Recently, the Supreme Court requested that the Department of Justice (DOJ) file a brief regarding a qui tam or whistleblower lawsuit brought under the False Claims Act (FCA) as regards a clarification of what, in fact, constitutes a “material” misrepresentation under the law. The response from the DOJ is controversial, to say the least.
False Claims Act
The False Claims Act allows private citizens to bring lawsuits against companies for defrauding the federal government. In such a suit, known as a qui tam, or whistleblower action, the person who brings the suit is known as a relator and the government is given the opportunity to prosecute the suit on behalf of the relator, decline to prosecute the action and allow the relator to continue on his or her own, or dismiss the action entirely. One of the requirements of the law and one which is frequently at issue in lawsuits is that of materiality. The Court has said that, in order to be considered as illegal under the FCA, ”a misrepresentation about compliance with a statutory, regulatory or contractual requirement must be material to the Government’s payment decision in order to be actionable.” The law itself defines “material” as “having a natural tendency to influence, or be capable of influencing, the payment or receipt of money or property.”