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Qui Tam Lawsuits: What You Need to Know Before You File in 2024
Thursday, April 25, 2024

The False Claims Act’s qui tam provisions allow individuals to report fraud, waste, and abuse (FWA) to the federal government and allows the federal government to in turn issue qui tam actions. The qui tam provision holds individuals and companies accountable and the government uses the qui tam action to do the same. The False Claims Act applies specifically to FWA affecting federal contracts, grants, and programs—including defense and transportation contracts, research grants, and healthcare programs such as Medicare and Medicaid. Fraud costs U.S. taxpayers hundreds of billions of dollars per year, and the U.S. Department of Justice (DOJ) relies on whistleblowers to come forward and file qui tam lawsuits. 

However, filing a qui tam lawsuit is not a simple process. There are several steps involved, and prospective qui tam whistleblowers (or qui tam “relators”) must ensure that they are prepared to assist with the DOJ’s investigation and enforcement efforts in qui tam cases. If the DOJ declines to intervene after its investigation, relators must also be prepared to pursue their qui tam suits independently. As a result, informed decision-making is critical, and prospective qui tam relators must ensure that they have all of the insights and information they need to move forward with confidence in their qui tam case. 

While filing a qui tam lawsuit might not be simple, it is extremely important. It can also be extremely rewarding. Not only do qui tam relators get the satisfaction of knowing that they helped the government fight FWA and recover taxpayer funds, but they get to participate in the government’s recovery as well. Under the False Claims Act, qui tam relators can receive between 15 and 30 percent of the government’s recovery in most cases—which usually translates to hundreds of thousands, if not millions, of dollars. 

With all of this in mind, what do you need to know if you are thinking about filing a qui tam lawsuit in 2024? Here are some important facts to consider before you file: 

Filing a Qui Tam Lawsuit Requires “Original Information”

To serve as a qui tam relator under the False Claims Act, you must be able to provide “original information” to the DOJ. This means that you must have independent knowledge of the information you are providing, and this information must not already be known to the federal government. This is true regardless of whether the DOJ (or another federal agency) is already conducting an investigation into the matter involved. 

Since preparing and filing a qui tam lawsuit is a substantial undertaking, it will often make sense to contact the DOJ before taking these steps. An experienced whistleblower lawyer will be able to communicate effectively with the DOJ on your behalf (while protecting your identity) to determine whether you will qualify as a qui tam relator if you decide to move forward. 

“Original information” can take many forms, and it can involve an extremely wide range of fraudulent, wasteful, or abusive practices. The False Claims Act prohibits all of the following: 

  • Knowingly submitting a false or fraudulent claim for payment or approval;
  • Knowingly making or using a false record or statement that is material to a false or fraudulent claim; 
  • Knowingly retaining money or other property that belongs to the federal government; 
  • Knowingly concealing, decreasing, or avoiding any payment obligation owed to the federal government; and/or, 
  • Conspiring to engage in any of the fraudulent practices listed above. 

If you believe that you may have “original information” and are considering filing a qui tam lawsuit, speaking with an experienced whistleblower lawyer is a key first step toward determining whether it makes sense to move forward. Along with communicating with the DOJ on your behalf (if warranted), an experienced whistleblower attorney will also be able to evaluate the scope, nature, and source of the information you have in your possession to determine whether you can qualify as a qui tam relator. 

Filing a Qui Tam Lawsuit is Unlike Filing Other Types of Federal Whistleblower Complaints 

Filing a qui tam lawsuit is unlike filing other types of federal whistleblower complaints. While most federal whistleblower programs allow (and require) whistleblowers to file their complaints directly with the relevant federal agency, qui tam relators must file their complaints in federal district court. This means that qui tam lawsuits must meet not only the substantive requirements of the False Claims Act, but also the procedural requirements established under the Federal Rules of Civil Procedure and the court rules in the relevant jurisdiction. 

Additionally, once a relator files a qui tam lawsuit, the relator must serve copies of the lawsuit on both the Attorney General and the United States Attorney. When doing so, the relator must also provide a "written disclosure of substantially all material evidence and information" in the relator’s possession. Failure to meet either of these requirements can delay the DOJ’s investigation of the relator’s complaint—and potentially prevent the DOJ from intervening in a timely manner. 

If You Have “Original Information” It Will Be Important to Act Promptly 

Due to the significant substantive and procedural requirements for filing a qui tam lawsuit, if you have “original information” in your possession, it will be important to act promptly. Also, keep in mind that if someone else files a relevant complaint before you do, you could lose your eligibility for protected whistleblower status. Thus, even though the statute of limitations for bringing a lawsuit under the False Claims Act is several years, it is strongly recommended that you begin working with an experienced federal whistleblower lawyer as soon as possible. 

The DOJ Will Investigate Your Complaint and Decide Whether to Intervene 

Once you properly file a qui tam lawsuit, the DOJ will investigate your complaint and decide whether to intervene. Initially, the DOJ “has 60 days from the date service is completed and the statement of material evidence is submitted, whichever is late[r], to notify the court of its decision” regarding intervention. While the DOJ can request an extension “for good cause shown,” it generally works quickly to investigate whistleblower complaints as efficiently as possible. 

If the DOJ decides to intervene, it will take over your qui tam lawsuit and seek appropriate remedies under the False Claims Act in federal district court. In this scenario, you would generally be entitled to between 15 percent and 25 percent of the government’s recovery if the lawsuit is successful. If the DOJ declines to intervene, you will have the option of pursuing your lawsuit on your own (or with your legal counsel); and, in this scenario, you will be eligible to receive up to 30 percent of any amount you successfully recover on the government’s behalf. 

The DOJ’s decision regarding intervention is a key step in the qui tam process; and, while you may be entitled to a larger percentage of the government’s recovery if the DOJ declines to intervene, pursuing a qui tam lawsuit independently is a much more time-intensive and resource-intensive process. Generally, whistleblowers will want to rely on their counsel to assist with the DOJ’s investigation and steer federal prosecutors’ decision toward intervention. 

You Must Take Proactive Steps to Maintain Your Confidentiality During the Process 

When you file a qui tam lawsuit in federal district court, your lawsuit will automatically be kept “under seal” for 60 days. But, to maintain your confidentiality beyond this initial 60-day period, you must take additional steps. Specifically, you must file a motion to extend the period that your lawsuit remains sealed. Extensions are typically for 60 days as well, and you may need to file (or rely on your lawyer to file) multiple extension requests during the process. 

The Amount of Your Whistleblower Award (if Any) Will Be Based Heavily on the Extent of Your Involvement 

While the DOJ’s decision regarding intervention determines the maximum percentage of your whistleblower award (if any), the amount of your award will also be based heavily on the extent of your involvement. Simply put, the more you do to help the DOJ recover fraudulent taxpayer losses, the more you will be entitled to receive. When it comes to calculating whistleblower awards under the False Claims Act, there isn’t a precise formula. Instead, the government considers all relevant facts and circumstances to determine what is appropriate on a case-by-case basis. 

It Is Important to Work with an Experienced Federal Whistleblower Lawyer 

Given the various decisions you need to make and the challenges involved in filing a successful qui tam lawsuit, it is important to work with an experienced federal whistleblower lawyer throughout the process. Since qui tam lawsuits are unique in many respects, it is important to work with a lawyer who has specific experience representing relators under the False Claims Act. Hiring an experienced lawyer to represent you should cost nothing out of pocket, as whistleblower lawyers generally provide contingency-fee representation (with their legal fees, if any, being calculated as a percentage of a client’s whistleblower award).

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