The Sixth Circuit recently ruled on a False Claims Act (“FCA”) case, Sanders v. Allison Engine Company, Inc., that was back before the court after its previous decision in the case was overturned by the Supreme Court.  In the original case before the Sixth Circuit, the court held that liability under the FCA did not require presentment of a false claim to the government.  The Supreme Court subsequently reversed the Sixth Circuit’s decision.  In May 2009, in response to the Supreme Court’s decision, Congress amended the FCA to remove the presentment requirement.  The amendment to the FCA stated that the amendment would apply to all “claims” under the False Claims Act pending on or after June 7, 2008.  The defendants in Sanders filed a motion in district court to preclude retroactive application of the amendment.  The district court granted the motion “because no claim was pending in June 2008 and further  . . . the retroactive application of the amendments was prohibited under the Ex Post Facto Clause.”  This decision was brought before the Sixth Circuit on interlocutory appeal and was reversed and remanded to the district court.  

The Sixth Circuit first evaluated whether there was a “claim” pending in June 2008.  While there was an FCA case pending at that time, there were not any claims for payment pending.  Courts that had previously evaluated what “claim” means in the statute were “almost evenly split” over the issue.  The Ninth and Eleventh Circuits found that “claims” means a claim for payment.  The Second and Seventh Circuits found that “claims” means cases.  The Sixth Circuit agreed with the latter reasoning and found that “claim” in the amendment refers to “a civil action or case.”  Therefore, the court found that a claim was pending in the Sanders case in June 2008. 

The Sixth Circuit then evaluated whether retroactive application of the amendment violated the Ex Post Facto Clause.  “The Ex Post Facto Clause is only implicated by criminal statutes or acts intended to punish.”  Something deemed a civil penalty by the legislature will only be transformed into a criminal penalty for purposes of the Ex Post Facto Clause if there is the “clearest proof” that the statutory scheme is so punitive in either purpose or effect that it negates the intention to deem it civil.  The Sixth Circuit found that the FCA was designed to combat fraud and not to impose punishment.  The court then found that there was not sufficiently clear proof that the FCA is sufficiently punitive to transform it into a criminal penalty.  Therefore, the court held that the retroactive application of the FCA does not violate the Ex Post Facto Clause.