Court Rules That Postal Service Covered By False Claims Act

United States District Judge G. Patrick Murphy recently ruled that the United States Postal Service was covered by the False Claims Act, denying a motion to dismiss brought by defendant Midwest Transport, Inc., in the Southern District of Illinois. Midwest Transport argued in its motion that the Postal Reorganization Act exempted the USPS from False Claims Act coverage and that USPS funds are separate from Treasury funds, also nullifying False Claims Act claims. The court ruled that despite some unique characteristics, the USPS was still a federal agency, and its funds were not separate from the Treasury. Page 6 of Judge Murphy’s order states, “There is no exception for the USPS in the plain terms of the False Claims Act. The Act speaks of claims to the United States Government, and the USPS is part of the Executive Branch.”

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