00-4110, 01-1810 U.S. ex rel. Chandler v. Cook County

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“[T]he legislative history of the 1986 amendments, in particular that accompanying the whistleblower provision, makes it likely that the Congress, when voting on the amendments, was aware that the FCA might reach municipalities. The Senate Judiciary Committee’s report states that ‘[t]he False Claims Act reaches all parties who may submit false claims. The term “person” is used in its broad sense to include partnerships, associations, and corporations . . . as well as States and political subdivisions thereof.’…

Unless municipalities are subject to suit under the FCA, Congress would have no reason to be concerned that municipalities might retaliate against their employees for bringing FCA claims. Given that states are excluded from the definition of ‘person’ within the FCA, the only public entities remaining are municipal corporations and other political subdivisions of states which are not arms or agencies of state government.”

“Were we to hold counties immune from the FCA’s damages scheme, we would frustrate the clear intention of Congress. The original FCA damages regime was remedial. See United States v. Bornstein, 423 U.S. 303, 315 (1976). In 1986, in an effort to increase the effectiveness of the FCA, Congress increased the per claim penalty from $2,000 to a minimum of $5,000 and the overall damages from double to treble. To hold that municipalities are immune, we would have to conclude that, in effecting this increase, Congress intended to exempt municipalities from the FCA sub silentio.”

Reversed and remanded.

Appeals from the United States District Court for the Northern District of Illinois, Gettleman, J., Ripple, J.