American Contractors in Iraq


by Debra Katz


         The False Claims Act (“FCA”) is a law intended to provide an incentive to private citizens to file claims on behalf of
the Federal Government for making fraudulent claims against the government.  31 U.S.C. §§ 3729 - 3733.  Successful
claimants under the FCA receive a portion of the recovery, often approximately 15-25%, with the remainder going to the

         Under the FCA a person is liable for a fine and treble damages if that person:

1. knowingly presents, or causes to be presented, to an officer or employee of the United States Government or a
member of the Armed Forces of the United States a false or fraudulent claim for payment or approval;

2. knowingly makes, uses, or causes to be made or used, a false record or statement to get a false or fraudulent claim
paid or approved by the Government;

3. conspires to defraud the Government by getting a false or fraudulent claim allowed or paid;

4. has possession, custody, or control of property or money used, or to be used, by the Government and, intending to
defraud the Government or willfully to conceal the property, delivers, or causes to be delivered, less property than the
amount for which the person receives a certificate or receipt;

5. authorized to make or deliver a document certifying receipt of property used, or to be used, by the Government and,
intending to defraud the Government, makes or delivers the receipt without completely knowing that the information on the
receipt is true;

6. knowingly buys, or receives as a pledge of an obligation or debt, public property from an officer or employee of the
Government, or a member of the Armed Forces, who lawfully may not sell or pledge the property; or

7.  knowingly makes, uses, or causes to be made or used, a false record or statement to conceal, avoid, or decrease an
obligation to pay or transmit money or property to the Government.

29 U.S.C.A. § 3729(a)(1) - (a)(7).

         An employee who participates in an FCA action is protected under the act’s whistleblower protection provisions.  
See 31 U.S.C. § 3730(h).  Specifically, an employee who participates in an FCA action may not be “discharged, demoted,
suspended, threatened, harassed, or in any other manner discriminated against.”  Id.  Protected activity under the FCA
includes “investigation for, initiation of, testimony for, or assistance in an action filed or to be filed under [the FCA].”  Id.  

         To prove that an employer retaliated against an employee in violation of 31 U.S.C. § 3730(h), an employee must
demonstrate that: (1) he engaged in protected activity; (2) his employer knew of the protected activity; and (3) his
employer discriminated against him in the terms and conditions of his employment as a result of these acts.  31 U.S.C. §
3730(h); Mann v. Heckler & Koch Defense, Inc., 2008 WL 4551104, at * 3-4 (E.D. Va. Oct. 7, 2008) (denying summary
judgment on FCA retaliation claim where plaintiff successful pled that he engaged in protected activity where he
complained of the employer’s fraudulent conduct).  To prove that the employer was on notice of protected activity, the
employee must demonstrate that he put the employer on notice by “characterizing the employer’s conduct as illegal or
fraudulent.”  Mann, 2008 WL 4551104, at * 5 (quoting Eberhardt v. Integrated Design & Constr., Inc., 167 F.3d 861, 868
(4th Cir. 1999)).  

         The employee need not have a specific awareness of the FCA, but must be engaged in action that is calculated or
could reasonably lead to a viable FCA action.  In Blincoe v. Boeing Co., 2007 WL 2007 at *5 (W.D. Wash. 2007), the
Court explained the relevance of the defendant’s scienter to an FCA retaliation claim as follows:

Defendant argues that Plaintiff cannot establish a prima facie case of retaliation under the False Claims Act (“FCA”). To
recover for retaliation under the FCA, an employee must show: “(1) that the employee engaged in activity protected under
the statute; (2) that the employer knew that the employee engaged in protected activity; and (3) that the employer
discriminated against the employee because she engaged in protected activity.” Moore v. Cal. Inst. of Tech. Jet
Propulsion Lab., 275 F.3d 838, 845 (9th Cir.2002). “[T]o come under the anti-retaliation provision of the [FCA], specific
awareness of the FCA is not required, but the plaintiff must be investigating matters which are calculated or could
reasonably lead, to a viable FCA action.” Id. In turn, an FCA claim requires “some request for payment [from the federal
government] containing falsities made with scienter (i.e. knowledge of the falsity and with intent to deceive).” United States
ex rel. Hopper v. Anton, 91 F.3d 1261, 1265 (9th Cir.1996).

(Emphasis added.)  Accordingly, the relevant inquiry is whether the employee reasonably believed that the conduct at
issue which he or she was investigating would give rise to an FCA claim.
In Graham County Soil & Water Conservation Dist. V. U.S. ex rel. Wilson, 545 U.S. 409, 416 n. 1 (2005), the Supreme
Court made clear that a plaintiff claiming retaliation in violation of 31 U.S.C. § 3730(h) is not required to prove a violation
of § 3729 (e.g., that the fraud in fact led to the authorization of payment of federal funds).

 Pursuant to 31 U.S.C. § 3732(a), “Any action under section 3730 may be brought in any judicial district in which the
defendant or, in the case of multiple defendants, any one defendant can be found, resides, transacts business, or in
which any act proscribed by section 3729 occurred.”  A summons as required by the Federal Rules of Civil Procedure
shall be issued by the appropriate district court and served at any place within or outside the United States.
The remedies available to a successful claimant are generally designed to “make the employee whole.”  Id.  Remedies
include reinstatement with seniority, back pay with interest, and special damages including attorneys’ fees.  Id.  Unlike with
many other whistleblower protections, the successful claimant under the FCA whistleblower provision is entitled to two
times the back pay owed.  Id.

© Copyright 2008, Debra S. Katz, Katz, Marshall & Banks, LLP.

Debra S. Katz is a partner with Katz, Marshall & Banks, LLP, a plaintiffs’ employment and civil rights law firm based in
Washington, D.C.  The firm specializes in the representation of plaintiffs in employment law, civil rights and civil liberties
matters, and whistleblower matters.