Former employees of a government contractor brought a qui tam action, alleging that the contractor repeatedly violated its contractual and regulatory obligations by improperly disposing of hazardous waste and falsely representing that it had fulfilled its obligations. The district court dismissed the action because, among other things, the relators failed to identify a particular invoice submitted to the government by the contractor.
In U.S. ex rel. Lemmon v. Envirocare of Utah, 2010 WL 3025021 (10th Cir. Aug. 4, 2010), the Tenth Circuit reversed this decision and held that relators do not need to identify particular invoices. The Court of Appeals instead held that relators “need only show the specifics of a fraudulent scheme and provide an adequate basis for a reasonable inference that false claims were submitted as part of the scheme.”
This decision is an important step forward for qui tam actions in this circuit. The government relies on relators to detail the specifics of “fraudulent schemes.” When courts dismiss qui tam actions simply because the relators do not have access to the underlying invoices, they silence potential actions that would have unmasked fraudulent activity.