Wisconsin Bell, Inc. v. United States ex rel. Heath

Background

The dispute involves the E-Rate program, which subsidizes internet and other telecom services for schools and libraries and is funded by payments from telecommunications carriers and administered under FCC rules by a private nonprofit. Todd Heath, an auditor, says Wisconsin Bell charged schools higher prices than similarly situated customers from about 2002 to 2015, violating the FCC’s “lowest corresponding price” rule and causing excessive reimbursement requests to the E-Rate fund. Heath sued under the False Claims Act (FCA), arguing those reimbursement requests were false "claims" because the government provided some of the money sought.

Reasoning

The Court considered whether a reimbursement request counts as a FCA "claim" when the statute requires that the Government "provide . . . any portion" of the money requested. The Court held that in the relevant years the U.S. Treasury transferred more than $100 million into the E-Rate fund—money that came from delinquent carrier contributions collected by federal agencies and from Justice Department settlements and restitution—so the Government had "provided" a portion of the funds. That factual showing was enough to let Heath’s fraud suit proceed. The Court limited its decision to this narrow, money-following ground and did not decide broader questions about the Government’s regulatory role or the fund administrator’s agency status.

Real world impact

The ruling permits FCA suits where Treasury deposits into a program’s fund can be shown. Carriers that billed schools face increased exposure in fraud suits. The opinion is not a final merits determination, and damages and recovery limits were left to lower courts.

Dissents or concurrances

Concurring opinions noted remaining questions: Justice Thomas highlighted potential implications for government control and the Government Corporation Control Act, and Justice Kavanaugh flagged unresolved Article II (constitutional) issues about qui tam suits.