Scienter Under the False Claims Act Does Not Require Proof of Specific Intent
An ordinary breach of a government contract caused by an honest mistake ordinarily does not give rise to False Claims Act liability. To prevail in a qui tam action, a relator must prove the defendant acted knowingly, i.e., that the defendant
“(i) has actual knowledge of the information;
(ii) acts in deliberate ignorance of the truth or falsity of the information; or
(iii) acts in reckless disregard of the truth or falsity of the information.”
31 U.S.C. § 3729(b). A False Claims Act relator is not required to prove specific intent to defraud. Therefore, a person who acts in deliberate ignorance or reckless disregard of a false or fraudulent claim can be liable under the False Claims Act.
As amended by the Fraud Enforcement and Recovery Act of 2009, a person is liable under the False Claims Act if he “knowingly makes, uses, or causes to be made or used, a false record or statement material to a false or fraudulent claim.” There is no requirement to prove that a false statement was made with the intent that it would result in the federal government paying the claim.
Supreme Court Clarifies False Claims Act Scienter Standard in SuperValu
In United States ex rel. Schutte v. SuperValu, Inc., 143 S. Ct. 1391 (2023), the Supreme Court clarified that the knowledge analysis under the False Claims Act “refers to respondents’ knowledge and subjective beliefs—not to what an objectively reasonable person may have known or believed.”
- “Actual knowledge” refers to what the defendant is aware of.
- “Deliberate ignorance” encompasses defendants who are aware of a substantial risk that their statements are false, but intentionally avoid taking steps to confirm the statements’ truth or falsity.
- “Reckless disregard” captures defendants who are conscious of a substantial and unjustifiable risk that their claims are false, but submit the claims anyway.
These forms of scienter track the common law of fraud, which generally focuses on the defendant’s lack of an honest belief in the statement’s truth. The focus is on what a defendant thought when submitting a claim—not what a defendant may have thought after submitting it: “As such, the focus is not, as respondents would have it, on post hoc interpretations that might have rendered their claims accurate. It is instead on what the defendant knew when presenting the claim.”
These briefs in the SuperValu appeal provide additional information about the correct scienter standard:
Senator Grassley’s amicus brief
False Claims Act Qui Tam Relators Need Not Demonstrate Intent
The Department of Justice takes the position that qui tam relators need not prove intent. In a Statement of Interest filed on September 19, 2017 in United States ex rel. Daniel Hamilton, Plaintiff, v. Yavapai Community College District, et al., CV-12-08193-PCT-GMS, the Department argued:
Despite defendants’ endorsement of an intent requirement, no such requirement exists. Instead, the FCA provides an action for “knowing” violations and defines “the terms ‘knowing’ and ‘knowingly’ [to] mean that a person, with respect to information has actual knowledge of this information; acts in deliberate ignorance of the truth or falsity of the information; or acts in reckless disregard of the truth or falsity of the information; and require no proof of specific intent to defraud[.]” 31 U.S.C. § 3729(b)(1) (emphasis added). This is made clear not only by the FCA itself, but also by several Ninth Circuit cases. See Hooper v. Lockheed Martin Corp., 688 F.3d 1037, 1049 (9th Cir. 2012) (district court applied the wrong standard in requiring relator to show defendant acted with “the intent to deceive”); see also U.S. v. Bourseau, 531 F.3d 1159, 1167 (9th Cir. 2008); U.S. ex rel. Plumbers and Steamfitters Local Union No. 38 v. C.W. Roen Const. Co., 183 F.3d 1088, 1092-93 (9th Cir. 1999); U.S. ex rel. Hagood v. Sonoma County Water Agency, 929 F.2d 1416, 1421 (9th Cir. 1991).
Experienced False Claims Act Qui Tam Whistleblower Attorneys
The experienced whistleblower attorneys at leading whistleblower law firm Zuckerman Law have substantial experience representing whistleblowers disclosing fraud and other wrongdoing at government contractors and grantees. To schedule a free preliminary consultation, click here or call us at 202-262-8959.
Our experience includes:
- Representing qui tam relators in False Claims Act actions concerning off-label marketing, false billing, and education loan fraud (inflating entitlement to interest rate subsidies).
- Representing whistleblowers in NDAA retaliation claims before the Department of Defense, and Department of Homeland Security, Department of Justice Offices of Inspectors General.
- Litigating False Claims Act retaliation cases.
- Representing whistleblowers disclosing fraud on the government in Congressional investigations.
- Training judges, senior Office of Inspector General officials, and federal law enforcement about whistleblower protections.
In addition, we have substantial experience representing whistleblowers under the Whistleblower Protection Act (WPA) and enforcing the WPA, the law that the NDAA whistleblower provisions are based upon. Before hiring a lawyer for a high-stakes whistleblower case, assess the lawyer’s reputation, prior experience representing whistleblowers, knowledge of whistleblower laws, and prior results. And consider the experience of other whistleblowers working with that attorney. See our client testimonials by clicking here.
- U.S. News and Best Lawyers® have named Zuckerman Law a Tier 1 firm in Litigation – Labor and Employment in the Washington DC metropolitan area.
- Dallas Hammer has extensive experience representing whistleblowers at government contractors in retaliation and rewards claims and has written extensively about cybersecurity whistleblowing. He was selected by his peers to be included in The Best Lawyers in America® in the category of employment law in 2021 and 2022.
- Described by the National Law Journal as a “leading whistleblower attorney,” founding Principal Jason Zuckerman has established precedent under a wide range of whistleblower protection laws and obtained substantial compensation for his clients and recoveries for the government in whistleblower rewards and whistleblower retaliation cases. He served on the Department of Labor’s Whistleblower Protection Advisory Committee, which makes recommendations to the Secretary of Labor to improve OSHA’s administration of federal whistleblower protection laws. Zuckerman also served as Senior Legal Advisor to the Special Counsel at the U.S. Office of Special Counsel, the federal agency charged with protecting whistleblowers in the federal government. At OSC, he oversaw investigations of whistleblower claims and obtained corrective action or relief for whistleblowers.
- Matt Stock is a Certified Public Accountant, Certified Fraud Examiner and former KPMG external auditor. As an auditor, Stock developed expertise in financial statement analysis and internal controls testing and fraud recognition. He uses his auditing experience to help whistleblowers investigate and disclose complex financial frauds to the government.
- Zuckerman was recognized by Washingtonian magazine as a “Top Whistleblower Lawyer” (2020, 2018, 2017, 2015, 2009, and 2007), selected by his peers to be included in The Best Lawyers in America® in the category of employment law (2011-2021) and in SuperLawyers in the category of labor and employment law (2012 and 2015-2021), is rated 10 out of 10 by Avvo, based largely on client reviews, and is rated AV Preeminent® by Martindale-Hubbell based on peer reviews
- We have published extensively on whistleblower rights and protections, and speak nationwide at seminars and continuing legal education conferences. We blog about new developments under whistleblower retaliation and rewards laws at the Whistleblower Protection Law and SEC Awards Blog, and in 2019, the National Law Review awarded Zuckerman its “Go-To Thought Leadership Award” for his analysis of developments in whistleblower law.
- Our attorneys have been quoted by and published articles in leading business, accounting, and legal periodicals, including The Wall Street Journal, Forbes, CNBC, MarketWatch, Vox, Accounting Today, Going Concern, Law360 – Expert Analysis, Investopedia, The National Law Review, inSecurities, Government Accountability Project, S&P Global Market Intelligence, Risk & Compliance Magazine, The D&O Diary, The Compliance and Ethics Blog, Compliance Week and other printed and electronic media.
Zuckerman Law has written extensively about whistleblower protections for employees of government contractors and grantees, including the following articles and blog posts:
- Boosting Contractor Employee Whistleblower Protections, Law 360 (December 2016)
- New Tools to Combat Whistleblower Retaliation, Taxpayers Against Fraud Education Fund Quarterly Review, Vol. 57 (October 2010)
- GAO Report Calls for Improvements in Government Contractor Whistleblower Protections
- False Claims Act Retaliation Decision Underscores Broad Scope of FCA Whistleblower Protection
- NDAA Provides Robust Whistleblower Protection
- FAR Amendment Bars Agencies from Subsidizing Whistleblower Retaliation
- NDAA Contractor Whistleblower Protection Law Highly Effective in Rooting Out Fraud
- Congress Enacts Anti-Gag Provision in Cromnibus Spending Bill
- Whistleblower Lawyer Jason Zuckerman Will Speak About False Claims Act Litigation at Taxpayers Against Fraud Conference
- Whistleblower Protections Under the Whistleblower Protection Act, Practical Law (October 2016)
- Whistleblower Lawyer Jason Zuckerman Quoted in National Law Journal
- Whistleblower Lawyer Jason Zuckerman Quoted About Federal Employee Whistleblower Rights
- Washington Post Quotes Whistleblower Attorney Jason Zuckerman About Chilling Effect of Insider Threat Program
- How to foster a more ethical culture
- Whistleblower Lawyer Jason Zuckerman Quoted About MacLean Whistleblower Protection Act Case
- Trump Questionnaire Raises Concerns About Retaliation Against Energy Department Staff
- CFPB official wants to silence a whistleblower before he can talk to Congress