False Claims Act -- 2016



AT&T, Inc. v. United States ex rel. Heath   (U.S. Supreme Court)

Whether False Claims Act pleadings must include specific false claims allegations

This is a False Claims Act (FCA) case where a whistleblower, known as a “relator” under the FCA, operated a telecommunications auditing firm and claimed that he became aware of fraudulent acts and practices through his “audits.” Yet, there were no allegations that the relator audited any AT&T invoice, and the relator pled no facts about any express or implied false claim submitted by AT&T or its subsidiaries to the government. The relator also did not allege any personal knowledge of the supposed improper billing scheme. The allegations of fraud rested upon innuendo and supposition, not facts or specific allegations of false claims.

The NAM filed an amicus brief supporting AT&T’s appeal to the Supreme Court. The issue is whether relators filing FCA claims must include specific allegations of false claims in their pleadings. There is currently a split among the federal circuits as to whether the Federal Rules of Civil Procedure require such particularized pleading in FCA cases. The NAM’s brief argues that this circuit split encourages speculative claims and forum shopping, and urges 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.

NAM members, along with other companies that do business with the government, often are the targets of whistleblower complaints under the FCA. Companies incur substantial costs and suffer reputational harm from these allegations. If these cases are permitted to proceed with no more than generalized accusations of fraudulent schemes and unspecified false claims for payment, these businesses must also bear the expense and disruption of burdensome discovery and protracted litigation.

Our brief warned the court that abusive FCA litigation harms manufacturers, and the growing volume of unmeritorious FCA suits threatens the legitimate business activities of the NAM’s members.

On June 27, 2016, the Court refused to review this appeal.


Related Documents:
NAM brief  (October 23, 2015)

 


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