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UNITED STATES v. NEIFERT-WHITE CO.

decided: March 5, 1968.

UNITED STATES
v.
NEIFERT-WHITE CO.



CERTIORARI TO THE UNITED STATES COURT OF APPEALS FOR THE NINTH CIRCUIT.

Warren, Black, Douglas, Harlan, Brennan, Stewart, White, Fortas; Marshall took no part in the consideration or decision of the case.

Author: Fortas

[ 390 U.S. Page 228]

 MR. JUSTICE FORTAS delivered the opinion of the Court.

This is an action by the United States to recover statutory forfeitures under the False Claims Act.*fn1 The

[ 390 U.S. Page 229]

     question is whether the Act applies to the supplying of false information in support of an application to a federal agency, the Commodity Credit Corporation (CCC), for a loan. The District Court dismissed the action on the ground that an application for a CCC loan, as distinguished from a claim for payment of an obligation owed by the Government, is not a "claim" within the meaning of the Act. The Court of Appeals for the Ninth Circuit affirmed. We granted certiorari. 389 U.S. 814 (1967).

The CCC is authorized to make loans to grain growers to finance the construction or purchase of storage facilities. § 4 (h) of the Commodity Credit Corporation Charter Act, as amended, 62 Stat. 1071, 15 U. S. C. § 714b (h). Pursuant to its authority under statute, 15 U. S. C. § 714b (d), the CCC has adopted regulations providing for the granting of loans in amounts not to exceed 80% of the actual purchase price of storage bins. A grain grower who desires to apply for a loan is required to support his application by an invoice showing the purchase

[ 390 U.S. Page 230]

     price and the amount of the down payment made by him. 23 Fed. Reg. 9687.

Since the Government's complaint was dismissed for failure to state a cause of action, the allegations of the complaint must be taken as true for present purposes. According to the complaint, respondent is a dealer in grain storage bins. In 1959, in selling bins to 12 grain farmers, one of respondent's officers prepared invoices in which the purchase price was deliberately overstated. The purpose was fraudulently to induce the CCC to extend loans to respondent's customers in amounts exceeding 80% of the actual purchase price. The invoices were submitted to the CCC along with the loan applications, and the agency relied on the overstated purchase price in determining the amount of loans that were subsequently made. The United States claims the statutory forfeiture of $2,000 for each of the 12 alleged violations of the Act.

The issue in this case is narrow and precise: Does the False Claims Act reach "claims" for favorable action by the Government upon applications for loans or is it confined to "claims" for payments due and owing from the Government?*fn2 It is respondent's position that the term "claims" in the Act must be read in its narrow sense to include only a demand based upon the Government's liability to the claimant. Respondent relies upon United States v. Cohn, 270 U.S. 339 (1926), and United States v. McNinch, 356 U.S. 595 (1958), to support this narrow reading.

Cohn involved a criminal proceeding under an earlier version of the present False Claims ...


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