United States v. Neifert-White Co.

Supreme Court of the United States
390 U.S. 228, 1968 U.S. LEXIS 2911, 19 L. Ed. 2d 1061 (1968)

ELI5:

Rule of Law:

The term 'claim' under the False Claims Act is not restricted to demands for payment on a pre-existing government obligation but broadly includes all fraudulent attempts to cause the government to pay out money, such as through a fraudulent loan application.

Facts:

Neifert-White Co. was a dealer in grain storage bins.
The Commodity Credit Corporation (CCC), a federal agency, provided loans to farmers for up to 80% of the purchase price of these storage bins.
In 1959, an officer of Neifert-White Co. sold bins to 12 different farmers.
When preparing the invoices for these sales, the officer deliberately overstated the purchase price.
These inflated invoices were submitted to the CCC along with the farmers' loan applications to support their requests.
Relying on the fraudulent invoices, the CCC loaned the farmers amounts that exceeded the 80% limit based on the actual purchase price.

Procedural Posture:

The United States sued Neifert-White Co. in the U.S. District Court, seeking statutory forfeitures under the False Claims Act.
The District Court dismissed the complaint, holding that a fraudulent loan application did not constitute a 'claim' within the meaning of the Act.
The United States, as appellant, appealed to the U.S. Court of Appeals for the Ninth Circuit.
The Court of Appeals affirmed the District Court's dismissal.
The United States petitioned the Supreme Court of the United States for a writ of certiorari, which was granted.

Premium Content

Subscribe to Lexplug to view the complete brief

You're viewing a preview with Rule of Law, Facts, and Procedural Posture

Issue:

Does the term 'claim' under the False Claims Act encompass fraudulent applications submitted to a government agency to obtain a loan, or is it limited to demands for payment of an existing obligation owed by the government?

Opinions:

Majority - Mr. Justice Fortas

Yes, the term 'claim' under the False Claims Act encompasses fraudulent applications submitted to a government agency to obtain a loan. The Act's definition of a 'claim' is not confined to demands for payment on an existing government liability. The Court reasoned that the False Claims Act is a remedial statute that should be read broadly to protect government funds from all types of fraud. The Act's legislative history from the Civil War era shows it was intended to cover all fraudulent schemes that result in financial loss to the government. The Court distinguished prior cases like United States v. McNinch, which involved loan insurance rather than a direct disbursement of government funds. Here, the fraudulent application had the direct purpose and effect of causing the government to immediately pay out money. Therefore, the statute 'reaches beyond 'claims' which might be legally enforced, to all fraudulent attempts to cause the Government to pay out sums of money.'

Analysis:

This decision significantly broadened the scope of liability under the False Claims Act by rejecting a narrow, technical definition of 'claim.' By including fraudulent applications for discretionary government benefits like loans, the Court ensured the statute could be used to combat a wider range of schemes designed to defraud the government. This precedent solidified the FCA as a primary tool for fighting fraud in government programs, extending its reach beyond traditional contractor invoices to any fraudulent action that causes the government to disburse funds. It signals that courts should interpret remedial anti-fraud statutes broadly to effectuate their protective purpose.

Gunnerbot

AI-powered case assistant

Loaded: United States v. Neifert-White Co. (1968)

Try: "What was the holding?" or "Explain the dissent"