Whistleblower/Qui Tam Lawsuits

The federal False Claims Act provides for triple damages and a penalty from $5,500 to $11,000 per claim for anyone who knowingly submits or causes the submission of a false or fraudulent claim to the United States. The statute, first passed in 1863, includes an ancient legal device called a "qui tam" provision (from a Latin phrase meaning "he who brings a case on behalf of our lord the King, as well as for himself"). This provision allows a private person, known as a "relator," to bring a lawsuit on behalf of the United States, where the private person has information that the named defendant has knowingly submitted or caused the submission of false or fraudulent claims to the United States. The relator need not have been personally harmed by the defendant’s conduct. Relators may be awared a portion (15% to 25%) of the government's recovery resulting from the False Claims Act lawsuit. Relators also may bring suit under the False Claims Act for retaliation related to their lawful attempts to prevent violations of the Act.  Over $18.5 billion in healthcare related funds have been recovered through False Claims Act settlements and judgements.
If your practice is in need of regulatory compliance consulting or health law services in order to help lower your risk of being subjected to qui tam lawsuits, contact John Little, Attorney at Law, PC.

Public Disclosure and Original Source

Relator FCA lawsuits will be dismissed if they're based on allegations or transactions which are the subject of a civil suit or a civil monetary penalty (CMP) proceeding in which the government is already a party.  A relator FCA lawsuit may be dismissed (if the dismissal is opposed by the government) in cases where substantially the same allegations or transactions underlying the relator suit were publicly disclosed:
  • in a federal criminal, civil, or administrative hearing (other than civil suit or CMP proceeding) in which the government or its agent is already a party,
  • in a congressional, Government Accountability Office (GAO), or other federal report, hearing, audit, or investigation
  • in the news media, unless the action is brought by the Attorney General or the person bringing the action is an original source of the information.
An original source is an individual who either (i) prior to a public disclosure, has voluntarily disclosed to the government the information upon which the allegations or transactions in the FCA suit are based, or (ii) has knowledge that is independent of and materially adds to the publicly disclosed allegations or transactions, and who has voluntarily provided the information to the government before filing the FCA lawsuit.

Remedies for Retaliation

An employee, contractor or agent of a provider submitting false claims is entitled to certain protections under the False Claims Act, in cases where the individual is discharged, demoted, suspended, threatened, harassed or in any other manner discriminated against because of his or her lawful acts pursued in furtherance of efforts to stop violations of the False Claims Act.
Relief to which the individual retaliated against may be entitled includes:
  • reinstatement to the same position with the same seniority status,
  • double back pay, plus interest, and
  • compensation for any special damages sustained as a result of the discrimination, including litigation costs and reasonable attorneys' fees.

Settlement and Judgement Statistics

FCA Settlement and Judgement Statistics - HHS related

Filing Process

The False Claims Act has a very detailed process for the filing and pursuit of these claims. The qui tam relator must be represented by an attorney. The qui tam complaint must, by law, be filed under seal, which means that all records relating to the case must be kept on a secret docket by the Clerk of the Court. Copies of the complaint are given only to the United States Department of Justice, including the local United States Attorney, and to the assigned judge of the District Court. The Court may, usually upon motion by the United States Attorney, make the complaint available to other persons. The complaint, and all other filings in the case, remain under seal for a period of at least sixty days. At the conclusion of the sixty days, the Department of Justice must, if it wants the case to remain under seal, file a motion with the District judge showing good cause why the case should remain under seal. In the usual course, these motions request an extension of the seal for six months at a time. In addition to the complaint filed with the District Court, the relator through his or her council must serve upon the Department of Justice a disclosure statement containing substantially all the evidence in the possession of the relator about the allegations set forth in the complaint. This disclosure statement is not filed in any court, and is not available to the named defendants.
After the relator’s complaint is unsealed, the relator through his or her attorney has the obligation under the Federal Rules of Civil Procedure to serve its complaint upon each named defendant within 120 days. Each named defendant then has the duty to file an answer to the complaint or a motion within 20 days after service of the government’s complaints. Discovery under the Federal Rules of Civil Procedure begins shortly thereafter.

Department of Justice Investigation

Under the False Claims Act, the Attorney General (or a Department of Justice attorney) must investigate the allegations of violations of the False Claims Act. The investigation usually involves one or more law enforcement agencies (such as the OIG or FBI). In some investigations where state agencies are alleged victims, state attorneys general with expertise and interest will participate in the investigation and work closely with the federal agencies. The investigation will often involve specific investigative techniques, including subpoenas for documents or electronic records, witness interviews, compelled oral testimony from one or more individuals or organizations, and consultations with experts. If there is a parallel criminal investigation, search warrants and other criminal investigation tools may be used to obtain evidence as well. At the conclusion of the investigation, or earlier if directed by the Court, the Department of Justice must choose one of three options named in the False Claims Act (but in practice, there is a fourth and fifth option for the Department of Justice):
  1. Intervene in one or more counts of the pending qui tam action. This intervention expresses the Government’s intention to participate as a plaintiff in prosecuting that count of the complaint. Fewer than 25% of filed qui tam actions result in an intervention on any count by the Department of Justice.
  2. Decline to intervene in one or all counts of the pending qui tam action. If the United States declines to intervene, the relator and his or her attorney may prosecute the action on behalf of the United States, but the United States is not a party to the proceedings apart from its right to any recovery. This option is frequently used by relators and their attorneys.
  3. Move to dismiss the relator’s complaint, either because there is no case, or the case conflicts with significant statutory or policy interests of the United States.
  4. Settle the pending qui tam action with the defendant prior to the intervention decision. This usually, but not always, results in a simultaneous intervention and settlement with the Department of Justice (and is included in the 25% intervention rate).
  5. Advise the relator that the Department of Justice intends to decline intervention. This usually, but not always, results in dismissal of the qui tam action.

Department of Justice Intervention

Intervention by the Department of Justice in a qui tam case is not undertaken lightly. Intervention usually requires approval by the Department of Justice in Washington. As part of the decision process, the views of the investigative agency are solicited and considered, and a detailed memorandum discussing the relevant facts and law is prepared. This memorandum usually includes a discussion of efforts to advise the named defendant of the nature of the potential claims against it, any response provided by the defendant, and settlement efforts undertaken prior to intervention. This memorandum is considered to be attorney work product exempt from disclosure.
Upon intervention approval, the Department of Justice files (i) a notice of intervention, setting forth the specific claims as to which the United States is intervening and (ii) a motion to unseal the qui tam complaint filed by the relator and the notice of intervention. All other documents filed by the Department of Justice up to that point remain under seal. The decision by the Department of Justice to intervene in a case does not necessarily mean that it will endorse, adopt or agree with every factual allegation or legal conclusion in the relator’s complaint. It has been the usual practice of the Department of Justice to file its own complaint about 60 days after the intervention, setting forth its own statement of the facts that show the knowing submission of false claims, and the specific relief it seeks. In addition, the Department of Justice has the ability to, and often will, assert claims arising under other statutes or common law.
If your practice is in need of regulatory compliance consulting or health law services in order to help lower your risk of being subjected to qui tam lawsuits, contact John Little, Attorney at Law, PC.