We missed it or did until today when I went to the Branch docket for an update and found a Statement of Interest in Opposition to Defendant State Farm’s Motion to Dismiss filed by the United States among the entries made before the Order dismissing Branch was issued.
There was no blog SLABBED until after Branch was dismissed. However, once we were up and running in March 2008, we posted the Branch Consultants’ qui tam case here; wrote about the Appeal here and here ; and reported on 5th Circuit’s decision here and here.
Nonetheless, until today, we missed the Government unequivocally stating that statutory authority over a WYO carrier can not be contracted away.
The fact that FIA and the WYO carriers enter into an agreement, and the agreement relates to the WYO carriers’ alleged violation of the FCA, does not mean that the FCA claim is founded on that agreement. Rather, the FCA claim is founded on the defendants’ alleged violation of a federal statute which prohibits a person, like the defendants, from acting with appropriate scienter to submit false or fraudulent claims to the government or make false statements in order to avoid an obligation to the government. Further, the FCA provides for relief – treble damages and penalties – that is not available under the Arrangement but that arises instead by statute.
With FCA claims not contract – based claims or dependent upon the degree of negligence involved, there is no “reasonable overpayment” – no “little bit pregnant” fraud permissible under the Expedited Claim Handling Processes authorized following Hurricane Katrina.
The USA supports its position noting, Other courts have also squarely held that claims under the FCA do not arise pursuant to a contract. This point was clearly articulated in United States ex rel. Roby v. Boeing Co. (“Roby I”):