Filing a Qui Tam Lawsuit

Our Whistleblower Attorneys Explain the Process of Filing a Qui Tam Lawsuit Under the False Claims Act

The qui tam provisions of the federal False Claims Act (FCA) allow private citizens to come forward with information about fraud, waste, and abuse. Individuals who come forward can qualify as whistleblowers under the statute, and FCA whistleblowers are entitled to confidentiality, anti-retaliation protections, and monetary awards in successful cases.

The qui tam process is unique, and FCA whistleblowers (who are also referred to as “qui tam relators”) must be prepared to work with the government during its efforts to seek accountability. With this in mind, here is an overview of what prospective qui tam relators need to know:

The Qui TamProvisions of the Federal False Claims Act (FCA)

The False Claims Act (FCA) empowers whistleblowers to report unlawful practices that result in the improper receipt of government funds. Companies that improperly obtain government funds can face liability for recoupments, treble damages, and additional civil penalties. The U.S. Department of Justice (DOJ) can also pursue criminal charges when warranted.

The FCA’s qui tam provisions cover “false and fraudulent” claims submitted to the United States government under all federal contracts, grants, and programs. Qui tam whistleblowers can report numerous forms of fraud; and, in successful cases, they will generally be entitled to monetary awards calculated as a percentage of the government’s recovery.

With this in mind, potential grounds to file a qui tam suit under the False Claims Act include:

Fraud Under Government Contracts

Many qui tam suits filed under the False Claims Act involve allegations against federal government contractors. Federal rules prohibit bid rigging, price fixing, double-billing, and numerous other forms of fraud by private contractors. Whether companies commit fraud to secure government contracts or bill the government in violation of federal law, whistleblowers can file complaints under the FCA to help the government hold bad actors accountable.

Fraud Under Government Grants

Qui tam relators can expose fraud by government grant recipients as well. Here too, this includes fraud at all stages of the process—from making false statements to secure federal grants to misrepresenting data or material evidence from study findings. While qui tam litigation involving federal grants is less common than qui tam litigation involving federal contracts, the DOJ strongly encourages current employees, former employees, and other individuals to come forward with information about grant fraud when warranted.

Fraud Under Government Programs

The DOJ strongly encourages qui tam relators to come forward with information about government program fraud as well. This includes everything from fraud perpetrated by healthcare providers under Medicare and Medicaid to fraud perpetrated by other businesses under disaster relief and economic relief programs. Due to widespread fraud under the pandemic-era Paycheck Protection Program (PPP) and Employee Retention Credit (ERC) program, the DOJ has been devoting more resources to enforcing compliance with the terms of federal programs in recent years.

Filing Qui TamLawsuits Under the FCA: 5 Key Steps in the Process

Let’s say you decide to come forward as a qui tam whistleblower. What can you expect when you hire an attorney to help you file a False Claims Act lawsuit? Here are five key steps in the process:

1. Initiating a Qui TamAction in Federal Court

The process begins with filing a qui tam complaint in federal district court. When filing a complaint, qui tam whistleblowers must also serve a copy of the complaint and a written disclosure statement to the U.S. Attorney General. These are strict requirements—if a prospective whistleblower does not take the necessary steps to formally initiate a legal action, the court may have no option but to dismiss the whistleblower’s complaint.

2. The Government Investigation

Once a qui tam whistleblower takes the necessary steps to initiate a lawsuit, the government will conduct an investigation. This investigation may be conducted by the United States Attorney’s Office or the DOJ’s Criminal Division depending on the nature of the allegations involved. During its investigation, the government will seek to review substantially all material evidence, and then attorneys at the DOJ will make a decision regarding whether to intervene.

3. The Government’s Decision Regarding Intervention

Government intervention is a key step in the qui tam litigation process. If the government intervenes, it will take over the litigation and pursue civil or criminal charges directly. If the government declines to intervene, the whistleblower will have the option of continuing to pursue the case independently. What the government decides to do regarding intervention also plays a key role in determining whistleblower award amounts—as discussed in greater detail below.

4. Enforcement Litigation Under the FCA

After the government’s decision regarding intervention, the litigation process takes center stage. Regardless of what the government decides, it will be important for the whistleblower (and the whistleblower’s attorney) to continue playing an active role. As noted above, enforcement litigation under the FCA can be either civil or criminal in nature, and eligible whistleblowers can receive monetary rewards in both civil and criminal cases.

5. Resolution and Issuance of a Whistleblower Award (in Successful Cases)

As a general rule, qui tam whistleblowers are entitled to monetary rewards when their complaints lead to successful enforcement actions. If the government secures monetary sanctions (or a whistleblower secures monetary sanctions on the government’s behalf), the whistleblower will generally be entitled to between 15% and 30% of the recovered funds. This is true whether the case ends with a verdict in federal district court or the defendant settles with the government.

Whistleblower Awards in Qui TamCases Under the FCA

Whistleblower awards in qui tam cases under the FCA can be substantial. When determining the specific percentage of a whistleblower’s award, the DOJ takes into account factors including (but not limited to):

• The value of the information contained in the whistleblower’s qui tam complaint and written disclosure statement;
• The level of additional assistance the whistleblower provided during the government’s investigation; and,
• Whether the government intervened in the litigation—rewards range from 15% to 25% in cases involving intervention, and from 25% to 30% in cases in which the government does not intervene.

Due to the scope of the fraud involved in most whistleblower cases filed under the False Claims Act, whistleblower awards in these cases tend to be substantial. If you have questions about how much you may be eligible to receive if you come forward, our attorneys can provide a confidential case assessment so that you can make informed decisions about your next steps.

FAQs: Filing a Qui Tam Lawsuit Under the False Claims Act

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