What makes our firm unique when we represent whistleblowers is our experience and expertise in the area of both Qui Tam lawsuits and employment law.  For Houston residents, our attorneys may privately discuss your potential case and bring the highly specialized Qui Tam matter to ensure that private individuals, called relators, are heard, protected and that the government is fully informed of the potential False Claims Act (“FCA”) violations.

Bringing an FCA Lawsuit

What makes FCA cases unique is that either the government, via a U.S. Attorney General or a State authorized representative, or a private person may bring a civil action under the FCA’s rules (31 U.S.C. § 3730).  If brought by a private litigant, or Qui Tam relator, the government conducts an independent investigation to determine whether to file or intervene in the FCA suit. Interestingly, and the reason for its popularity, the FCA creates incentives for private litigants, who may receive up to 30% of any recovery, depending in part on whether the government intervenes.

Government Intervention in a Qui Tam Case

Whether the government intervenes in a qui tam case is a major factor in determining the probable outcome and recovery in the case. According to the Department of Justice (“DOJ”), settlements and judgments in FCA cases in which the government intervened total more than $38 billion, compared to just over $2 billion when the government has declined to intervene (see DOJ’s Fraud Statistics – Overview – https://www.justice.gov/opa/pr/justice-department-recovers-over-28-billion-false-claims-act-cases-fiscal-year-2018).  In the last reported year (fiscal year 2018), the DOJ recovered over $2.8 Billion from FCA cases.

According to the DOJ, of the $2.8 billion in settlements and judgments recovered by the DOJ this past fiscal year, which ended September 30, 2018, $2.5 billion was within the health care industry, including drug and medical device manufacturers, managed care providers, hospitals, pharmacies, hospice organizations, laboratories, and physicians.

Many cases are still unknown since when they are brought to the government’s attention, they are confidential and under seal by the court. When the government is ready, it requests documents from the defendant while it is investigating to verify the information.   The defendant receives a formal notice of the lawsuit before the Qui Tam plaintiff’s complaint is unsealed.  (31 U.S.C. § 3733).

The DOJ’s use of Civil Investigative Demand (“CID”) increased exponentially after the 2009 amendments to the FCA. When previously, all CIDs had to be signed and issued directly by the Attorney General, the amendments delegated the issuance of CIDs to an Attorney General’s designee.  This made them easier for prosecutors to obtain.  For example, in 2011, the DOJ authorized 888 CIDs, which is more than ten times the number of CIDs issued in the two years prior to the amendments (see Press Release, Office of Pub. Affairs, DOJ, Acting Assistant Attorney General Stuart F. Delery Speaks at the American Bar Association’s Ninth National Institute on the Civil False Claims Act and Qui Tam Enforcement (June 7, 2012)).  We welcomed this change and hope that the government continues to loosen up the requirements.

Qui Tam Plaintiff’s Recovery

If the FCA case is successful, the qui tam plaintiff may collect a percentage of any judgment or settlement regardless of whether the government intervenes in the action. The qui tam plaintiff can collect between 25% and 30% of the proceeds of any judgment or settlement if the government does not intervene. On the other hand, the qui tam plaintiff may collect up to 25% of the proceeds if the government does intervene. The specific amount depends on the extent to which qui tam attorneys contributed to the prosecution of the action. It also is contingent on whether the action was based on disclosures and information provided by the qui tam plaintiff. Importantly, qui tam plaintiffs are also entitled to reasonable expenses and attorneys’ fees. (31 U.S.C. §§ 3730(d)(1)-(2).)