Split D.C. Circuit Limits False Claims Act Liability Under Federal Grants

In U.S. ex rel. Totten v. Bombardier Corp. (Aug. 27, 2004), a divided D.C. Circuit upheld dismissal of a qui tam complaint alleging that a contractor for a federal grantee had submitted false claims to the grantee, reasoning that presentation of the claims to (and their payment by) the federal grantee did not, by itself, satisfy the FCA provision that actionable claims be "presented to an officer or employee of the … Government" (31 USC 3729(a)(1), emphasis added), or the alternate FCA provision imposing liability for a false record made in order to get a false claim "paid or approved by the Government" ((31 USC 3729(a)(2), emphasis added). The dissent argued vigorously that the consequence of the majority's opinion is a "dramatic cutback" in FCA coverage because it would preclude liability in the common situation where a grantee is not required to seek Government approval before paying a contractor's invoice.