David v. Goliath: Firms respond to growth in whistle-blower cases
The False Claims Act, which allows whistle-blowers to receive 15 to 30 percent of any recovered fraud, requires all cases to be filed under seal with the government. The government can evaluate the case for six months to four years before making its decision to pursue a case or not.
Leonard's case against CVS bucked that trend. The government declined to intervene, but Leonard eventually led the case to settlement in all three states and earned a total of about $20 million.
"It was kind of David versus Goliath, because within our firm it was one or two people against 15 or 20 lawyers" on the defense, Leonard said.
"But we've come to the realization that it's extremely unlikely that the government's going to intervene. The answer is usually no. So you have to choose cases that are good, knowing that most likely you're going to litigate it."
Once that litigation begins, plaintiffs typically face a vast resource disparity, said David Chizewer, a partner at Goldberg Kohn who litigated a whistle-blower case all the way to trial after the government initially declined to intervene.
That case, United States of America ex. rel. Cleveland A. Tyson, et al. v. Amerigroup Corporation, et al., earned a $334 million judgment after a three-week trial in the U.S. District Court for the Northern District of Illinois in 2006, which Chizewer said represents the largest False Claims Act judgment in history at the time.