Former employees of a government subcontractor sued the company (and others) under the False Claims Act, which allows private parties to bring actions to enforce the Act. They claimed that the companies defrauded the federal government by submitting false claims for payment to the prime contractor.
The False Claims Act specifies that liability arises when any person presents or causes to be presented a false or fraudulent claim "to an officer or employee of the United States Government." The Sixth Circuit ruled that actual presentment to an officer or employee is not actually required as long as the bill is ultimately paid from money from the federal government.
The Supreme Court resolved a split in the Circuits and reversed. It ruled unanimously that merely using funds from a government contract to pay a fraudulent claim is insufficient to win a False Claims Act suit. Rather, a plaintiff must prove that the defendant intended that the false statement be material to the Government's decision to pay or approve the false claim. This ruling will make it harder to bring qui tam suits where it is not clear that the Government relied on a false claim to pay a bill.