Federal Courts Impose Varying Standards on FCA Relators Pleading Presentment

What's Happening?

The False Claims Act (FCA) imposes civil liability on individuals who knowingly present false claims for government payment. Relators, or whistleblowers, face challenges in pleading presentment due to varying standards across federal circuits. The Sixth and Eleventh Circuits require stringent evidence, such as specific examples of false claims or firsthand knowledge of fraudulent billing practices. In contrast, the Fourth and Seventh Circuits allow for a more intermediate approach, requiring a pattern of conduct that suggests false claims were submitted. The number of FCA suits continues to rise, with 979 qui tam lawsuits filed last fiscal year, the highest on record. This increase is partly due to initiatives like the DOJ-HHS False Claims Act Working Group and the Justice Department’s Civil Rights Fraud Initiative.

Why It's Important?

The varying standards for pleading presentment under the FCA have significant implications for whistleblowers and companies interacting with the government. Stricter requirements in certain circuits can lead to the dismissal of claims, potentially discouraging whistleblowers from coming forward. This affects the ability to hold companies accountable for fraudulent practices. Conversely, more lenient standards may increase the number of successful claims, putting pressure on companies to ensure compliance with government billing practices. The rise in FCA suits indicates heightened scrutiny and potential legal challenges for businesses, impacting their operations and financial stability.

What's Next?

As FCA suits continue to rise, companies must be vigilant in understanding the pleading standards of their respective circuits to prepare for potential legal challenges. Whistleblowers may need to gather more substantial evidence to meet the presentment requirements, especially in stricter circuits. Legal experts anticipate further developments in FCA litigation, influenced by ongoing government initiatives and the evolving legal landscape. Companies may need to enhance their compliance programs to mitigate risks associated with FCA claims.