In a Qui Tam Case Where It Is the Real Party in Interest, the Government Can Be Responsible for the Contractor's Legal Fees Under the Spearin Doctrine — Abrahams Wolf-Rodda, LLC
Definition. In a qui tam action, a private party called a relator brings an action on the government's behalf. The government, not the relator, is considered the real plaintiff. ... For example, the federal False Claims Act authorizes qui tam actions against parties who have defrauded the federal government.
The case netted the largest criminal fine ever imposed in the United States for any matter, $1.195 billion, and the largest civil fraud settlement against any pharmaceutical company. Qui tam "relators" are not eligible to receive shares of criminal fines.
Qui tam is a type of lawsuit based on an ancient writ in common law that allows a private person, known as a relator, to prosecute a lawsuit for the government and receive a reward.
The qui tam provision of the Federal False Claims Act (FCA), or “Lincoln Law,” empowers whistleblowers (also known as a qui tam relator) who have firsthand knowledge of frauds or violations against the government to report them to the appropriate officials.
Qui tam lawsuits are civil suits that are brought by whistleblowers under the False Claims Act to stop many different types of fraud against the government. Some types of fraud that may give rise to a qui tam lawsuit include: ... Conspiring with others to get a fraudulent claim paid by the federal government; or.Oct 18, 2021
In FCA lawsuits, known as qui tam suits, the government has the right to intervene and join the private citizen's lawsuit. If the government is then able to collect from the fraudulent contractor, the law allows the whistleblower to share in the proceeds.
The complaint remains under seal for at least sixty days, to give the government an opportunity to investigate the allegations and decide whether it wants to intervene in the action. If the government decides to intervene, it then takes over the action, and has the primary responsibility for prosecution.
False Claims Act Whistleblowers Protected Even Without a Successful Qui Tam Lawsuit. The False Claims Act contains a newly broadened anti-retaliation provision that protects whistleblowers who take actions in furtherance of a Qui Tam action, or in an attempt to stop one or more violations of the False Claims Act.
Under the False Claims Act, qui tam allows persons and entities with evidence of fraud against federal programs or contracts to sue the wrongdoer on behalf of the United States Government. In qui tam actions, the government has the right to intervene and join the action.
Description: A whistleblower is a person who comes forward and shares his/her knowledge on any wrongdoing which he/she thinks is happening in the whole organisation or in a specific department. A whistleblower could be an employee, contractor, or a supplier who becomes aware of any illegal activities.
This law contains a “qui tam” provision that allows individuals who have knowledge that a corporation or organization is defrauding the government to “blow the whistle” on the illegal activity. The person who files a qui tam case is often referred to as the “relator” or “whistleblower.”
The False Claims Act, 31 U.S.C. §§ 3729, provides that anyone who violates the law “is liable to the United States Government for a civil penalty of not less than $5,000 and not more than $10,000, . . . plus 3 times the amount of damages.” But how does that apply in practice?
If the Government Does Not Intervene. The government can always decide not to intervene in the case. In this instance, you may incur some costs once the case is over, but if you win, you will also receive a larger award because the government decided not to be a part of it.
When you meet with an attorney for the first time to review your case, that consultation will usually be free. This consultation is simply to determine if your case has merit. If it does not, you are not charged anything for that meeting. If it does, the attorney will likely take the case on a contingency fee basis.
This means that when the case is over, the attorney will receive a percentage of the compensation you are awarded. You do not have to pay for anything out of pocket.
After filing, you will need to tell the government the facts of the case. If they decide to intervene at that point, you will likely not need to pay any attorney fees because your attorney is no longer trying the case; the government is.
Both the federal False Claims Act and the California False Claims Act have provisions that allow whistleblowers to recover their attorney’s fees and other expenses. This means if you are successful, the defendant, or the person or company you blew the whistle on, is responsible for paying your attorney’s fees.
The FCA provides that if the Government chooses to seek an alternate remedy for its losses instead of proceeding under the FCA. The qui tam whistleblower who originally brought the action is entitled to the same rights as if the Government had proceeded with the action under the FCA. Therefore, if the Government chooses to pursue an alternate ...
If the government intervenes, the qui tam whistleblower is entitled to receive fifteen to twenty-five percent of the proceeds in a qui tam case, subject to the qui tam whistleblower’s noninvolvement in the alleged wrongdoing and lack of public disclosure issues. The amount the qui tam whistleblower receives depends upon the extent to which the person substantially contributed to the prosecution of the action. The Senate factors provided by the legislative history of Section 3730 and the Department of Justice (“DOJ”) Guidelines both provide factors, which courts may take into account when determining the qui tam whistleblower’s share.
Furthermore, the general rule is that these fees are paid to the qui tam whistleblower not the qui tam whistleblower’ s attorney. A qui tam whistleblower may not request fees unless there is an attorney-client relationship, even if the qui tam whistleblower is an attorney.
The following factors are recommended to increase the qui tam whistleblower’s share: 1) qui tam whistleblower reported the fraud promptly; 2) upon learning of the fraud, the qui tam whistleblower attempted to stop it, or reported it to a supervisor or the Government; 3) the qui tam filing or investigation caused the defendant to stop the fraudulent practices; 4) the complaint warned the Government of a safety issue; 5) the complaint exposed a nationwide practice; 6) qui tam whistleblower provided extensive, first-hand details of the fraud to the Government; 7) the Government had no previous knowledge of the fraud; 8) qui tam whistleblower provided substantial assistance during the investigation and pretrial phases of the case; 9) excellent quality of qui tam whistleblower’s witness testimony; 10) qui tam whistleblower’s counsel provided substantial assistance to the Government; 11) qui tam whistleblower and counsel supported and cooperated with the Government during the entire proceeding; 12) the case went to trial; 13) the FCA recovery was relatively small; and 14) there was a substantial, adverse impact on qui tam whistleblower as a result of filing the complaint.
In a case where the Government does not intervene, Section 3730 (d) (2) provides the qui tam whistleblower with twenty-five to thirty percent of the proceeds; the actual amount within this range is left to the court’s discretion. When determining the final amount of the qui tam whistleblower’s share, courts consider the same type of factors as those considered when the Government does intervene.
While most counsel and defendants in qui tam cases are aware that the False Claims Act (“FCA”) in Section 3730 (d) (2) provides for the mandatory award of attorney’s fees and expenses to successful relators, it is generally not recognized that a corresponding provision can serve as the basis for such an award to prevailing defendants.
There are few cases authorities addressing exactly what the reach of Section 3730 (d) (4) may be. These cases, however, can be most helpful to a prevailing defendant in appropriate situations.
One of the rare decisions in which prevailing defendants were successful in recovering attorneys’ fees and expenses under Section 3730 (d) (4) is United States ex rel. Stewart v. Fleet Financial Group, et al., Case No. 1:98cv 75, 1999 U.S. Dist. LEXIS 13624 (W.D. Mich. August 31, 1999). The case is informative on several fronts.
Relators often argue that there is a purported general public policy favoring an award of attorneys’ fees only under the most egregious circumstances. A particularly effective rebuttal to this contention is contained in United States ex rel. Herbert v. National Academy of Sciences, No. 90-2568, 1992 U.S. Dist. LEXIS 14063 (D.D.C. Sept.
It is sound strategy to avoid “springing” the concept of attorney’s fees and expenses upon relators by waiting until the conclusion of litigation to alert them to the issue.
Successfully securing the award of attorney’s fees and expenses under Section 3730 (d) (4) almost certainly will prove to be an arduous undertaking which is often doomed to failure.
The costs to get started on an FCA or qui tam case are relatively small, including a small federal filing fee and possible administrative expenses. However, when you file a qui tam case, your lawyer is likely to ask you to agree to something called a contingent fee arrangement.
FCA claims are a bit different than the normal court case or civil litigation. When you file, you inform the government of your case, but not the defendant. You must inform them of the particular facts surrounding your case, so the government can investigate the claims.
No problem! Contact the skilled attorneys at Bothwell Law Group by calling 770.643.1606, and ask about how we handle whistleblower attorney fees.
Originally enacted in 1863, the False Claims Act1 (FCA) was part of a concentrated effort by the Federal Government to combat defense contractor fraud during the Civil War.2 Although the statute has undergone modifications throughout the years, its purpose remains the same: To prevent fraud against the United States. While there is little extraordinary about much of the FCA, the unusual enforcement mechanisms warrant examination. Within the FCA, two means of enforcement are outlined. Not surprisingly, the first vests primary authority for enforcement of the FCA in the hands of the Attorney General of the United States.3 However, the second mode of enforcement is somewhat more remarkable. These provisions, referred to as “qui tam” provisions, vest additional authority for enforcement of the FCA in the hands of private citizens, who are authorized to bring suit on behalf of the United States, with the promise of a share of any monies recovered serving as incentive.4 These suits, commonly known
The complaint must be filed in camera and remain under seal for at least 60 days, during which time all information contained within the complaint must be kept confidential from outside parties, including the defendant.6 The relator is also required by law to serve a copy of the complaint, as well as a written disclosure statement detailing all pertinent information in the relator’s possession, upon the United States Government.7 Once these steps have been taken, the United States is granted a mandatory 60-day period to investigate the relator’s allegations and decide whether to intervene in the lawsuit and assume primary responsibility for the litigation.8