United States ex rel. Kenneth Kraemer v. United Dairies, L.L.P., No. 22-3306 (8th Cir. 2023)Annotate this Case
Kenneth Kraemer and Kraemer Farms, LLC (collectively, “Plaintiffs”) commenced this qui tam action under the False Claims Act (“FCA”), against United Dairies, other dairy farms, and their partners and agents (“Defendants”) alleging that they knowingly filed false crop insurance claims. Plaintiffs’ FCA Complaint alleged that Defendants (1) fraudulently obtained crop insurance payments by falsely reporting a silage-use-only variety of corn as grain and using that false statement to obtain the payments, and (2) were unjustly enriched by receiving the payments. The district court held that Defendants submitted materially false claims but denied Plaintiffs FCA relief because they failed to prove that Defendants knowingly defrauded the United States. However, the court found that certain Defendants had been unjustly enriched and awarded damages to the United States. The United States then filed a post-trial motion urging the district court to vacate or amend its judgment because Plaintiffs do not have standing to seek common law unjust enrichment relief on behalf of the United States. The district court granted the motion and vacated its judgment for lack of subject matter jurisdiction.
The Eighth Circuit affirmed. The court explained that the dismissal of Plaintiffs’ FCA claims must be affirmed even if Plaintiffs are correct that the district court erred in ruling that any violations were not knowing. The court wrote that because it concludes that Defendants in submitting Acreage Reporting Forms supporting their crop insurance applications did not submit materially false claims for crop insurance payments, Plaintiffs contention -the district court applied the wrong legal standard in denying FCA relief on other grounds is of no moment.
Court Description: [Loken, Author, with Colloton and Erickson, Circuit Judges] Civil case - False Claims Act. Plaintiffs brought this qui tam action under the False Claims Act, alleging that defendants had knowingly filed false crop insurance claims. After a nine-day trial, the district court found that defendants had submitted materially false claims, but that plaintiff had failed to prove defendants knowingly defrauded the United States; the district court also concluded that the defendants had been unjustly enriched and awarded damages to the United States; the district court later vacated this award on the motion of the United States for lack of subject matter jurisdiction. Plaintiffs appeal. With respect to plaintiffs' claim that the district court erred in finding they had not proved defendants knowingly defrauded the U.S., the court need not reach this issue because on this trial record, plaintiffs failed to prove defendant caused a false or fraudulent claim to be submitted for payment; in submitting Acreage Reporting Forms supporting their crop insurance applications, defendants not submit materially false claims for crop insurance payments; the United States, which had not joined the action, was the real party in interest and could bring to the court's attention the fact that the plaintiffs lacked statutory standing to seek the relief they were requesting on behalf of the United States. Judge Colloton, concurring in the judgment. [ September 19, 2023 ]