This “false certification” theory of False Claims Act liability has led many defendants to argue that a “false certification” is mandatory under the False Claims Act. This is simply untrue. Most theories of liability under the False Claims Act do not depend on or require “certification.” For example, where there is an overcharge—i.e., the defendant is alleged to have charged a higher dollar amount than allowed under a contract, law, or regulation—there is no issue of “certification.” Similarly, where the promised product or service is not delivered, or the product or service is substandard, no “certification” is required.
Indeed, nowhere does the False Claims Act statute require, or even mention, “certification.” “False certification” has simply developed in the case law as one manner by which a claim can be rendered false under specified circumstances.
Overcharge cases, in contrast, are as old as the False Claims Act itself. As described by the Fourth Circuit in Harrison I:
Originally passed during the Civil War in response to overcharges and other abuses by defense contractors, Congress intended that the False Claims Act, 31 U.S.C.A. §§ 3729-3733 (West Supp. 1998), and its qui tam action would help the government uncover fraud and abuse by unleashing a “posse of ad hoc deputies to uncover and prosecute frauds against the government.” United States ex rel. Milam v. Univ. of Tex. M.D. Anderson Cancer Ctr., 961 F.2d 46, 49 (4th Cir. 1992).
Harrison I, 176 F.3d at 784 (emphasis added).
Indeed, the leading defense-oriented treatise on the False Claims Act describes the various types of False Claims Act cases as follows:
There are as many types of False Claims Act cases as there are False Claims Act defendants. Nevertheless, it is possible to suggest several broad categories into which the bulk of these cases fall. . . . The five categories of affirmative false claims cases are:
1. The “mischarge” case;
2. The “fraud-in-the-inducement,” “promissory fraud,” or “false negotiation” case;
3. The “false certification” case;
4. The “substandard product or service” case; and
5. The “reverse false claim” case.
John T. Boese, Civil False Claims and Qui Tam Actions (4th Ed., 2014) § 1.06 (emphasis added).
If a company knows that it is supposed to charge the government $10, and instead charges $12; or bills for a service it never provided; or induces the government to enter into a contract based on false information; or bills for substandard products or services; those are false claims—with or without an independent “certification.” It is that simple.
Justin T. Berger is a Partner at Cotchett, Pitre & McCarthy, LLP, where he handles high-profile cases of corporate fraud, including representing whistleblowers in qui tam actions under the federal and California False Claims Acts ...