Private individuals, called relators, in Qui Tam actions bring cases on behalf of the government. That way, we all ensure that taxpayer dollars and our government’s resources are spared. Our attorneys’ unique experience and knowledge ensure that such whistleblowers are well represented. This has been proven by our experience and expertise in the area of both Qui Tam lawsuits and employment law. Our specialized attorneys will confidentially discuss your potential case and guide you in how to bring the highly complex Qui Tam matter to ensure its greatest degree of success. Phoenix whistleblowers may contact our practice to discuss their potential False Claims Act (“FCA”) case.
It is critical the whistleblowers are represented by competent counsel. This is due to the many obstacles and defenses that the company attorney may bring to quash and dismiss a case. One of these defenses is the Public Disclosure Bar. Here, a qui tam action will be dismissed if substantially the same allegations or transactions in the complaint were publicly disclosed in any of the following:
- A federal criminal, civil, or administrative hearing in which the government or its agent is a party;
- A congressional, Government Accountability Office, or other federal report, hearing, audit, or investigation, or
- The news media. (31 U.S.C. § 3730(e)(4)(A).)
However, an experienced attorney will know how to ensure that the qui tam action is presented with the greatest opportunity to succeed. In this scenario, there is an exception to the public disclosure bar if the relator is an “original source” of the information. To be an original source, the relator must have either:
- Conveyed the information to the government prior to the public disclosure, or
- Had independent knowledge that materially adds to the publicly disclosed allegation and provided that information to the government before filing the FCA action. (31 U.S.C. § 3730(e)(4)(B).)
In a recent case, the Supreme Court resolved a circuit court split (when different areas in the country are in conflict) on whether a federal agency’s response to a Freedom of Information Act (“FOIA”) request disclosing an alleged fraud is a federal “report” that would trigger the public disclosure bar. (Schindler Elevator Corp. v. U.S. ex rel. Kirk.) The relator in Schindler alleged that his former employer submitted hundreds of false claims regarding the veteran status of its employees, and supported his complaint using information obtained through an FOIA request to the Department of Labor. The court held that the FOIA response is a report within the definition of the public disclosure bar. (Schindler Elevator Corp. v. U.S. ex rel. Kirk, 131 S. Ct. 1885, 1890-96 (2011).)
Another defense that our attorneys have witnessed is the first-to-file bar. The first-to-file bar prevents a second relator from bringing another action based on the same facts underlying the pending action (31 U.S.C. § 3730(b)(5)). The first-to-file bar creates an incentive for relators to “race to the courthouse” to preserve their ability to receive part of the recovery. Therefore, timing is crucial in this respect. If you know that others in your company are aware of the potential FCA violations, it behooves you to speedily contact an attorney and file the case, if appropriate. The first-to-file bar keeps new claims out of court only while the related claims are still pending. If the related claims are dismissed, these claims are no longer considered to be pending (Kellogg Brown & Root Services, Inc., et al. v. United States ex rel. Carter, 135 S. Ct. 1970, 1978-79 (2015) (where the court held that a second relator’s qui tam claim was improperly dismissed with prejudice pursuant to the first-to-file bar where the first relator’s claim was dismissed for failure to prosecute).
A qui tam relator can take advantage of the three-year tolling provision (which is a way to freeze a statute of limitation) up to ten years after the FCA violation, if the relator embarks on the action within three years of the responsible government official learning of the fraud, regardless of whether the government intervenes (Cochise Consultancy, Inc. v. United States ex rel. Hunt, 139 S. Ct. 1507 (2019).
In addition, Qui Tam claimants should also be aware of the Wartime Suspension of Limitations Act (“WSLA”) which may also toll the FCA statute of limitations. If the U.S. is at war (which seems to always be the case somewhere around the world), the WSLA suspends the statute of limitations for criminal offenses until five years after the termination of the war or hostilities (18 U.S.C. 3287). However, the WSLA does not toll the FCA statute of limitations for civil claims (Kellogg Brown, 135 S. Ct. 1970, 1978 (2015)). These and other unique laws benefit the potential plaintiffs in FCA lawsuits.