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GK Partner David Chizewer Quoted in Law360 on Proposed Amendments to the False Claims Act

David Chizewer discusses a proposed Senate bill aimed at bolstering the government’s enforcement actions under the FCA in Law360.

July 28, 2021

David Chizewer, a partner in Goldberg Kohn's Litigation Group, recently spoke with Law360 about a proposed Senate bill that seeks to reform the False Claims Act (FCA), which is a federal law that imposes liability on federal contractors who defraud governmental programs. It is the primary litigation tool used by whistleblowers to combat fraud against the government. According to a Department of Justice report, the federal government has used the FCA to recover more than $62 billion since 1987.

The bipartisan False Claims Amendments Act of 2021 was introduced in the US Senate on July 26. It requires defendants to present "clear and convincing" evidence to rebut a showing by a whistleblower or the government that an alleged false claim is material to the government's decision to reimburse a contractor for their payment claim. The legislation is aimed at strengthening the government's enforcement actions under the FCA but some think it may have the opposite effect due to conflicting and potentially unconstitutional language that may elevate a defendant's position.

Proving the materiality of an alleged false claim is a key issue that emerged from the U.S. Supreme Court's landmark Escobar decision in 2016. Lawmakers led by Sen. Chuck Grassley, R-Iowa, argued that "fraudster" defendants have taken advantage of confusion in lower courts interpreting the high court's ruling. Defendants have latched onto language from the ruling to wrongly escape FCA cases based solely on the government continuing to pay claims made by a contractor despite knowing about their alleged falsity, Grassley said.

Mr. Chizewer told Law360 that “by focusing on whether a government decision to pay is material, rather than on reaffirming the broader principle of the FCA that a contractor can’t falsely claim money it knows it’s not entitled to, the bill overemphasizes one aspect of the Escobar ruling. While this [bill] may fix a big part of the problem, and it may be a good practical political solution, I think it still feeds into the unfortunate emphasis on the government’s payment conduct.”

In Escobar, the relevant line states that the government’s continued payment despite knowledge of an alleged false claim is “very strong evidence” that a claim is not material. “That line, despite coming in a case that was unanimously decided in favor of the relator, has received so much favorable play by defendants and should be considered a miscomprehension of the proper role of the court, Chizewer said.

The legislation is worth watching due to the significant amendments to the FCA and potential implications that may reverse gains made by defendants in FCA cases. If enacted, the legislation would make these changes effective retroactively to pending cases within the date of the legislation’s enactment.

Click here to read David’s analysis in the article published by Law360.

David Chizewer is a principal in the firm's Litigation Group. He is a nationally recognized trial lawyer and has been featured in the National Law Journal’s list of 10 of the nation’s top litigators. He has been named Trial Lawyer of the Year by the Public Justice Foundation and was separately a runner-up for that same award. He has also been named Lawyer of the Year by the Taxpayers Against Fraud Education Fund, and has received the Award for Excellence in Pro Bono Service by the Federal Court in Chicago on two separate occasions.

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