Government Knowledge Defense

Whistleblower_resourcesUnder the so-called “government knowledge” defense, the government’s awareness of a fraud can defeat False Claims Act liability on the ground the defendant did not “knowingly” defraud the government since the government acted with full information.  It is not a statutory defense but merely a way for a defendant to rebut the intent (or scienter) element of a False Claims Act challenge.

Here are some of the more recent court decisions on the scope and reach of the government knowledge defense.

January 8, 2015

Fifth Circuit Finds Government Knowledge Defense Not Appropriate On Motion To Dismiss

By the C|C Whistleblower Lawyer Team

Under the so-called “government knowledge” defense, the government’s awareness of a fraud can defeat False Claims Act liability on the ground the defendant did not “knowingly” defraud the government since the government acted with full information.  It is not a statutory defense but merely a way for a defendant to rebut the intent (or scienter) element of a False Claims Act challenge.  It is an escape hatch largely designed to capture those situations where the government and a contractor are openly working together, perhaps outside their contractual relationship, to reach a common goal or solution to a problem.  And it is a defense defendants routinely employ to fend off False Claims Act suits.  In US v. Bollinger Shipyards, the Fifth Circuit recently joined a chorus of other circuits in finding there is no place for this defense on a motion to dismiss.
Click here for more.