Academic journal article Defense Counsel Journal

False Claims Act

Academic journal article Defense Counsel Journal

False Claims Act

Article excerpt

State Not a "Person" for Qui Tam Suits

A state is not a "person" within the meaning of that word as used in the False Claims Act, 3729-3733, the U.S. Supreme Court held in Vermont Agency of Natural Resources v. United States ex rel. Stevens, 120 S.Ct. 1858 (2000), and therefore it cannot be sued under the act in what is known as a qui tam suit.

The act imposes liability on "any person" who "knowingly presents, or causes to be presented, to an officer of the United States Governments . . . a false or fraudulent claim for payment or approval." A defendant is liable for up to treble damages and a civil penalty of up to $10,000 per claim. A private person, known as the relator and frequently a "whistleblower," may commence a suit in the name of the government, which has 60 days in which to intervene and conduct the suit itself.

The relator, Jonathan Stevens, brought this suit in a federal district court against the Vermont Agency for Natural Resources, his former employer, alleging that it had submitted false claims to the federal Environmental Protection Agency in connection with federal grant programs. The federal government declined to intervene, so Stevens forged ahead on his own. If he were successful, he would receive a share of the proceeds recovered, usually 25 to 30 percent, as well as costs and attorney's fees.

The Vermont agency sought dismissal on the ground that a state or a state agency is not a "person" within the meaning of the act and that a qui tam suit in a federal court against a state is barred by the 11th Amendment to the federal Constitution. …

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