Second Circuit – False Claims Act: United States ex rel. Billington v. HCL Techs. Ltd.

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United States Court of Appeals for the Second Circuit

False Claims Act — Reverse claim — H-1B visas

United States ex rel. Billington v. HCL Techs. Ltd.

22-1854-cv

Judges Walker, Parker, and Bianco

Background: The plaintiffs-relators filed a qui tam action alleging that the defendants defrauded the United States when they applied for and secured visas for foreign employees to work in the U.S. and avoid paying higher salaries to American citizens. They specifically allege violations of the False Claims Act when the defendant avoided an obligation to pay government tax revenues when it underpaid its H-1B visa workers, and avoided an obligation to pay the government visa application fees when it applied for less expensive visas for workers who required the more expensive H-1B visas. The plaintiffs-relators appealed from the dismissal of their complaint.

Ruling: The Second Circuit affirmed. The court held that the plaintiffs-relators failed to state a plausible claim that the defendant decreased or avoided an established obligation to pay money to the U.S. in the form of higher taxes on the higher visa application fees. The court noted that there was no obligation to pay federal payroll taxes on higher wages than those the defendant actually paid as the defendant never paid any wages that supported such taxes. Furthermore, there was no obligation to pay a more expensive H-1B visa application.

Daniel Kotchen, of Kotchen & Low, for the plaintiffs-relators-appellants; David L. Schenberg, of Ogletree, Deakins, Nash, Smoak & Stewart, for the defendants-appellees.

Oral argument audio