No Individual Liability Under the False Claims Act: Fifth Circuit | Practical Law

No Individual Liability Under the False Claims Act: Fifth Circuit | Practical Law

In Howell v. Town of Ball, the US Court of Appeals for the Fifth Circuit held that no individual liability exists for whistleblower retaliation claims under the False Claims Act (FCA).

No Individual Liability Under the False Claims Act: Fifth Circuit

Practical Law Legal Update w-002-7786 (Approx. 5 pages)

No Individual Liability Under the False Claims Act: Fifth Circuit

by Practical Law Labor & Employment
Published on 12 Jul 2016 • USA (National/Federal)
In Howell v. Town of Ball, the US Court of Appeals for the Fifth Circuit held that no individual liability exists for whistleblower retaliation claims under the False Claims Act (FCA).
On July 1, 2016, in Howell v. Town of Ball, the US Court of Appeals for the Fifth Circuit held that a district court did not err in dismissing an employee's False Claims Act (FCA) whistleblower claims against individual defendants because individuals are not subject to liability under the FCA ( (5th Cir. July 1, 2016).
The FCA traditionally allows for whistleblower retaliation suits against employers only (31 U.S.C. § 3730(h)). Howell, a sergeant fired after aiding in an FBI police corruption investigation, argued that a 2009 amendment removing the word "employer" from the liability section of the statute indicated a legislative intent to permit FCA whistleblower retaliation claims against individuals as well (see Fraud Enforcement and Recovery Act of 2009, Pub. L. No. 111-21, § 4(d), 123 Stat. 1617).
The Fifth Circuit noted that:
  • The term "employer" was removed from the statute to expand the class of possible FCA plaintiffs to include contractors and agents, not to expand potential liability to individual defendants.
  • It is highly unlikely that Congress would overturn long-standing precedent by mere implication, instead of inserting express language concerning the change.
  • Howell provided no authority interpreting the 2009 amendment to expand liability to individuals.
Concerning Howell's other claims, the Fifth Circuit found that:
  • The district court erred in holding that Howell's involvement in the FBI investigation was not entitled to protection under the First Amendment. Although Howell was a police sergeant, he was acting in his capacity as a citizen when aiding in the FBI investigation, an activity that is not within the scope of his ordinary job duties. Howell was allowed to proceed with his First Amendment retaliation claim against the Town of Ball.
  • Although Howell asserted a free speech violation, individual defendants were entitled to qualified immunity because Howell's First Amendment claim was not "clearly established" when he was discharged.

Practical Implications

Prior to the 2009 amendment, federal courts uniformly held that FCA claims may be asserted against the plaintiff's employer only. To the extent employment counsel questions whether the 2009 amendment expanded the scope of FCA liability, the Fifth Circuit concludes that it does not.