The Fifth Circuit May Expand a Relator's Ability to Bring Qui Tam Actions Even With Uncertainty of Damages

The Fifth Circuit is currently hearing a case which, depending on the outcome, could greatly expand an individual’s ability to bring qui tam actions under the False Claims Act (“FCA”) by allowing a relator to sue a company for unassessed damages based solely on a statutory violation. The case currently pending before the Fifth Circuit is Simoneaux v. E.I. DuPont De Numours & Co., No. 16-30141. The Plaintiff, Jeffrey Simoneaux, is a former DuPont employee who has alleged that DuPont avoided paying environmental penalties to the government by knowingly concealing its reporting obligations under the Toxic Substance Control Act (“TSCA”).[1] The Plaintiff has alleged that DuPont’s actions gives rise to a “reverse false claim.”[2]

The issue the Fifth Circuit must resolve is whether, based on the 2009 amendments, an individual can bring a claim under the FCA based solely on the violation of a statute, even when the prosecuting agencies of the government have exercised their discretion not to pursue the alleged violation. What makes this situation even more unique is the fact the federal government is against the lawsuit brought by the relator. In this case, the Department of Justice has filed an Amicus Brief with the Fifth Circuit supporting DuPont’s position in the matter.[3] If Simoneaux prevails, it could potentially allow individual citizens to step into the shoes of prosecuting agencies and file lawsuits for violation of the FCA for unassessed damages, even when the federal government has exercised its discretion not to act, and is against the lawsuit.

Specifically, DuPont operates a facility located in Burnside, Louisiana which manufactures sulfur trioxide (SO3), sulfur dioxide (SO2), and sulfuric acid.[4] Simoneaux filed a lawsuit against DuPont, under the qui tam provision of the FCA, alleging that DuPont failed to comply with its obligation under the TSCA to report the release of SO2, SO3, and sulfuric acid at its Burnside Plant to the Environmental Protection Agency (“EPA”).[5] There is no dispute that DuPont had periodic chemical leaks at its facility, nor is anyone disputing that exposure to these chemicals can cause adverse human health effects.[6] Simoneaux argues that DuPont had “substantial risk information” which triggered its reporting obligation under Section 8(e) of the TSCA.[7] In this case, Simoneaux has brought a “reverse false claim” action under the FCA.[8]

The FCA prohibits an individual from knowingly submitting a false claim to the government for payment.[9] An individual or a company can be subject to liability for a “reverse” FCA violation if they knowingly or improperly avoid an obligation owed to the federal government.[10]

The FCA can be enforced by a lawsuit initiated by the federal government or through a qui tam action brought by a private individual, referred to as a “relator.”[11] In this case, Jeffrey M. Simoneaux filed a lawsuit as a relator against DuPont, arguing that DuPont violated the “reverse” provision of the FCA when it failed to report the sulfur trioxide leaks at the DuPont plant in Burnside, Louisiana.[12] Simoneaux argues that DuPont violated the “reverse” provisions of the FCA by concealing or avoiding its “obligations” to report the gas leaks under Section 8(e) of the TSCA.[13]

Section 8(e) requires chemical manufacturers to immediately report to the EPA when it has information that a substance or mixture presents a substantial health or environmental risk, unless the company already knows the EPA has been adequately informed of the risk.[14] Under the TSCA, the EPA can assess fines up to $37,500 for each failure to report violation, and each day the failure to report continues is assessed as a separate violation.[15]

DuPont has argued that an unassessed statutory penalty cannot serve as the basis for a “reverse” FCA violation.[16] In previous decisions, the Fifth Circuit held the “reverse false claims act does not extend to the potential or contingent obligations to pay the government fines or penalties which have not been levied or assessed.”[17] However, Simoneaux argues that in 2009 Congress amended the FCA to extend the definition of the term “obligation” to include established duties arising from the statutes, and the FCA now provides a claim for fraudulent concealment of an obligation.[18] While Simoneaux and DuPont dispute Congress’ intent behind the 2009 amendments to the FCA, if Simoneaux prevails then we can expect to see much more FCA litigation in the future.

[1] David Couillard, DuPont Appeal May Clarify What Constitutes a Reverse False Claim “Obligation,” Dorsey Always Ahead, January 28, 2016 available at

[2] Id.

[3] Brief for United States Department of Justice as Amici Curiae Supporting Appellant, Simoneaux v. E.I. DuPont De Numours & Co., at 1 (2016) (No. 16-30141) (citing 31 U.S.C. § 3729(a)(1)(A)).

[4] Simoneaux v. E.I. Du Pont de Numours & Co., No. 12-219-SDD-SCR (M.D. La. Nov. 10, 2014).

[5] Id. at 1-2.

[6] Id. at 2.

[7] Id. at 2.

[8] Id. at 4.

[9] Brief for United States Department of Justice as Amici Curiae Supporting Appellant, Simoneaux v. E.I. DuPont De Numours & Co., at 1 (2016) (No. 16-30141) (citing 31 U.S.C. § 3729(a)(1)(A)).

[10] Id. at 1-2 (citing 31 U.S.C. § 3729(a)(1)(G)).

[11] Id. at 2 (citing Vermont Agency of Natural Res. v. United States ex. Rel. Stevens, 529 U.S. 765, 769-78 (2000)).

[12] Id. at 3.

[13] Id. at 3.

[14] Id. at 3 (citing 15 U.S.C. § 2607(e)).

[15] Id. at 3-4 (quoting 15 U.S.C. § 2615(a)(1)).

[16] Id. at 4.

[17] United States ex rel. Marcy v. Rowan Cos., 520 F.3d 384, 391 (5th Cir. 2008) (quoting United States ex rel. Bain v. Georgia Gulf Corp., 386 F.3d 648, 657 (5th Cir. 2004)).

[18] Brief of Relator-Appellee Jeffrey M. Simoneaux at 4, Simoneaux v. E.I. DuPont De Numours & Co., No. 16-30141. (5th Cir. July 18, 2016) (citing 31 U.S.C. § 3729(a)(1)(G); 31 U.S.C. § 3729(b)(3)).