One hot-button topic in the world of qui tam litigation under the federal False Claims Act and Virginia Fraud Against Taxpayers Act is the so-called “false certification” of cases. Regular readers will recall that I have covered false certifications many times before on this blog in contexts like the Procurement Integrity Act, and I have also suggested ways in which state and local governments can use certification language to beef up their fraud-fighting efforts.
At the end of the day, false certifications are really all about contractual duties between parties, and contracts generally impose on parties two different levels of obligations. Legal academics sometimes call these “first-order duties” and “second-order duties.” A party’s first-order duty is to perform as he or she agreed. The second-order contractual duty is the real meat of a contract, because that duty entails a responsibility to pay damages if the party breaches.
In our complicated world, however, contracts sometimes impose a third type of obligation on one party or the other. This duty is, basically, a duty to make it easier for the other party to discover a breach of the agreement. Examples of this third category include the duty to create and preserve records of performance, or a duty to allow the other party to examine records or conduct an audit.
And if you ask me, false certifications of compliance fit into this framework also by making it certain that if a person signs on the dotted line, they agree to some pretty hefty penalties and punishments…if I ever become a legal academic (yeah, right!) maybe I will figure out how these things fit together….