Wisconsin Bell, Inc., Petitioner v. United States, ex rel. Todd Heath

The Supreme Court ruled unanimously that reimbursement requests made to the FCC's E-rate program are 'claims' under the False Claims Act. The Court found that because the federal government provides at least a portion of the funding, any fraud involving those funds is subject to federal law. This decision affirms that the government's role in collecting and distributing money satisfies the legal requirement for it to be considered federal funding.

This ruling ensures that companies providing services to schools and libraries cannot escape federal fraud laws just because the money comes from private carrier fees. It protects billions of dollars in subsidies meant to help students and library patrons access modern telecommunications. If a company overcharges these institutions, the government now has a clear path to sue for triple damages.

The case centers on the False Claims Act, a Civil War-era law used to punish people who cheat the government. The Court had to decide if money that passes through the government's hands but starts with private companies still counts as government money. This decision clarifies that the government's regulatory control over a fund is enough to trigger federal fraud protections.

In a 9-0 decision, Justice Elena Kagan wrote the majority opinion for a unanimous Court. Justices Thomas and Kavanaugh wrote concurring opinions (agreements with the result but for different reasons), with Justice Alito joining part of Thomas's opinion.

“Because even a fraction of the funds at issue flowed through the government’s hands, the statute’s plain text is satisfied: the government 'provided' a portion of the money paid to E-Rate participants.”

The Supreme Court held that the False Claims Act applies to the E-rate program because the government provides a portion of its funding.

The case will now return to the lower courts where the whistleblower's lawsuit against Wisconsin Bell can proceed. Wisconsin Bell will have to defend itself against allegations that it overcharged schools and libraries for years. Other federal programs with similar funding structures may also see an increase in fraud-related litigation.

The dispute was whether requests for E-rate money counted as federal 'claims.' Wisconsin Bell argued the money was private, while the whistleblower argued it was provided by the government.

Schools and libraries are better protected from being overcharged for internet and phone services. Companies must now follow the 'lowest-corresponding-price' rule or face heavy federal penalties.

The Court ruled that a request for money is a 'claim' if the government provides 'any portion' of the funds. This applies even if the money originated from private sources.

The case is remanded (sent back) to the lower court for further proceedings. The whistleblower, Todd Heath, can now move forward with his evidence of alleged overcharging.

The decision shows the Court's willingness to read fraud laws broadly to protect public programs. It confirms that the government's regulatory control is a key factor in defining federal funds.