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Roderick Thomas Discusses Sixth Circuit Reversal of False Claims Act Damages Award

Bloomberg BNA's Federal Contracts Report
April 8, 2015

Roderick L. Thomas, chair of Wiley Rein’s White Collar Defense & Government Investigations Practice, was quoted in an article published April 6 in Bloomberg BNA’s Federal Contracts Report about a ruling by the U.S. Court of Appeals for the Sixth Circuit on treble damages, restitution, and prejudgment interest under the False Claims Act (FCA).

According to the article, the three-judge panel reversed a $657 million award, ruling that the government did not account for competition between the appellant and a competitor in its fair market value assessment of damages. Mr. Thomas said the decision is a reminder that the burden of proof to prove damages under the FCA lies with the government, and that it cannot use baseless damages calculations.

“The court reiterated the longstanding principle that in situations when the government gets what it paid for despite an FCA violation, it is not entitled to an actual damages award,” Mr. Thomas told Bloomberg BNA. “The court reinforced that a damages analysis should be tied to real world metrics, suggesting that a comparable sales analysis is the preferred methodology to determine the fair market value of what the government received.”