ARTICLE
17 March 2023

Lincoln's Law Turns 160

CM
Crowell & Moring LLP

Contributor

Our founders aspired to create a different kind of law firm when they launched Crowell & Moring in 1979. From those bold beginnings, our mission has been to provide our clients with the best services of any law firm in the world through a spirit of trust, respect, cooperation, collaboration, and a commitment to giving back to the communities around us.
March 2, 2023, marked the 160-year anniversary of the enactment of the False Claims Act (FCA). Signed into law by the sixteenth president, the statute known as "Mr. Lincoln's Law"...
United States Government, Public Sector
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March 2, 2023, marked the 160-year anniversary of the enactment of the False Claims Act (FCA). Signed into law by the sixteenth president, the statute known as "Mr. Lincoln's Law" was passed in response to the actions of contractors that sold rancid food, faulty rifles, and shoddy uniforms to the Union Army. Eight score after the law's passage, the FCA has become the government's primary enforcement tool in cases involving allegations of fraud, and today the Civil War era statute is applied in cases involving industries and federal programs that would have exceeded Lincoln's wildest imagination.

The "Informers Act" Has Lived Up to Its Name

At the time of its passage in 1863, the FCA was also referred to as the Informer's Act due to the law's provisions allowing individuals to bring suit in the name of the government in exchange for a bounty. 160 years later, the qui tam provisions remain a defining feature of the law's enforcement, and whistleblower-initiated suits continue to be the government's primary source of new referrals. The Department of Justice began keeping track of FCA settlements and judgments following the 1986 amendments to the statute that were aimed at promoting more FCA suits by whistleblowers. Of the $72 billion recovered under the FCA since 1986, more than $50 billion came from cases that were initiated by qui tam relators. Similarly, relator-initiated actions continue to be the main driver of new case openings. Of the 948 new FCA matters that were opened in FY 2022, 652 were qui tam actions.

Not a Gold Standard for Legislative Drafting

The author of the Gettysburg address was known for the power of his pen, and so it would likely be the source of some consternation if Lincoln knew that his namesake law has been routinely criticized for its imprecise language. The 1986 amendments may have ushered in the modern era of the FCA by making it easier for relators to file suit, but the amendments' imprecise language has also created fertile ground for litigation. Lower courts have noted that the amendments are far from a model of legislative drafting, and when one of the statute's provisions was before the Supreme Court in 2015 in U.S. ex rel Carter, the opinion wryly observed that "[t]he False Claims Act's qui tam provisions present many interpretive challenges, and it is beyond our ability in this case to make them operate together smoothly like a finely tuned machine."

The statute's ambiguities when combined with the potential for large relator's shares and the spectre of treble damages for defendants has made the FCA one of the most frequently litigated federal statutes. Just this term, two separate provisions of the statute are before the Supreme Court for interpretation which is partly a reflection of the volume of FCA-related litigation in recent years.

New Frontiers

If Honest Abe's character was forged on the frontier, so too has the FCA been shaped by litigation in cases seeking to expand the law's outer edges. Not only have qui tam relators been a driving force behind the FCA's annual recoveries, but they have often led the statute's expansion into new terrain. As the country's national budget has expanded and federal dollars have flowed through new programs, an active relators bar has consistently found novel ways to bring suit under the statute against new classes of defendants such as universities, private equity funds, and mortgage companies.

A decade ago, when the FCA turned 150, few would have anticipated that telehealth, pandemic relief, and cybersecurity would be active areas of FCA enforcement in 2023. And so even with wisdom of the sixteenth president, one would be hard-pressed to predict the new industries and federal programs that will be the focus of FCA enforcement ten years from now when Lincoln's Law turns 170.

The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.

ARTICLE
17 March 2023

Lincoln's Law Turns 160

United States Government, Public Sector

Contributor

Our founders aspired to create a different kind of law firm when they launched Crowell & Moring in 1979. From those bold beginnings, our mission has been to provide our clients with the best services of any law firm in the world through a spirit of trust, respect, cooperation, collaboration, and a commitment to giving back to the communities around us.
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