Bipartisan Bill Introduces Amendments to Strengthen False Claims Act
A new bipartisan bill, known as the False Claims Amendments Act of 2023, aims to bolster the enforcement of the False Claims Act (FCA) by making significant changes to strengthen its effectiveness. Led by Senator Chuck Grassley (R-Iowa), the bill addresses perceived flaws in court interpretations that have allowed defendants to avoid accountability and evade penalties for fraudulent activities.
Sen. Grassley has been a long-time advocate for stricter enforcement of the FCA, and the recent bill seeks to clarify the original intent of the legislation in holding accountable those who defraud taxpayers. Grassley expressed concern over inconsistent court rulings and the creation of loopholes that undermine the FCA’s purpose.
One significant aspect of the bill is its proposed alteration to the materiality test, which determines whether a regulatory violation is considered actionable under the FCA. A Supreme Court decision in 2016 established that if the government pays a claim in full despite its knowledge of violations, it suggests that the requirements are not material. The new bill aims to practically eliminate this element by stating that the government’s decision not to seek a refund or to pay a claim despite knowing about fraud should not be considered decisive for establishing materiality. This change could make it more challenging for defendants to dismiss or challenge FCA allegations during the early stages of a case.
In addition to modifying the materiality standard, the bill seeks to expand the scope of FCA retaliation claims to cover post-employment retaliation. Currently, different circuit courts have inconsistent views on whether post-employment conduct is actionable under the FCA. The proposed legislation aims to bring these differing views together for a more unified approach.
The False Claims Amendments Act of 2023 also includes a provision that mandates the U.S. Government Accountability Office to produce a report detailing the benefits and challenges of FCA enforcement efforts, as well as the amounts recovered since the FCA’s amendment in 1986. This report will offer valuable insights into the effectiveness of the legislation and help inform future decision-making.
If passed into law, these proposed changes will signal a shift toward facilitating successful FCA claims for the government and whistleblowers. However, for FCA defendants, it may mean increased difficulties and costs in challenging alleged liability.
The False Claims Amendments Act of 2023 has garnered bipartisan support, demonstrating a shared commitment to strengthening the FCA and combating fraud against the government. As the bill makes progress through the legislative process, stakeholders will closely monitor the potential impact these amendments could have on enforcement efforts and the overall fight against fraudulent activity.
Disclaimer: This article is for informational purposes only and does not constitute legal advice. Please consult with a qualified attorney for specific information and guidance regarding the False Claims Act and its implications.
