- Justin P. Tschoepe, A Fraud Against One Is Apparently a Fraud Against All: The Fraud Enforcement and Recovery Act’s Unprecedented Expansion of Liability Under the False Claims Act, 47 Hous. L. Rev. 741 (2010). (Westlaw)
Prior to its amendment in the Fraud Enforcement and Recovery Act of 2009, the False Claims Act was criticized as lacking an understanding of the complex commercial structure of the modern United States and the culpability that should attach for inaccurate statements made in transactions with the federal government. FERA’s removal of the only real methods of reining in a potentially limitless statute has magnified those concerns. The amendments eliminate both statutory and judicial limitations that rationally prevented the reach of the FCA from encroaching into the entire commercial marketplace. The removal of the presentment and intent requirements in conjunction with the amended definition of “claim” will place countless entities far removed from the government itself at risk of falling under the statute’s draconian penalties. To prevent such results, courts should rely on strict interpretations of the newly codified materiality requirement and place heavy emphasis on legislative history, thereby requiring that the transaction be predominantly federal in character. Regardless of the success of these methods, the coming years will likely be filled with tremendous amounts of litigation attempting to clarify FERA’s complex language and to constrain its almost limitless realm of potential liability.