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What is the significance of the UNITED STATES ex rel. MARCUS v. HESS et al. case?

The UNITED STATES ex rel.

MARCUS v.

HESS et al.

case established that the federal government could recover damages even when the fraud was perpetrated through local governments, rather than directly against the federal government.

The case allowed private individuals to sue on behalf of the government under the Revised Statutes sections 5438 and 3490-3493 (now 31 U.S.C.

§§ 231-234), which are the qui tam provisions of the False Claims Act.

The Supreme Court's 6-1 decision in 1943 reversed the lower court's ruling, allowing Marcus's qui tam lawsuit against Hess et al.

to proceed.

The Court's decision recognized that qui tam actions were an "effective means of preventing frauds on the Treasury" by allowing private citizens to act as whistleblowers.

The case established that the measure of damages in a collusive bidding case is the government's "out-of-pocket" payment for each affected project, rather than the "benefit of the bargain" approach.

The Court's decision in MARCUS v.

HESS paved the way for the modern False Claims Act, which has been used to recover billions of dollars in fraudulent government payments.

The case was a significant expansion of the qui tam provisions, as previous decisions had limited their application to only direct claims against the federal government.

The case is considered a landmark decision in establishing the government's ability to recover damages for indirect harms caused by fraudulent schemes targeting public funds.

The decision in MARCUS v.

HESS was cited in the 2005 Supreme Court case GRAHAM COUNTY SOIL AND WATER CONSERVATION DISTRICT v.

UNITED STATES ex rel.

WILSON, which further clarified the scope of the False Claims Act's qui tam provisions.

The case demonstrated the importance of private citizens acting as "relators" to supplement the government's own efforts in detecting and prosecuting fraud against public programs.

MARCUS v.

HESS was a significant victory for the government in its fight against war profiteering and other fraudulent schemes during World War II.

The case has had a lasting impact on the development of the False Claims Act and the use of qui tam actions to combat fraud involving government funds.

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