Those of us who write about litigation have a slim thesaurus. There's a lot of overlap, especially when you don't want to sound like a geeky nitpicker, between "suit," "complaint," "case" and "claim." But a ruling Friday by the 6th Circuit Court of Appeals shows, once again, that the law belongs to geeky nitpickers. A three-judge panel of the 6th Circuit ultimately decided what when Congress amended the False Claims Act in 2009, it didn't mean to draw a line distinguishing between "claims" and "cases."

If you're thinking that should have been an obvious conclusion, you'd be wrong. Other federal circuits have reached the opposite conclusion about "cases" and "claims" in the FCA amendment, and it took the 6th Circuit pages of analysis of the statutory language and background to justify its holding.

Ironically, the 6th Circuit's ruling came in the very same whistle-blower case that resulted in the U.S. Supreme Court ruling that prompted Congress to amend the False Claims Act in 2009: an FCA suit by whistle-blower Roger Sanders against Allison Engine Company which has been climbing up and down the federal court system for 17 years. Whistle-blower counsel James Helmer of Helmer, Martins, Rice & Popham told me Monday that he's hoping he'll finally get a trial date, but he's not holding his breath: Given the circuit split on interpreting congressional intent on "claims" and "cases," there's every possibility that Allison Engine will seek additional appellate review. (Allison counsel Glenn Whitaker of Vorys, Sater, Seymour & Pease referred me to an Allison representative, who said in a statement that the company is reviewing the ruling and evaluating its options.)

Here's the once-in-a-lifetime backstory. Sanders and another whistle-blower filed a quitam suit in 1995, claiming that several defense subcontractors engaged in fraud in connection with the construction of generators for U.S. Navy missile destroyers. The United States intervened to prosecute the whistle-blowers' claims. After a jury trial, U.S. District Judge Thomas Rose of Cincinnati tossed the case, ruling that, as a matter of law, the plaintiffs hadn't shown that false claims were actually presented to the Navy. In the case's first trip to the 6th Circuit, the appeals court disagreed, holding that there's no presentment requirement for liability under the False Claims Act. But the whistle-blowers' roller coaster took a plunge when the Supreme Court ruled in 2008 that plaintiffs have to show that the defendant made a false statement in connection with a claim for payment by the United States.

Fearing that the ruling would make it tougher to police fraud against the federal government, Congress enacted legislation in 2009 to revise the standard of liability under the False Claims Act. Specifically, the new law imposed liability for "knowingly (making) ... a false record or statement material to a false or fraudulent claim," thus eliminating the Supreme Court's requirement that plaintiffs show defendants actually made the fraudulent claim.

That provision was straightforward enough for cases stemming from conduct after the law took effect in May 2009. But what about cases dating back before the new law -- like the Allison Engine suit that spawned the FCA amendment? Here's where the contradiction between "claims" and "cases" comes in. In two separate provisions of the 2009 law, Congress said that the amended liability would apply to all FCA "claims" pending as of June 2008. But it also said it would apply to "cases" pending as of the date of the new law's enactment.

When the Allison case returned to Judge Rose in federal district court in Cincinnati, he ruled that there were no pending FCA claims in the case as of June 2008, so the case couldn't be revived. Rose said that if Congress had meant retroactively to apply the new liability standard to all cases, it wouldn't have used the word "claims" in the provision relating to that standard. The trial judge also said that even if the new standard applied, retroactive liability was unconstitutional under the ex post facto clause, which bars retroactive punishment for conduct that predates the law establishing illegality.

The 6th Circuit accepted an interlocutory appeal on the "claim" versus "case" question, which it framed this way: " I f 'claim' in (the amended FCA law) means a request or demand for payment, then (the provision) would not apply retroactively to this case because there were no claims pending in 2008.... However, if 'claim' means a civil action or case, then (the law) would apply because this case was pending in June 2008." According to the 6th Circuit, in rather cursory examinations of the question, the 2nd and 7th Circuits have found that retroactive liability attaches to all FCA cases dating back to 2008, but the 9th and 11th Circuits have said that "claim" means a demand for payment, so only cases involving actual demands can be revived under the new standard.

In its painstaking examination of the question, the 6th Circuit panel -- Chief Judge Alice Batchelder and Judges Julia Gibbons and Deborah Cook -- said that the provisions referring to "claims" and "cases" were drafted by different bodies of Congress at different times, and since the statute elsewhere uses "claim" and "case" interchangeably, it would be a mistake to impose a distinction where Congress does not appear to have intended one.

And in what may turn out to be a further-reaching examination, the panel also concluded that the False Claims Act is not punitive, so the ex post facto doctrine does not apply. Though the legislative history is replete with mentions of punishment, the court acknowledged, this is a civil statute, so in the end "Congress intended to implement civil proceedings for combating fraud and not to impose punishment."

Whistle-blower counsel Helmer said that the appeals court ruling means that even if the original plaintiff dies before the case concludes, his estate can continue litigating. "We've now won this case twice at the 6th Circuit, once at the Supreme Court, and before Congress," he said. "We're hoping now we can get a trial date and finish it."

(Reporting by Alison Frankel)

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