Eric Hare: Business needs a fair shake from Washington on the Federal Claims Act

Eric Hare: Business needs a fair shake from Washington on the Federal Claims Act

By Eric Hare, K-9 Global K9 Protection Group

Small businesses have often felt left behind during the pandemic. I’ve watched some of the most hard-working folks in Alabama quietly struggle to keep their doors open.

Entrepreneurs don’t like to ask for help. While small business owners have sometimes received assistance from Washington during this crisis, most of us would prefer to get through it on our own. One thing we do want, however, is a fair shake and for Washington to not to make things worse. On this front, I am concerned about legislation moving through Congress that would make it easier for trial lawyers to sue small businesses that hold government contracts.

Earlier this year, Senators Chuck Grassley (R-IA) and Patrick Leahy (D-VT) introduced legislation to amend the Federal Claims Act (FCA). The FCA is a tool the government uses to fight fraud. It is a good law that dates back to the Civil War. The statute was made even better in 2016 when the Supreme Court unanimously clarified the law was not intended to be used to punish “garden-variety” contract violations. Instead, it was a weapon to be used to fight real fraud where contractors were intentionally and materially cheating taxpayers.

Senators Grassley and Leahy are seeking to legislatively reverse the Court’s ruling and to lower the high bar the Court put in place. The Grassley amendment would allow lawsuits under the FCA to be brought for minor, technical contract breaches. It would open the floodgates for trial lawyers to attack businesses in pursuit of a judicial jackpot and expose small businesses to costly, frivolous lawsuits.

Just why Senator Grassley and others are looking out for trial lawyers over business owners is anyone’s guess. Data from the Department of Justice makes clear there is no need to amend the FCA. The law works. In the last three years, the Department of Justice has recovered more than $11 billion dollars for taxpayers, suggesting the government has all the tools it needs
to fight fraud.

Ironically, if Senator Grassley succeeds, the victims of new lawsuits are likely to be many of the heroes of the current pandemic. The federal government has spent a lot of money fighting the Coronavirus. Billions have gone to hospitals, health care facilities, medical suppliers, and universities researching new cures. These businesses and public institutions will have a target on their back if the amendments pass, as bad actors in the legal system will see new opportunities to line their pockets by “blowing the whistle” on businesses who forgot to dot an “i” or cross a “t.”

That is not what FCA is for, and Congress should not allow it.

The pandemic has taken a toll on business. It is important that leaders in Washington help.

Senator Grassley and Leahy’s legislation does the opposite. I hope that Alabama’s US Senators stand up for small businesses and oppose this legislation.

Eric Hare is the CEO of Global K9 Protection Group, an Opelika-based company which has grown into the nation’s largest provider of canine cargo screening facility services.