In a July 31, 2012 opinion in Little v. Shell Exploration & Prod. Co., the Fifth Circuit has held that a federal employee may be a "person" under the False Claims Act (FCA) and thus may maintain a qui tam claim.
The relators in this action were auditors for the Minerals Management Service (MMS), an agency within the Department of the Interior. They had been tasked with investigating theft and/or fraud within Defendant Shell's royalty programs, and they claimed to have found evidence that Shell had defrauded the United States out of at least $19 million by taking unauthorized deductions for expenses to gather and store oil on twelve of its offshore drilling platforms. Subsequently, the relators brought a qui tam action in the Southern District of Texas. After protracted discovery, the district court granted summary judgment to Shell on the ground that the auditors could not qualify as "persons" authorized to bring suit under Section 3730(b)(1) of the FCA because they were government employees engaged in the scope of their duties and thus lacked standing to bring their claims.
The Fifth Circuit reversed the grant of summary judgment and remanded for further proceedings. The Court examined the plain language of Section 3730(b)(1), noting that it provides only that a "person" may bring suit under the FCA and does not qualify that term to somehow exclude federal government employees. Further, the Court found instructive that Section 3730(e) enumerates four statutory limits on a court's jurisdiction to hear FCA claims, and does not include any provision restricting a federal employee's right to bring an FCA claim. As such, the court held that Section 3730 does not prevent a federal employee from maintaining an action under the FCA and thus that summary judgment against the auditors was inappropriate.
The decision further widened a developing circuit split as to the issue of whether a federal employee may bring an FCA claim. As the Little court noted, though the Tenth and Eleventh Circuits had previously held that federal employees had standing under the FCA, the First Circuit had held that at least some federal employees could not be qui tam plaintiffs under the FCA.