Harper v. Muskingum Watershed Conservancy District

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In 1949, the federal government deeded a large parcel to the Muskingum Watershed Conservancy District (MWCD), the entity responsible for controlling flooding in eastern Ohio. The deed provided that the land would revert to the United States if MWCD alienated or attempted to alienate it, or if MWCD stopped using the land for recreation, conservation, or reservoir-development purposes. MWCD sold rights to conduct hydraulic fracturing (fracking) operations on the land. Fracking opponents discovered the deed restrictions and, arguing that MWCD’s sale of fracking rights triggered the reversion, filed a “qui tam” suit under the False Claims Act, 31 U.S.C. 3729. alleging that MWCD was knowingly withholding United States property from the government. The Sixth Circuit affirmed dismissal of the claim. The court noted recent legislative amendments that replace a fraudulent-intent requirement in two FCA provisions with a requirement that the defendant acted “knowingly,” but concluded that the plaintiffs failed to state a claim even under the more lenient scienter requirement; they did not specify whether or how MWCD knew or should have known that it was in violation of the deed restrictions, such that it knew or should have known that title to the property reverted to the United States. View "Harper v. Muskingum Watershed Conservancy District" on Justia Law