DRAFT FOR ATTORNEY REVIEW — NOT FINAL

Section 1

Citation
Section 1
Parent Document
United States v. Southland Management Corp., 326 F.3d 669 (2002)
Effective Date
2002-05-22
Original Source
https://www.courtlistener.com/opinion/27565/united-states-v-southland-managem... ↗

Other Sections in This Document (1123)

Full Text

1,597 chars 
Most of our sister circuits have held that under some circumstances, the government’s knowledge of the falsity of a statement or claim can defeat FCA liability on the ground that the claimant did not act “knowingly”, because the claimant knew that the government knew of the falsity of the statement and was willing to pay anyway. “If the government knows and approves of the particulars of a claim for payment before that claim is presented, the presenter cannot be said to have knowingly presented a fraudulent or false claim.” United States ex rel. Durcholz v. FKW, Inc., 189 F.3d 542, 545 (7th Cir.1999). The inaptly-named “government knowledge defense” captures the understanding that the FCA reaches only the “knowing presentation of what is known to be false.”8 Hagood, 81 F.3d at 1478 (citation and internal quotation marks omitted). Where the government and a contractor have been working together, albeit outside the written provisions of the contract, to reach a common solution to a problem, no claim arises. United States ex rel. Becker v. Westinghouse Savannah River Co., 305 F.3d 284, 288-89 (4th Cir.2002); Lamers, 168 F.3d at 1019-1020; United States ex rel. Butler v. Hughes Helicopters, Inc., 71 F.3d 321, 326-27 (9th Cir.1995). The government’s knowledge and acquiescence in its contractor’s actions in many of these cases was “highly relevant,” see United States ex rel. Hagood v. Sonoma County Water Agency, 929 F.2d 1416, 1421 (9th Cir.1991), to show that the contractor did not submit payment claims in deliberate ignorance or reckless disregard of their truth or falsity.9