Supreme Court Unanimous in False Claims Act Decision
  • June 29, 2008 | Author: Gary W. Eiland
  • Law Firms: King & Spalding LLP - Houston Office; King & Spalding LLP - Atlanta Office
  • On June 9, the Supreme Court decided unanimously in Allison Engine Co. v. United States ex rel. Sanders, U.S., No. 07-214 that it is not sufficient for a plaintiff asserting a claim under §3729(a)(2) of the False Claims Act (FCA) to show that the false statement’s use resulted in obtaining payment for a claim or that government money was used to pay a false claim. Instead the Court held that a plaintiff asserting a claim under §3729(a)(2) of the FCA must prove that the defendant intended that the false statement “be material to the Government’s decision to pay or approve the false claim.”

    In Allison, two former employees of a subcontractor brought a qui tam suit alleging that their former employer, along with two other subcontractors who were building missile destroyers for shipyards under contract with the Navy, submitted invoices to the shipyards, fraudulently seeking payment for work that had not been performed in conformance with contract specifications. The Court, vacating the judgment of the Court of Appeals and remanding the case for further proceedings, determined that the proper interpretation of §3729(a)(2) requires that a defendant, in order to be liable, must have the purpose and intent that the Government itself pay the false claim. It is not sufficient under §3729(a)(2) for a plaintiff to show that a false statement resulted in the use of Government funds to pay a false claim.

    The Court reasoned that to eliminate such an element of intent under the FCA would expand the FCA beyond its purpose of resisting fraud against the Government. However, in its opinion the Court also stated that §3729(a)(2) does not refer to the concept of presentment. Therefore, while a plaintiff must show that a defendant made a false statement for the purpose of getting a false claim approved by the Government, §3729(a)(2) does not require the plaintiff to prove that the defendant caused a false statement to be presented to the Government. The Court further explained that if a defendant makes a false statement to a private entity without intent that the Government rely on the statement to make payment, then the false statement was not made with the purpose of inducing the Government to make payment on a false claim.