State Farm attempts to undermine the False Claims Act

On the morning of November 1, the U.S. Supreme Court heard oral arguments in State Farm Fir and Casualty Company v. U.S. ex rel. Rigsby. In an attempt to avoid paying the judgement, State Farms urged the Supreme Court to automatically dismiss the False Claims Act (FCA) cases where whistleblowers violate the FCA’s seal provision (31 U.S.C. § 3730(b)(2)) rather than employ the balancing test that the U.S. has historically used to determine the appropriate course of action.

Justice Elena Kagan posed a very critical question to the deciding Court:

Given that the government is the beneficiary of this [seal] provision, why shouldn’t we give very significant discretion to the government?

Mandatory dismissal is not an appropriate sanction as it would undermine the Congressional intent behind the FCA. To find out why, read more here.

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