An employee who whistleblows on fraud committed against the Federal Government, such as a healthcare worker reporting Medicare fraud or an employee working for a contractor who contracts with the US government, possibly may be able to bring a claim under the False Claims Act, and by filing a Qui Tam Complaint may be able to receive a percentage of the government’s recovered funds under what is known as the qui tam provisions of the False Claims Act (FCA), 31 U.S.C. §§ 3729 et seq. Non-employees who report such fraud on the Federal Government may also file Qui Tam Complaints. You may read on the elements of a FCA claim, and the liability and damages in a FCA claim in NJ Whistleblower Attorney, Employees and the False Claims Act.
Note: This article is not intended to provide legal advice or take formal positions. This article should not be construed as giving legal advice, nor should it be relied upon in filing a claim. Successful False Claims Act claims are among the most complex of legal claims. If you think you may have any type of a whistleblower claim, you may contact this office today for a free consultation.
Filing a Qui Tam Complaint and “Relator”
The qui tam provisions of FCA allows private persons to file suit for violations of the FCA on behalf of the government. A suit filed by an individual on behalf of the government is known as a “qui tam” action, and the person bringing the action is referred to as a “relator.”
31 U.S.C. § 3730(b) of the FCA qui tam provisions, § 3730(b)(1,) stipulates that a person may file a qui tam action. Section 3730(b)(2) provides that a qui tam complaint must be filed with the court under seal. The complaint and a written disclosure of all the relevant information known to the relator must be served on the U.S. Attorney for the judicial district where the qui tam was filed and on the Attorney General of the United States.
After the Filing There Is a Government Investigation
The qui tam complaint is initially sealed for 60 days. The government is required to investigate the allegations in the complaint; if the government cannot complete its investigation in 60 days, it can seek extensions of the seal period while it continues its investigation. The government must then notify the court that it is proceeding with the action (generally referred to as “intervening” in the action) or declining to take over the action, in which case the relator can proceed with the action.
The Government May Intervene / Rights of the Parties in a Qui Tam Action
If the government intervenes in the qui tam action, the government then has the primary responsibility for prosecuting the action. § 3730(c)(1). It can dismiss the action, even over the objection of the relator, so long as the court gives the relator an opportunity for a hearing (§ 3730(c)(2)(A)) and it can settle the action even if the relator objects so long as the relator is given a hearing and the court determines that the settlement is fair. § 3730(c)(2)(B).
One of the FCA settlements was described in a press release by the DOJ, where a group health provider had to pay $6.3 million to settle False Claims Act allegations. The settlement resolves allegations originally brought in a lawsuit filed under the qui tam, or whistleblower, provisions of the False Claims Act by a former employee of the group health provider. Because the act permits private parties to sue on behalf of the government for false claims for government funds and to receive a share of any recovery, the former employee will receive approximately $1,500,000.
Suppose the Relator Wants to Dismiss or Settle the Action?
If a relator seeks to settle or dismiss a qui tam action, it must obtain the consent of the government. § 3730(b)(1). When the case is proceeding, the government (§ 3730(c)(2)(C)) and the defendant (§ 3730(c)(2)(D)) ask the court to limit the relator’s participation in the litigation.
Award to the Relator
If the government intervenes in the qui tam action, the relator is entitled to receive between 15% and 25% of the amount recovered by the government through the qui tam action. If the government declines to intervene in the action, the relator’s share is increased to 25 to 30 percent. Under certain circumstances, the relator’s share may be reduced to no more than ten percent. If the relator planned and initiated the fraud, the court may reduce the award without limitation. The relator’s share is paid to the relator by the government out of the payment received by the government from the Defendant.
If a qui tam action is successful, the relator also is entitled to legal fees and other expenses of the action by the defendant. The FCA also provides under §3730(c)(5) that if the government chooses to obtain a recovery from the defendant in certain types of proceedings other than the relator’s FCA suit, this is known as an alternate remedy and the relator is entitled to the same share of the recovery as if the recovery was obtained through the relator’s FCA suit.
Legal Bars to FCA Claims, Statutory Bars and Public Disclosure Bar When a Relator Cannot File or Pursue a Qui Tam Action
The FCA provides several circumstances in which a relator cannot file or pursue a qui tam action, a common one being “the public disclosure bar”.
1) Public Disclosure Bar
The public disclosure bar is when a qui tam action is based upon information which has already been disclosed to the public such as published articles in newspapers; or through any of several other means such as in criminal, civil, or administrative hearings in which the government is a party; or in government hearings, audits, reports, or investigations: or through news media including newspaper publications (this is known as the “public disclosure bar.”) §3730(e)(4)(A). When the relator was the original source of the information, there is an exception to the public disclosure bar.
2) Criminal Conduct Bar
The criminal conduct bar is when relator was convicted of criminal conduct arising from his or her role in the FCA violation. § 3730(d)(3).
3.) First to File Bar - Conduct Already Filed
This bar is when another qui tam concerning the same conduct already has been filed. §3730(b)(5).
4. Government Already a Party
This bar is when the government already is a party to a civil or administrative money proceeding concerning the same conduct. §3730(e)(3).
When NJ employees think of whistleblower claims, they may commonly think of the claims filed under New Jersey Conscientious Protection Act. See New Jersey Whistleblower Laws Attorney. These arise when an employer retaliates against an employee reported or objected or refused to participate in any activity, policy or practice they believed to be illegal. To read more, see NJ Employment Attorney, Auditor Employees have Whistleblower Protection.
The False Claims Act is not new and dates to the Civil War. Due to concerns that suppliers of goods to the Union Army during the Civil War were defrauding the US Army Congress enacted the the False Claims Act (FCA), 31 U.S.C. §§ 3729 - 3733 in 1863. At that time, the FCA provided that anyone who knowingly submitted false claims to the government was liable for double the government’s damages plus a penalty of $2,000 for each false claim.
Congress made significant changes to the FCA in 1986, including increasing damages from double damages to treble damages and raising the penalties from $2,000 to a range of $5,000 to $10,000 for each false claim. Since 1986, the FCA has been amended three times. If a person is culpable in any of listed seven types of conduct that result in FCA liability, the FCA provides that one who is liable must pay a civil penalty of between $5,000 and $10,000 for each false claim (those amounts are adjusted from time to time; the current amounts are $5,500 to $11,000) and treble the amount of the government’s damages. You may see the seven types of conduct that result in FCA liability in NJ Whistleblower Attorney, Employees, and the False Claims Act.
Again, note: This article is not intended to provide legal advice or take formal positions. This article should not be construed as giving legal advice, nor should it be relied upon in filing any type of claim, whistleblower or otherwise. Successful whistleblower claims are among the most complex of legal claims. If you think you may have any type of a whistleblower claim, you may contact this office today for a free consultation.
Don’t Sit on Your Rights
I have represented whistleblowers and was successful in recovering financial compensation for their emotional pain and suffering and moneys for lost wages, both for past lost wages and projected future lost wages. If you think you may have any type of a whistleblower claim or are being discriminated against, you should contact this office immediately for a free consultation. I accept whistleblower and employment discrimination cases from all over New Jersey and have locations in Southern, Central and Northern NJ to meet with clients. See Employment/Civil Rights Law.
Hope A. Lang, Attorney at Law represents workers throughout the entire state, including Hackensack, Jersey City, Newark, Irvington, Orange, East Orange, Trenton, Paterson, Montclair, Elizabeth, North Brunswick, Cherry Hill, Vineland, Union, Plainfield, Hamilton Township, Lakewood, Edison, Parsippany-Troy Hills, Franklin, Lakewood, and every NJ County, including Bergen, Hudson, Middlesex, Essex, Monmouth, Somerset, Ocean, Union, Camden, Passaic, Morris, Gloucester, Atlantic, Burlington, Camden Counties.