Implied False Certification Theory Gains Support In Ninth Circuit

Last month, the U.S. Court of Appeals for the Ninth Circuit extended the breadth of the False Claims Act for actions brought within that Circuit by accepting the implied false certification theory of liability. This is a significant development that increases the risk of doing business with the government and enhances the Government's leverage in negotiations with contractors. 

First, some background: the False Claims Act ("FCA") is the government's weapon of choice to combat alleged waste, fraud, and abuse in government contracting. The FCA forbids contractors from submitting false claims (such as inaccurate invoices) or making false statements in support of a claim. The penalties for violating the FCA are harsh: contractors are subject to treble damages and penalties of up to $11,000 per claim.