Cook County v. United States ex rel. Chandler, 538 U.S. 119 (2003)

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certiorari to the united states court of appeals for the seventh circuit

No. 01-1572. Argued January 14, 2003—Decided March 10, 2003

Under the False Claims Act (FCA), "[a]ny person" who, inter alia, "knowingly presents, or causes to be presented, to an officer or employee of the United States Government . . . a false or fraudulent claim for payment or approval," 31 U. S. C. 3729(a)(1), is liable to the Government for a civil penalty, treble damages, and costs, 3729(a). Although the Attorney General may sue under the FCA, a private person, known as a relator, may also bring a qui tam action "in the name of the Government." 3730(b). The relator must inform the Justice Department of her intentions and keep the pleadings under seal while the Government decides whether to intervene and do its own litigating. 3730(b)(2). If the claim succeeds, the relator's share may be up to 30 percent of the proceeds of the action, plus reasonable expenses, costs, and attorney's fees. 3730(d). This case involves a National Institute of Drug Abuse research grant to Cook County Hospital for a study that was later administered by a nonprofit research institute affiliated with the hospital. Respondent Chandler, who ran the study for the institute, filed this qui tam action, claiming that Cook County (hereinafter County) and the institute had submitted false statements to obtain grant funds in violation of 3729(a)(1). After this Court held in Vermont Agency of Natural Resources v. United States ex rel. Stevens, 529 U. S. 765, that States are not "persons" subject to FCA qui tam actions, the District Court granted the County's motion to dismiss the claims against it. The court held that the County, like a State, could not be subjected to treble damages, which Stevens described as "essentially punitive," id., at 784. The Seventh Circuit distinguished Stevens and reversed.

Held: Local governments are "persons" amenable to qui tam actions under the FCA. Pp. 125-134.

(a) While 3729 does not define the term "person," its meaning has remained unchanged since the original FCA was passed in 1863. Stevens, supra, at 783, n. 12. There is no doubt that the term then extended to corporations. Indeed, this Court as early as 1826 in United States v. Amedy, 11 Wheat. 392, 412, recognized the presumption that "person" also includes "persons politic and incorporate." Essentially conceding that private corporations were taken to be persons when the


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