There are companies, trade groups, and law firms set in direct opposition to the False Claims Act. One law firm that embodies the unabashed direct opposition to all positive aspects of the FCA is Fried, Frank, Harris, Shriver & Jacobson LLP. Whenever a court rules in a potentially favorable way, Fried Frank attempts to spin it in a way that would undercut the viability of or the effectiveness of the False Claims Act. On December 19, 2007, Representative Howard Berman introduced HR 4854–a companion to Senator Grassley’s S. 2041 entitled “False Claims Act Corrections Act of 2007″. In its FraudMail Alert No. 07-12-21, Fried Frank warns that “the bill attempts to remove (or significantly weaken) the pleading requirement found in Federal Rule 9(b), which requires that the details of actual false claims must be alleged with particularity.”
Not surprisingly, those companies, trade groups and law firms who make great profit from a weakened FCA, would prefer that there be a procedural mechanism to eliminate otherwise meritorious FCA actions. “Form over substance” is the cry. If this bill does, in some measure, bring sanity to the process of prosecuting companies that defraud the federal government, it is to be lauded and not attacked. If companies have done nothing wrong, why should they hide behind a procedure to protect them rather than prove that they did nothing wrong in a court of law?
Rule 9(b) as applied by most courts has thrown out the baby with the bathwater. It has nothing to do with genuinely protecting against the unnecessary costs of defending a frivolous lawsuit and everything to do with protecting white collar crime against the United States treasury. Where a company can destroy or limit access to a small amount of information (such as the billing records), it can protect itself from prosecution for unabashed fraud on the government because the courts are requiring every detail of every scheme to be pled (including evidence of the billing that is fraudulent). The court interpretations on this point (as on many others) are not attempting to discover and enforce the intent of Congress, but rather to effectuate an agenda of protection of potential fraudsters that is directly contrary to every congressional action on the FCA since 1863.
