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Eleventh Circuit affirms summary judgment for defendant in retaliatory relief lawsuit filed by defendant’s former employees under False Claims Act, finding that lawsuit could not be maintained since defendant had not actually filed any false claims with the government

On January 19, 2021, in Hickman, et al. v. Spirit of Athens, Alabama, Inc., No. 19-10945, the Eleventh Circuit Court of Appeals affirmed the district court’s summary judgment in favor of the defendant non-profit organization in a lawsuit filed by former employees of the defendant who claimed that they had been fired for attempting to uncover suspected fraud within the organization.  The plaintiffs filed a lawsuit under the provisions of the federal False Claims Act (FCA), 31 U.S.C. §§ 3729 – 3733, which allow a whistleblower employer to bring a lawsuit for damages arising from retaliatory actions taken by the employer.  Section 3730 of the Act was amended in 2009 and 2010 to expand the protection given to whistleblower employees who engage in “efforts to stop 1 or more violations” of the FCA even if those efforts do not lead to lawsuit or the “distinct possibility” of a lawsuit.  See United States ex rel. Chorches v. Am. Med. Response, Inc., 865 F.3d 71, 95–98 (2d Cir. 2017). However, the Eleventh Circuit concluded that the plaintiffs at a minimum were required to show that the activity they were fired over had something to do with FCA, and in this case, the plaintiffs could not satisfy this test because there were no alleged false claims by the defendant. The Eleventh Circuit noted that payments were made to the defendant by an entity (the Tennessee Valley Authority) that arguably could be termed “federal” in nature, but that the payments occurred automatically (by operation of law) rather than due to representations or claims submitted by the defendant to the federal government.