Implied Certification in False Claims Act Cases

“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 implied certification in False Claims Act cases.

Contract Violations

A contractor who materially fails to perform the requirements of a government contract and presents the government with a claim for full payment without disclosing anything about this lack of performance is in violation of the False Claims Act (FCA). This type of violation is quite common, especially in the areas of construction and defense-contracting.

When a contractor presents a claim for payment, they represent to the government that they have complied with all the conditions for receiving payment. So, for example, if the contract has specific requirements like using materials of a certain quality or performing quality assurance testing, then a request for payment is a statement to the government that the contractor has complied with every requirement. These statements can be either explicit or implicit.

Express Certifications

Often, particularly in contracts involving certain goods and services, the government requires contractors to sign certifications stating that they have complied with the contract terms in order to receive payment. These are explicit certifications and usually say something along the lines of, “By submitting this claim, I hereby certify that I have complied with all contract terms.”

Many contracts, however, do not contain such express certifications. If a contract does not require an express certification, a person presenting a claim for payment instead makes an implicit certification, which is an unwritten assurance that—by presenting the claim—the contractor has done every material thing the contract required.

If a contract requires a contractor to conduct safety testing before delivering a product, for instance, then presenting a claim for payment for a delivered product is an implicit certification that the appropriate testing was done. Likewise, if a contract requires a contractor to use only small or minority-owned subcontractors, then presenting a claim for payment is an implicit certification that only such subcontractors were used. Therefore, a contractor who presents a claim for a good or service that they know does not comply with the material terms of the contract has committed an FCA violation. This is true even if the good or service is just as good, or better, than what the contract required.

Implied Certifications

Implicit certifications are not limited just to compliance with the terms of the contract. When a contractor presents a claim for payment, they also implicitly certify that they have complied with all relevant laws and regulations. A construction contract may not expressly state that a contractor is required to follow all applicable building codes or use only licensed professionals, but they are nevertheless required to comply with these rules.

For example, a contract may not specify that a contractor cannot use asbestos insulation, but because asbestos insulation is banned by law it cannot be used. Since it is banned by law, by presenting a claim for payment, a contractor has implicitly certified that they have not used asbestos insulation.

Finally, a contractor who presents a claim for payment also implicitly certifies that they have not knowingly withheld any information material to the government’s decision to pay the claim. A contractor who has violated a contract term or a relevant law or regulation is required to disclose that information to the government. Failure to do so is a violation of the FCA. If you have more questions about contract violations, ask a False Claims Act lawyer in DC.

It’s important to note that some federal circuit courts have held that, in order to be material to the government’s decision to pay a claim, a violated law or regulation must condition payment on compliance. So, under this reasoning, if the law doesn’t say that a person who breaks it will not get paid, then compliance with that law is not material to the government’s decision to pay.

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 in False Claims Act cases is an importance concept in determining the manner in which an individual or entity is liable.

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.

How an Attorney Can Help with Implied Certification in False Claims Act Cases

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. If you are looking to understand implied certification in False Claims Act cases, call a dedicated DC attorney to discuss your case.