United States Court of Appeals for the District of Columbia Circuit holds that “but-for causation is necessary to establish a fraudulent inducement claim under the FCA.”
The D.C. Circuit Court of Appeals held in United States ex rel. Cimino v. IBM, that “but-for causation is necessary to establish a fraudulent inducement claim under the FCA.” No. 19-7139, 2021 U.S. App. LEXIS 19955 (D.C. Cir. July 6, 2021). Judge Neomi J. Rao wrote the opinion in this case that involved an allegation that IBM had fraudulently induced the IRS into a new contract for IBM’s services. The District Court had originally dismissed the Relator’s lawsuit, but in this opinion, the Court of Appeals partially restored the Relator’s False Claims Act case and remanded it to the District Court for further proceedings.
Per the opinion, “Under longstanding Supreme Court precedent, a violation of the FCA occurs when a person fraudulently induces the government to enter a contract and later submits claims for payment under that contract.” United States ex rel. Cimino v. IBM, No. 19-7139, 2021 U.S. App. LEXIS 19955, at *9 (D.C. Cir. July 6, 2021) Additionally:
“Although the text of the FCA prohibits only false or fraudulent claims, the Court has placed a common law gloss on the statute, interpreting it to also prohibit fraudulent inducement. This means that “each claim submitted to the Government under a contract which was procured by fraud” is false “even in the absence of evidence that the claims were fraudulent in themselves.”
Id. The opinion holds that if a Relator pleads that the government was fraudulently induced into entering into a contract, then they must show that there was causation. The opinion also establishes that the standard is but-for causation as to actual cause.
If you have a potential False Claims Act case, you should speak with an Attorney about what needs to happen in filing a qui tam action. Remember, in those courts under the jurisdiction of the Fourth Circuit Court of Appeals, a lawyer has to file the False Claims Act case on behalf of the relator. Wojcicki v. SCANA/SCE&G, 947 F.3d 240 (4th Cir. 2020). You lawyer will help you determine what kind of fraud you are alleging to have occurred and also will determine the proper cause of action for your case.
Saluda Law handles False Claims Act cases. If you are looking to file a qui tam action for false claims for payment of government money or fraud in the inducement of government contracts, contact Saluda Law. Let an Attorney help you report fraud against the Federal Government.
Content last updated on July 7, 2021. Any information posted about the firm’s cases is intended only to be representative of the firm’s practice. These examples are not intended to, and cannot be relied upon, to predict the results in any other case. Information or interaction on this page should not be construed as establishing a client-attorney relationship or as legal advice. For advice about your specific situation, please contact Saluda Law, LLC. The Statements contained within this page have been reviewed and approved by Mr. VanSyckel.
