Since the US Supreme Court’s ruling in Loper Bright Enterprises v. Raimondo, attorneys have argued the overruling of Chevron offers a new arrow in the False Claims Act defense bar’s quiver.
Without Chevron deference, the argument goes, defendants can collaterally attack many FCA cases premised on regulatory violations. If the underlying regulation doesn’t pass muster, then the defendant couldn’t have engaged in fraud. A long line of cases creates a significant obstacle to such a defense.
In the 1937 decision of US v. Kapp, the defendants were convicted of making false claims to the government when they lied about information required by the Agricultural Adjustment Act. They argued that the underlying requirement was unconstitutional, so a false claims conviction based on that requirement couldn’t stand.
The Supreme Court disagreed, finding that the constitutionality was irrelevant, saying the defendants “were not indicted for a conspiracy to violate the Agricultural Adjustment Act but for a conspiracy to violate the statute protecting the United States against frauds.”
The justices at the time reasoned, “It is cheating the Government at which the [false claims] statute aims and Congress was entitled to protect the Government against those who would swindle it regardless of questions of constitutional authority as to the operations that the Government is conducting.”
The Kapp rule has been continuously reaffirmed ever since. Nearly 30 years later, in Dennis...
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