The Department of Justice (DOJ) recently announced its False Claims Act (FCA) Recoveries for 2022, with the second-highest number of settlements in history. While the number of settlements increased, the total amount of dollar recoveries declined. Each year, the DOJ publishes statistics about its recoveries under the FCA and the number of new FCA matters filed during the prior year. These FCA statistics provide helpful information and offer a window into the DOJ’s enforcement activity and reliance on private whistleblowers (often called “relators”) who bring FCA cases forward and help the DOJ recover significant sums of money. 

In 2022, the government and whistleblowers were party to 351 settlements and judgments. Despite the record-setting number, the total amount of recoveries sunk to just $2.2 billion in an underwhelming year of recoveries for the government. A large portion of the recovery for 2022 came from only one large settlement, a deal for nearly $845 million with pharmaceutical company Biogen, Inc. to resolve allegations that the company offered and paid illegal physician kickbacks.

Over the last year, the DOJ continued its recent trend of bringing more cases outside qui tam claims—often using data analysis to identify matters. Since 2020, the government has increased the number of FCA cases brought. And in 2022, both the government and whistleblowers brought an increased number of new matters, from 212 to 296 and 598 to 652, respectively. Despite the increase in new cases, recoveries have not yet grown. Reviewing the recovery numbers without considering the number of cases resolved provides a skewed view of FCA statistics, given that many FCA cases are filed under seal and often take years to resolve. The conduct alleged in the Biogen, Inc. case, settled in 2022, involved conduct from 2009 to 2014.

Whistleblowers also saw significant success this year, despite the DOJ’s continued dismissal of meritless qui tam cases under the Granston Memo policy. The number of new matters brought by relators in 2022 recovered from the lull noted in the previous year. In addition, settlements and judgments in cases where the DOJ declined to intervene more than doubled to a record $1.18 billion, making one wonder why the DOJ declined some of these cases. In 2022, whistleblowers received awards of 29.29% of recoveries, a substantial increase from past years, resulting in a record of $347 million paid to relators. Despite this success, the DOJ has continued to defend its right to dismiss whistleblower cases after initially declining to intervene, including in the pending case, Polansky v. Executive Health Resources, No. 21-1052 (U.S. argued Dec. 6, 2022), currently before the Supreme Court.

The contrast between a record number of settlements and new matters and the downturn in total recoveries suggests that, on average, FCA settlement amounts have decreased. There are multiple potential causes. First, defendants in the largest cases may be waiting to engage in settlement discussions with the government pending the Supreme Court decision in Schutte v. SuperValu, No. 21-1326 (petition for cert. filed April 1, 2022), which could settle the issue of whether an FCA defendant’s contemporaneous subjective understanding or beliefs about the lawfulness of its conduct are relevant to whether he or she “knowingly” violated the FCA. Second, the increase in DOJ enforcement actions may have shifted corporate focus in recent years to more substantial compliance programs, preventing large-scale fraud from developing, discovering and addressing issues earlier than they would have been. Third, many new fraud cases stem from the COVID-19 pandemic, including PPP and other CARES Act fraud cases, which may temporarily deplete recoveries in other areas as the government expends resources to investigate millions of PPP loans and develop new theories of liability. Overall, each of these factors is likely to play some role, and the next few years of recoveries will determine whether the trend is temporary or a new shift in government enforcement.

Just days after the DOJ announced its 2022 recoveries, Senator Chuck Grassley, R-Iowa, spoke at a Federal Bar Association event for qui tam relators and criticized recent landmark FCA decisions and stated that he plans to “reintroduce” legislation to amend the FCA. In 2021, Senator Grassley presented a bill intended to address DOJ authority to dismiss cases filed by whistleblowers and clarify the materiality standard. The Senator has requested any stakeholders weigh in before he reintroduces amendments to the FCA, stating that “no stakeholder group . . . will be turned down.” Senator Grassley also sponsored the bipartisan FCA amendments in 1986, which supported whistleblower FCA cases including by mandating financial incentives and providing an anti-retaliation provision. Since those amendments, qui tam cases have obtained settlements and judgments over $50 billion.