FEATURE COMMENT: Ten FCA Decisions From 2013 That Government Contractors Need To Know While the U.S. Supreme Court did not issue a single decision addressing the False Claims Act, 2013 saw a flurry of activity in the lower courts, especially the Court of Appeals for the Fourth Circuit. Some of these decisions reined in attempts to broaden the FCA. The Fourth Circuit, for example, refused to relax the pleading requirements for a qui tam relator who could not identify even one allegedly false claim. And the Seventh Circuit rejected an approach to calculating damages favored by the Government that would have led to outsized jury awards and settlements. These were welcome cases for contractors. But many of the decisions—in no small part because of the recent amendments to the statute—effectively broaden the FCA’s reach, creating increased risk for Government contractors. In a decision that may soon be addressed by the Supreme Court, the Fourth Circuit held that the Wartime Suspension of Limitations Act (WSLA) extends to the FCA, effectively tolling its statute of limitations indefinitely. In another decision, the Fourth Circuit concluded that statutory penalties of $24 million on a contract worth slightly more than $3 million does not constitute an unconstitutional “excessive fine,” even though there was no finding that the Government had suffered any harm. And the Second Circuit left open the possibility that in-house counsel may be whistleblowers against their own clients using confidential information gained during their employment.
