Page:U.S. ex rel. Schutte v. SuperValu.pdf/18

Rh argument is as follows: At common law, misrepresentations of law are not actionable; only misrepresentations of fact are. Because the FCA incorporates the common law of fraud, it embodies that same limitation. And the claims here would have been knowingly false only because respondents correctly understood what “usual and customary” meant. Therefore, respondents conclude, their reports were not false because of any misrepresentation of fact; to the contrary, their claims would have been false only because of their view of the law.

But those premises do not support that conclusion. To be sure, many courts appear to have stated—as a general rule—that misrepresentations of law are not actionable at common law. See Restatement (Second) of Torts §545; W. Keeton, D. Dobbs, R. Keeton, & D. Owen, Prosser and Keeton on Law of Torts §109, pp. 758–759 (5th ed. 1984) (Prosser & Keeton). So, for example, if a defendant had told the plaintiff, “your claim will be dismissed because federal courts lack jurisdiction over claims like that,” that representation might not be actionable as a fraud. See ibid.; Utah Power & Light Co. v. ''Federal Ins. Co.'', 983 F. 2d 1549, 1556 (CA10 1993). Varying rationales appear to have been given for this rule, including that such statements are of mere opinion and that no one could justifiably rely on them. See Dobbs §677, at 688.

For purposes of these cases, we assume without deciding that the FCA incorporates some version of this rule; even then, the rule has significant limits on its own terms. As relevant here, statements involving some legal analysis remain actionable if they “carry with [them] by implication” an assertion about “facts that justify” the speaker’s statement. Restatement (Second) of Torts §545, Comment c; see also Prosser & Keeton §109, at 759. So, as a contrasting example, a person might be liable for falsely stating that “the plumbing work that I did on your house complied with state law.” See Sorenson v. Gardner, 215 Ore. 255, 261, 334