United States ex rel. Marcus v. Hess - 317 U.S. 537 (1943)
U.S. Supreme Court
United States ex rel. Marcus v. Hess, 317 U.S. 537 (1943)
United States ex rel. Marcus v. Hess
Argued December 10, 1942
Decided January 18, 1943
317 U.S. 537
1. Section 5438 of the Revised Statutes, which subjects to the penalties therein prescribed
"Every person who . . . causes to be presented, for payment . . . any claim upon or against the Government of the United States, . . . knowing such claim to be . . . fraudulent . . ."
held applicable to contractors who, by collusive bidding, obtained contracts with municipalities and school districts of a State for work on federal Public Works Administration projects, and who were paid for their work under the contracts largely with funds granted by the federal Public Works Administrator. P. 317 U. S. 542.
Competitive bidding was a federal requirement; all bidders were fully advised that these were PWA projects, and many, if not most, of the contractors certified that their bids were "genuine, and not sham or collusive." While payment itself, in the sense of the direct transferring of checks, was done in the name of local authorities, monthly estimates for payment were submitted by the contractors to the local sponsors on PWA forms which showed the Government's participation in the work and called attention to other federal statutes prohibiting fraudulent claims. It was a prerequisite to the contractors' payment by the local sponsors that these estimates be filed, transmitted to, and approved by, the PWA authorities. Payment was then made from a joint construction bank account containing both federal and local funds. The work was done under constant federal supervision.
2. R.S. § 5438 is to be construed not with the "utmost strictness," but according to its fair intendment. P. 317 U. S. 541.
3. The substantive language of R.S. § 5438 cannot be said to have one meaning in criminal prosecutions and another in qui tam suits. P. 317 U. S. 542.
4. The first, second, and third clauses of R.S. § 5438, taken together, indicate a purpose to reach any person who knowingly assisted in causing the Government to pay claims which were grounded in fraud, without regard to whether the person had direct contractual relations with the Government. P. 317 U. S. 544.
5. The qui tam action which R.S. §§ 3491-3493 authorizes "any person" to bring for the recovery of the sums which R.S. § 3490 provides shall be forfeited and paid to the United States by violators of R.S. § 5438 is not barred by the fact that the offenders have been indicted and, on pleas of nolo contendere, fined for defrauding the Government in connection with the same transactions; nor by the fact that the complainant may have obtained his information from the indictment, and may have contributed nothing to the discovery of the crime. P. 317 U. S. 545.
6. Considerations of policy in permitting qui tam actions in the circumstances of this case are for Congress, and not the courts. P. 317 U. S. 546.
7. A respondent on certiorari may urge in support of the judgment a ground which was rejected by the District Court and not considered in the Circuit Court of Appeals. P. 317 U. S. 548.
8. Persons who have previously been indicted and convicted under 18 U.S.C. § 88 for conspiracy to defraud the Government, are not subjected to double jeopardy in violation of the Fifth Amendment by a subsequent qui tam action under R.S. §§ 3490-3493, though arising out of the same transactions. P. 317 U. S. 548.
9. The proceedings under R.S. §§ 3490-3493 here involved are remedial, and impose a civil sanction. P. 317 U. S. 549.
10. The proceeding authorized by R.S. §§ 3490-3493 does not lose its quality as a civil action though more than the precise amount of so-called actual damage be recovered. P. 317 U. S. 550.
11. The words "forfeit and pay" in R.S. § 3490 are not inconsistent with the conclusion that the action authorized by §§ 3490-3493 is civil. P. 317 U. S. 551.
12. In the circumstances of this case, the lump sum in damages authorized by R.S. § 3490 ($2,000 forfeit for doing "any" of the acts prohibited by R.S. § 5438) was properly assessed for each Public Works Administration project involved. P. 317 U. S. 552.
127 F.2d 233 reversed.
Certiorari, post, p. 613, to review the reversal of a judgment, 41 F.Supp. 197, against the defendants in a qui tam action under R.S. §§ 3490-3493.