Alleged Environmental Violation/False Claims Act: U.S. District Court Considers Application of Implied False Certification Theory

by Mitchell, Williams, Selig, Gates & Woodyard, P.L.L.C.

Mitchell, Williams, Selig, Gates & Woodyard, P.L.L.C.

Download PDF

A United States District Court (Eastern District-Pennsylvania) (“Court”) addressed a qui tam action filed by Gary Cressman (“Cressman”) under the federal False Claims Act (“FCA”) in connection with an alleged environmental regulatory violation at a waste transfer station in Souderton, Pennsylvania. See Gary Cressman v . Solid Waste Services, Inc. t/d/p/a J.P Macaro & Sons 2018 WL1693349 (April 6, 2018).

Defendant Solid Waste Services, Inc. (“SWS”) is alleged to have submitted false claims for payment to various federal agencies with which it had service contracts without disclosing the alleged improper discharge of leachate.

Plaintiff Cressman and Defendant SWS filed Cross-Motions (“Motions”) for Summary Judgment.

In addressing the motions, the Court described SWS as providing:

. . .Integrated Solid Waste Services to the public, including the collection, transportation, disposal and recycling of residential, commercial, industrial and municipal non-hazardous solid waste.

The geographic area served included Pennsylvania. Customers include the United States Government. Various SWS divisions perform trash collection services for several federal agencies.

Plaintiff Cressman worked at SWS’s Souderton, Pennsylvania facility. This facility included a waste-transfer station (“TS”) permitted and regulated by the Pennsylvania Department of Environmental Protection (“DEP”). The

TS generates leachate whose collection and disposal is regulated by the state environmental agency. The TS leachate was collected and transported off site for treatment at a publicly-owned waste water treatment plant.

Cressman is described as having been a roll-off truck driver hired by SWS in 2011. His duties included trash collection services.

Cressman is stated to have observed the regulatory violation by the employees at the TS. The violations are described as the discharge of TSA leachate on a grassy area of SWS property.

Cressman reported his observations of the leachate discharge to DEP. This reporting triggered a subsequent inspection of the SWS property by agency representatives. The DEP representatives were stated to have interviewed the two employees about the discharge.

Cressman apparently conveyed to SWS personnel that the two employees statements were not consistent with his own observations. Further, he is stated to have advised SWS that the observations would be conveyed to other legal authorities. His observations were later provided to DEP. SWS subsequently terminated the two employees involved with the discharge.

DEP concluded that the violations related to the leachate discharge had been corrected. The agency assessed a civil penalty of $37,000.00.

Plaintiff filed the qui tam Complaint 17 days after the penalty was assessed. The FCA claim was filed under what is described by the Court as an “implied false certification theory” of liability. The Court states that:

Generally, under this theory of liability, entity is liable for falsely representing itself as having complied with applicable regulations in connection with its submission of a claim or invoice for payment from federal funds.

The FCA’s qui tam provisions permit a private person to bring a civil action on behalf of the United States against any individual or company who has knowingly presented a false or fraudulent claim for payments to the United States. The statute imposes liability upon a person who knowingly presents or causes to be presented a false or fraudulent claim for payment or approval or who knowingly makes, uses, or causes to be made or used, a false record or statement material to a false or fraudulent claim.

The Court states that two categories of FCA false claims are available to Plaintiffs. They include:

  • A factually false claim
  • A legally false claim

Cressman’s claim is characterized as a “legally false claim”.

A claim is legally false when a claimant knowingly falsely certifies that it complied with the statute or regulation, the compliance with which is a condition or precondition for a government of payment.

The Cressman claim is based on what is described as a “false certification theory liability”. This theory requires that the plaintiff establish that the defendant knowingly made a false claim for payment of federal funds from a federal agency without disclosing and is in violation of a regulation or law that affects its eligibility for payment and that is a precondition for payment by the government. It must be shown that if the Government had been aware of the defendant’s violation of the laws and regulations that are the bases of the plaintiff’s FCA claims it would not have paid the defendant’s claims.

A misrepresentation about compliance with a statutory, regulatory, or contractual requirement is required to be material to the Government’s payment decision in order to be actionable under the FCA. The Court cites a United States Supreme Court case describing the materiality requirement as being “demanding” and “rigorous.” Such material representation is defined as one that goes “to the very essence of the bargain.” See Universal Health Services, 136 S. Ct. 1989 (2016).

SWS stated that Cressman failed to make an evidentiary showing sufficient to establish the existence of elements necessary to the FCA cause of action based on an implied false certification theory of liability. The company argued that Cressman had not shown and could not show an alleged failure to disclose a February 25, 2013 Discharge Incident/Violation when it submitted invoices to the Federal Agency for waste removal services it performed for those agencies was material to SWS’s right to payment for those Federal Agencies. It further asserted that the violation was not connected in any way to the waste disposal services that were contracted to and performed for the Federal Agencies.

The Court notes that under the undisputed facts the February 25, 2013 Discharge Incident/Violation at the TS was not remotely related to SWS’s service contracts with the Federal Agencies. Instead, the SWS contractual relationship with the Federal Agencies was limited to picking up and transporting solid waste to various landfills for disposal. TS played no role in the provision of these services.

The Court determined Cressman presented no evidence that the Federal Agencies would not have paid SWS’s services had they known of the February 25, 2013 Discharge Incident/Violations at the TS. No connection or nexus between the regulatory violation at the TS and the waste collection SWS performed for the Federal Agencies was identified.

Cressman contended that SWS’s compliance with all federal environmental public safety laws was an express or implied condition of the company’s waste removal service contracts with the Government. He argued that SWS:

. . . violated the FCA by submitting invoices to the Federal Agencies for payment without disclosing its violation of various environmental laws/regulations arising out of the February 25, 2013 Discharge Incident/Violation.

The Court concludes that Cressman “overstates the scope of existing law with respect to claims under the FCA, particularly with respect to the materiality requirement for any such claim.”

SWS’s Motion for Summary Judgment was granted.

A copy of the opinion can be downloaded below.

Written by:

Mitchell, Williams, Selig, Gates & Woodyard, P.L.L.C.

Mitchell, Williams, Selig, Gates & Woodyard, P.L.L.C. on:

Readers' Choice 2017
Reporters on Deadline

"My best business intelligence, in one easy email…"

Your first step to building a free, personalized, morning email brief covering pertinent authors and topics on JD Supra:
Sign up using*

Already signed up? Log in here

*By using the service, you signify your acceptance of JD Supra's Privacy Policy.
Custom Email Digest
Privacy Policy (Updated: October 8, 2015):

JD Supra provides users with access to its legal industry publishing services (the "Service") through its website (the "Website") as well as through other sources. Our policies with regard to data collection and use of personal information of users of the Service, regardless of the manner in which users access the Service, and visitors to the Website are set forth in this statement ("Policy"). By using the Service, you signify your acceptance of this Policy.

Information Collection and Use by JD Supra

JD Supra collects users' names, companies, titles, e-mail address and industry. JD Supra also tracks the pages that users visit, logs IP addresses and aggregates non-personally identifiable user data and browser type. This data is gathered using cookies and other technologies.

The information and data collected is used to authenticate users and to send notifications relating to the Service, including email alerts to which users have subscribed; to manage the Service and Website, to improve the Service and to customize the user's experience. This information is also provided to the authors of the content to give them insight into their readership and help them to improve their content, so that it is most useful for our users.

JD Supra does not sell, rent or otherwise provide your details to third parties, other than to the authors of the content on JD Supra.

If you prefer not to enable cookies, you may change your browser settings to disable cookies; however, please note that rejecting cookies while visiting the Website may result in certain parts of the Website not operating correctly or as efficiently as if cookies were allowed.

Email Choice/Opt-out

Users who opt in to receive emails may choose to no longer receive e-mail updates and newsletters by selecting the "opt-out of future email" option in the email they receive from JD Supra or in their JD Supra account management screen.


JD Supra takes reasonable precautions to insure that user information is kept private. We restrict access to user information to those individuals who reasonably need access to perform their job functions, such as our third party email service, customer service personnel and technical staff. However, please note that no method of transmitting or storing data is completely secure and we cannot guarantee the security of user information. Unauthorized entry or use, hardware or software failure, and other factors may compromise the security of user information at any time.

If you have reason to believe that your interaction with us is no longer secure, you must immediately notify us of the problem by contacting us at In the unlikely event that we believe that the security of your user information in our possession or control may have been compromised, we may seek to notify you of that development and, if so, will endeavor to do so as promptly as practicable under the circumstances.

Sharing and Disclosure of Information JD Supra Collects

Except as otherwise described in this privacy statement, JD Supra will not disclose personal information to any third party unless we believe that disclosure is necessary to: (1) comply with applicable laws; (2) respond to governmental inquiries or requests; (3) comply with valid legal process; (4) protect the rights, privacy, safety or property of JD Supra, users of the Service, Website visitors or the public; (5) permit us to pursue available remedies or limit the damages that we may sustain; and (6) enforce our Terms & Conditions of Use.

In the event there is a change in the corporate structure of JD Supra such as, but not limited to, merger, consolidation, sale, liquidation or transfer of substantial assets, JD Supra may, in its sole discretion, transfer, sell or assign information collected on and through the Service to one or more affiliated or unaffiliated third parties.

Links to Other Websites

This Website and the Service may contain links to other websites. The operator of such other websites may collect information about you, including through cookies or other technologies. If you are using the Service through the Website and link to another site, you will leave the Website and this Policy will not apply to your use of and activity on those other sites. We encourage you to read the legal notices posted on those sites, including their privacy policies. We shall have no responsibility or liability for your visitation to, and the data collection and use practices of, such other sites. This Policy applies solely to the information collected in connection with your use of this Website and does not apply to any practices conducted offline or in connection with any other websites.

Changes in Our Privacy Policy

We reserve the right to change this Policy at any time. Please refer to the date at the top of this page to determine when this Policy was last revised. Any changes to our privacy policy will become effective upon posting of the revised policy on the Website. By continuing to use the Service or Website following such changes, you will be deemed to have agreed to such changes. If you do not agree with the terms of this Policy, as it may be amended from time to time, in whole or part, please do not continue using the Service or the Website.

Contacting JD Supra

If you have any questions about this privacy statement, the practices of this site, your dealings with this Web site, or if you would like to change any of the information you have provided to us, please contact us at:

- hide
*With LinkedIn, you don't need to create a separate login to manage your free JD Supra account, and we can make suggestions based on your needs and interests. We will not post anything on LinkedIn in your name. Or, sign up using your email address.