Fourth Circuit Adopts ‘But-For’ Causation For False Claims Act Retaliation Cases

By Andrew J. Henson
Earlier this month in United States ex rel. Cody v. ManTech, Int’l, Corp., 2018 WL 3770141 (4th Cir. 2018), the Fourth Circuit determined that a “but-for” causation standard should apply to retaliation claims under the Federal False Claims Act (“FCA”). 31 U.S.C. § 3729, et seq.

The Fourth Circuit’s opinion scrutinized the FCA’s retaliation protections, which apply in part if an employee is discharged, “because of lawful acts done by the employee, . . . in furtherance of an action under [the FCA] or other efforts to stop 1 or more violations of [the FCA].” 31 U.S.C. § 3730(h)(1) (emphasis added). The court reviewed this statute in conjunction with two significant Supreme Court cases construing similar federal employment statutes, Gross v. FBL Financial Services, Inc., 557 U.S. 167 (2009) (finding “but-for” causation under the ADEA where the statute utilized the phrase “because of”), and Univ. of Texas Southwest Med. Center v. Nassar, 570 U.S. 338 (2013) (finding the phrase “on the basis of” in Title VII retaliation claims required but-for causation). Moreover, by this decision, the Fourth Circuit joins the opinions of the Seventh, Fifth, and Third Circuits on that same issue. See DiFiore v. CSL Behring, LLC, 879 F.3d 71 (3d Cir. 2018) (finding but-for causation under FCA retaliation claims); United States ex rel. King v. Solvay Pharm., Inc., 871 F.3d 318 (5th Cir. 2017) (same); United States ex rel. Marshall v. Woodward, Inc., 812 F.3d 556 (7th Cir. 2015) (same).

The Fourth Circuit’s ruling this month is hardly a surprise, but the decision comes at a time in which the federal appellate courts are regularly hearing retaliation claims under the FCA. Since the enactment of the Fraud Enforcement and Recovery Act of 2009 (“FERA”), Pub. L. 111-21, which significantly broadened protections to employees and others by augmenting the type of conduct protected under the FCA, the precise scope of retaliation protections for a person who complains of or objects to instances of actual or reasonably perceived fraud on the government has been a subject of frequent appellate review. See, O’Hara v. Nika Tech., Inc., 878 F.3d 470 (4th Cir. 2017) (holding that FCA retaliation was not limited to adverse actions taken by an employer); United States ex rel. Carson v. Manor Care, Inc., 851 F.3d 293 (4th Cir. 2017) (finding the Qui Tam relator “first-to-file” rule did not apply to FCA retaliation claims). In particular, the Fourth Circuit’s future opinions as to the contours of FERA’s added protections of “other efforts to stop 1 or more violations” will be of critical importance in determining the reach of the FCA.  See, Farmer v. Eagle Systems and Services, Inc., 654 Fed.Appx. 157 (4th Cir. 2016) (“[T]his Court has not yet articulated the precise scope of FCA-protected activity in light of the 2009 ‘efforts to stop’ amendment[.]”).