ELR Citation: ELR 20103
No(s). 03-30023 (5th Cir. Sep 27, 2004)

The Fifth Circuit held that an individual failed to state a claim under the reverse FCA in its qui tam action against a chemical manufacturer. In a reverse false claims suit, the defendant's action does not result in improper payment by the government to the defendant, but instead results in no payment to the government when a payment is obligated. Here, the individual claimed that the company concealed from the government the fact that it had falsified emissions records in an effort to avoid a fine or monetary penalty to which the company might have been subjected had the government known of the illegal emissions and had it decided to take action against the company. Under the circumstances of this case, however, the avoidance of such a potential fine or civil penalty does not give rise to reverse false claims liability. The district court's decision was therefore reversed and remanded.