On July 26, Senator Chuck Grassley and a bipartisan group of Senators introduced the False Claims Amendments Act of 2021 (“Amendments Act”) to the Senate. While much of the original False Claims Act (“FCA”) is left intact, the Amendments Act purports to address issues that have been litigated and decided by the courts in recent years. 

The Amendments Act has the following components: 


To state a claim under the FCA, a plaintiff must demonstrate that a defendant’s misconduct was material to the government’s decision to pay a claim. The Supreme Court in United Health Services Inc. v. Escobar, held that if the government pays a claim in full despite actual knowledge that certain requirements were violated, that is very strong evidence that those requirements are not material to the government’s decision to pay a claim. 

To address the materiality requirement, the Amendments Act provides that a relator or the government may establish materiality by a preponderance of the evidence. The burden then shifts to the defendant who can rebut materiality by clear and convincing evidence. In a press release, Senator Grassley stated that this provision “clarifies the current law following confusion and misinterpretation of the Supreme Court decision in [Escobar], which has made it all too easy for fraudster to argue that their obvious fraud was not material simply because the government continued payment.” 

Cost Shifting

The Amendments Act also contains a cost shifting provisions whereby if the government declines to intervene in the case, the government can move the court to require a party to reimburse the government for costs associated with discovery. The requesting party will have to reimburse the government for discovery costs, unless it can demonstrate that the discovery is relevant, proportional to the needs of the case, and not unduly burdensome to the government. 

Dismissal Authority

As we have discussed in a prior blog post, the FCA gives the government the right to dismiss a qui tam action. Circuit courts are split as to the level of judicial review to apply to the government’s decision to dismiss a qui tam action. Senator Grassley has been a vocal critic of the government’s dismissal authority and has long vowed to propose legislation addressing the issue.  

The Amendments Act prohibits the government’s unfettered right to dismiss a qui tam action by providing that the government bears the burden of demonstrating the reasons for dismissal and the qui tam plaintiff must have the opportunity to show that the reasons for dismissal are fraudulent, arbitrary and capricious, or contrary to law.  The Amendments Act appears to require an actual evidentiary hearing on any motion to dismiss, which, given Senator Grassley’s vehement opposition to the government’s dismissal authority, is presumably designed to further reduce the government’s exercise of its dismissal authority. 


Currently there is a circuit split as to whether the FCA’s anti-retaliation provision applies only to current, as opposed to current and former, employees. The Amendments Act amends the FCA’s anti-retaliation provision to apply to “any” employee, which would resolve the circuit split.  


If passed, the Amendments Act would apply to all litigation pending at the time of passage as well as all future litigation. The application of the Amendments Act to pending litigation is designed to ensure the act covers the trillions of dollars the government spent on COVID relief. 

Whether the Amendments Act will ultimately pass remains to be seen. However, if passed, defendants stand to face more difficulty and expense in defending against FCA claim. 

The attorneys at Chilivis Grubman represent clients of all types and sizes in connection with False Claims Act investigations and litigation.  If you need assistance with such a matter, please contact us today.