Grassley Proposes Significant Changes To The False Claims Act

On September 12, 2007, Senator Chuck Grassley introduced Senate Bill 2041, "The False Claims Correction Act of 2007." The legislation seeks to amend the False Claims Act ("FCA") in light of recent case rulings that its sponsors (Senators Grassley, Durbin, Leahy, Lott, Specter, and Whitehouse) believe have led to a narrowed interpretation of the existing FCA. Senate Bill 2041, if enacted as is, would greatly expand potential liability under the FCA and could effectively eliminate several longstanding defenses intended to protect against speculative and parasitic lawsuits.

The FCA prohibits the knowing submission of false claims to the government. Persons who knowingly submit false claims for payment to the government are liable under the FCA for up to $10,000 per false claim¹ and three times the amount of damages sustained by the government as a result of such false claims. FCA actions may be brought by the government or by whistleblowers, known as qui tam relators, in the name of