United States ex rel. Purcell v. MWI Corp.

After the United States prevailed in a civil action brought pursuant to the False Claims Act (FCA), 31 U.S.C. 3729, based on certifications by MWI to the Bank to secure loans financing MWI's sale of water pumps to Nigeria, a jury awarded the government $7.5 million in damages. The damages were trebled to $22.5 million pursuant to the FCA. Because an FCA defendant is entitled to an offset from the trebled damages by any amount paid to compensate the government for the harm caused by the false claims, and the district court considered Nigeria’s repayment of the loan to be compensatory, MWI’s damages were reduced from $22.5 million to $0. The district court did impose civil penalties at the highest level. The government appealed and MWI cross-appealed. The court reversed the judgment because the government failed to establish that MWI knowingly made a false claim. Absent evidence that the Bank, or other government entity, had officially warned MWI away from its otherwise facially reasonable interpretation of an undefined and ambiguous term, the FCA’s objective knowledge standard, as the Supreme Court clarified while this litigation was pending in Safeco Insurance Co. of America v. Burr, did not permit a jury to find that MWI “knowingly” made a false claim. View "United States ex rel. Purcell v. MWI Corp." on Justia Law