Finally, Recovery of Attorney Fees for Government Overreach

There are two major, interrelated reasons why government contractors, including Medicare providers, are so afraid of the False Claims Act (FCA). One is the draconian nature of the liability: treble damages plus up to $21,916 in penalties per claim. That means, for example, a knowing overcharge of $5 on a single $20 Medicare claim could generate liability of $21,623—4,395 times the overcharge.

The other reason is the whistleblower bounty—up to 30% of the government’s recovery–that makes contractors vulnerable to qui tam suits by disgruntled former employees and others.

But even by FCA standards the treatment of contractor Circle C Construction was brutal. In a project to build 42 warehouses, a Circle C sub paid two electricians $9,900 less than the Davis-Bacon Act required. The sub settled the claim for $15,000. Nevertheless, the government and a whistleblower sued Circle C for—are you sitting down?–$1.66 million.

Years of litigation later, the government won an award of $14,748—less than 1% of its claim. When Circle C sought reimbursement of its $469,000 in attorneys’ fees, the district court denied the request. But on August 18 the Sixth Circuit reversed and remanded, ruling that Circle C was entitled to recover under the Equal Access to Justice Act.


The case is US ex rel. Wall v. Circle C Construction, No. 16-6169 (6th Cir. Aug. 18, 2017).

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