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Guide to United States v. Neifert-White Co., 390 U.S. 228 (1968)
| [1] | SUPREME COURT OF THE UNITED STATES |
| [2] | No. 267 |
| [3] | 1968.SCT.619 <http://www.versuslaw.com>,
390 U.S. 228, 88 S. Ct. 959, 19 L. Ed. 2d 1061 |
| [4] | March 5, 1968 |
| [5] | UNITED STATES v. NEIFERT-WHITE CO. |
| [6] | CERTIORARI TO THE UNITED STATES COURT OF APPEALS FOR THE NINTH CIRCUIT. |
| [7] | John S. Martin, Jr., argued the cause for the United States. With him
on the briefs were Solicitor General Griswold, Assistant Attorney General
Weisl, John C. Eldridge and Robert V. Zener. |
| [8] | Patrick F. Hooks argued the cause for respondent. With him on the brief
was Michael J. Hughes. |
| [9] | Warren, Black, Douglas, Harlan, Brennan, Stewart, White, Fortas; Marshall
took no part in the consideration or decision of the case. |
| [10] | The opinion of the court was delivered by: Fortas |
| [11] | The False Claims Act, which was enacted "broadly to protect the funds
and property of the Government from fraudulent claims, regardless of the
particular form, or function, of the governmental instrumentality upon which
such claims were made," Rainwater v. United States, 356 U.S. 590, 592
(1958), held to apply to the supplying of false information in support of
an application to the Commodity Credit Corporation for a loan. Pp. 229-233. |
| [12] | MR. JUSTICE FORTAS delivered the opinion of the Court. |
| [13] | This is an action by the United States to recover statutory forfeitures
under the False Claims Act. *fn1
The question is whether the Act applies to the supplying of false information
in support of an application to a federal agency, the Commodity Credit Corporation
(CCC), for a loan. The District Court dismissed the action on the ground
that an application for a CCC loan, as distinguished from a claim for payment
of an obligation owed by the Government, is not a "claim" within
the meaning of the Act. The Court of Appeals for the Ninth Circuit affirmed.
We granted certiorari. 389 U.S. 814 (1967). |
| [14] | The CCC is authorized to make loans to grain growers to finance the construction
or purchase of storage facilities. § 4 (h) of the Commodity Credit Corporation
Charter Act, as amended, 62 Stat. 1071, 15 U. S. C. § 714b (h). Pursuant
to its authority under statute, 15 U. S. C. § 714b (d), the CCC has adopted
regulations providing for the granting of loans in amounts not to exceed
80% of the actual purchase price of storage bins. A grain grower who desires
to apply for a loan is required to support his application by an invoice
showing the purchase price and the amount of the down payment made by him.
23 Fed. Reg. 9687. |
| [15] | Since the Government's complaint was dismissed for failure to state a
cause of action, the allegations of the complaint must be taken as true
for present purposes. According to the complaint, respondent is a dealer
in grain storage bins. In 1959, in selling bins to 12 grain farmers, one
of respondent's officers prepared invoices in which the purchase price was
deliberately overstated. The purpose was fraudulently to induce the CCC
to extend loans to respondent's customers in amounts exceeding 80% of the
actual purchase price. The invoices were submitted to the CCC along with
the loan applications, and the agency relied on the overstated purchase
price in determining the amount of loans that were subsequently made. The
United States claims the statutory forfeiture of $2,000 for each of the
12 alleged violations of the Act. |
| [16] | The issue in this case is narrow and precise: Does the False Claims Act
reach "claims" for favorable action by the Government upon applications
for loans or is it confined to "claims" for payments due and owing
from the Government? *fn2
It is respondent's position that the term "claims" in the Act
must be read in its narrow sense to include only a demand based upon the
Government's liability to the claimant. Respondent relies upon United States
v. Cohn, 270 U.S. 339 (1926), and United States v. McNinch, 356 U.S. 595
(1958), to support this narrow reading. |
| [17] | Cohn involved a criminal proceeding under an earlier version of the present
False Claims Act. *fn3
It concerned a fraudulent application to obtain the release of merchandise
which did not belong to the United States and which was being held by the
customs authorities as bailee only. The case did not involve an attempt,
by fraud, to cause the Government to part with its money or property, either
in discharge of an obligation or in response to an application for discretionary
action. The language in the Court's opinion upon which respondent relies
cannot be taken as a decision upon a point which the facts of the case did
not present. *fn4 |
| [18] | In McNinch, the Government brought suit for damages and forfeitures under
the False Claims Act, in its present form, against persons who had filed
fraudulent applications for home-modernization loans with a private bank
which was regularly insured by the Federal Housing Administration against
losses on such loans. The bank granted the loans sought by defendants, which
were "routinely" insured by the FHA. 356 U.S., at 597, n. 4. This
Court held that since FHA "disburses no funds nor does it otherwise
suffer immediate financial detriment," id., at 599, the transaction
was not within the ambit of the False Claims Act. The Court emphasized the
distinction between contracts of insurance against loss such as those involved
in McNinch, and transactions in which the United States pays or lends money.
For purposes of the present case, we need not reconsider the validity of
this distinction. It is sufficient to note that the instant case involves
a false statement made with the purpose and effect of inducing the Government
immediately to part with money. |
| [19] | The precise question presented by this case has never been considered
by the Court. However, both the history and the language of the False Claims
Act, as well as the thrust of our prior decisions, indicate the answer to
our present inquiry. The original False Claims Act was passed in 1863 as
a result of investigations of the fraudulent use of government funds during
the Civil War. Debates at the time suggest that the Act was intended to
reach all types of fraud, without qualification, that might result in financial
loss to the Government. *fn5
In its present form the Act is broadly phrased to reach any person who makes
or causes to be made "any claim upon or against" the United States,
or who makes a false "bill, receipt, . . . claim, . . . affidavit,
or deposition" for the purpose of "obtaining or aiding to obtain
the payment or approval of" such a false claim. In the various contexts
in which questions of the proper construction of the Act have been presented,
the Court has consistently refused to accept a rigid, restrictive reading,
even at the time when the statute imposed criminal sanctions as well as
civil. *fn6
See, e. g., United States ex rel. Marcus v. Hess, 317 U.S. 537 (1943). |
| [20] | On the very day that this Court decided McNinch, it also decided three
cases holding that a fraudulent application for a loan submitted to the
CCC was a claim against the Government of the United States, within the
meaning of the False Claims Act. *fn7
The question debated in those cases was not the meaning of the word "claim,"
but whether the CCC, a wholly owned government corporation, was "the
Government of the United States, or any department or officer thereof"
within the meaning of the statute. In the course of its opinion on this
matter, the Court noted that the objective of Congress in enacting the False
Claims Act "was broadly to protect the funds and property of the Government
from fraudulent claims, regardless of the particular form, or function,
of the government instrumentality upon which such claims were made"
and that "by any ordinary standard the language of the Act is certainly
comprehensive enough to achieve this purpose." Rainwater v. United
States, 356 U.S. 590, 592 (1958). |
| [21] | Analogous reasoning leads us to hold today that the False Claims Act should
not be given the narrow reading that respondent urges. This remedial statute
reaches beyond "claims" which might be legally enforced, to all
fraudulent attempts to cause the Government to pay out sums of money. We
believe the term "claim," as used in the statute, is broad enough
to reach the conduct alleged by the Government in its complaint. Accordingly,
we reverse the judgment of the Court of Appeals and remand the case for
further proceedings in accordance with this opinion. |
| [22] | Reversed and remanded. |
| [23] | JUSTICE MARSHALL took no part in the consideration or decision of this
case. |
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| Opinion Footnotes | |
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| [24] | *fn1
In relevant part, the statute provides as follows: |
| [25] | R. S. § 3490 (1874): |
| [26] | "Any person . . . who shall do or commit any of the acts prohibited
by any of the provisions of section fifty-four hundred and thirty-eight,
Title 'CRIMES,' shall forfeit and pay to the United States the sum of two
thousand dollars, and, in addition, double the amount of damages which the
United States may have sustained by reason of the doing or committing such
act . . . ." |
| [27] | R. S. § 5438 (1874): |
| [28] | "Every person who makes or causes to be made, or presents or causes
to be presented, for payment or approval, to or by any person or officer
in the civil, military, or naval service of the United States, any claim
upon or against the Government of the United States, or any department or
officer thereof, knowing such claim to be false, fictitious, or fraudulent,
or who, for the purpose of obtaining or aiding to obtain the payment or
approval of such claim, makes, uses, or causes to be made or used, any false
bill, receipt, voucher, roll, account, claim, certificate, affidavit, or
deposition, knowing the same to contain any fraudulent or fictitious statement
or entry, or who enters into any agreement, combination, or conspiracy to
defraud the Government of the United States, or any department or officer
thereof, by obtaining or aiding to obtain the payment or allowance of any
false or fraudulent claim, . . . shall be imprisoned at hard labor for not
less than one nor more than five years, or fined not less than one thousand
nor more than five thousand dollars." |
| [29] | The criminal aspect of this statutory scheme has been altered and codified
in 18 U. S. C. § 287 and 18 U. S. C. § 1001; see n. 2, (infra). The civil
(forfeiture) provisions have been codified, unaltered, in 31 U. S. C. §
231, but the above-cited version of these provisions continues to be the
official one. The above-quoted provisions survive only insofar as civil
liability is concerned. |
| [30] | *fn2
No other issue is presented. The statute expressly reaches persons who falsify
a "receipt" "for the purpose of . . . aiding to obtain the
payment or approval of claim." See n. 1, (supra) . |
| [31] | *fn3
See n. 1, (supra) . The criminal aspect of the original False Claims Act
has been carried forward in two separate criminal statutes currently in
force. Section 287 of Title 18 makes it a crime for a person to present
"any claim upon or against the United States, or any department or
agency thereof, knowing such claim to be false, fictitious, or fraudulent." |
| [32] | Section 1001 of the same title subjects to criminal penalties "whoever
. . . knowingly and willfully falsifies, conceals or covers up by any trick,
scheme, or device a material fact, or makes any false, fictitious or fraudulent
statements or representations, or makes or uses any false writing or document
knowing the same to contain any false, fictitious or fraudulent statement
or entry." |
| [33] | Respondent has been indicted under still another criminal statute, 15
U. S. C. § 714m (a), which prohibits the making of false statements for
the purpose of influencing the CCC. |
| [34] | *fn4
"It is clear, in the light of the entire context, that in the present
statute, the provision relating to the payment or approval of a 'claim upon
or against' the Government relates solely to the payment or approval of
a claim for money or property to which a right is asserted against the Government,
based upon the Government's own liability to the claimant." 270 U.S.,
at 345-346. (Emphasis added.) |
| [35] | *fn5
See Cong. Globe, 37th Cong., 3d Sess., 952-958. |
| [36] | *fn6
See n. 1, (supra) . |
| [37] | *fn7
The principal case was Rainwater v. United States, 356 U.S. 590 (1958).
Reference was made to the other two cases, Cato Bros. v. United States and
Toepleman v. United States, in the course of the opinion in McNinch. |
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