Seeking More Scienter: The Effect of False Claims Act Interpretations

Abstract

Two circuit conflicts have developed regarding the proper interpretation of the FCA. First, the circuits are divided over whether an implicit certification of compliance with a federal law, regulation, or contract is sufficient to give rise to liability under the FCA. Second, the circuits have split on what constitutes "presentment" of a claim to the government as required by the FCA. While the two circuit splits involve separate questions of interpretation, courts that have rejected liability on both issues are motivated by a common but unacknowledged concern: ensuring that unsuspecting defendants do not face FCA liability. The interpretive moves used to achieve this result, however, in practice create additional scienter requirements that are imperfect solutions for the problem of unsuspecting defendants. In fact, the courts are doing more harm than good. The statutory scienter framework can better protect unsuspecting defendants than the courts' similarly intentioned reinterpretations of the FCA.

Keywords: False Claims Act, scienter, Totten, Allison Engine