Originally referred to as the “Lincoln Law,” the FCA was passed by Congress during the Civil War in 1863. To prevent the fraudulent sale of lame horses, moth-eaten blankets, and rancid food to the Union army, the Act initially sought to deter wartime profiteering.
1943 and 1986 Amendments
In 1943, the FCA was significantly weakened by congressional amendments in order to combat several whistleblower lawsuits that were deemed “parasitic.” However, in 1986, Congress amended the FCA again due to several highly publicized stories of defense contract fraud, including $900 toilet seats and $500 hammers. The 1986 amendments greatly expanded the scope of Act, most notably by increasing the relator’s reward share and including employee whistleblower protections.
More than two decades later, the Fraud Enforcement and Recovery Act (FERA) of 2009 again amended the FCA to make the law more favorable to qui tam plaintiffs. Anticipating fraud associated with massive government spending and stimulus efforts, the 2009 amendments expanded the scope of the FCA to allow suits regarding improper use of government funds under stimulus packages such as the Troubled Assets Relief Program.
In 2010, the Patient Protection and Affordable Care Act (PPACA) amended the FCA to further bolster its effectiveness. One important revision limited the dismissal of qui tam actions based on the public disclosure bar, and relaxed the rule that relators have actual, first-hand knowledge.