United States v. Neifert-White Company

PETITIONER: United States
RESPONDENT: Neifert-White Company
LOCATION: South Boston Court

DOCKET NO.: 267
DECIDED BY: Warren Court (1967-1969)
LOWER COURT: United States Court of Appeals for the Ninth Circuit

CITATION: 390 US 228 (1968)
ARGUED: Jan 18, 1968
DECIDED: Mar 05, 1968

Facts of the case

Question

Media for United States v. Neifert-White Company

Audio Transcription for Oral Argument - January 18, 1968 in United States v. Neifert-White Company

Earl Warren:

Petitioner, versus Neifert-White Co.

Mr. Martin.

John S. Martin, Jr.:

Mr. Chief Justice and may it please the Court.

This case is here on a writ of certiorari to review a judgment of the Ninth Circuit Court of Appeals, affirming an order of the District Court of the District of Montana, which dismissed the complaint in the government's action under the civil provisions of the False Claims Act against the respondent, Neifert-White Company.

Respondent is a corporation which acts as a dealer in grain storage bins.

The complaint in this action charged or alleged that, on 12 separate occasions in 1959, respondent engaged and made sales to various individuals.

These sales were financed by loans obtained from the Commodity Credit Corporation.

According to the applicable regulations of the Commodity Credit Corporation, the corporation was authorized to issue loans on storage facilities in an amount not to exceed 80% of the purchase price of that facility.

The complaint in this action alleged that, in each of the 12 instances referred to, the respondent submitted to the Commodity Credit Corporations false invoices which fraudulently stated and inflated the purchase price of the bins in question.

The result of this fraud being that, in each of the 12 instances, the Commodity Credit Corporation was caused to issue loans which were, in fact, in access of 80% of the purchase price that was actually paid by the purchases.

In dismissing the complaint in this action, the -- and in affirming that dismissal, the court below ruled that a loan application is not a claim within the meaning of the False Claims Act.

Therefore, the only and the sole issue presented by this case with this Court's decision is whether or not a loan application is a claim within the meaning of the False Claims Act.

It is the Government's position that it is and that the court below was in error in narrowly construing the provisions of the False Claims Act.

The relevant statutory language appears at page 2 of the Government's brief and, without reading all of that language, further Court-- the key language in this statute which is of concern here is that the statute applies to any claim upon or against the Government.

The Government's position that that language means -- what the Court referred to -- this Court referred to in United States v. McNinch when it said that the conception of a claim against the Government, and this language appears at page 10 in our brief, the Court said, “the conception of a claim against the government normally connotes a demand for money over some transfer of property.”

That is the test which we submit should be applied to determine whether or not there has been a claim against the Government.

Is the applicant seeking the payment of government funds for the transfer of government property?

We think that the construction that we urge is consistent with the legislative purpose in enacting the False Claims Act that it is supported by the language of the statute, is in line with the cases decided by this Court and, in addition, that the standard set down by the court below, whether or not there is an assertion of a legal right, is not a meaningful standard which can be clearly applied by either the Justice Department or the courts below.

Looking first at the language of the statute --

Does the court below split on this?

John S. Martin, Jr.:

Well, Mr. Justice Harlan, the answer to that is this.

The Courts -- this is the first case to come before this Court and also in the Courts of Appeals where the question of whether or not a loan is a claim within the meaning of the False Claims Act has been expressly considered by the courts.

It has, in a number of cases, three cases appear in -- that came before this Court, United States v. Rainwater, United States v. Cato, and United States v. Toepleman were here before this Court and the issue raised in those cases was whether the Commodity Credit Corporation was the United States within the meaning of the False Claims Act.

Implicit in the holding that sustained an action under the False Claims Act against those defendants was that a loan is a claim.

So that --

Byron R. White:

Well, is that at --

Was that at issue?

John S. Martin, Jr.:

No, it was not.

Byron R. White:

It wasn't argued or anything?

John S. Martin, Jr.:

It was not, Mr. Justice White, except -- with this exception, that the word -- the meaning of the word “claim” was argued in a slightly different context in a companion case.