On May 17, 2022, the US Court of Appeals for the DC Circuit issued an opinion in a False Claims Act suit, narrowly interpreting the so-called “government-action bar.” The government-action bar, 31 USC § 3730(e)(3), forecloses qui tam suits “based upon allegations or transactions which are the subject of ... an administrative civil money penalty proceeding in which the Government is already a party.”

In United States ex rel. Vermont National Telephone Company v. Northstar Wireless, LLC, 2022 WL 1548488, --- F.4th --- (DC Circ. 2022), the court held that the government-action bar did not apply to spectrum license proceedings conducted by the Federal Communications Commission because civil money penalties are unavailable in such proceedings.

By way of background, the FCC holds auctions in order to grant spectrum (radio frequency band) licenses to companies in order to provide television, cell phone, and wireless internet service. Before the auction, applicants submit a short-form application to the FCC verifying their eligibility for the auction and any “bidding credit” discounts they seek. If the company is successful at the auction, it submits a long-form application to the FCC, demonstrating its qualifications for the license and its eligibility for the bidding credits. Other interested parties can then petition the FCC to deny the license, and the FCC then decides whether to grant the license.

In Vermont National, two companies with winning license bids allegedly made...

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