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(A version of this article appears in the California
Construction Law Reporter, published by the West Group.)
By James Acret
Stevens
brought a qui tam action against the Vermont Agency of Natural
Resources alleging that the agency overstated the amount
of time spent by its employees on federally funded projects
and thereby induced the federal government to disburse more
grant money than the agency was entitled to receive. The
Supreme Court held that a private individual has standing
to bring an action in federal court on behalf of the United
States under the False Claims Act, 31 U.S.C. §§3729-3733,
but that the False Claims Act does not subject a state agency
to liability. Vermont Agency of Natural Resources v.
United States ex rel. Stevens, ___ U.S. ___, 2000 Daily
Journal D.A.R. 5319 (2000).
Justice
Scalia delivered the majority opinion from which Justices
Stevens and Souter dissented. The court held that plaintiff
had standing under Article III of the Constitution on the
premise that the False Claims Act can be regarded as effecting
a partial assignment of the government's damages claim to
the qui tam plaintiff. The False Claims Act originally was
enacted in 1863. Qui tam actions appear to have originated
around the end of the 13th Century, when private individuals
who had suffered injury began bringing actions in the royal
courts on behalf of the Crown. Qui tam suits were
authorized by many early statutes, including the Statute
Providing a Remedy for Him Who Is Wrongly Pursued in the
Court of Admiralty (1400), the Statute Prohibiting the Sale
of Wares After the Close of Fair (1331), Act to Avoid Horse-Stealing
(1589) and Act to Prevent the Over-Charge of the People
by Stewards (1604). But the act does not authorize an action
against a state. The FCA was enacted in 1863 with the principal
goal of stopping massive frauds perpetrated by private contractors
during the Civil War. The FCA imposes liability upon "any
person," not states.
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