Treating the Symptoms But Not the Disease: A Call to Reform False Claims Act Enforcement

• Author: Charles T. Kirchmaier
• Position: Judge Advocate, U.S. Army
• Pages: 186-240

186 MILITARY LAW REVIEW [Vol. 209

TREATING THE SYMPTOMS BUT NOT THE DISEASE: A

CALL TO REFORM FALSE CLAIMS ACT ENFORCEMENT

LIEUTENANT COLONEL CHARLES T. KIRCHMAIER*

I. Introduction

On May 20, 2009, President Barack Obama signed into law the

Fraud Enforcement and Recovery Act (FERA), thereby ushering in the

most sweeping changes to the False Claims Act (FCA) that had occurred

in over twenty years.1 According to the law’s congressional sponsors,

amending the FCA was vital to restoring “the spirit and the intent” of the

law, and reinvigorating the Act’s usefulness as the federal government’s

premier anti-corruption law.2 President Obama welcomed the FCA’s

* Judge Advocate, U.S. Army. Presently assigned as Chief, Contract and Fiscal Law

Division, Office of the Judge Advocate, U.S. Army Europe, Germany; LL.M., 2010, The

George Washington University Law School, Washington, District of Columbia; LL.M.,

2005, The Judge Advocate General's Legal Center and School, U.S. Army,

Charlottesville, Virginia; J.D., 1997, Temple University, Beasley School of Law,

Philadelphia, Pennsylvania; B.A., 1989, The University of Florida, Gainesville, Florida.

Previous assignments include Chief, Military Justice, Multi-National Corps–Iraq and

XVIII Airborne Corps, Baghdad, Iraq, 2008–2009; Student, U.S. Army Command and

General Staff School, Intermediate Level Education, Fort Leavenworth, Kansas, 2007–

2008; Operational Law Trainer, U.S. Army Battle Command Training Program, Fort

Leavenworth, Kansas, 2006–2007; Operational Law Fellow, Center for Law and Military

Operations, The Judge Advocate General's Legal Center and School, Charlottesville,

Virginia, 2005–2006; Regimental Judge Advocate, 75th Ranger Regiment, Fort Benning,

Georgia, 2003–2004; International Law Attorney, Office of the General Counsel,

Department of Defense, Pentagon, Washington, District of Columbia, 2002–2003; Trial

Attorney, Contract Appeals Division, Arlington, Virginia, 2000–2002; Trial Counsel and

Legal Assistance Attorney, 82d Airborne Division, 1998–2000. Member of the bar of

New Jersey. The opinions expressed herein are those of the author in his individual

capacity and do not necessarily reflect the official views of the U.S. Department of

Defense, the Department of the Army, or the Office of the Judge Advocate, U.S. Army

Europe.

1 See generally The Fraud Enforcement and Recovery Act (FCA), Pub. L. No. 111-21, §

4(a)–(f), 123 Stat. 1625 (2009) (to be codified at 31 U.S.C. §§ 3729–3733 (2006))

[hereinafter the 2009 FCA Amendments], available at

http://frwebgate.access.gpo.gov/cgi-bin/getdoc.cgi?dbname=111_cong_public_laws&doc

id=f:publ021.111. See also False Claims Act Correction Act, H.R. 1788, 111th Cong.

(2009); False Claims Act Clarification Act, S. 458, 111th Cong. (2009); accord The Civil

False Claims Act, 31 U.S.C. §§ 3729–3733 (2006) [hereinafter False Claims Act or

FCA].

2 See generally 155 CONG. REC. S2424 (daily ed. Feb. 24, 2009) (statement of Sen.

Charles Grassley) (introducing S. 458, The False Claims Clarification Act of 2009). See

also 155 CONG. REC. E1295 (daily ed. June 3, 2009) (statement of Rep. Howard L.

2011]

F

ALSE CLAIMS ACT ENFORCEMENT REFORM 187

changes as part of his administration’s effort to restore the public’s trust

and confidence in the government’s ability to oversee a federal

acquisition system he described as being broken.3 Congress intended the

amendments to strengthen and enhance the government’s ability to

combat corruption within the federal acquisition system. More

specifically, FERA incentivized increasing private relator involvement in

the FCA enforcement process. These incentives lowered the evidentiary

threshold for establishing a false claim while simultaneously increased

the scope of actions that could be prosecuted under the Act.

However, two key issues remain unanswered: tangible ways to

improve FCA enforcement, and the government’s role in overseeing and

monitoring the FCA enforcement process. Legislation aimed solely at

increasing private lawsuit filings incorrectly presumes that the more FCA

lawsuits filed, the better the FCA enforcement process becomes. Yet

even the President acknowledged upon signing FERA into law that “[the]

Government must set the rules of the road that are fair and fairly

enforced.”4 By promoting legislation that invites increased qui tam

lawsuit filings, the government should also accept greater responsibility

for ensuring FCA enforcement is limited only to those suits that have

some veritable basis for being prosecuted on the government's behalf.5

Berman) (describing how the 2009 Fraud Enforcement and Recovery Act would

strengthen the FCA).

3 On March 4, 2009, President Obama declared that the federal procurement system was

“broken” and “plagued by massive cost overruns, outright fraud, and the absence of

oversight and accountability.” See President Barack H. Obama, Remarks by the President

on Procurement (Mar. 4, 2009), http://www.whitehouse.gov/the_press_office/Remarks-

by-the-President-on-Procurement-3/4/09.

4 President Barack H. Obama, Remarks by the President at the Signing of the Helping

Families Save Their Homes Act and the Fraud Enforcement and Recovery Act (Nov. 20,

2009), http:// www.whitehouse.gov/the-press-office/Remarks-President-Signing-Helping-

Families-Save-Their-Homes-Act-and-Fraud-Enforcement-and-Recovery-Act. This article

presumes that when President Obama uses the term “Government,” he refers only to the

federal government.

5 Qui tam is a Latin phrase for “who as well for the King as for himself sues in this

matter.” BLACK’S LAW DICTIONARY 1289 (8th ed. 2004). Black’s Law Dictionary

describes a qui tam action as, “An action brought under a statute that allows a private

person to sue for a penalty, part of which the government or some specified public

institution will receive.” Id. The individual who files a qui tam action on behalf of the

Government is known as a relator. The FCA authorizes private citizens to enforce the law

by filing lawsuits on the Government's behalf and keeping a portion of any recovery

obtained from the defendant. See, e.g., 155 CONG. REC., supra note 2, at E1295

(explaining that “[t]he 1863 Act authorized individuals, called 'qui tam relators,' to bring

lawsuits on behalf of the United Sates to prosecute fraud against the Government and to

recover funds that were wrongfully obtained”).

188 MILITARY LAW REVIEW [Vol. 209

This article outlines the problems underlying the government’s

current FCA enforcement practices and recommends a model for

reforming how qui tam lawsuits are regulated by the Department of

Justice (DoJ) before turning them over for private prosecution. Part II

discusses the general concerns with the qui tam relator role in FCA

prosecutions and current FCA enforcement practices. Part III provides a

brief overview of the 1986 and 2009 FCA Amendments and explains

how qui tam relators have gained a prominent role in litigating lawsuits

on the government’s behalf. The legislative history underlying the 2009

FCA Amendments demonstrates how Congress drafted FERA to further

empower qui tam relators and overturn judicial precedent. Part IV

assesses the future challenges in interpreting and applying the FCA’s

revised statutory scheme. This article predicts that the 2009 FCA

Amendments may clarify little substantive law and actually raise new

legal questions where it attempted to answer or resolve old ones. Part V

examines recent FCA enforcement statistical trends and leads to the

inevitable conclusion that the DoJ should be more proactive in

dismissing frivolous qui tam lawsuits. Part VI provides an overview of

how the DoJ outsources its prosecutorial function and proposes adopting

stronger case screening guidelines to encourage earlier dismissal of

frivolous lawsuits. Part VII proposes reforming current FCA

enforcement practices by empowering agencies to employ alternate

remedy procedures to resolve the majority of FCA lawsuits before they

end up being dismissed in civil litigation. Finally, Part VIII summarizes

the arguments for reforming current FCA enforcement practices in light

of the changes wrought by FERA and the 2009 FCA Amendments.

II. The Expanded Role of the Qui Tam Relator

A. Treating the Symptoms But Not the Disease

Allowing qui tam relators to bring lawsuits under the FCA permits

private individuals to perform a monitoring function for the government

and thereby help protect the acquisition system’s integrity.6 Under the

FCA, if the government does not bring an action against the defendant,

relators may file a civil action in the government’s name in return for a

6 See generally Steven L. Schooner, Desiderata: Objectives for a System of Government

Contract Law, 11 PUB. PROCUREMENT L. REV. 103, 103 (2002). Professor Schooner

describes “integrity” within the federal procurement arena as the rules of conduct for

government personnel and private industry. Id.