Implied Certification in False Claims Act Cases

A false claim is any attempt to obtain payment through misrepresentation to the government, and, of course, it is something that arises within the context of a False Claims Act case. Generally, defining something as a false claim is involved, due to the nature of what constitutes a “misrepresentation” and what is “false.”

In order for something to be considered false under the False Claims Act, it must be a knowingly false representation. That is, the person presenting the information to the government must know that what he or she is claiming is not true.

Additionally, the false claim must be made for payment or approval from the government or a government agency. Technically, the act refers to a claim as any request or demand—whether under a contract or otherwise—for money or property, therefore, the claim must be presented to an officer, employee, or agent of the United States, or to a contractor or grantee who is using government funds. This action is what triggers liability under the False Claims Act Law.

Due to the complexities that can come up in these cases, it is important for a person to contact a False Claims Act attorney.

Determination of a False Claim

This process is complicated, as there are many different kinds of government businesses, and most government agencies and businesses have their own procedures as to how somebody submits a bill to them.

For instance, for Medicare and Medicaid, claims are made in forms with codes that represent what is being billed. Almost every kind of medical service or procedure is broken down into some level of coding, and these codes are what is submitted to the Center for Medicaid Medicare Services, which then generates the bills. Thus, when individuals or entities lie using these codes, it is rather easy to determine the nature of the false claim.

However, defense contracting, in which the government hires contractors and makes purchases, involves contracts, bids, and subcontracts. In these processes, the invoices the government receives may or may not explicitly detail all goods and services being billed. Therefore, the process of determining false claims can get very complicated when goods and services are not explicitly stated.

Meaning of Implied Certification

“Implied certification” refers to the notion that an individual or entity has an ongoing obligation to comply with all applicable laws, regardless of whether or not he, she, or it has made an explicit agreement to do.

For example, if an attorney provides his or her client with a bill, this bill may expressly state, “I have followed the law of the District of Columbia, in which I am licensed to practice law.” This is an express certification. However, if the attorney provides a bill without such a statement, there is an implied certification that he or she is licensed to practice law and has done so in accordance with all applicable laws.

This theory can provide ways to hold contractors accountable for false claims under the False Claims Act.

False Claims Act & Implied Certification

The idea regarding bills sent to the government was that individuals and entities doing business with the government “had to cut square corners” with the government. This refers to the notion that such individuals and entities cannot lie to or cheat the government and that the government should be able to rely on representations made in bills it receives.

The False Claims Act was started to enforce that notion. When individuals and entities did bigger and more business with the government, the theory of implied certification became increasingly more significant, as the very act of issuing a bill implies that the individual or entity issuing that bill is entitled to the amount billed. While not every invoice explicitly states that an individual or entity is certifying to have done X, Y, or Z, many big cases come down to the idea that, when a bill is issued to the government, the individual or entity issuing the bill is also providing an implied certification. The certification may not be stated in the bill directly but the bill implies that the contractor either followed the law or complied with terms of a contract. In this way, implied certification is an importance concept in determining the manner in which an individual or entity is liable under the False Claims Act.

Over-Scrutiny of Claims

The Defense Bar’s view is that every minor issue should not constitute a False Claims Act case. The line the Defense Bar uses is, “We use staples made in Japan.” That is, does the act of using staples made in another country mean that the individual or entity using the staples is violating the law with respect to American only production? Of course, defense lawyers try to extend the idea that virtually any implication is not important enough to hold the defendant liable.

The False Claims Act itself involves certain standards of the materiality. That is, the act is not designed to deal with minor issues of compliance. Instead, the False Claims Act is designed to deal with material false claims to the government. While the distinction between a minor and significant claim is not easily determined from the law, the False Claims Act is generally designed to combat knowingly false or fraudulent claims against the government.