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The NAM filed an amicus brief supporting AT&T Inc. in its petition to the U.S. Supreme Court seeking review of an alleged False Claims Act (FCA) violation where the relator’s pleading did not include facts about any express or implied false claims, nor alleged any personal knowledge of the supposed improper conduct. The issue is whether relators filing FCA claims must include specific allegations of false claims in their pleadings. Unwarranted and excessive FCA claims increase the expense and disruption of burdensome discovery and protracted litigation for manufacturers. The NAM’s brief argued that that a circuit split encourages speculative claims and forum shopping and urged the Court to step in to resolve the split and clarify that FCA claims must, at a minimum, include an allegation of a specific false claim. Unfortunately, the Supreme Court declined review.

The NAM filed an amicus brief urging the U.S. Supreme Court to reject suits under the “implied false certification” theory, which allows False Claims Act (FCA) lawsuits without intent to defraud the government. This is an appeal from a U.S. Court of Appeals for the First Circuit ruling that took a broad view of what may constitute a “false or fraudulent” claim, after the respondent filed a qui tam lawsuit alleging that Universal Health had violated the FCA. This case raised concerns for manufacturers that the rapid rise in qui tam claims would subject them to increased litigation. The NAM’s brief argued that Congress did not intend for regulatory or contractual violations to be deemed false or fraudulent claims under the FCA, thus the broad interpretation of the FCA is at odds with congressional intent, and that the FCA’s intent is to hold those who knowingly intend to defraud the government accountable. In a win for government contractors, the Court held that the First Circuit’s interpretation was too broad.

For 17 years Moving Waters Industries (MWI) fought the federal government in a False Claims Act (FCA) case. MWI is a small, family-owned manufacturer of water pumps used for irrigation and sanitation systems. The particular sale at issue in the case involved sale of pumps to Nigeria. Financing documents in the transaction required the disclosure of any commissions that were not “regular.” There was not an existing regulatory definition or guidance about what the term “regular” meant, so MWI applied what it thought was a reasonable interpretation—that a normal, longstanding, market rate commission was regular. Based on a complaint asserting that the commission was in fact “irregular,” the government pursued a civil FCA case.

The NAM filed this brief in support of MWI’s appeal of the lower court's finding of liability against MWI under the False Claims Act (FCA). The brief argued that FCA “falsity” cannot be established where the violation at issue stems from an ambiguous contract term and the defendant’s actions are consistent with a reasonable interpretation of that term. The FCA is intended to protect the government’s financial resources from fraudulent conduct. It is not meant to be a tool for resolving disputes between contractors and the government over the proper interpretation of unclear contract terms. In addition, a defendant cannot be found to have acted "knowingly" under the FCA, which can include acting in "reckless disregard" of truth or falsity, if the defendant employed a reasonable interpretation of an ambiguous term.

In an opinion that will have far-reaching implications for all industries subject to potential FCA claims, on November 24, 2015, the DC Circuit found that the FCA was not intended to impose liability for an innocent, good faith mistake about the meaning of an applicable regulation. This outcome is an important victory for due process, and highlighted the fundamental unfairness of subjecting parties to liability for violating a rule without first providing notice of what the rule requires.