Split Sixth Circuit Panel Affirms Dismissal Of Reverse False Claims Case Involving Fracking Leases?

Last week, a 2-1 split panel on the US Court of Appeals for the Sixth Circuit affirmed the lower court's dismissal of U.S. ex rel. Harper, et al. v. Muskingum Watershed Conservancy District, Case No. 15-4406 (6th Cir. Nov. 21, 2016). The Sixth Circuit's decision comes nearly eleven months after the US District Court, Northern District of Ohio dismissed the relators' False Claims Act (FCA) complaint, which alleged reverse false claims arising from hydraulic fracturing ("fracking") leases executed by the Muskingum Watershed Conservancy District (MWCD). In this case, the Sixth Circuit became the first appellate court to address the requisite mental state for the so-called "reverse false claims" theory of liability, 31 U.S.C. § 3729(a)(1)(G), under which a defendant is liable if it "knowingly conceals or knowingly and improperly avoids or decreases an obligation to pay or transmit money or property to the Government."