What Is A Qui Tam Lawsuit?
The term qui tam originates from a Latin phrase that means "[he] who sues in this matter for the king as well as for himself." As such, a qui tam lawsuit is a type of civil lawsuit whereby a private individual, or a relator, with knowledge of fraudulent activity, assists in filing a case on behalf of the government. Qui tam lawsuits are filed under the False Claim Act and, in the event of a successful case, a relator receives as a reward a part of the funds recovered by the government.
Who Can File A Qui Tam Lawsuit?
Whistleblowers in qui tam lawsuits can be any past or present employee of a company, or even an individual who does not work for a company but is aware of fraudulent or illegal practices of said company.
The individual who initiates a qui tam lawsuit is known as a relator. The False Claim Act does not specify the nature of the relationship a qui tam relator needs to have with the company. The relator can be a competitor of the company who becomes aware of fraudulent acts. The relator can also be a contractor or subcontractor who works with the company regularly. The critical factor is that the relator has relevant information about illegal activities not available to the general public.
It is important to note that the anti-retaliation provision of the False Claims Act makes it illegal for employers to discharge, demote, threaten, or harass anyone who files a qui tam lawsuit.
When Can A Qui Tam Lawsuit Be Filed?
Like most other legal actions, there is a statute of limitations regarding when a case can be brought under the False Claims Act. The statute of limitations prevents relators from filing a lawsuit when too much time has passed following a given violation of the False Claims Act. Under the qui tam provisions of the False Claim Act, a lawsuit needs to be filed:
- within six years of the date that the Act was violated, or
- within three years of the date when facts material to the lawsuit are known or reasonably should have been known by the federal government
- whichever occurs earlier in time
In any event, no qui tam lawsuit can be filed more than 10 years after the act was violated.
What Is The Procedure Of Filing A Qui Tam Lawsuit?
All qui tam lawsuits need to be filed in camera, which means it is "under seal"—or strictly confidential. Only the judge, the federal government, and the relator knows about the existence of the lawsuit. The relator’s attorney must also deliver to the U.S. Attorney General and the local U.S. Attorney a copy of the complaint that includes a Disclosure Statement, which describes all the evidence and information in the possession of the relator about the action. Neither the evidence nor the complaint made by the relator can be made public until the seal is removed.
After the action has been filed, the federal government must decide whether it will intervene in the case. It is to the relator's benefit to have the government take interest and intervene in the lawsuit, because it indicates to the defendant that the government sees merit in the case. Intervened cases often result in a quick settlement by the defendant. But it is important to remember that a case can still be successful without government intervention. The government's refusal to intervene in the case does not necessarily mean that the case is meritless.
The government has 60 days from the date that it was served with the complaint to notify the court whether it will intervene in the case. In some cases, the government may request an extension of the date by which the government must decide whether it will intervene in the case.
During these 60 days, the local U.S. Attorney forwards a copy of the complaint and the Disclosure Statement containing evidence of the fraud to the Commercial Litigation Branch of the Civil Division of the U.S. Department of Justice ("DOJ"). The Commercial Litigation Branch then contacts other sections of the DOJ to determine if they have prior knowledge of these allegations of fraud or if the activities of the company are already under criminal investigation.
If there are no other investigations underway, the government investigates these allegations with the help of the relator's attorney. The role of the relator's attorney is essential to the success of a whistleblower lawsuit.
Based on these investigations and the evidence presented by the relator, the government decides whether or not it will take over the qui tam action and pursue legal measures against the allegedly fraudulent activities of the company in question.
What Is The "First-to-File" Rule?
A whistleblower wanting to report fraudulent activity should note that it is vitally important to get a qui tam case on file before any other potential whistleblower. The "first-to-file" rule bars a later allegation of fraud if it states all the same essential facts of a previously-filed qui tam suit. The rule also incentivizes whistleblowers to make complaints as promptly as possible.
HOW CAN WE ASSIST?
Working with an experienced whistleblower attorney can help ensure that a claim is made promptly and accurately, improving your chances of the government intervening in your qui tam litigation and increasing your share of the funds recovered.
At Goldberg Kohn, we can help you evaluate your case and its chances of success. Our experienced attorneys have helped many of our clients achieve successful settlements in decisions that have reshaped the law that affects whistleblowers, including the largest verdict in the history of the False Claims Act, resulting in a total judgment of $334 million. If you are interested in speaking with one of our attorneys, call us at 312-284-3258 to arrange a free and confidential consultation. You can also contact us online and a member of our team will get back to you as soon as possible.