A
research project director sued a county-operated hospital where she oversaw
a drug research program, claiming that the hospital violated the False Claims
Act by submitting false statements to the federal government for the purpose
of obtaining grant funds. The county argued that, like states, local governments
were not "persons" under the False Claims Act. Prior case law had
excluded states from prosecution under the False Claims Act on the basis that
states cannot be subjected to the punitive, treble damages allowed under the
Act. The United States Supreme Court held that local governments are "persons"
under the False Claims Act and, therefore, the municipal corporation that operated
the hospital in this case could be sued.