Oppose the False Claims Act Correction Act

• The False Claims Act (FCA) is the U.S. Government’s main weapon against fraud on federally funded programs.  It authorizes the Attorney General to recover treble damages and fines from anyone who submits or causes someone else to submit a false claim for payment to the U.S. Government. The False Claims Act Corrections Act (S. 2041), sponsored by Senator Charles Grassley (R-IA), would amend the FCA in a manner that severely changes the intent of the act. It would expand the universe of claims – many of which would not involve truly “false” or “fraudulent” behavior nor involve any loss to the Federal Treasury – and would ultimately lead to an increase in the cost of doing business with the Government and, thus, increase the taxpayer’s cost for needed goods and services.

• The False Claims Act Corrections Act Would Unfairly Extend the FCA Statute of Limitations to at Least Ten (10) Years. The current law limits the statute of limitations to six (6) years or within three (3) years of the time when the relevant Government official “knew or should have known” the material facts, with a ten (10) year maximum. Extending this time period would not only encourage the proliferation of stale claims but could also create additional liability by allowing qui tam plantiffs to delay filing a claim in order to increase their own recovery by maximizing the Government’s financial losses.
• The Legislation Would Remove a Defendant’s Ability to Seek Dismissal of Parasitic Qui Tam Suits. The bill would eliminate the current Act’s “public disclosure” provision that safeguards against “parasitic” qui tam suits – which are based on information already known to the Government or reported in the news media.  Further, the bill would prevent courts to be unable to raise the issue as a jurisdictional matter, thus opening a Pandora’s Box for potential plaintiffs to sue based on information reported publicly in newspapers and journals.
• S. 2041 Would Enact Wholesale Changes to How Damages are Recovered. The bill would unfairly eliminate “loss” or “damages” as the basis for recovery under the False Claims Act and dramatically expand the way recoveries, which are trebled, are calculated. The bedrock principle in measuring damages under the FCA has been to ensure that the Government recovers the actual damages it sustains because of the violation. The proposed change represents a sharp departure from the basic principle underlying the FCA for almost 150 years – protection of the Federal Treasury from fraud. This change would entitle the Government to recover amounts in excess of any losses actually suffered and potentially benefit from enormous windfalls because it would be entitled to recover treble the amount of a contract or claim even where it suffered no loss at all. 
• The Bill Would Inappropriately Authorize Retroactive Application of Many of the Proposed Amendments to Pending and Past Cases. Applying the legislation retroactively, including applying it to actions that occurred prior to the effective date of the bill, raises serious due process concerns. For example, the provisions eliminating public disclosure as a jurisdictional defense would unconstitutionally attach a new disability for prior conduct and the extension of the statute of limitations would impermissibly revive time-barred claims if applied retroactively.
• None of the Proposed Changes in the False Claims Act Corrections Act are in the Interests of the United States, its Citizens and Taxpayers, or the Businesses that are Partners with the U.S. Government.  Instead, S. 2041 will raise companies’ cost of doing business, increase the Government’s cost of contracts, discourage large and small businesses from doing business with the Government and cause irreparable damage to the Government contracting process.

• S.2041 - False Claims Act Correction Act of 2007
  • 9/12/2007 - Introduced

• Download AGC's talking points on the False Claims Act Correction Act of 2007.