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WHISTLEBLOWERS: A Brief History & A Guide to Getting Started
The False Claims Act (FCA) was established in 1863 to allow individuals to sue on behalf
of the government when they witness fraud against the government. Provisions of
the FCA make these whistleblowers eligible to receive up to 30 percent of money
recovered as a result of their report. Beasley Allen lawyer Lance Gould provides a
brief history of whistleblower law, and how it has grown through the years to expose
health care fraud, pharmaceutical and medical device fraud, government contractor
fraud, as well as financial fraud. He also provides basic instruction on how to identify
a whistleblower claim, and advice about how to navigate these often complex claims.

Lance Gould
In his practice at Beasley Allen Law Firm, Lance Gould has represented people who are
the victims of fraud in many forms. In particular, he focuses on whistleblower litigation.
He and his team are committed to working on behalf of whistleblowers who want to
expose fraud, waste and abuse against the government. His experience with these
types of cases makes him uniquely equipped
to navigate this often challenging litigation.
Lance earned his J.D. from Thomas Goode
Jones School of Law in 1996. He began his
legal career with Beasley Allen in 1997
handling cases involving Predatory Lending.
He was a member of the trial team in a
landmark case involving a door-to-door sales
and finance scam, which resulted in a verdict
of $581 million. As a result of this litigation, the
finance company quit these types of activities
in the state of Alabama.

A Brief History & A Guide To Getting Started

By C. Lance Gould

Whistleblowers: A Brief History & A Guide To Getting Started
By C. Lance Gould

Produced by the law firm of Beasley, Allen, Crow, Methvin, Portis & Miles,
218 Commerce Street
Montgomery, Alabama 36104
(334) 269-2343
© 2016 Beasley Allen Law Firm
All Rights Reserved
Published 2016
Printed in the United States of America
First Edition
Every effort has been made to ensure the accuracy of the information
herein. However, author and Beasley Allen Law Firm are not responsible
for any errors or omissions which might have occurred.

A Brief History & A Guide to Getting Started
Table of Contents


Part I – How Did We Get Here? A Brief History of Qui Tam
Chapter 1 – Whistleblowing: Who, What & When
Chapter 2 – A Brief History of the False Claims Act
Chapter 3 – Recent Noteworthy Settlements and Judgments
Chapter 4 – More than a Civic Duty: Why Qui Tam Cases Matter


Part II – Filing a Qui Tam Case
Chapter 5 – Is a Qui Tam Suit Appropriate?
Chapter 6 – Evaluating a Potential Relator
Chapter 7 – The Essential Elements of a False Claims Act Qui Tam Claim
Chapter 8 – Initial Hurdles
Chapter 9 – The Procedural Requirements for Filing a Claim under the
False Claims Act
Chapter 10 – Intervention by the Government in False Claims Act Cases
Chapter 11 – Common Areas of Concern
Chapter 12 – Theories of Liability
Chapter 13 – Discovery
Chapter 14 – Defenses in False Claims Act Cases
Chapter 15 – Motion Practice in False Claims Act Cases
Chapter 16 – Witnesses
Chapter 17 – Trial Strategies for a False Claims Act Qui Tam Case
Chapter 18 – Recovery
Chapter 19 – A Note on State False Claims Acts
Chapter 20 – Final Thoughts: A Qui Tam Checklist





Why did I write this book? I wrote it for the same reason a person
blows the whistle: civic duty. Whistleblowing laws enable us as
citizens to help our own country and government by recouping
funds that should never have been paid in the first place.
On a personal level, I enjoy my work because it enables me to help
people. Whistleblowing in particular offers a great opportunity to
help citizens who are trying to do the right thing and who, in turn,
have been wronged by their employer.
Whistleblowing is not a new phenomenon. In fact, its underlying
principles date back to the Civil War era when Abraham Lincoln
became inextricably intertwined with whistleblowing in this
country. Perhaps, then, it is appropriate for the answer to why I
wrote this book to be summarized with a quotation from Lincoln
himself: “To sin by silence when they should protest makes
cowards of men.”1
Can you imagine paying $435 for a hammer? What about $640 for
a toilet seat? Such outrageous pricing may seem fictitious, but
these are, in fact, documented prices companies have charged the
government in order to make a few dollars (or, in some cases, a
few million dollars) at the expense of our tax dollars.2
Unfortunately, there is a longstanding history in this country of
companies contracting with and defrauding the government.
Fortunately, with the passage of the False Claims Act (FCA) and
its subsequent amendments, it is now becoming more common for
individuals to stand up and attempt to put an end to frauds on the
This book examines the historical significance of the FCA and
whistleblowers in our country. It also highlights the history of
whistleblower law and how it has grown through the years to
expose health care fraud, pharmaceutical and medical device fraud,

government contractor fraud, and financial fraud. Most
importantly, this book gives a concise guide on how to put the
principles of the FCA into practice.
The key to putting an end to government fraud is blowing the
whistle on the companies that engage in it. Thus, whistleblower
suits are not only a method of remedy for individuals against
whom these companies have retaliated, but they are also an
important tool in recovering government funds that these
companies were wrongly paid.

How Did We Get Here?
A Brief History of Qui Tam

Whistleblowing: Who, What & When

Chapter 1 – Who, What, Where & When
Who Is a Whistleblower?

Whistleblowers are the most essential element to discovering and
exposing fraudulent activity against our government. A
whistleblower, also known as a relator, must be a person with firsthand knowledge of fraud or other wrongdoing.3 A whistleblower
may sue on behalf of the government when she witnesses fraud,
waste, and/or abuse in government programs.4
Whistleblowers have been awarded millions for their efforts in
revealing fraud against the government. When someone files suit
on behalf of the government under the False Claims Act (FCA),
they are eligible to receive up to 30 percent of any money
recovered by the government.5
Whistleblower actions are also called qui tam actions, because they
are brought by a person qui tam pro domino rege quam pro si ipso
in hac parte sequitur, that is, “who pursues this action on our Lord
the King’s behalf as well as his own.”6
If a person believes they have incriminating knowledge, it is
important that they secure all proper and legal documentation.7 It
is also advisable to talk to an experienced whistleblower lawyer
before filing any claim or reporting the wrongdoing and to make
sure that a claim is valid under either the federal FCA or a state’s
false claims law.8



What Happens After the Whistle is Blown?
Blowing the whistle takes courage, and facing what comes
afterward can be very daunting to some people. More than
anything, a whistleblower has to be prepared for retaliation from
the fraudulent party.
Because a whistleblower is, in effect, exposing information that
will ultimately have a negative impact on her employer’s public
reputation, retaliation is not uncommon once the whistle has been
blown. Fortunately, as I will discuss in more detail later, the FCA
provides protection from such retaliation, and having an
experienced whistleblower lawyer by one’s side can increase the
probability of receiving such protection.9
Various types of retaliation the whistleblower may face, such as
being fired, suspended, discriminated against, demoted, or
threatened, are prohibited.10 If such retaliation does in fact occur,
the whistleblower must be reinstated to her former position or
status.11 The law also guarantees recovery of back pay, interest,
other compensation, and even seniority.12
While knowing how the law can protect a whistleblower is helpful,
nothing better prepares a lawyer and the relator for the challenging
road ahead than looking at the fates of duty-driven whistleblowers
of the past, and how the laws have evolved to protect these
courageous citizens.


A Brief History of the False Claims Act

Chapter 2 – A Brief History of the False Claims Act
Enacting the False Claims Act
Fraud on the government was particularly rampant during the Civil
War as the sudden increase in military spending provided new
opportunities for defense contractors to receive ill-gotten profits
from the government.13 Reports of misappropriation of money
supposedly spent to aid the war effort included: the same mules
being sold over and over again to Army quartermasters;14 rotted
ship hulls freshly painted to appear new then sold to the Navy;15
infantry boots made of cardboard that wore out after a mile of
marching;16 uniform cloth made from recycled rags, which
disintegrated when wet;17 gunpowder barrels that contained
sawdust;18 and newly ordered horses arriving crippled, old, and
sometimes blind.19
These and other stories plagued Congress and President Abraham
Lincoln at a time when the Union Army was already suffering
defeat from rebel forces.20 In fact, war profiteer Jim Fisk once
bragged, “You can sell anything to the government at almost any
price you’ve got the guts to ask.’’21
Fed up with these practices, President Lincoln called these
profiteers “worse than traitors in arms”22 and, in 1863, called for
Congress to pass the original False Claims Act (FCA), then known
as the “Informer’s Act” or “Lincoln’s Law.”23
This Act prohibited anyone from knowingly committing or
agreeing to commit any fraud against the United States
government through the submission of false or fraudulent claims
for payment, and it established both civil and criminal punishments
for conviction.24 Frustrated with the Justice Department’s handling
of the problem, President Lincoln also successfully urged
Congress to enact “qui tam” provisions in the Act.


Very little regarding the legislative history of the Informer’s Act25
is recorded in the congressional record.26 Senator Jacob M.
Howard, who sponsored and guided the bill through the Senate,
provided the only clear explanation of the qui tam provision:
The other clauses which follow, and which prescribe the
mode of proceeding to punish persons who are not in the
military service of the United States, I take it, are open to
no serious objection. The effect of them is simply to hold
out to a confederate a strong temptation to betray his
coconspirator, and bring him to justice. The bill offers, in
short, a reward to the informer who comes into court to
betray his coconspirator, if he be such; but it is not
confined to that class. Even the district attorney, who is
required to be vigilant in the prosecution of such cases,
may be also the informer, and entitle himself to one half the
forfeiture under the qui tam clause, and to one half of the
double damages which may be recovered against the
person committing the act. In short, sir, I have based the
fourth, fifth, sixth, and seventh sections upon the oldfashion idea of hold out a temptation, and “setting a rogue
to catch a rogue,” which is the safest and most expeditious
way I have ever discovered of bringing rogues to justice. 27
This original version of the FCA authorized individuals, known as
“relators,” to take on the role of an attorney general and bring a
civil suit themselves.28 They were then rewarded by receiving 50
percent of any recovered funds.29 These whistleblowers were liable
for all costs in bringing their qui tam suits.30
The qui tam provision intended to motivate individuals to publicly
disclose any knowledge they might have about fraudulent activity
targeting the government. But the original FCA did not require the
individual bringing the lawsuit to have taken steps to actually
uncover the fraud. As you will see in the following chapters, this
led to a new type of parasitic activity, which led to the FCA being
amended and tightened.

Chapter Two: A Brief History of the False Claims Act

The Parasitic Lawsuit Problem
Whistleblowing laws were passed to protect the government from
those seeking to profit off the government, especially in a time of
the nation’s struggle to survive. Whistleblowers were rewarded for
stopping profiteers of war, yet, as it was originally designed, the
FCA contained no measures to prevent private individuals from
filing qui tam suits based on public information of fraud. As a
result, private parties could file “parasitic” civil lawsuits against
contractors who were already under criminal indictments by the
government based solely on information contained in the criminal
indictments. 31
Thus, in the years leading up to and during the beginning of World
War II, relators regularly and successfully filed FCA suits despite
lacking independent knowledge of the fraud on which they were
blowing the whistle.32 Such “parasitic lawsuits” infuriated
Attorney General Francis Biddle.
One such case – United States ex rel. Marcus v. Hess – made its
way to the United States Supreme Court after a jury found against
an electrical contractor on a public works administrative contract
in a qui tam suit.33After the United States had indicted the
electrical contractors for collusive bidding, resulting in a fine of
$54,000, the relators filed suit and obtained a verdict for
In his amicus curiae brief, Attorney General Biddle challenged the
qui tam provisions, arguing that the whistleblower in this case
“received his information not by his own investigation but from
the previous indictment.”35 The whistleblower denied the
government’s claims, even asserting “that he spent money in
conducting an investigation of his own, and . . . that he presented
more evidence than the government had discovered.”36 Still,
Attorney General Biddle told the Supreme Court that qui tam



actions should be eliminated because effective law enforcement
required that control of litigation be left to the Attorney General.37
In resolving this dispute, the Supreme Court rejected Attorney
General Biddle’s arguments as policy matters appropriately
addressed to and dealt with by Congress. The Court upheld the
relators’ verdict, reiterating that the qui tam provisions worked
exactly as contemplated by Congress:
Even if, as the government suggests, the petitioner has
contributed nothing to the discovery of this crime, he has
contributed much to accomplishing one of the purposes for
which the Act was passed. The suit results in a net
recovery to the government of $150,000, three times as
much as the fines imposed in the criminal proceedings; and
this recovery was obtained at the risk of a considerable loss
to the petitioner since Section 3491 explicitly provides that
the informer must bear the risk of having to pay the full
cost of litigation.38
The Court proceeds to explain its finding, expounding on the
purpose of the False Claims Act:
One of the chief purposes of the Act, which was itself first
passed in war time, was to stimulate action to protect the
government against war frauds. To that end, prosecuting
attorneys were enjoined to be diligent in enforcement of the
Act’s provisions, and large rewards were offered to
stimulate actions by private parties should the prosecuting
officers be tardy in bringing the suits.39
The Court’s majority opinion was clearly opposite of Biddle’s and
his supporters. However, vindicating Attorney General Biddle’s
frustrations, Justice Robert H. Jackson wrote in his dissenting
If ever there was a case where the letter killeth but the spirit
giveth life, it is this. Construed to the letter as the Court

Chapter Two: A Brief History of the False Claims Act

does, it becomes an instrument of abuse and corruption
which can only be stopped by the timely intervention of
Congress … [T]o permit the informer to recover when he
has not actually informed seems to me an evil result
unintended by the Act…. I would hold that the rich rewards
of this kind of proceeding are reserved for those who
actually and in good faith have contributed something to
the enforcement of the law and the protection of the United
As a result, Attorney General Biddle shifted his attack on the qui
tam provisions of the FCA to another front: Congress. He sought
legislative action to abolish these provisions, citing multiple
pending qui tam actions as warranting repeal.41 His crusade against
these parasitic qui tam actions became the catalyst for the first of
many changes to the FCA beginning with the 1943 amendments.



The 1943 Amendments: The First of Many
In response to those infuriated by “parasitic” qui tam suits,
Congress adopted the 1943 Amendments. Unfortunately, finding a
balance between eradicating the “parasitic” lawsuit problem and
protecting true whistleblowers proved to be quite difficult.
On April 1, 1943, with only twenty-three members present, the
House of Representatives passed a resolution to amend the FCA by
abolishing all qui tam actions.42 The Senate, however, strongly
resisted these efforts.43 Unlike the proceedings that occurred in the
House, the Senate held hearings on the matter and listened to the
opinions of at least one qui tam relator, Gordon Coates, who
testified against repeal of the qui tam provisions.44
The Senate debates focused on what deference should be provided
to the Attorney General, and considered language that would have
permitted a qui tam case to be pursued only if the Attorney
General had failed to act on information giving rise to the suit for
six months.45 Such language was ultimately rejected.
The version eventually adopted by both Houses and signed into
law by President Franklin Roosevelt on December 23, 1943, made
two substantial changes to the FCA.
First, Congress incorporated a broad jurisdictional bar against qui
tam lawsuits “whenever it shall be made to appear that such suit
was based upon evidence or information in the possession of the
United States or any agency, officer or employee thereof, at the
time such suit was brought.”46 This change had a dramatic effect
on civil FCA lawsuits because it barred qui tam suits if any
government employee had received any tip or information about
the fraud. Similarly, qui tam suits were barred if any information
about the fraud was contained in any government file, even if the
government was unaware of the matter and even if the relator was
the source of the government’s knowledge.47


Chapter Two: A Brief History of the False Claims Act

Second, the 1943 Amendment reduced the qui tam relator’s share
of the recovered proceeds from 50 percent to between 10 percent
and 25 percent,48 thereby creating less of an incentive for
individuals to report government fraud.
The 1943 Amendments weakened the FCA to such an extent that
qui tam actions were effectively eliminated for the next forty
years.49 However, this changed in the 1980s.



The 1986 Amendments:
Making Qui Tam Viable Again
In the 1980s, in response to the Cold War, U.S. defense spending
soared. As defense spending increased, highly publicized fraud
involving defense industry contractors also increased.
On May 29, 1985, a headline in the New York Times read “NAVY
$600 TOILET SEAT” was another headline in The Washington
Post.51 With these and other outrageous expenditures, it was
obvious that something had to be done to address the seemingly
uninhibited fraud driven by defense contractors.
As a result, Congress began to reassess the FCA’s utility in
combating fraud. Thus, in 1986, Congress once again amended the
FCA, establishing liability pursuant to one of seven subsections of
the FCA, codified at 31 U.S.C. §§ 3729(a)(1) through (a)(7).52
A. The Amendments
After the 1986 Amendments became effective, to state a claim
under the FCA the relator must allege that the defendant:
(1) Knowingly presented or caused to be presented a false or
fraudulent claim for payment or approval to an officer or
employee of the United States Government or a member of
the Armed Forces of the United States;53
(2) Knowingly made, used or caused to be made or used, a
false record or statement to get a false or fraudulent claim
paid or approved by the Government;54
(3) Conspired to defraud the Government by getting a false or
fraudulent claim allowed or paid;55
(4) Had possession, custody or control of property, or money
used, or to be used, by the Government and, intending to
defraud the Government or willfully to conceal the


Chapter Two: A Brief History of the False Claims Act

property, delivered or causes to be delivered, less property
than the amount for which the defendant received a
certificate or receipt;56
(5) Authorized to make or deliver a document certifying
receipt of property used, or to be used, by the Government
and, intending to defraud the Government, made or
delivered the receipt without completely knowing that the
information on the receipt is true;57
(6) Knowingly bought or received as a pledge of an obligation
or debt, public property from an officer or employee of the
Government, or a member of the Armed Forces, who
lawfully may not sell or pledge the property;58 or
(7) Knowingly made, used, or caused to be made or used, a
false record or statement to conceal, avoid, or decrease an
obligation to pay or transmit money or property to the
While sections 3729 (a)(1), (a)(2), (a)(3) and (a)(7) are the most
frequently used FCA claims, all of the foregoing FCA claims
require proof of three common elements in order to establish a
violation of the FCA:
(1) a “claim” must be presented to the Government by the
defendant, or the defendant must “cause” a third party to
submit a “claim;”
(2) the claim must be made “knowingly” and
(3) the claim must be “false” or “fraudulent.”60
In addition to these three common elements, some courts require
that the claim (4) be material (although this is not specifically
mandated by the statute)61 and that the claim (5) caused resulting
damage to the Government.62
While the 1986 Amendments eliminated many of the barriers
erected by the 1943 provisions, some of the 1986 provisions raised
new issues (e.g., the “public disclosure” and “original source”
rules) for qui tam relators.



B. Reviving the Qui Tam Suit
The Ohio Southern District Court’s decision in Gravitt v. General
Electric Company represented the first true revival of the qui tam
suit.63 John Gravitt became a national figure as a whistleblower
who put the 1986 amendments to the test. His successful five-year
legal battle against GE Aircraft Engines made it easier for
whistleblowers to report fraud, and for the government to earn
damages from federal contractors who had defrauded it.64
Gravitt was hired in 1980 by General Electric (GE) to work at a jet
engine plant in Ohio.65 Once promoted to foreman, his supervisors
asked him to falsify cost reports in such a way that allowed the
company to shift cost overruns on commercial projects to federal
contracts.66 Though Gravitt refused to falsify the time cards, his
supervisors brazenly altered the documents in order to bill more
time to government contracts.67 When Gravitt protested in a letter
to a GE vice president, he was fired.68
As a result, Gravitt filed suit in 1984 under the FCA alleging that
the company had cheated the government out of about $7
million.69 Based on the penalty provisions of the FCA, GE would
owe about $44 million.70
Without taking a single deposition or interviewing any witnesses,
and opposing all attempts by Gravitt’s counsel to conduct
appropriate discovery, the Department of Justice (DOJ) agreed to
settle all claims with GE for a payment of $234,000.71
While this settlement was pending, in late 1985 and early 1986,
both Gravitt and his counsel were subpoenaed to appear and testify
before panels of the U.S. Senate and House of Representatives,
who were considering amendments to the FCA.72 Gravitt’s
testimony was the only evidence Congress heard from an
individual who faced the hurdles of the 1943 Amendments, had a
qui tam action pending, or who had even ever filed a qui tam

Chapter Two: A Brief History of the False Claims Act

As a result of this testimony, Congress amended the FCA and the
amendments detailed above were signed into law by President
Ronald Reagan in October of 1986.74
The special master in the Gravitt case eventually issued an opinion
in August 1987, recommending the settlement between the DOJ
and GE be accepted.75 The federal district judge, however,
retroactively applied the 1986 Amendments and rejected the
magistrate’s opinion.76 Criticizing the DOJ for an incomplete
investigation and for failing to accept Gravitt’s help, the court
rejected the $234,000 settlement as inadequate in light of the
increased penalties, lesser burden of proof, and lack of requirement
for proof of specific intent.77
The final settlement came in 1989, on the eve of trial, for a total of
$3.5 million.78 Gravitt and three other whistleblowers shared a
$770,000 award which, at that time, was the largest in U.S.
Though at the time this settlement was the first major qui tam
recovery under the FCA in nearly fifty years, it would soon be
overshadowed by subsequent enormous recoveries against other
government contractors as a result of qui tam actions.80
The fiscal year ending September 30, 2015, was the fourth year
running where the DOJ recovered more than $3.5 billion in cases
under the FCA.81 This brought total FCA recoveries from January
2009 to the end of the fiscal year 2015 to $26.4 billion.82



Fraud Enforcement and Recovery Act of 2009
In May 2009, the Fraud Enforcement and Recovery Act (FERA)
was enacted by Congress and signed into law by President Barack
Obama.83 FERA made liable anyone who “knowingly makes, uses,
or causes to be made or used, a false record or statement to get a
false or fraudulent claim paid or approved by the Government.”84
It also greatly expanded the liability provisions of the FCA beyond
the Act’s previous limits by revising all seven of the statute’s
liability provisions and redefining key terms such as “claim,”
“material,” and “obligation.” FERA also eliminated the intent
requirement by removing the phrase “to get paid,” on which the
unanimous Supreme Court relied in Allison Engine Co. v. United
States ex rel. Sanders, to limit FCA liability to false statements or
claims made by defendants for the purpose of getting the
government to pay the claim.85 The new sections 3729(a)(1)(A) –
(G) extended liability to any person who:
(A) knowingly presents, or causes to be presented, a false or
fraudulent claim for payment or approval;
(B) knowingly makes, uses, or causes to be made or used, a
false record or statement material to a false or fraudulent
(C) conspires to commit a violation of subparagraph (A),(B),
(D), (E), (F), or (G);
(D) has possession, custody, or control of property or money
used, or to be used, by the Government and knowingly
delivers, or causes to be delivered, less than all of that
money or property;
(E) is authorized to make or deliver a document certifying
receipt of property used, or to be used, by the Government
and, intending to defraud the Government, makes or
delivers the receipt without completely knowing that the
information on the receipt is true;


Chapter Two: A Brief History of the False Claims Act

(F) knowingly buys, or receives as a pledge of an obligation or
debt, public property from an officer or employee of the
Government, or a member of the Armed Forces, who
lawfully may not sell or pledge property; or
(G) knowingly makes, uses or causes to be made or used, a
false record or statement material to an obligation to pay or
transmit money or property to the Government, or
knowingly conceals or knowingly and improperly avoids or
decreases an obligation to pay or transmit money or
property to the Government.86
In order to fully understand the significant impact these
amendments had on expanding FCA liability, it is important to
understand what led to these changes.
A. The Allison Engine Decision
Following the enactment of the 1986 Amendments, a split emerged
among the Circuit Courts of Appeals regarding the intent
requirement applicable to sections 3729(a)(2) and (3) claims. For
example, since section 3729(a)(2) prohibited the making or use of
“a false record or statement to get a false or fraudulent claim paid
or approved,” some courts reasoned that the relator must prove that
the defendant intended the Government itself pay the claim.87
Other courts held that sections 3729 (a)(2) and (3) could be
established by proving that the defendant intended to cause a claim
to be paid by a private entity using Government funds.88
In 2008, the U.S. Supreme Court weighed in on the subject in
Allison Engine Co. v. United States ex rel Sanders.89 The facts of
the case were straightforward. The Navy contracted with two
shipyards to build destroyers, each of which needed generator sets
for electrical power.90 The shipyards subcontracted with Allison
Engine Company, Inc., which in turn, subcontracted with two
other subcontractors to do work associated with the generator
sets.91 The subcontracts required that each generator set be



accompanied by a certificate of conformance (COC) certifying that
the unit was manufactured according to Navy specifications.92
Former employees of one of the subcontractors brought a FCA
The relators argued that the subcontractors knowingly submitted
invoices to the shipyards for work that did not meet the Navy
requirements and that the contractors had issued false COCs
representing that they had met the requisite specifications.93 In
addition to the false COCs, the relators introduced evidence that
the defendants presented invoices for payment to the shipyards.
The relators did not, however, provide evidence of the invoices
that the shipyards presented to the Navy.94 Writing for a
unanimous Court, Justice Alito held:
“[A] subcontractor violates §3729 (a)(2) if the
subcontractor submits a false statement to the prime
contractor intending for the statement to be used by the
prime contractor to get the Government to pay its claim.”95
The Court interpreted the phrase “to get a false or fraudulent claim
paid” to mean that a defendant must intend the government itself
to pay the claim; thus, FCA liability would not attach to fraud
committed against prime contractors working on projects funded
with federal dollars because the fraud was not directed against the
government itself. Thus, the Supreme Court’s decision in Allison
Engine essentially made it far more difficult to prove FCA claims
against subcontractors, vendors and/or suppliers. However, due to
Congressional action, the effects of the Allison Engine decision
were short lived.
B. The 2009 FERA Amendments and the Allison Engine
Following the Supreme Court’s decision in Allison Engine,
Congress became increasingly concerned about how these types of
judicial decisions would unnecessarily limit the scope of FCA

Chapter Two: A Brief History of the False Claims Act

liability in 31 U.S.C § 3729(a). Through FERA, Congress
eliminated both (1) the “presentment” requirement in Section
3729(a) by deleting the phrase “to an officer or employee of the
Government, or to a member of the Armed Forces” and (2) the
“get paid” language in sections 3729(a)(2) and 3729(a)(3).96
This amendment also modified the definition of “claim” to include
a request for money or property made “to a contractor, grantee, or
other recipient, if the money or property is to be spent or used on
the Government’s behalf or to advance a Government program or
Most notably, the FERA amendment eliminated the “intent”
requirement found in Allison Engine, and instead hinged liability
upon materiality – whether the false statement or record was
“material” to getting a false claim paid or approved.98 Finally,
though the liability provisions of the FCA remain categorically the
same, FERA renumbered and expanded these categories to cover
additional conduct.99
As you can see, FERA greatly expanded the liability provisions of
the FCA, thereby making it easier for relators to bring a qui tam



The 2010 Patient Protection and Affordable Care Act
Less than a year later, the False Claims Act (FCA) was once again
influenced by legislation. In March 2010, President Barack Obama
signed the Patient Protection and Affordable Care Act (PPACA).
This massive piece of legislation reformed not only multiple
aspects of health care, but also increased the strength and scope of
the FCA in several ways.
First, the PPACA amendments removed the jurisdictional nature of
the public disclosure bar thereby allowing Congress to add a
savings clause. This clause states: “The court shall dismiss an
action or claim under this section, unless opposed by the
Government . . . .” 100 Thus, the otherwise mandatory dismissal
under the public disclosure bar may now be precluded if the
Government opposes dismissal.
Additionally, the PPACA also redefined what constitutes “publicly
disclosed information” to bar only those suits based on disclosures
from federal sources or the news media. Specifically, the FCA will
not bar a claim unless “substantially the same allegations or
transactions were publicly disclosed” in:
(1) “a Federal criminal, civil, or administrative hearing in
which the government or its agent was a part,
(2) “a congressional, [GAO], or other Federal report, hearing,
audit, or investigation,” or
(3) “from the news media.”101
Consequently, the PPACA now allows relators to bring qui tam
claims based on information derived from state and local
government sources.
Second, the PPACA expands the scope of the “original source”
exception to the public disclosure bar. Prior to the PPACA, qui
tam relators could file FCA claims based on publicly disclosed


Chapter Two: A Brief History of the False Claims Act

information only if the relator had disclosed the information to the
government before filing suit and only if the relator had “direct
and independent knowledge” of the information at issue.102
Under the new amendment, an original source is now someone
who has “knowledge that is independent of and materially adds to
the publicly disclosed allegations or transactions.”103 Thus, the
relator’s allegations can now be based on secondhand information,
so long as those allegations add to the information that has already
been publicly disclosed.
Next, the PPACA clarified an amendment to the FCA made by
FERA in 2009. Specifically, one of the FERA amendments
broadened the “reverse false claim” provision of the FCA to
include someone who “knowingly conceals or knowingly and
improperly avoids or decreases an obligation to pay or transmit
money or property to the government.”104 FERA then defined the
term “obligation” to mean, among other things, “retention of any
The PPACA clarified exactly how long a provider had to return an
overpayment once it was discovered. Under the PPACA,
overpayments under Medicare and Medicaid must be reported and
returned within sixty days of discovery or returned on the date any
corresponding cost report is due, if applicable.106
Finally, the PPACA also cleared up any ambiguity concerning
whether the Anti-Kickback Statute (AKS) could form the basis of
a FCA claim. Section 6402(f)(1) of the PPACA establishes that
claims submitted in violation of the AKS automatically constitute
false claims for purposes of the FCA. In addition, section 6402(f)
(2) of the PPACA amends the AKS to state that “a person need not
have actual knowledge … or specific intent to commit a violation”
of the AKS. Thus, providers will not be able to defend a FCA
claim by arguing a lack of intent with a respect to the underlying
AKS violation.



As you can see, the changes implemented by the PPACA are a
stark contrast to the qui tam legislation enacted more than sixty
years ago. This powerful and at times controversial piece of
legislation strengthened the reach of the FCA and has since paved
the way for qui tam relators to more easily expose fraud against the


– Recent Noteworthy
and Judgments
and Judgements
After a turbulent history, whistleblowing is alive and well to this
day. Most notably, the settlements and judgments in such cases
continue to get larger. Since January 2009, the Department of
Justice (DOJ) has recovered $26.4 billion. 107According to the
DOJ’s 2015 summary, the DOJ received more than $3.5 billion in
settlements and judgments – for the fourth year in a row.108
In fiscal year 2015, 638 qui tam lawsuits were filed by
whistleblowers, who received $597 million in rewards. After
recovering more than $3.5 billion from False Claims Act (FCA)
cases in 2015, Principal Deputy Assistant Attorney General
Benjamin C. Mizer, head of the Justice Department’s Civil
Division asserted, “The [FCA] has again proven to be the
government’s most effective civil tool to ferret out fraud and return
billions to taxpayer-funded programs.” 109
Most of the DOJ’s recoveries – $1.9 billion in the 2014-2015 fiscal
year – came from the health care industry. 110 Since the beginning
of 2016, federal and state governments have amassed more than
$1.86 billion in FCA recoveries.111 While the majority of these
recoveries have been from the health care sector, recoveries were
also made in other areas including government contracts and the
financial industry. The following examples represent only a
handful of the significant recoveries that have been made by qui
tam relators in FCA cases in the last two years alone.
Health Care Industry

Two of the largest health care recoveries in 2015 were
recovered from DaVita Healthcare Partners, Inc., the
leading provider of dialysis services in the United States.112
DaVita paid $450 million to resolve allegations that it
knowingly generated unnecessary waste in administering


the drugs Zemplar and Venofer to dialysis patients, and
then billed the government for costs that could have been
avoided.113 DaVita also paid an additional $350 million to
resolve claims that it violated the FCA by paying kickbacks
to physicians to induce patient referrals to its clinics.114

On July 6, 2015, a multinational pharmaceutical
manufacturer agreed to pay $46.5 million plus interest, and
another pharmaceutical manufacturer agreed to pay $7.5
million plus interest, to the United States and participating
states.115 The settlement resolved claims that the companies
knowingly underreported prices for certain drugs, leading
to underpayment of quarterly rebates owed to the states
under the Medicaid Drug Rebate Program and overcharges
to the United States for payments to the states.116

Olympus Corporation of the Americas, the United States’
largest distributor of medical equipment, was ordered to
pay $623.02 million to settle criminal charges and civil
claims relating to kickback schemes.117 Olympus was
charged with conspiracy to violate the Anti-Kickback
Statute, and because the kickback payments caused false
claims to be submitted to federal health care programs –
such as Medicare, Medicaid, and TRICARE – Olympus
also violated the FCA.118

The DOJ recovered more than $900 million from more
than 300 people who have been arrested and charged with
Medicare fraud this year.119 This is the largest takedown of
defendants attempting to defraud the Government through
the Medicare program.120 The arrests were in thirty-six
federal districts across the country and involved twentynine doctors, eight pharmacists, eleven nurses or physician
assistants, nine medical counselors, and others, including
physical therapists and home health care providers.121


Chapter Three: Recent Noteworthy Settlements and Judgments

Government Contracts

In October 2015, Boeing, a company in the aerospace and
defense industry, was ordered to pay $18 million to settle
the FCA allegations that the company submitted false
claims for labor charges on its maintenance contract with
the U.S. Air Force.122 Specifically, it was alleged that
Boeing knowingly charged the Government for time that
Boeing’s mechanics spent on extended breaks and lunch
hours, instead of repairing the aircraft.123

On January 6, 2016, the DOJ announced a $9 million
settlement stemming from alleged FCA violations
connected to United States Agency for International
Development contracts.124 According to the Government, a
design and construction firm misrepresented its eligibility
and qualifications for infrastructure projects in Egypt in the
1990s by concealing from the government that it had
already engaged joint-venture partners for the project.125

On February 1, 2016, a Florida security and fire-protection
services company settled FCA allegations for $7.4
million.126 The company, which subcontracted with a larger
government contractor to provide fire-fighting services to
U.S. military bases in Iraq, allegedly inflated labor costs by
double-billing certain salaries as both direct and indirect
costs. More than $1.3 million of the settlement funds will
be awarded to the whistleblower who initially brought the
FCA lawsuit.127

On March 7, 2016, a defense contractor that provides
helmets to the Army resolved FCA claims against it by
paying $3 million.128 The government alleged that the
contractor provided defective helmets from 2006 to 2009
and that the helmets were not manufactured and tested
properly.129 The lawsuit originated as a qui tam action filed



by employees of a subcontractor. The two whistleblowers
will split $450,000.130
Fraud in the Financial Industry

On October 16, 2015, the estate of a former owner and
president of a financial corporation and its subsidiary
agreed to pay $4 million to settle claims relating to alleged
false statements about the financial condition of the
corporation and its intended use of Troubled Asset Relief
Program (TARP) funds, causing the Department of
Treasury to invest TARP funds in the corporation.131
Criminal actions against certain executives of the
corporation and its subsidiary are pending.132

In October 2015, Fifth Third Bank had been unlawfully
certifying loans as being eligible to be insured by the
Federal Housing Administration (FHA).133 As a result of
the bank’s false representations, the U.S. Department of
Housing and Urban Development (HUD) lost millions of
dollars as those loans defaulted.134 From 2003 to 2013,
Fifth Third Bank had certified 1,439 materially defected
loans, 36 percent of which defaulted forcing HUD to pay
the insurance claims.135 Fifth Third Bank and its
subsidiaries were ordered to pay $85 million to resolve the
civil fraud claims against them.136

On April 15, 2016, a mortgage originator and underwriter
based in New Jersey settled alleged FCA violations with
the Department of Justice for $113 million. 137 The
originator and underwriter allegedly ignored FHA
guidelines for FHA-insured mortgages between 2006 and
the end of 2011 well after the financial crisis.138 In addition
to generating mortgages that did not meet requirements to
be FHA-insured, the originator and underwriter allegedly
failed to report defaults to the federal government.139


Chapter Three: Recent Noteworthy Settlements and Judgments

On May 13, 2016, an upstate New York bank settled with
the DOJ for $64 million after the government alleged that
the bank originated and underwrote FHA-insured mortgage
loans that it knew did not meet federal requirements. 140
The bank allegedly originated and underwrote those
mortgage loans between 2006 and 2011, during which time
it allegedly identified hundreds of problematic loans but
self-reported only seven.141

These examples represent only the tip of the iceberg.
Unfortunately, they also demonstrate that fraud against the
Government is pervasive in our country and can touch almost any
area of life. It is clear that whistleblowers are needed now more
than ever.


a Civic
More than
Why Duty:
Qui Tam Cases Matter
Why Qui Tam Cases Matter
The above cases are just a small sample of the many in our
nation’s history that have forged a longstanding belief that each of
us has a civic duty to protect our government from fraudulent
activity. Anyone who chooses to become a whistleblower also
becomes one more dutiful citizen in a long legacy of noble
informers. As one Department of Justice (DOJ) official said in
December 2015, “many of the recoveries obtained under the False
Claims Act (FCA) result from courageous men and women who
come forward to blow the whistle on fraud they are often uniquely
positioned to expose.”142
No one understands this better than whistleblower Blake Percival.
Mr. Percival was a whistleblower who filed a qui tam complaint in
2011 alleging that U.S. Investigation Services (USIS) violated the
FCA in performing a contract with the Office of Personnel
Management (OPM) to perform background investigations of
federal employees and those applying for federal service. 143
Specifically, the lawsuit alleged that USIS knowingly conducted
flawed investigations of individuals seeking security clearances.144
My colleague, Larry Golston, and our firm’s Consumer Fraud
section head, W. Daniel “Dee” Miles, represented Mr. Percival.
This case exposed the troubling shortcuts taken by companies
entrusted with vetting individuals to be given access to our
country’s sensitive and secret information. The lawsuit alleged
that, beginning in at least March 2008 and continuing through at
least September 2012, USIS management devised and executed a
scheme to deliberately circumvent contractually required quality
reviews of completed background investigations in order to
increase the company’s revenues and profits.145 Relying upon
USIS’ false representations, OPM issued payments and contract
incentives to USIS that it would not otherwise have issued had


OPM been aware that the background investigations had not gone
through the quality review process required by the contracts.146
It was further alleged that USIS engaged in a practice referred to
internally as “dumping” or “flushing,” which involved releasing
cases to the OPM as complete when in fact investigations on
individuals were either not complete or no substantive
investigation was performed.147 According to the allegations,
approximately 40 percent of all USIS security background checks
– at least 665,000 in total – involved dumping/flushing and
resulted in individuals receiving security clearances for positions
for which they were not properly vetted.148
Ultimately, USIS agreed to forego at least $30 million in payments
legitimately owed to the company to settle the government’s
allegations.149 It is cases like this one that best exemplify the
importance of qui tam litigation.





As evidenced by the modern developments to the FCA and recent
whistleblower cases, like Mr. Percival’s case, you as a practitioner
will experience various triumphs and challenges as you pursue the
relator’s qui tam case. In Part II of this book, I will give you
practice tips to help you evaluate a potential qui tam case and learn
what it takes to get this complex litigation on the path to a
successful resolution.


Filing a Qui Tam Case

Is a Qui Tam Suit Appropriate?

Chapter 5 - Is a Qui Tam Suit Appropriate?

Your first step in evaluating a potential qui tam case is deciding
whether filing under the False Claims Act (FCA) is even a viable
option for your relator. Note that there are some claims that have
been exempted from the FCA, and there are some instances where
a relator is barred from bringing an otherwise actionable suit.
Other remedies may be available for certain relators with qui tam
claims, and the order in which these remedies are pursued may be
First, there are certain claims that are not actionable under the
FCA. These claims include those brought by members of the
armed forces against another member of the armed forces; claims
against members of Congress, members of the judiciary, or senior
executive branch officials;150 and claims, records, or statements
made under the Internal Revenue Code.151
Furthermore, although not explicitly excluded by the statutory
language, the following allegations do not fall within the scope of
the FCA: mismanagement by government contractors that does not
rise to the level of false statements knowingly made to the
government for purposes of having a claim paid, allegations that
the government’s own ineptitude or waste constitutes a false claim,
and claims against states and state entities, as they are not
“persons” within the meaning of Section 3729(a).152
Additionally, there are certain circumstances under which a relator
may not file a qui tam action. If the relator was convicted of
criminal conduct arising from her role in the FCA violation,153
another qui tam concerning the same conduct has already been
filed154 (“first to file bar”), the government is already party to a
civil or administrative money proceeding concerning the same
conduct,155 or the qui tam action is based upon information that has
already been disclosed to the public156 (“public disclosure bar”), a
relator may be prohibited from pursuing her qui tam action.


Many whistleblowers may pursue other causes of action instead of,
or prior to, filing a qui tam suit. Such actions may include
antiretaliatory administrative remedies – as found in many other
federal statutes – or remedies under state law, such as promissory
estoppel, common law fraud, or local whistleblower statutes.157
Other options may also include more traditional remedies such as
state and federal age, race, or sex discrimination laws.158
If you determine that a qui tam suit is your relator’s best solution
for obtaining both personal relief and to expose the wrongdoing
against the government, you must first ensure that a qui tam action
is not restricted by a prior-filed suit. While a FCA action is not
always precluded when legal proceedings under other remedies
have already been initiated, this is not the case in all jurisdictions.
Some courts have found that the filing of a whistleblower action
under state law constitutes a “public disclosure” for purposes of
determining jurisdiction in a subsequent action under the FCA.159
Thus, from the beginning, it is critical that you completely assess
the merits of your relator’s case and determine whether a qui tam
action is the most appropriate avenue to pursue. Part II of this
book is specifically designed to help you evaluate your relator’s
potential qui tam suit and to assist you in moving forward with
your relator’s claims.


Evaluating a Potential Relator

Chapter 6 – Evaluating a Potential Relator

After determining that a qui tam suit is a viable option, you must
carefully evaluate a would-be relator in order to avoid those with
only a faint notion of fraud but a strong hope of turning a quick
profit. You should seek out those relators who are genuinely
concerned about the fraudulent activity they have witnessed and
are determined to remedy it.
Such relators likely have collected documentary evidence of the
fraud, and many will have even raised the issue internally before
seeking counsel. By evaluating the nature and frequency of any
internal complaints, as well as the relator’s knowledge of the
resolution of those complaints, you can get a sense of the extent of
the relator’s determination and intentions.160
Additionally, you should also be aware of any relators with
unrealistic expectations or cynical attitudes toward resolution of
the case, or those who seek fame through a qui tam action. Such
relators may not have the desire to pursue the action if it gets
tough, or alternatively may never want to resolve the action,
preferring instead to continue litigating until every injustice they
can imagine has been remedied. Ultimately, though, it is up to you
to decide whether to represent a relator based on your own rational
analysis of the relator’s claims.161
If you do choose to serve as counsel for a relator, it is critically
important that you establish a trusting relationship with your
potential relator the moment you begin gathering information for
your qui tam case. You should always make efforts to ensure that
the lines of communication with the relator remain open, otherwise
you will risk frustrating the purpose of the lawsuit and may
ultimately lose access to valuable and relevant information.
Although this relationship is not that much different from the
traditional attorney-relator relationship, the primary difference is


the level of involvement that your relator should have in the
development of a qui tam case.
Specifically, in False Claims Act cases, the relator and relator’s
counsel should make a concerted effort to work closely together to
ensure that the common goals of the litigation are being met at all
times. Specifically, it is important for the attorney to allow the
relator to assist with reviewing documents, interviewing witnesses,
entering documentary information into a computer database,
summarizing documents, and other activities to ensure that the
case will be successful. Finally, during your evaluation of the
relator, you must determine if the relator possesses the knowledge
and skill to assist in the litigation.


The Essential Elements of a False
Act Elements
Qui Tam ofClaim
Chapter 7 – The
False Claims Act Qui Tam Claim
Under the False Claims Act (FCA), a claim may be brought
against any person who –
(A) knowingly presents, or causes to be presented, a false
or fraudulent claim for payment or approval;
(B) knowingly makes, uses, or causes to be made or used, a
false record or statement material to a false or
fraudulent claim;
(C) conspires to commit a violation of subparagraph (A),
(B), (D), (E), (F), or (G);
(D) has possession, custody, or control of property or
money used, or to be used, by the Government and
knowingly delivers, or causes to be delivered, less than
all of that money or property;
(E) is authorized to make or deliver a document certifying
receipt of property used, or to be used, by the
Government and, intending to defraud the Government,
makes or delivers the receipt without completely
knowing that the information on the receipt is true;
(F) knowingly buys, or receives as a pledge of an
obligation or debt, public property from an officer or
employee of the Government, or a member of the
Armed Forces, who lawfully may not sell or pledge
property; or
(G) knowingly makes, uses, or causes to be made or used, a
false record or statement material to an obligation to
pay or transmit money or property to the Government,
or knowingly conceals or knowingly and improperly
avoids or decreases an obligation to pay or transmit
money or property to the Government . . . .162
As I mentioned in Part I, in order to be actionable under 31 U.S.C.
§ 3729(a) of the FCA, a “claim” must be (1) made “knowingly”


and must be (2) “false or fraudulent.” Although the FCA does not
define “false” or “fraudulent,” the Act is “intended to reach all
types of fraud, without qualification, that might result in financial
loss to the Government.”163 Thus, the phrase should be interpreted
broadly, which means that any claim that is grounded in fraud and
that might result in financial loss to the Government is covered by
the Act.164
In addition to these considerations, in drafting your qui tam
relator’s complaint, you must also determine whether materiality,
causation, and damages exist in your relator’s case. Each of these
elements is discussed in more detail below.
A. The Meaning of “A Claim”
The passage of the 2009 Fraud Enforcement and Recovery Act
(FERA) broadened the meaning of the term “claim” under the
FCA, thereby adding clarity to what types of fraudulent conduct
were prohibited. This change was made in response to United
States ex rel. DRC, Inc. v. Custer Battles, LLC, in which the
Eastern District Court of Virginia held that funds administered by
the Coalition Provisional Authority in Iraq were not U.S.
Government funds within the reach of the FCA.165
Less than two weeks after the 2009 Amendments were passed, the
Fourth Circuit overruled its district court, holding that the FCA did
reach money held by a grantee so long as the United States
provided any portion of the funds.166
Section 3729(b)(2) of the FCA currently provides that the term
(A) means any request or demand, whether under a
contract or otherwise, for money or property
and whether or not the United States has title to
the money or property, that –


Chapter Seven: The Essential Elements of a False Claims Act Qui Tam Claim

(i) is presented to an officer,
employee, or agent of the United
States; or
(ii) is made to a contractor, grantee,
or other recipient, if the money
or property is to be spent or used
on the Government’s behalf or to
advance a Government program
or interest, and if the United
States Government –


provides or has provided
any portion of the money
or property requested or
demanded; or
will reimburse such
contractor, grantee, or
other recipient for any
portion of the money or
property which is
requested or demanded;

(B) does not include requests or demands for money
or property that the Government has paid to an
individual as compensation for Federal
employment or as an income subsidy with no
restrictions on that individual’s use of the
money or property . . . .167
As you can see, this new definition of “claim” extends the reach of
the FCA to fraud against money or property used on the
government’s behalf or used to advance a government program
or interest if the government provides or has provided any portion
of the money or property, regardless of whether the government
has retained title to that money or property.168 Thus, a “claim”
under the FCA encompasses virtually all demands or requests that



cause the disbursement of federal funds, whether the demand or
request is on the Government directly or is made on some other
recipient of government funds.169 The FCA explicitly states,
however, that it does not apply to tax claims under the Internal
Revenue Code.170
B. Made “Knowingly”
The 1986 amendments to the FCA resolved the split among the
Circuit Courts over the requisite degree of intent necessary to
prove an FCA violation. Under the 1986 amendments, section
3729(b)(1)(B) clearly states that “no proof of specific intent to
defraud is required” to prove a violation.171 Instead, a defendant
will be liable if the relator proves that the defendant “knowingly”
submitted a false claim.172
The term “knowingly” is defined as
(1) actual knowledge of the false information;
(2) acts in deliberate ignorance of the truth or
falsity of the information; or
(3) acts in reckless disregard of the truth or falsity
of the information.173
As you can see, this definition does not require a relator to prove
that the defendant actually intended to submit a false claim in
order to succeed in a FCA case.174 In fact, liability may even be
established by simply proving deliberate ignorance or reckless
disregard for the truth of the claims.175
Note, however, that negligence or an innocent mistake are not
sufficient.176 The key to establishing this prong of a FCA claim is
to show that the knowledge existed at the time the defendant
submitted the claim for payment.177 Simply showing that the
defendant had the requisite knowledge at some point during the
parties’ interactions is insufficient to prove an FCA violation.178


Chapter Seven: The Essential Elements of a False Claims Act Qui Tam Claim

C. Must be “False” or “Fraudulent”
As noted above, under 31 U.S.C. § 3729 of the FCA, a “claim”
must be “false or fraudulent.” Unlike the terms “claim” and
“knowingly,” the terms “false” and “fraudulent” were not defined
by Congress in the FCA. Courts have held that the essence of a
fraudulent claim is one that is based on a lie.179 The withholding of
information critical to the government’s decision to pay is the
essence of a “false” claim.180 Furthermore, courts have held that by
adding the connector “or,” a relator does not have to prove a claim
is both false and fraudulent.181
The most common examples of false claims are claims for goods
or services not provided. False claims can also arise from goods or
services provided in violation of contract terms, specifications,
statutes, or regulations. A government contractor or vendor may
defeat a finding of falsity, however, when a contract or regulation
is subject to more than one reasonable interpretation.
D. The Materiality Requirement
The 1986 amendments of the FCA did not contain language that
indicated a false or fraudulent claim had to be “material” in order
to impose liability. Despite this fact, several courts have held that a
relator must also prove materiality. This requirement is largely due
to the absence of a definition for the terms “false or fraudulent.”182
For example, many courts have defined a “false claim” as common
law fraud.183 Thus, as the reasoning goes, because materiality is
required to prove common law fraud the same element is a
requirement under the FCA. As a practical matter, an attorney
should be prepared to establish materiality. First, it will certainly
be a consideration by a jury in determining how much in damages
it should award. Second, the materiality requirement has been
expressly added via the 2009 FERA amendments when it comes to
proving claims under section 3729.184



Section 3729(a)(1)(B) imposes liability on a person who
“knowingly makes, uses, or causes to be made or used, a false
record or statement material to a false or fraudulent claim.”185
Additionally, Section 3729(a)(1)(G) imposes liability on any
person who “knowingly makes, uses or causes to be made or used,
a false record or statement material to an obligation to pay or
transmit money or property to the Government . . . .”186 The
standard for materiality under FERA is whether a false or
fraudulent statement or record has a “natural tendency to
influence” or is “capable of influencing” the payment or receipt of
money or property.187
This standard has been described as requiring “only that the false
or fraudulent statements either (1) make the government prone to a
particular impression, thereby producing some sort of effect, or (2)
have the ability to effect the government’s actions, even if this is a
result of indirect or intangible actions on the part of the
For example, omissions from a medical center’s bills to the United
States that the services stemmed from compensated referrals or
kickbacks in violation of the Stark laws or false certifications of
compliance with a corporate integrity agreement requiring the
return of excess government payments have been deemed as
material in FCA cases.189 In contrast, false certifications of
compliance with standards of care applicable under Medicare’s
conditions of participation and nonbinding planning cost
projections for labor costs that were neither submitted nor used for
the purpose of calculating a contractor’s award fee payment are
examples statements that have been deemed nonmaterial in FCA
Finally, when determining the material falsity of a potential
relator’s claims, you should note that courts often find that
materiality is lacking where a defendant has fully disclosed the
alleged “falsity” in question to the appropriate government
officials and the government pays the claim nonetheless.191

Chapter Seven: The Essential Elements of a False Claims Act Qui Tam Claim

Most recently, in June 2016, the Supreme Court issued a
unanimous decision resolving a circuit split around the viability of
“implied” fraud claims – claims that are fraudulent not because of
an actual misrepresentation, but because of an implicit
representation of contractual and regulatory compliance perceived
in the contractor’s request for payment.
In Universal Health Services v. United States ex rel. Escobar,192
the contractor, Universal Health Services, provided clinical
services covered by Medicaid and Medicare, and submitted claims
for those services, which the government reimbursed. However,
many of the individuals that provided the services did not have the
required qualifications. As a result, the First Circuit treated the
contractor’s reimbursement request as an implied certification that
the contractor had complied with all applicable regulations, and
held that the complaint stated a claim under the FCA. Though the
Supreme Court agreed that implied certification is a valid basis for
liability, it narrowed the route for recovery under an implied fraud
Specifically, the Court held that implied certification can apply
where a defendant seeking payment “makes specific
representations about the goods or services provided” but fails to
disclose violations of “material” requirements regarding the goods
or services.193 The Court found implied certification was present in
the Escobar case because, by using payment codes for specific
services and professionals, the defendant falsely implied that the
services were performed by properly licensed and supervised
The Court recognized that “common-law fraud has long
encompassed certain misrepresentations by omission,” and thus
extended this rule to representations that are implied in a claim for
payment.195 The touchstone, the Court explained, is whether the
omission makes the claim “misleading.” Therefore, certain “halftruths – representations that can state the truth only so far as it



goes, while omitting critical qualifying information – can be
actionable misrepresentations.”196
The key concept for the Court was that an item is “material” only
if it is outcome determinative. The Court explained that the
materiality requirement “looks to the effect on the likely or actual
behavior of the recipient of the alleged misrepresentation.”197 It is
not enough to make a falsehood “material” if it would give the
government a technical right to withhold payment; the falsehood
has to be so serious that the government in fact would withhold
Although the Court seemingly expanded a relator’s recovery under
the FCA by validating the “implied” fraud theory, the Court may
have narrowed recovery under such theory through the materiality
requirement of the statute. In the wake of the Escobar decision,
interpretation of the materiality requirement will become
increasingly important – especially in the context of implied
certification cases.
E. Causation, Damages, and Penalties
When a person “presents, or causes to be presented, a false or
fraudulent claim to the U.S. Government for approval,” the
causation element under the FCA is satisfied.198 The FCA applies
to any person who knowingly assisted in causing the Government
to pay claims that are grounded in fraud, without regard to whether
that person had direct contractual relations with the Government.
The FCA allows for significant civil monetary damages and
penalties to be awarded against a defendant who submits a
fraudulent claim to the Government.199
The Department of Justice recently issued its “Interim Final Rule
with Request for Comments” that adjusted for inflation civil
monetary penalties for FCA violations.200 This Rule went into
effect on August 1, 2016, and established that FCA civil penalties
increase to between $10,781.40 and $21,562.80 per claim, plus

Chapter Seven: The Essential Elements of a False Claims Act Qui Tam Claim

three times the amount of damages that the Government sustains
because of the false claim.201 It is fully expected that the interim
rule will be adopted. For violations that occurred prior to
November 2, 2105, violators are liable for a civil penalty of $5,500
to $11,000 per claim, plus three times the amount that the
Government sustains because of the false claim.202


Initial Hurdles

Chapter 8 – Initial Hurdles

Although you may find that your relator’s case contains the
aforementioned elements, there are several initial hurdles to
overcome in the beginning stages of filing a qui tam suit. Before a
suit is even filed, you should consider whether the information
held by your relator has already been publicly disclosed, or if
another qui tam suit for the same conduct has already been filed.
The presence of such a suit will immediately bring your relator’s
case to a halt.
On the other hand, if such a suit has not been filed, you must still
consider your relator’s standing to bring suit under the False
Claims Act (FCA), jurisdiction, and the statute of limitations.
A. The Public Disclosure Bar and Original Source
The 1943 Amendments led many whistleblowers to be
unsuccessful if the Government already had any information
regarding the alleged fraudulent activity. The 1986 Amendments
later expanded the FCA to include situations in which the
Government already had related information. The only limitation
under these amendments was that a whistleblower could not sue
based on “publicly disclosed” information, unless the
whistleblower was the “original source” of that information.
As previously mentioned in Part I of this book, significant changes
to this public disclosure bar and original source exception were
then implemented with the passage of the Patient Protection and
Affordable Care Act (PPACA) in 2010. The 2010 PPACA
amendment is not retroactive; therefore, the changes do not apply
to conduct that occurred before March 23, 2010.




1986 Amendments

The “public disclosure bar” included in the 1986 Amendments
prohibits all qui tam actions where the facts pertinent to the action
have already been publicly disclosed in (1) a federal criminal,
civil, or administrative hearing; (2) a congressional, administrative,
or United States Government Accounting Office report, hearing,
audit, or investigation; or (3) from the news media.203 This
exemption does not apply if the relator is an “original source” of
the information.204
Most cases interpreting the public disclosure bar of the 1986
amendments seem to focus on whether the qui tam action is “based
upon” the public disclosure or whether the “allegations or
transaction” alleged in the complaint were publicly disclosed. If
not, the action is not barred; if so, the action is barred unless the
relator qualifies as an “original source.”
However, the caselaw surrounding the public disclosure bar and
original source exception are conflicting, as this topic is one of the
most hotly litigated areas of practice under the qui tam provisions
of the FCA.205 Thus, careful research must be done in the
applicable jurisdiction at the time of filing.206
For example, a circuit split exists as to whether discovery papers
that were not filed in court in a civil case were publicly disclosed
within the meaning of the FCA; the Second and Third Circuits
have held that they are,207 while the Seventh, Ninth, Tenth, and
District of Columbia Circuits have disagreed, holding that material
only potentially available to the public has not been “publicly
You must also carefully consider the implications in ensuring your
relator qualifies as an “original source.” To be an “original source”
under the 1986 amendment, your relator must have “direct and
independent knowledge of the information on which the
allegations are based” and must voluntarily provide the

Chapter Eight: Initial Hurdles

information to the federal government before filing an action based
on the information.209 Proof of “direct and independent
knowledge” has to be determined on a case-by-case basis
depending on the facts.
In fact, the requirement that the relator have “direct and
independent knowledge” has caused some courts to dismiss qui
tam actions brought by relators who based their claims on
nonpublic information, but acquired their information through
others who either chose not to come forward or had incomplete
knowledge of the fraud.210 The circumstances surrounding the
disclosure may also cause a court to conclude the disclosure is not
“voluntary.” Such circumstances may arise if the relator’s job
duties required the relator to report the fraud to the Government,211
or if the disclosure was made in response to questions from a
federal investigator.212
Moreover, prior to the 2010 amendments to the False Claims Act,
several courts narrowed the standard that a relator must satisfy
under the statute to be considered an “original source.” For
example, the Second and Ninth Circuits213 required an individual
to be the source of the underlying public disclosure, while the
United States Court of Appeals for the District of Columbia Circuit
no longer required a relator to disclose to the Government before
the public disclosure.214 The Sixth Circuit concluded that an
original source must have filed suit before the public disclosure
occurred and was the source of disclosure to the Government; the
Seventh Circuit held that a relator is an original source only if he
voluntarily notifies the Government of the allegations before filing

2010 Patient Protection and Affordable Care Act

Buried deep within the PPACA, you will find several changes
made to the public disclosure bar and original source exception of
the FCA.216 These changes include (1) narrowing the types of
disclosures that can trigger the public disclosure bar, (2) modifying


the reach of the original source exception, (3) eliminating the
jurisdictional nature of the 1986 public disclosure bar, and (4)
adding a savings clause that allows the Government to oppose
dismissal because of a public disclosure.217 The importance of
these changes cannot be overstated. Thus, I would like to take a
moment to briefly address each of them.
a. Disclosures that Trigger the Public Disclosure
First, Congress narrowed the FCA’s bar-triggering disclosures to
only those made in “Federal criminal, civil, or administrative
hearing[s]” and “congressional, Government Accountability
Office, or other Federal report, hearing, audit, or investigation.”218
Administrative “report[s], hearing[s], audit[s], or investigation[s]”
are no longer enumerated public disclosures at all.219
Second, “the Government or its agent” must be a party to a
“Federal criminal, civil, or administrative hearing” for a public
disclosure to be created.220 This ensures that the Government is
actually notified of the allegedly fraudulent conduct.
These are distinctions you should determine early on when
investigating a potential relator’s FCA claims. Failure to do so can
severely damage your relator’s case.
b. Modifications to the Original Source Exception
As I briefly noted in Part I of this book, prior to the PPACA, qui
tam relators could file FCA claims based on publicly disclosed
information only if the relator had disclosed the information to the
government before filing suit and only if the relator had “direct
and independent knowledge” of the information at issue. Under the
new amendment, an original source is now someone who has
“knowledge that is independent of and materially adds to the
publicly disclosed allegations or transactions.”221 Thus, the
relator’s allegations can now be based on secondhand information,

Chapter Eight: Initial Hurdles

so long as those allegations add to the information that has already
been publicly disclosed.
Most notably, the “direct knowledge” requirement has been
dropped, allowing relators to now base their claims on nonpublic
information discovered either through investigation of others’
incomplete knowledge of the fraud, or through others who chose
not to come forward.
Furthermore, an original source can maintain a claim with
substantially the same allegations or transactions as publicly
disclosed information if he has voluntarily disclosed to the
government either (1) the information on which allegations or
transactions in a claim are based before public disclosure occurred,
or (2) independent knowledge that materially adds to publicly
disclosed allegations before filing suit.222
This exception frequently arises in qui tam litigation. Thus, be sure
that you are familiar with its application and always consider
how it may impact your relator’s case.
c. Elimination of the Jurisdictional Nature of the
1986 Public Disclosure Bar
Prior to the PPACA amendment, Section 3730(e)(4)(A) read: “No
court shall have jurisdiction over an action under this section based
upon the public disclosure of allegations or transactions . . .”
Based on this language, the Supreme Court effectively held that
courts must analyze the jurisdictional aspects of the public
disclosure bar, even if they are not disputed by the parties. Thus, a
qui tam case could be lost on public disclosure grounds at any
time, even if a jurisdictional challenge was never raised by
Congress has now removed the jurisdictional language of the
public disclosure bar. The statute now states: “The court shall



dismiss an action or claim under this section . . . if substantially the
same allegations or transactions as alleged in the action or claim
were publicly disclosed . . . .”223
Most courts are now leaning toward interpreting the public
disclosure bar as a non-jurisdictional defense.224 While this does
not alter the substance a relator must prove, it does provide some
procedural protection by removing the lingering threat of dismissal
for lack of jurisdiction. It also has the practical effect of shifting
the burden of persuasion from the relator to the defendant.225
d. The Savings Clause and Dismissal
When a defendant files a motion to dismiss under Rule 12(b)(1) of
the Federal Rules of Civil Procedure for lack of subject matter
jurisdiction, the plaintiff then has the burden to prove that
jurisdiction exists. Prior to the 2010 amendment, a relator would
have to prove the court had jurisdiction because there was no
qualifying public disclosure, or that the relator was an original
source thereof.
Now that the jurisdictional element of the public disclosure bar has
been removed, dismissal is no longer warranted under Rule
12(b)(1).226 Rather, dismissal under Rule 12(b)(6) requires the
court to presume that the plaintiff’s claims are true; thus, the
defendant has the burden to prove the existence of a public
disclosure. Thus, relators can now, in a way, postpone the public
disclosure analysis from the motion to dismiss stage until summary
Removing the jurisdictional nature of the public disclosure bar also
allowed Congress to add a savings clause. This clause states: “The
court shall dismiss an action or claim under this section, unless
opposed by the Government . . . .”228
Thus, the otherwise mandatory dismissal under the public
disclosure bar may now be precluded if the Government opposes

Chapter Eight: Initial Hurdles

dismissal. This is especially helpful to a relator who has provided
substantial assistance to the federal Government, as the
Government can keep them in the case even if the relator is not an
original source. Importantly, this provision advances the overall
goal of the FCA by not only encouraging private citizens to
disclose fraud, but also enhancing the Government’s resources in
redressing such fraud.229
The new language of Section 3730(e)(4) also changed the old
standard that dismissed an action “based upon the public
disclosure of allegations or transactions . . .” to one dismissing an
“action or claim . . . if substantially the same allegations or
transactions as alleged in the action or claim were publicly
disclosed . . . .”230 This new language shows that a relator need not
be aware of the public disclosure before her action will be barred.
Thus, the bar will only be triggered if her qui tam complaint
contains “substantially the same allegations or transactions” as
were publicly disclosed.231
Because the public disclosure bar and original source exception
can play a key role in FCA litigation, you should always keep each
of the above changes in mind as you move forward with your
relator’s FCA case.
B. First to File Bar
A second hurdle of which you should be aware in filing your qui
tam suit is Section 3730(b)(5) of the FCA, sometimes referred to
as the “first to file” rule. This rule provides that: “When a person
brings an action under [the qui tam provisions], no person other
than the Government may intervene or bring a related action based
on the facts underlying the pending action.”
Identical facts, or copycat cases, are thus clearly barred, as this rule
seeks to discourage the filing of “parasitic lawsuits that merely
feed off previous disclosures of fraud.”232 Though the “first to file”
rule is generally not an absolute bar, some ambiguity and



jurisdictional variance does exist as to how courts interpret this
rule.233 These differences are best understood by looking at each
individual phrase included in the rule.

“no person other than the Government may
intervene . . .”

Reading Section 3730(b)(5) together with Section 3730(c)(5)
(allowing a relator to participate in an alternate remedy pursued by
the Government) and Federal Rule of Civil Procedure 24(b) (types
of intervention), courts have determined that Section 3730(b)(5)
seeks only “to prohibit parties unrelated to the original plaintiff
from joining the suit to assert a claim based on the same facts
relied upon by the original plaintiff.”234 Nonetheless, the Fourth
Circuit has rejected this analysis, instead reading Section
3730(b)(5) as preventing all nongovernment interventions, thus a
relator who filed the initial qui tam action would be disallowed
from participating in a later qui tam action to protect her rights.235
Still other courts have upheld the right to amend a complaint to
allow multiple relators to pursue defendants in a consolidated

“related action, based on the facts underlying . . .”

What constitutes a “related action” under the first-to-file bar of the
FCA has been the subject of much debate among the courts that
have addressed that issue. When analyzing this issue, a small
minority of courts have adopted what is known as the “identical
facts” test. Under this test, some courts will only permit multiple
lawsuits to proceed on similar facts if they are not factually
identical to one another.237 The reasoning behind this is to avoid
duplicative recoveries for non-identical claims.238
The vast majority of courts, however, have rejected this approach
and have held that the plain language of section 3730(b)(5) does
not mean that relators are only barred from pursuing subsequent
suits if they are identical to earlier filed actions since the statute

Chapter Eight: Initial Hurdles

refers to a “related action” and not an identical one.239 In so
holding, these courts often apply what is known as the “same
material elements” test. This test bars any qui tam complaint that is
based upon the “same material elements of fraud as an earlier suit,
even if the allegations incorporate somewhat different details.”240
Not every jurisdiction applies this test uniformly. 241 Thus, you
should research this issue in your jurisdiction to determine which
test has been applied. You should note, however, that regardless of
the test applied, courts will compare the initial complaint to any
subsequently filed complaints and will only bar those portions of
the subsequent actions that offend Section 3730(b)(5).242

“the pending action . . .”

Prior to 2015, a circuit split existed as to the meaning of “pending”
in the first-to-file rule. The Fourth, Seventh, and Tenth Circuits
agreed that, if the initial case had been resolved or dismissed, it
was no longer “pending” for the purposes of the first-to-file bar.243
The District of Columbia Circuit, however, read “pending action”
as the term used merely to distinguish the initial action from laterfiled actions, and thus any earlier filed suits, whether technically
“pending” or not, barred all later-filed suits.244
The Supreme Court later resolved this dispute in Kellogg Brown &
Root Services, Inc. v. United States ex rel. Carter.245 The Court
concluded that “a qui tam suit under the FCA ceases to be
‘pending’ once it is dismissed.”246 Thus, as long as the earlier suit
remains undecided, a later suit will be barred; however, once the
initial suit is dismissed, subsequent actions may then proceed.247

Other Section 3730(b)(5) Nuances

Most courts have decided that the first-to-file rule is jurisdictional,
as this rule presents threshold issues regarding a court’s ability to
hear later-filed actions.248 Thus, it will be one of the first issues
resolved in your relator’s suit.



Additionally, because qui tam complaints are filed under seal, it is
sometimes difficult to ascertain whether your relator’s claim will
be the first filed. This, combined with the fact that courts often
read Section 3730(b)(5) too strictly, occasionally causes relators to
file qui tam suits as mere placeholders, sometimes even employing
John Doe defendants, to establish priority and beat others to the
courthouse.249 Though these suits will likely fail to meet the
required pleading standards, relators filing placeholder suits hope
to maintain them by amending their complaints while still under
seal as the Department of Justice determines whether to


The well-settled Article III standing doctrine requires any plaintiff
bringing suit to have an “injury in fact” caused by the defendants
that can be legally redressed.251 However, the qui tam provision of
the FCA confers standing on relators to bring suit “in the name of
the Government.”252 In fact, no appellate court – including the
Supreme Court – has ever suggested it lacked jurisdiction because
a qui tam relator lacked standing,253 though defendants historically
had been certain to raise the issue.
Definitively deciding the issue once and for all, the Supreme Court
in Vermont Agency of Natural Resources v. United States ex rel.
Stevens concluded that a relator has standing under the FCA. 254
Specifically, in Stevens, Justice Antonin Scalia noted that the
relator is given the right under the FCA to continue as a party to
the action even when the Government itself has assumed primary
responsibility for prosecuting it.255 In doing so, the Court
determined that an injury in fact suffered by the United States was
enough to meet the injury in fact requirement, because the relator
is a partial assignee of the Government.256


Chapter Eight: Initial Hurdles


Jurisdiction: Where to Bring Your Qui Tam Suit

Jurisdiction over qui tam actions is conferred by 31 U.S.C. §
3732(a). That subsection provides:
Any action under section 3730 may be brought in any
judicial district in which the defendant or, in the case of
multiple defendants, any one defendant can be found,
resides, transacts business, or in which any act proscribed
be section 3729 occurred. A summons as required by the
Federal Rules of Civil Procedure shall be issued by the
appropriate district court and served at any place within or
outside the United States.
31 U.S.C. § 3732(a)(emphasis added). Courts construe 31 U.S.C. §
3732(a) as conferring upon the district courts exclusive jurisdiction
over qui tam claims.257
The 1986 Amendments set out broad jurisdictional provisions,
allowing a FCA case to be brought in any jurisdiction in which at
least one defendant “can be found, resides, transacts business,” or
in any jurisdiction wherein any act giving rise to the false claim
occurred.258 Because this often provides multiple forums in which
jurisdiction would be proper, as relator’s counsel you can take
advantage of the one with the most favorable views to your case.
Finally, as noted in Part I of this book, there are four categories of
cases identified in the FCA over which no court has jurisdiction.
These categories include: actions by and against soldiers, actions
against senior Government officials, actions that have already been
filed by the Government, and when information has been publicly
disclosed; and whether a relator is an original source.259
Remember that whether a court chooses to exercise jurisdiction
over your qui tam suit may also be affected by the way the courts
in your jurisdiction handle issues such as public disclosure,



original source, first to file nuances, and required proof of each
false claim element.

The False Claims Act’s Statute of Limitations

The qui tam relator must file her suit within the time prescribed by
the statute of limitations. With respect to the statute of limitations,
the FCA states in section 3731(b):
A civil action under section 3730 may not be brought –
(1) more than six years after the date on which the
violation of section 3729 is committed, or
(2) more than three years after the date when facts material
to the right of action are known or reasonably should
have been known by the official of the United States
charged with responsibility to act in the circumstances,
but in no event more than ten years after the date on
which the violation is committed, whichever occurs
Both the qui tam relator and the Government must file a FCA
claim within six years of the FCA violation regardless of who
(relator or Government) initiates the lawsuit. The statute seems to
suggest that lawsuits commenced by the Government, and only
those initiated by the Government, can receive an additional threeyear tolling period if circumstances are warranted.
Some courts have held that the six-year statute of limitations
applies in qui tam actions when the Government has decided not to
intervene, while the additional three-year tolling provision and tenyear limitations period has been construed to only serve the
Government, not qui tam relators.261 Other courts have taken a
slightly different approach.262
Note that in a FCA suit seeking civil penalties all events necessary
to state a claim have occurred when the false claim is submitted to

Chapter Eight: Initial Hurdles

the Government.263 In a case where actual damages are sought, all
the events necessary to state the claim do not occur until the
Government has made full and final payment on the claim.264
Thus, it is imperative that you verify how courts in your
jurisdiction have handled these issues.


The Procedural Requirements for Filing a Claim
the False
Claims Actfor Filing a
Chapter 9 – The
Claim Under the False Claims Act

Once you determine that the above elements are met and both you
and your relator have agreed that violations of the False Claims
Act (FCA) have occurred, you are ready to move forward with
your relator’s case by drafting and filing the complaint. Due to the
unique nature of FCA litigation, there are a few important
distinctions that you must keep in mind as you commence your
relator’s qui tam case. This chapter will discuss these distinctions
in great detail and will provide specific guidelines that you will
need to follow.
A. The Complaint and the Disclosure Statement
A FCA claim can be brought by the Government directly or by the
relator pursuant to the FCA’s qui tam provisions.265 In the case of
qui tam relators, the FCA requires a relator to follow special filing
procedures in initiating a qui tam lawsuit. Prior to filing a qui tam
suit, a relator must prepare and serve a copy of the complaint and a
written disclosure of substantially all material evidence within her
possession on the U.S. Attorney General and the U.S. Attorney in
the district where the action is brought, not the defendant.266
Next, the relator must file the complaint in camera and under seal.
The complaint will remain under seal for at least sixty days so that
the Government can decide whether or not to intervene. 267 Failure
to file the complaint under seal and provide the written disclosure
statement may result in the lawsuit being dismissed.268 Because the
complaint and the disclosure statement are the first steps in a FCA
case, it is critical that the content of both documents provide a
detailed and accurate picture of your relator’s claims.

The Disclosure Statement

A disclosure statement is meant to provide the Department of


Justice (DOJ) with substantially all material information and
evidence that support the relator’s allegations.269 Thus, drafting a
complete and effective disclosure statement is critical. The
disclosure statement should be based on everything that you and
your relator have learned about the particular facts and the law
concerning your case.270 An effective disclosure statement will
organize any documentary evidence in the relator’s possession and
should provide the Government with a written explanation of the
nature of the documents and what they show.271 The following list
of items that should be included in your disclosure statement:

A detailed description of who the relator is, the steps she
has taken to report the fraud, and what she can do to assist
in the Government’s investigation.
A comprehensive list of all of the documentation in the
relator’s possession that supports her allegations.
Specific examples of the alleged fraudulent activity,
including steps taken by the relator to report this activity.
A detailed timeline of when the alleged fraudulent conduct
A detailed list of potential witnesses, including a
description of their relationship with the relator and the
defendant, a description of the information they can
provide, and the likelihood of their desire to cooperate with
A description of who in the defendant’s operation knew the
claim was false and how the relator knows this.
A detailed description of the Government program that has
been defrauded and how much money the Government has
lost as a result of this conduct.
A complete and concise report of the legal authority
(including regulations and caselaw) supporting the
allegations that the defendant’s claims are false.
The estimated size of the false claims, and facts or clearly
explained assumptions demonstrating how the estimate was


Chapter Nine: The Procedural Requirements for Filing a Claim under the False Claims Act

A list of documents to subpoena and witnesses to interview
that you believe will be helpful to the investigation as well
as a brief description of what each is likely to reveal. 272

Note that because the relator is required to provide the
Government with all material information, including all
documentary evidence that the relator has gathered showing the
existence of fraud, several issues may arise.
For example, after an employee gathers and discloses the evidence
of fraud, employers often file counterclaims against relators for
breach of confidentiality agreements, breach of fiduciary duty, and
conversion.273 In ruling on these counterclaims, courts consider
several factors, including (1) whether the relator had access to the
documents in the course and scope of employment, (2) the
relevancy of the documents, and (3) the applicability of a valid
privilege or enforceability of a confidentiality agreement.
Courts have also noted that employee confidentiality agreements
tend to tie relators’ hands unacceptably in the disclosure of
relevant evidence and prohibit relators from carrying out legitimate
investigations that are encouraged by public policy. The Supreme
Court has held that a private contract is “unenforceable if the
interest in its enforcement is outweighed in the circumstances by a
public policy harmed by enforcement of the agreement.”274
However, the Government has determined that “[a] private
agreement that broadly prevents a relator from turning over any
non-privileged evidence of fraud which she ‘possesses’ to the
Government should not be enforced” because such “broad
corporate confidentiality agreements would frustrate the purposes
of the FCA by proscribing the relator from providing the
Government with some of the best evidence of fraud, gleaned from
the company’s files.”275 Thus, a defendant’s confidentiality
agreements are unenforceable to the extent that they conflict with
the purpose of the FCA and prevent relators from disclosing nonprivileged information evidencing fraud.276



Thus, remember that courts are often flexible when allowing
relators to gather evidence because relators are viewed as being in
the best position to gather such evidence. Most importantly, a
defendant’s concerns regarding confidentiality, trade secrets, and
proprietary information need not impede disclosure because
disclosure under the FCA is only permitted to the Government.

The Sealed Complaint

Filing a complaint under the FCA is different from filing a
traditional complaint in federal court. The FCA requires that all
qui tam actions be filed in camera and remain under seal for at
least sixty days.277 This sixty-day period allows the Government to
consider whether it will elect to prosecute the action, to issue civil
investigative subpoenas, or to otherwise engage in fact gathering,
and to consider whether it should proceed in some alternate
fashion such as criminally or civilly.278
In order to file a lawsuit in camera, you should first check the local
rules in your jurisdiction. In the event that qui tam actions are
rarely filed in your jurisdiction, you should become familiar with
the standard operating procedures by your clerk’s office.
One of the most critical aspects of filing a qui tam complaint is the
seal requirement. Filing a qui tam complaint under seal means that
all records relating to the case must be kept on a secret docket by
the Clerk of the Court. Failure to comply with the sealed
requirements under 31 U.S.C. § 3730(b)(2) when filing a qui tam
complaint could result in serious consequences. For example, some
courts will dismiss the noncompliant qui tam claims with
prejudice.279 Regardless of the jurisdiction you are in, you should
adhere to the following steps in preparing your relator’s qui tam
At one time, the DOJ was responsible for conducting the
investigation while the relator and relator’s counsel occupied a

Chapter Nine: The Procedural Requirements for Filing a Claim under the False Claims Act

more peripheral role until an intervention or declination decision
was made.280 However, a new trend has begun to emerge in recent
years, in which relators and their counsel are becoming more
actively involved in the investigation, and even step up to litigate
the unsealed case while DOJ continues its investigation.281
For example, government contracting is highly technical, so the
relator’s expertise in these areas may be needed to evaluate any
information received. During the initial meeting with the relator,
you should learn at least three things: (1) a fundamental
understanding of the technical area; (2) the extent of the relator’s
knowledge in these areas; and (3) the relator’s ability to relate
technical expertise to jurors.282
Furthermore, in drafting the complaint, you should also keep three
goals in mind.283 First, you must make sure that the qui tam
complaint complies with the heightened pleading requirements
under Rule 9(b) of the Federal Rules of Civil Procedure.284
Second, you must always be aware of any additional related
complaints that have been filed already or may be filed in the
future due to the “first-to-file” battle that is very common in qui
tam litigation.285 Finally, you must demonstrate that your relator’s
allegations are credible and adequately supported since the DOJ
will be evaluating the complaint when determining whether to
intervene in your relator’s case.286
Because heightened pleading tends to create the most problems for
attorneys representing qui tam plaintiffs, I am going to discuss it in
more detail.
When drafting the complaint, you must adhere to the heightened
pleading requirements of Rule 9(b) under the Federal Rules of
Civil Procedure.287 It is critical that you adhere to this heightened
pleading requirement because failure to do so may result in a court
denying leave to amend on the basis of the proposed amendment’s
futility.288 Thus, pursuant to Rule 9(b), you must first present the
Court with a pleading that sets forth the “circumstances



constituting fraud” with “particularity.” The complaint thus “must
specify the time, place, and content of an alleged false
representation.” 289
Specifically, the complaint must include “details concerning the
dates of the claims, the content of the forms or bills submitted,
their identification numbers, [and] the amount of money charged to
the government.”290 It is the fraud itself that must be pled with
particularity, not just “who benefits from the fraud and what pot of
federal money may be the object of the fraud.”291
However, Rule 9(b) does not require a wealth of evidentiary detail,
nor does it require plaintiffs to allege every single fact pertinent to
the case. In fact, district courts confronted with this issue have
found that a description of the parties involved, details of the exact
conduct at issue, and the approximate time of the misconduct
provides defendants with adequate notice of the alleged fraud.292
Finally, less specificity is required under Rule 9(b) when “the
challenged conduct involves many complex transactions and took
place over a considerable period of time.”293 What constitutes a
considerable period of time for purposes of a relaxed Rule 9(b)
standard varies by court, but a District of Columbia trial court
found a six-year scheme was not long enough.294
B. Delivery and Service of the Complaint
Unlike in traditional civil litigation, the defendant is not served
with the complaint until the Government decides whether to
intervene and the court orders service.295 The relator must deliver a
copy of the summons and complaint to the U.S. Attorney for the
district where the action is brought and send a copy of the
summons and complaint by registered or certified mail to the U.S.
Attorney General in Washington, D.C.296
The FCA further provides that the defendant is not required to
respond to any complaint filed under the FCA until twenty days

Chapter Nine: The Procedural Requirements for Filing a Claim under the False Claims Act

after the complaint is unsealed by the court and served upon the
defendant pursuant to Rule 4 of the Federal Rules of Civil
Procedure.297After the court unseals the complaint, the defendant
must be served within 120 days after the court unseals the
complaint.298 If the Government intervenes in the action, the
responsibility for serving the complaint falls on the Government as
the party with primary responsibility for prosecuting the action.299
Each named defendant then has a duty to file an answer to the
complaint or a motion within twenty days after service of the
Government’s complaint and discovery should begin shortly
thereafter pursuant to the Federal Rules of Civil Procedure.
C. Amending the Complaint
Once the original complaint has been filed, the relator may choose
to amend the complaint either before or after the seal is lifted
pursuant to Rule 15 of the Federal Rules of Civil Procedure.300 As
long as the claims in the amended complaint arise out of the same
conduct or occurrences laid out in the initial complaint, the
relator’s amended complaint should be construed to relate back to
the date of the original filing pursuant to Rule 15(c) regardless of
whether the original complaint complied with the particularity
requirements in Rule 9(b) of the Federal Rules of Civil
Additionally, in cases where the Government has intervened, it
may amend the complaint and add non-FCA claims.302 Part of the
reason for this is that the Government often gathers new
information during its own investigation and, thus, should be
allowed to add these new details to the complaint.
The Government can also take advantage of the “relation back”
provision of Rule 15(c). Under section 3731 of the FCA, the
government’s complaint-in-intervention or amended complaint
relates back to the date of the complaint filed by the relator as long
as the government’s claim arises out of the same conduct,
transactions, or occurrences set forth in the original complaint.303



It is important to note, however, that the above only applies if the
original complaint was filed with a qui tam claim.304 If a suit was
filed without a qui tam claim but a FCA cause was later added,
Rule 15 does not permit relation back because it cannot be said
that the defendant, who was sued as part of the original non-qui
tam claim, could be on notice that it might also be subject to a qui
tam action.305 Keep this limitation in mind when filing your
original complaint.


Intervention by the Government in
Chapter 14 – Intervention
by the
False Claims
Cases in False
Claims Act Cases

As mentioned above, when the relator files the complaint in camera
and under seal, the complaint will remain under seal for at least
sixty days so that the Government can decide whether to intervene.
Although rare, intervention by the Department of Justice (DOJ) in a
qui tam case can have a significant impact on your qui tam case.
Generally, fewer than 25 percent of filed qui tam actions result in
an intervention on any count by the DOJ.306 The process is
extensive and involves a significant amount of time and investigative
effort on the part of the federal Government.

Intervention usually requires approval by the DOJ in Washington,
D.C. As part of the decision process, the views of the investigative
agency are solicited and considered, and a detailed memorandum
discussing the relevant facts and law is prepared. It will include a
discussion of efforts to advise the named defendant of the nature of
the potential claims against it, any response provided by the
defendant, and settlement efforts undertaken prior to
intervention.307 Note that this memorandum is considered to be
attorney work product and is usually exempt from disclosure.308
The key aspect of an intervention decision is the Government’s
A. Government Investigation
Investigation by the Government is a key characteristic of filing a
False Claims Act (FCA) case. While you should try not to interfere
with this investigation, you can assist the Government in
identifying witnesses, interpreting documents, and refining
information gained from other witnesses.309 If the Government
asks your relator to participate in its investigation, you should be
involved in the investigation as well to ensure that your relator’s
rights are not being jeopardized in any way.310


Even if your relator does not participate with the Government’s
investigation, you can expect the Attorney General, or another
DOJ attorney, to investigate your relator’s FCA allegations.311 This
process can involve multiple law enforcement agencies.312 In some
investigations where state agencies are victims, state attorneys
general with expertise and interest will participate in the
investigation and work closely with the federal agencies.
In theory, the Government’s investigation should last no longer
than sixty days; however, the Government investigation normally
lasts at least four months and often goes on for more than year. 313
During the course of its investigation, the Government will often
use subpoenas for documents or electronic records, witness
interviews, compelled oral testimony from one or more individuals
or organizations, and consultations with experts.314 If, during that
time, a criminal investigation is also being conducted, the
Government may choose to use search warrants and other criminal
investigation tools to obtain evidence.315
Upon the expiration of the sixty-day period during which the
complaint is sealed, the Government has five basic options on how
to proceed. The Government can request an extension of the time
period to continue its investigation; intervene and take over the
prosecution of the FCA suit; decline to intervene and permit the
relator to prosecute the FCA suit; move to dismiss the suit; or
attempt to settle the suit prior to formal intervention or
The DOJ usually seeks to extend the seal period in virtually all
cases since the FCA permits such extensions upon a showing of
“good cause.”317 To convince the court of its good cause for such
an extension, the Government will file an affidavit with its
extension request identifying the steps that have been taken in the
investigation of the complaint’s allegations and setting forth what
else needs to be done.318 Such documents are filed under seal and
are usually not shared with the relator unless they are heavily

Chapter Ten: Intervention by the Government in False Claims Act Cases

redacted.319 If the Government makes a showing that disclosure of
confidential investigative procedures could jeopardize an ongoing
investigation or injure non-parties, then the court will decline to
unseal such materials.320 If, however, the Government’s showing is
lacking, then a court will usually unseal these documents.321 Most
courts have denied attempts to keep qui tam cases indefinitely
B. Government Intervention
Following its investigation, the Government has the discretion to
determine whether or not it will intervene in your relator’s FCA
case. As a practical matter, the Government tends not to pursue
cases unless the potential recovery outweighs costs and
resources.323 You should note, however, that regardless of whether
the Government proceeds with the action, if the court finds that the
relator planned and initiated the alleged FCA violation, it may
choose to reduce the relator’s share of the proceeds from the
action.324 Additionally, if the relator is convicted of criminal
conduct related to the allegations upon which the action is based,
the court may choose to dismiss the relator from the action and
prevent the relator from recovering any share of the proceeds from
the action.325
Whether the Government chooses to intervene can and often will
have an effect on how your relator’s FCA case will proceed. It will
also impact how much your relator will receive in the event that
the qui tam suit is successful.

When the Government Intervenes

If the government chooses to intervene and proceed with the
action, pursuant to the FCA, the Government may “file its own
complaint or amend the complaint of a person who has brought an
action under section 3730(b) of the FCA to clarify or add detail to
the claims in which the Government is intervening and to add any
additional claims with respect to which the Government contends



it is entitled to relief.”326 For statute of limitations purposes, the
Government’s pleadings relate back to the filing date of the
relator’s complaint as long as the Government’s claim arose out of
the same conduct, transaction, or occurrence.327 Even if the
Government declines to intervene initially, it may intervene at a
later date upon a showing of good cause.
When the Government intervenes in the qui tam action, it is
responsible for prosecuting the lawsuit.328 The relator will continue
as a party to the case with the right of unrestricted participation in
the litigation.329 However, the court may choose to limit the
relator’s participation in the suit if it determines “that unrestricted
participation during the course of the litigation by the person
initiating the action would interfere with or unduly delay the
Government’s prosecution of the case, or would be repetitious,
irrelevant, or for purposes of harassment. . . .”330
When it intervenes, the Government can settle the action even if
the relator objects as long as the relator is given a hearing to
express her concerns and the court finds that the settlement is fair,
adequate, and reasonable.331 Note, however, that some courts may
limit the relator’s right to object to a settlement and to obtain a
hearing unless the relator can show a “substantial and
particularized need.”332 Other courts have determined that the
relator should have an active role in settlement hearings in a qui
tam suit.333 The relator is entitled to receive between 15 to 25
percent of the amount recovered in the qui tam lawsuit.334

When the Government Does Not Intervene

If the Government chooses not to intervene, the relator is permitted
to move forward with the action.335 When the Government
declines intervention, the relator’s share is increased to an amount
of 25 to 30 percent.336 If the qui tam lawsuit is successful, the
relator is also entitled to recover attorney’s fees and expenses from
the defendant.337


Chapter Ten: Intervention by the Government in False Claims Act Cases

Note, however, that if the relator and the qui tam defendant reach a
proposed settlement, courts are split as to whether the Government
can intervene and block this proposed settlement if it previously
declined to intervene. Some courts have found that the relator has
the right to consider a proposed settlement over the government’s
objection.338 Other courts have held that the government still has
an absolute right to challenge a settlement agreement made by the
Another important impact that the Government’s decision not to
intervene may have on your case involves the sharing of gathered
information. If the Government chooses not intervene, it is under
no obligation to share the information it uncovered during its
investigation with the relator.340 Thus, you should gather your own
information and conduct your investigation independently from the
Government since you likely will not have access to this
information once the Government’s investigation is complete.


Common Areas of Concern

Chapter 11 – Common Areas of Concern

Due to the complex nature of False Claims Act (FCA) cases, there
are a few common issues that can arise. In this chapter, I have
identified four of the most significant areas of concern of which
you should be aware as you prepare to move forward with your
relator’s qui tam case. Because each area has its own unique
nuances, you should familiarize yourself with these common areas
of concern.
Common False Claims Act Issues
A. Criminal Prosecution
Filing a civil qui tam lawsuit may have risks for the relator that
you should explore prior to filing her claim. For example, if the
aspiring relator personally participated in the actions or
misconduct that is the basis of the fraud, that person could be in
jeopardy of being prosecuted for a crime.341 If the relator
participated in the crime, filing a qui tam case will likely not
provide him with protection from criminal prosecution.
In fact, filing the lawsuit could make the Government aware of an
indictable offense that might otherwise have gone undetected. As
noted earlier, a relator convicted of a crime related to the
underlying fraudulent activity cannot recover under a civil qui tam
suit.342 Qui tam relators who are not convicted but are the
masterminds of the fraudulent claims can recover an award but
these relators are generally limited in the amount they can
A lawyer thinking of filing a qui tam suit under the FCA should
carefully examine the possibility of criminal liability and advise
the relator accordingly before proceeding.



B. Retaliatory Discharge Claim
Another issue you will need to consider may arise if the relator is a
current employee of the defendant. If this is the case, there are
obviously concerns regarding whether the relator’s employment
would be jeopardized by informing the Government of the
defendant’s fraudulent activities. To address this concern, the 1986
amendments to the FCA included provisions protecting
whistleblowers from adverse employment actions or
discrimination by their employers. Thus, if you find that your
relator may be faced with retaliation as a result of her decision to
come forward, you should be aware of the following provisions.
A FCA retaliatory discharge claim can be filed when an employer
discharges, demotes, suspends, harasses, or otherwise
discriminates against the employee with respect to her
employment. Under section 3730(h), the employer may be liable
for two times the amount of back pay, interest, and special
damages.344 Section 3730(h) also includes reinstatement to the
same seniority status for employees that establish retaliation under
the FCA.345
Whistleblower protection is available to any employee who
participates in the qui tam action on behalf of the Government or
relator.346 An employer may be liable for a whistleblower
retaliation claim even if the fraud allegation underlying the qui tam
action is shown to be without merit.
In addition, qui tam relators seeking to file a retaliation claim now
have the benefit of an important new amendment. The retaliation
provisions of the FCA were amended by the Dodd-Frank Wall
Street and Consumer Protection Act.347 Specifically, under
section1079B(c) of the Dodd-Frank Act, qui tam relators now
have up to three years to file a retaliatory discharge lawsuit.
Additionally, by amending the FCA to remove the statutory
language of “agent on behalf of the employee, contractor, or agent
or associated others in furtherance of other efforts to stop 1 or
more violations of this subchapter” and instead inserting “agent or
associated others in furtherance of an action under this section or

Chapter Eleven: Common Areas of Concern

other efforts to stop 1 or more violations of this subchapter, ”
section 1079B(c) also broadened the scope of activity protected
from retaliation as well as the class of persons protected by the
FCA’s retaliation provisions.
C. The Impact of Bankruptcy on Your Relator’s Qui Tam
The insolvency of either the relator or the defendant in a FCA case
can have an impact on the progress and outcome of a qui tam case
under the Act. Generally, all pending cases are subject to an
automatic stay when a relator or defendant in a FCA case declares
bankruptcy. However, an action may be exempt from the
automatic stay rule where the action or proceeding is a
continuation by a governmental unit and where the governmental
unit is enforcing its police and regulatory powers.348
One of the key issues that you may face with bankruptcy in a FCA
qui tam action is the effect bankruptcy may have on your relator’s
Article III standing. A relator who has filed bankruptcy can risk
her standing to pursue a qui tam action. Cases that have dealt with
this issue have determined that a debtor’s legal interests are
transferred to the bankruptcy estate on the filing of the bankruptcy
petition and that this includes “all causes of action the debtor could
have brought at the time of the bankruptcy.”349
A qui tam relator’s Article III standing is formed around the
potential recovery that the relator may realize from the claim and
the United States’ assignment of its injury-in-fact. 350 After
bankruptcy, the relator no longer has an interest in any damages
because the claim is no longer his; the relator's right to the claim
(including any money damages) is now the property of the
bankruptcy estate.351
Thus, when discussing the possibility of pursuing a potential qui
tam action with your relator, be sure to ask about any potential
bankruptcy issues your relator may have.



D. Multi-District Litigation and the False Claims Act
FCA litigation often involves common questions of fact touching
on numerous districts and parallel claims. Courts will often
consolidate FCA qui tam cases in an effort to serve the
convenience of the parties and witnesses and to promote the just
and efficient conduct of the litigation. Doing so eliminates
duplicative discovery, prevents inconsistent pretrial rulings and
conserves the resources of the parties, their counsel, and the
Although transfer of a qui tam case into multi-district litigation
with other cases can have its advantages, you should also be aware
that it can result in discovery delays pending the expiration of the
seal on those other cases.353 The FCA does provide that a judge
may stay discovery in a qui tam case if that discovery would
interfere with an ongoing investigation in a criminal or civil matter
arising out of the same facts.354 Specifically, a judge in the
transferee district could choose to limit discovery or even require
that particular depositions be taken in camera.
The controlling law in a FCA case in multi-district litigation is
simplified in that, from the outset, as a matter of federal subject
matter jurisdiction, the law of the transferee district will almost
always apply.355 However, any orders that a multi-district judge
inherits from the transferee district are subject to her review and
E. The Drawbacks with Blowing the Whistle
Blowing the whistle on fraudulent conduct against the government
is both needed and encouraged. Before proceeding with a qui tam
case, however, there are certain drawbacks inherent within the qui
tam litigation process that you must make sure your relator fully


Chapter Eleven: Common Areas of Concern

First, although whistleblowing is a noble endeavor and while most
relators are driven by a strong desire to protect their government’s
interests, they will ultimately be labeled a “whistleblower.”358 This
can both help and hinder your relator’s reputation and integrity in
the eyes of other employers.359 While some employers may find it
admirable, many do not. Your relator should be prepared to find
another job once her qui tam suit is underway.360 It is critical that
you fully explain this risk to your relator since they may have to
explain this to a future employer even after the case has
Furthermore, your relator needs to be aware of the publicity that
often accompanies a qui tam suit, especially where the relator is
blowing the whistle on a well-known defendant. Every attempt
will be made to discredit your relator and this means that nothing
in your relator’s personal or professional life is sacred.362
Second, although retaliation in any form is prohibited by the FCA,
that does not mean that this type of conduct never occurs. You
should prepare your relator for the possibility of facing retaliation
by her employer.363 While many potential qui tam relators have
often faced some form of retaliation from their employer prior to
seeking outside legal advice, you should discuss this possibility
with your relator if he has not.364
In addition to retaliation by her employer, your relator should also
be prepared to face some form of retaliation from former coworkers.365 To counter the negative effects of this conduct, you
should encourage your relator to reach out to and befriend a fellow
whistleblower who can empathize with them and provide them
with additional support throughout the litigation process.366
Third, be sure to fully explain to your relator that it will likely take
a long time for her case to be completely resolved.367 Although the
current provisions of the FCA are favorable to relators, the
litigation process can be very slow and grueling.368 Your relator’s



patience and cooperation throughout the process is vital to the
success of her case.
Finally, your relator may come to you with an expectation of
receiving a significant monetary judgment in her case.369 This
means that you must also explain to your relator that he may not
recover a large qui tam judgment like the ones he has read about
online.370 Specifically, your relator needs to understand that the
money recovered in such cases may be allocated to criminal
penalties and that there could be other whistleblowers with whom
your relator will have to split the award that is given.371 Thus, be
sure to provide your relator with reasonable expectations on the
share he may receive if the case is successful.


Theories of Liability

Chapter 12 – Theories of Liability

Although the False Claims Act (FCA) originally involved fraud in
the defense contractor industry, there are numerous theories of
liability under the FCA and the following list of theories is by no
means exhaustive.
A. Fraudulent Billing for Medicare/Health Care
In fiscal year 2015, the Department of Justice (DOJ) recovered
$3.5 billion in FCA settlements and judgments. This amount
included $1.9 billion in health care fraud. There are several areas
within the Medicare/health care treatment arena in which FCA qui
tam cases arise.
Claims for Services Not Actually Performed: The simplest FCA
claims arise when a medical provider bills for services that were
not provided. This usually occurs when the provider performs one
procedure, yet bills for other procedures that could be related to the
procedure performed, but were not actually performed.
Claims for Services Not Medically Necessary: Medical
providers are routinely required to certify to the Government that
services provided to a patient (e.g. tests, therapy, etc.) are
medically necessary and that the patient met the requisite criteria
for receiving the service. The certification to the Government
typically takes place when the provider submits a Certificate of
Medical Necessity to the Government.
Claims Misrepresenting the Provider of Services: When a
medical provider misrepresents the qualifications of the person that
provides medical services to patients, a FCA violation may occur.
Often these FCA claims arise where a provider represents to the
Government that someone eligible to receive Medicare
reimbursement provided a service, when in reality the service was


provided by someone not eligible to receive reimbursement.
Examples of this behavior could be a doctor instructing a nurse to
provide a service but then insisting that the nurse bill Medicare
using the doctor’s provider identification number.
Upcoding for Services and/or Goods: Billing for a service not
provided or products not delivered as billed.
Unbundling Services: In the health care industry it is common for
certain procedures and services that are automatically performed as
a group or set to be billed as a single service. Unbundling occurs
when medical providers are reimbursed for bundled services.
Then, in addition to what they have already billed the Government,
the provider pulls out a service or services from the bundled group
and submits another claim to the Government. Essentially, the
medical provider is paid multiple times for a service that was only
provided once.
False Cost Reports: Medicare Part A providers such as hospitals,
nursing homes, and home health facilities routinely have to submit
cost reports submitted by medical providers to Medicare.
Typically, these cost reports require the providers to certify that
the medical provider is in compliance with all federal laws that are
required for reimbursement. Examples of false cost reports that
result in FCA claims are: inflating the costs of patient care;
reporting costs of non-covered services; seeking reimbursement
for costs that are not related to patient care; improperly
manipulating statistics; and seeking reimbursement for costs
related to non-Medicare patients.
B. The Stark Act
The Stark Act, 42 U.S.C. §1395, prohibits a physician or
immediate family member from referring a patient to any provider
that provided designated health services (DHS) if the physician or
immediate family member has a direct or indirect financial
relationship with the provider. A “financial relationship” is defined

Chapter Twelve: Theories of Liability

as any compensation arrangement between the physician and the
provider. In the event that a referral is made and a financial
relationship exists, the provider cannot submit a claim to Medicare
for the DHS provided unless the financial relationship falls under a
statutory or regulatory exception. A Stark Act violation can result
in FCA liability.
C. Anti-Kickback Statute
Another theory of liability concerns the Anti-Kickback Statute
(AKS).372 This statute prohibits, among other things, paying
kickbacks to induce referrals for services paid for by Federal
health care programs. The AKS arose out of Congressional
concern that payoffs to those who can influence health care
decisions corrupt professional health care decision-making. These
actions could result in Federal funds being diverted to pay for
goods and services that are medically unnecessary, of poor quality,
or even harmful to a vulnerable patient population. In pertinent
part, the statute states:
(b) Illegal remuneration
(2) Whoever knowingly and willfully offers or pays any
remuneration (including any kickback, bribe, or rebate)
directly or indirectly, overtly or covertly, in cash or in kind
to any person to induce such person –
(A) to refer an individual to a person for the
furnishing or arranging for the furnishing of
any item or service for which payment may be
made in whole or in part under a Federal health
care program, or
(B) to purchase, lease, order or arrange for or
recommend purchasing, leasing or ordering any
good, facility, service, or item for which



payment may be made in whole or in part under
a Federal health care program, shall be guilty of
a felony and upon conviction thereof, shall be
fined not more than $25,000 or imprisoned for
not more than five years, or both.373
Violation of the statute can also subject the perpetrator to
exclusion from participation in Federal health care programs and
civil monetary penalties of up to $550,000 per violation and up to
three times the amount of remuneration paid.374
Even prior to the Patient Protection and Affordable Care Act
(PPACA) amendment, the majority of Federal Courts held that a
violation of the AKS gave rise to a FCA violation.375
D. Off-Label Drug Marketing
The U.S. Food and Drug Administration (FDA) is required by law
to approve all prescription drugs sold in the United States. Once an
application for approval has been made, the FDA reviews a drug’s
safety and effectiveness. Thereafter, the FDA will approve the
drug for the treatment of particular illnesses or diseases. Once it
has been approved for a particular illness, the pharmaceutical
manufacturer must market the drug for only that use.
However, in an effort to increase revenues and profits, some
pharmaceutical manufacturers will market or promote a drug for a
use that the FDA has not approved. If the Medicare program pays
for these non-approved uses, a FCA claim may arise.
Unlawful off-label drug promotion has been the subject of
significant health care fraud enforcement efforts by the
Government. In addition to causing inappropriate spending of
Medicaid funds, off-label uses that are not medically accepted may
expose patients to harm. Despite these dangers, and despite FDA
restrictions on off-label marketing, some pharmaceutical
manufacturers continue to market drugs for off-label uses.

Chapter Twelve: Theories of Liability

E. Government Contracts
The United States spends approximately $600 billion per year in
national defense. Fraud by defense contractors and contractors
involved with homeland security continues to be one of the most
important areas of FCA litigation. Although there is an infinite
amount of theories in schemes involved with this kind of fraud,
some common FCA theories in this area are:
Product Substitution: Defense and security contracts routinely
require contractors to use products or parts of a particular quality
or type. Further, some contracts require that parts be made in the
United States or made by American companies. When contractors
substitute products or parts that are substandard or made of inferior
quality, a FCA violation can occur. Likewise, if a contractor uses
parts from foreign sources without obtaining the Government’s
permission, the contractor may be liable under the FCA.
Mischarging and Cross-Charging: Both mischarging and crosscharging are common types of fraud. Mischarging, as the name
suggests, occurs when the contractor submits bills to the
Government that contain false charges. This type of fraud includes
instances where a contractor inflates its bill to the Government by
charging for labor, parts or other costs that are more than the costs
actually incurred by the contractor. Cross-charging occurs when a
contractor charges work performed on one contract to a different
contract. Common occurrences of cross-charging are when the
contractor shifts expenses and costs (e.g. overhead) from one
contract to another in order to increase profits.
Failure to Test or Inspect: Government contracts often require
the contractor to perform tests or inspections on a product to
ensure that the product functions properly. Failure to perform tests
or inspections that are called for by the contract, or called for by
Government regulations, can result in a FCA violation.



Substandard Products or Services/Failure to Adhere to
Specifications: Equipment, machinery, weapons and other
products usually have to meet the design specifications
incorporated into the contracts. The knowing submission of these
items that do not meet contract specifications could result in a
FCA violation. Likewise, when a contractor knew or should have
known that equipment, machinery, weapons and/or a product was
worthless or would not perform as promised but delivers the items
to the Government anyway, the contractor violates the FCA.
General Procurement: Any false certification that items
furnished under a contract with the Government are of a quality
specified in the contract or a certification that the items conform
with contract requirements is a FCA violation.
Violations of the Truth-in-Negotiations Act (TINA): Because of
the complex and specialized nature of weapons systems and
certain equipment used by the U.S. Military, the Government often
has no choice but to purchase weapons and equipment from a
single supplier. The inherent problem in this circumstance is that
the Government has no real way of knowing if it is paying a fair
price since there is no competitive bidding process for the
contracts. To alleviate this problem, the TINA requires contractors
to disclose all relevant information about its costs information.
Contractors who inflate their costs and expenses may be found
liable for FCA violations.



Chapter 13 – Discovery
A. Generally

Discovery in a False Claims Act (FCA) action is often extensive
and is somewhat different than in any other civil case. As I noted
above, a qui tam complaint is initially filed under seal. Although
discovery is generally governed by Rule 26 of the Federal Rules of
Civil Procedure, this rule does not apply while a case is under
seal.376 Before the seal is lifted, discovery is primarily limited to
Civil Investigative Demands (CIDs) and certain government
subopoenas.377 After the seal is lifted, traditional discovery tools
are normally used.
Although your relator often comes to you with some evidence of
the fraud they are seeking to expose, it will be your job to use that
information to determine what additional evidence you will need
to prove your relator’s qui tam case in court. An effective
discovery plan in a FCA case will generally include carefully
drafted and detailed interrogatories, document requests, and
requests for admission. You should also plan to depose
government witnesses and the defendants to ensure that the
information you are gathering is accurate and complete. This
chapter will highlight some of the most effective uses of these
discovery tools.
B. Discovery Before a Case has been Unsealed – Civil
Investigative Demands and Government Subpoenas
Although rarely used, the CID is often issued by the Attorney
General of the United States and may require any person with
knowledge of the requested material to provide specific
information, answer certain questions, or give testimony.378 The
CID does not, however, provide unrestrained authority for the
Government to request any information and material.379 In fact, a
person who is served with a CID is not required to turn over


material that is protected by a recognized privilege.380 This
discovery tool may not be used once the Attorney General decides
to intervene and any information gathered through its use cannot
be revealed to the relator.381
Because the CID can be limiting during the discovery process, the
Government often relies on subpoenas to investigate FCA claims.
Subpoenas may be issued by the Attorney General and Inspectors
General of executive departments and agencies on behalf of their
agencies.382 Courts have limited judicial review of such subpoenas
and will generally enforce an administrative subpoena if it “(1) is
within the statutory authority of the agency that issues it; (2)
requests information that is reasonably relevant to the inquiry; (3)
is not unreasonably broad or burdensome;” and (4) “is not issued
for an improper purpose, such as harassment.”383
C. Discovery After a Case has been Unsealed
Once the seal has been lifted in a qui tam case, most parties will
employ traditional discovery techniques such as interrogatories,
requests for inspection, requests for admission, and document
requests. Because of the complex nature of a qui tam case, there a
few techniques you should keep in mind as you use each of these
discovery tools.
When using interrogatories during the discovery phase of your qui
tam case, your goal should be to identify as many witnesses and
document locations in as few interrogatories as possible. Keep in
mind that the Federal Rules of Civil Procedure govern the
discovery process in a qui tam case just as they do in other federal
civil cases, which means the number of interrogatories permitted is
limited to twenty-five. Thus, you will want to make sure that your
interrogatories are detailed and direct.


Chapter Thirteen: Discovery

Generally, this goal can be accomplished by first asking the
defendant to identify the employees responsible for ensuring
compliance with government contracts and to describe the
procedure by which they accomplish this task.384 You should also
consider inquiring about any internal investigations conducted by
the defendant into the allegations of the complaint, the identities of
the investigators, and the location and nature of the results of the
In contrast to the interrogatories submitted in a qui tam case
brought by a private plaintiff, the Government’s interrogatories
may yield little information beyond that which is readily accessible
through other means. Thus, a Government attorney may choose to
reserve its allocation of interrogatories until after discovery is
Note that a defendant may elect to reserve its interrogatories until
discovery is substantially complete. At that time, the defendant
will serve contention interrogatories that are designed to determine
all evidence in the relator’s possession pertaining to the subject
matter specified in the interrogatories and are often veiled attempts
to obtain the relator’s counsel’s work product.387 Generally, the
relator will be required to answer such interrogatories, thus, it may
be necessary for you to obtain a protective order to postpone a
response if such contention interrogatories are being used
prematurely for purposes of harassment.388
Document Requests
Document requests are the most extensive forms of discovery that
are available in FCA cases. At a minimum, the parties must collect
all documents involved, all claims for payment made pursuant to
certain contracts, and any documents pertaining to the fraudulent
activity.389 Due to the large volume of documents that are sure to
be produced during a FCA qui tam case, it is important for you to
develop a clear plan for using the information acquired during
document review.



From the Government’s perspective, document requests, like
interrogatories, may supplement other means of gathering
information from the defendant. However, document requests from
the Government differ slightly than those from the relator because,
in addition to the contractual right to request information
pertaining to the performance of Government contracts, the
Attorney General has the authority to issue civil investigative
demands to request both documentary and testimonial information
concerning violations of the FCA.390
As I mentioned previously, this broad authority may be exercised
at any time prior to the Attorney General’s commencement of a
civil proceeding under the FCA.391 In most cases, however, the
Attorney General tends to negotiate the disclosure of information
from the defendant informally rather than through formal
Requests for Admission
Unlike in traditional federal civil cases, requests for admission in
FCA cases are generally more productive after some initial
discovery has been completed. This is generally the case because,
in a qui tam action, the defendant routinely denies all allegations of
wrongdoing in the early stages of litigation. Sometimes, the relator
can use a companion interrogatory to ask the responding party to
set forth all reasons for any response to a request for admission as
a means of narrowing the issues for trial.393 This strategy is often
employed by the relator, the Government, and even the defendant
in qui tam FCA litigation.
In most FCA cases, there are numerous witnesses employed
by the defendant with some knowledge of the fraud. As a result,
there is a high likelihood that you will need to seek relief from
the court to expand the ten-person deposition limit set forth
in Rule 30(a)(2)(A) of the Federal Rules of Civil Procedure.

Chapter Thirteen: Discovery

You should note, however, that the principal difference between
the use of depositions in FCA cases is the plaintiff’s ability to
notify the defendant of a subject area of inquiry and requires the
defendant to designate an appropriate, knowledgeable witness or
witnesses.394 Although defendants may try to resist these
depositions by designating people who, in fact, are not the most
knowledgeable, this resistance can often be handled by the court,
thereby allowing discovery to continue.395
Requests for Inspection
In some instances, you may need to perform a physical inspection
of the property, production facilities, or equipment pursuant to
Rule 34 of the Federal Rules of Civil Procedure. Unlike requests
for inspection in non-qui tam cases, a request for physical
inspection in a FCA case may involve classified documents,
security clearances, and technical expertise.396 If you believe that
your case may require this level of physical inspection, be sure to
apply for security clearances early on in your investigation and, if
need be, hire an expert to conduct a physical examination of the
items in the request.
D. Special Considerations for False Claims Act Discovery
Considerations for Relator’s Counsel
Due to the nature of qui tam FCA cases, there are some special
issues that may arise during the discovery process. For example, in
cases where the relator is still the defendant’s employee, the
defendant may attempt to interview your relator outside of the
discovery process. If this is the case, you must make every attempt
to attend the interview; however, this will often depend, at least in
part, on whether the case is still under seal and whether counsel’s
appearance at such an interview would jeopardize an ongoing
criminal investigation.397 Your attendance at such an interview will
also depend on your assessment of the relator’s ability to maintain



secrecy of the ongoing criminal investigation without your
Discovery Requests and the Touhy Regulations
Discovery in FCA litigation will generally require counsel on both
sides of the case to seek discovery of documents and testimony
from federal departments and agencies. This process is governed
by the Department of Justice and by agency regulations and are
commonly referred to as the Touhy regulations.399
The Touhy regulations provide that, when official information is
sought, the party “seeking such release or testimony must . . . set
forth in writing, and with as much specificity as possible, the
nature and relevance of the official information sought.” 400 The
regulations further provide that, where documents or other
materials are sought, “the party should provide a description using
the types of identifying information suggested in section
5.3(b).” 401
Under section 5.3(b), you must describe the records that you seek
in enough detail to enable Department personnel to locate them
with a reasonable amount of effort.402 Whenever possible, your
request should include specific information about each record
sought, such as the date, title or name, author, recipient, and
subject matter of the record.403
Additionally, subject to section 5.47, Department of Justice
employees “may only produce, disclose, release, comment upon,
or testify concerning those matters which were specified in writing
and properly approved by the appropriate Department official
designated in section 5.44.” 404 Despite the restrictive nature of
these regulations, they do not supersede court orders that regulate
discovery, divest a court of its jurisdiction over discovery matters,
or curb the court’s power to enforce its own orders.405
When conducting informal discovery of the Government,
defendants and other qui tam litigants are bound by these

Chapter Thirteen: Discovery

regulations. To ensure compliance, discovery from agencies
should be coordinated with the Department of Justice or the
Assistant U.S. Attorney assigned to the qui tam action and with the
agency’s or department’s general counsel.406 Thus, when drafting
your discovery requests and depositions, be sure to review these
E. Resolving Discovery Issues and Disputes in False
Claims Act Cases
Although there are many discovery issues that could arise, these
often depend on the facts of a given case. There are four, however,
that I would like to highlight that may arise in any FCA qui tam
case because they concern certain privileges that may be invoked
during discovery.
Attorney-Client Privilege and Work Product
Doctrine Issues
Qui tam litigants are limited to discovery of matters that are not
privileged. The rules of privilege apply at all stages of the
proceeding. Although FCA parties will raise the attorney-client
privilege or work product doctrine to resist discovery, just as in
civil litigation the objecting party must raise the objection and
satisfy the burden of establishing the privilege or protection.408
Because the Government and the relator have common interests,
attorney-client information that they share should be considered
privileged.409 Similarly, with the work product doctrine, a party
does not waive the protections of this doctrine simply by sharing
the work product with others with common interests in the
litigation.410 This is especially true with the relationship between
the Government and the relator in a qui tam FCA action.
The Self-Evaluative Privilege
Some defendants may attempt to prevent otherwise discoverable
information from being produced by claiming that it was prepared



to help the defendant better evaluate its own deficiencies.411 This
argument generally rests on the concept of the self-evaluative
privilege. The self-evaluative privilege was originally created in
1970 by a court in the District of Columbia to protect peer review
records from discovery in medical malpractice cases.412 Since then
a four-part test has evolved.
Under this test, in order for the self-evaluative privilege to apply:
(i) the information must result from a self-critical analysis
undertaken by a party seeking protection; (ii) the public must have
a strong interest in preserving the flow of the type of information
sought; (iii) the information must be of the type whose flow would
be curtailed if discovery were allowed; and (iv) the subject
document must have been prepared with the expectation that it
would be kept confidential.413
A defendant’s use of this argument has, generally, been
unsuccessful because preventing discovery hinders the
enforcement of certain governmental objectives, and thus, courts
often find that its application generally violates public policy.414
Special Considerations for Classified Material
Because some qui tam litigation can involve classified or highly
confidential information, there may be times where you seek to
obtain such information and the defendant attempts to resist
producing it. You can avoid this issue early on in litigation by
requesting security clearances from the Government to view these
classified documents.415 Note that the relator need not have this
clearance in order for you to obtain it.
The State Secrets Privilege
The state secrets privilege is much broader than that afforded to
classified information. This privilege applies regardless of whether
the information has actually been classified pursuant to the
substantive and procedural requirements of applicable statutes and

Chapter Thirteen: Discovery

executive orders. You should note that this type of privilege can
only be invoked by the Government and, once it is properly
invoked, the effect of the privilege is to exclude the evidence from
the case.416


Defenses in False Claims Act Cases

Chapter 14 – Defenses in False Claims Act Cases
Successful Affirmative Defenses
There are at least three common affirmative defenses that have
proven to be successful for defendants in False Claims Act (FCA)
qui tam cases.
First, the most common challenge that you are likely to face from a
FCA defendant is a motion to dismiss pursuant to Rule 9(b) of the
Federal Rules of Civil Procedure.417 Using this defense, the
defendant can, in essence, attack the merits of the whistleblower’s
case from a procedural standpoint.418 Specifically, the defendant
may allege that the plaintiff has not set forth sufficient evidence of
fraud to support a claim.419 In some jurisdictions, the court may
allow the plaintiff to amend her complaint – or may dismiss
the lawsuit altogether.420
A second common affirmative defense is the statute of
limitations.421 The statute of limitations on a FCA lawsuit is just
six years from the date the alleged fraud occurred – or, three years
from the date material facts are known (or should have been
discovered).422 If a plaintiff alleges fraud occurring beyond the sixyear deadline, there is a strong likelihood the defendant will assert
that the statute of limitations has passed and the claim is
considered waived.423
Finally, the FCA only addresses reckless or intentional acts of
fraud against the Government. In other words, accidents,
oversights, or negligence are not considered actionable under the
FCA, and a defendant will often invoke this defense to avoid
exposure to liability.424 However, a plaintiff may be able to
overcome this assertion by, as one example, pointing to written
communication between the parties showing that the defendant
was made aware of the problem and did not take steps to remedy
the issue.425


Unsuccessful Affirmative Defenses
Despite the common affirmative defenses discussed above, there
are also several affirmative defenses that are usually unsuccessful
in FCA cases.
For example, one key defense that defendants attempt to raise
concerns the Government’s knowledge of the alleged fraudulent
activity. Some courts have found that while Government
knowledge of the underlying actions giving rise to the FCA claims
may be relevant to the objective falsity of the claim, Government
knowledge of the underlying facts giving rise to FCA violations is
not a true affirmative defense that completely exonerates a
defendant.426 Furthermore, case-law has identified other common
unsuccessful defenses that a court is likely to strike. These
defenses include: waiver, equitable estoppel, and ratification by
Government officials.427 This is not, however, an exhaustive list.
In a recent December 9, 2015, ruling on a motion to strike
affirmative defenses, the U.S. District Court for the Eastern
District of Virginia struck eleven of the affirmative defenses
asserted by the defendants: estoppel, laches, waiver, unclean
hands, public disclosure, failure to state a claim, failure to plead
fraud with specificity, damages too remote or speculative, release,
accord and satisfaction, and statute of limitations.428
In rendering its holding, the court noted that some of these
defenses are simply unavailable against the Government.
Specifically, the court ruled that “equitable estoppel does not apply
against the United States in a suit to recover public funds” and that
unclean hands also is unavailable as a defense because the
Government is “acting in the public interest.”429
Additionally, other defenses were held to fail as a matter of law.
First, the court ruled that laches defense failed because the United
States is not subject to the defense when “enforcing its rights.”430

Chapter Fourteen: Defenses in False Claims Act Cases

Second, the court held that “[w]aiver fail[ed] as a matter of law
because violations of the FCA can only be waived by the United
States Department of Justice.”431 Finally, the court noted that
because “[a]ctual damage to the United States is not a necessary
element of a FCA cause of action,” the court also struck the
defense of damages too remote or speculative.432
The FCA imposes civil penalties for each false claim and the court
held that the defendants could be liable even without any actual
damages to the United States.433 Thus, as your qui tam case moves
forward, be aware of these defenses and be prepared to address
whether defendants in your jurisdiction have been successful in
using them.


Motion Practice in False Claims Act Cases

Chapter 15 – Motion Practice in False Claims Act Cases
False Claims Act (FCA) cases often entail active motion practice.
While most motion practice in FCA qui tam cases is very similar
to motion practice in other federal cases, the types of motions most
commonly used by relators and defendants are motions to dismiss,
motions in limine, and motions for summary judgment.
A. Motions to Dismiss
Motions to dismiss under Rule 12(b) of the Federal Rules of Civil
Procedure are frequently filed by defendants in FCA cases. In
order to avoid having your case dismissed, you must conduct a
careful investigation of the facts and provide adequate pleading of
those facts and the law in your complaint.434 In the event that a
motion to dismiss is filed, you should be prepared to encourage the
court to follow the rule that “a complaint should not be dismissed
for failure to state a claim unless it appears beyond doubt that the
plaintiff [or relator] can prove no set of facts in support of his
claim which would entitle him to relief.”435

Public Disclosure and Original Source Issues

Defendants most often file motions to dismiss on the grounds that
a public disclosure exists and that the relator is not an original
source.436 The burden for establishing these issues is on the
defendant.437 These issues most often arise when the defendant is
challenging the court’s jurisdiction over the case.438 Resolution of
these issues may require inquiry into the merits of the case, so that
the relator’s allegations can be compared to whatever disclosure
the defendant claims is sufficient to trigger a jurisdictional
inquiry.439 Be aware that if such a motion is successful, the qui tam
portion of the case will be terminated on procedural grounds
before the merits are reached.440




The First-to-File Provision

The first-to-file provision of the FCA is another common motion
to dismiss that can be used by defendants, the Government, and
other relators. Section 3730(b)(5) of the FCA states: “When a
person brings an action under [the qui tam provisions of the FCA],
no person other than the Government may intervene or bring a
related action based on the facts underlying the pending action.”441
When representing a relator, this motion should be filed when you
are aware of subsequent relators who have filed jurisdictionally
invalid complaints pursuant to this section. Likewise, the
Government may also choose to file a motion to dismiss on similar
grounds, but it rarely does so.442

Rule 9(b)

Rule 9(b) is the most common form of motion to dismiss that is
filed in a qui tam FCA case. You should note that the key factor in
whether a qui tam FCA case will survive a Rule 9(b) pleadings
challenge is whether the Government has intervened.443 This type
of motion is generally only successful where relators pursue cases
in which the Government chooses not to intervene.
The primary reason for this is that courts are often skeptical as to
whether a relator’s claims should be taken as true. When the
Government intervenes, it brings with it a wealth of detailed
information on the fraudulent activity that most relators do not
have. Despite the significant challenge that this presents for
relators, some courts will allow a relator to proceed with her case
as long as there are sufficient “indicia of reliability” to support
claims of fraudulent activity.444
Thus, when drafting your complaint, always make sure that your
claims are supported by specific facts or allegations of fraud.


Chapter Fifteen: Motion Practice in False Claims Act Cases

B. Motions in Limine
A motion in limine is a commonly used pre-trial tactic that
requests that certain inadmissible evidence not be referred to or
offered at trial. These motions are particularly important in FCA
qui tam cases where the evidence is often voluminous. By far the
most common use of the motion in limine in FCA cases is to limit
irrelevant or prejudicial evidence.445
Finally, another common motion in limine used in FCA qui tam
litigation is a motion in limine to prevent defense counsel from
arguing that the Government’s decision not to intervene is a
comment on the merits of the FCA case. If the Government does
not intervene in your action, you should consider filing a motion to
forbid the defendant from making this argument because it is
legally and factually irrelevant and, most importantly, is unfairly
C. Motions for Summary Judgment
Motions for summary judgment are often an effective technique in
order to make a trial less lengthy and complicated. While this
tactic is generally used by defendants in FCA cases, this technique
is available to all parties. Specifically, you should be prepared to
use motions for partial summary judgment to shorten the trial and
eliminate the need to present undisputed issues to the trier of fact
or to eliminate unnecessary affirmative defenses.447
As with any other civil case, the burden of proof rests on the
moving party to establish that there are no disputed issues of
material fact and that summary judgment is appropriate as a matter
of law.448 While summary judgment motions may be filed at any
time during the case, they are most commonly encountered
following the close of discovery but before trial.449



Chapter 16 – Witnesses

A key element in preparing a successful False Claims Act (FCA)
case is to identify individuals who have knowledge of the alleged
fraudulent activity. Although the relator will likely know who
these individuals are, there are several pitfalls that you must take
care to avoid when investigating a potential qui tam case. First,
you must ask the relator how the witness feels about the fraudulent
activity.450 This is critical because if the witness is a willing
participant in the fraud, she may attempt to cover up the illegal
There is also a risk that approaching a witness may cause him or
her to file a qui tam case before the relator can do so.452 This poses
a significant risk to the relator’s interests because, as previously
discussed, the first qui tam action bars all others.453 Thus, it is
critical that you and the relator work together to identify the
witnesses who may not only have relevant information for your
case, but who may also be able to provide key testimony to help
your case succeed.
Due to the potentially complex nature of a qui tam action under the
FCA, you should be prepared to hire one or more experts to testify
at trial. Because the expenses of necessary experts are fully
compensable by the defendant if the relator prevails,454 all parties
should make early determinations about the need for expert help.
The qualifications of such experts are straightforward: the expert
must be qualified to render an opinion on the ultimate issues about
which she testifies.455
FCA cases can present unique circumstances in selecting effective
expert witnesses because if the relator, a Government employee, or
an employee of the defendant is to be used to provide expert
testimony, the requirements regarding disclosures of experts prior
to the trial should be considered, even where the person may also
be used as a fact witness.456 Experts in FCA cases can even include


former Government employees who can serve as credible
advocates for your case due to their background in Government
Note, however, that some federal courts will restrict the number of
experts who may testify at a trial.458 Because of this limitation, you
should consider retaining consulting experts to assist you in the
preparation of your case for trial.459 Retaining these types of
experts can be very useful because they are virtually immune from
having their opinions and work disclosed in discovery.460 They can
also assist you in reaching stipulations that can narrow the issue
presented at trial and defining the necessary expertise for testifying
You should consult with your relator and, if necessary, the
Government, to determine if they are aware of any experts that
would be able to provide the most effective testimony at trial.


Trial Strategies for a
ActforQuia False
Tam Claims
Case Act
Chapter 17False
- TrialClaims
Qui Tam Case

Perhaps one of the most significant developments in False Claims
Act (FCA) cases in the last few decades is the increased use of the
jury trial. The effectiveness of a jury trial is significant because
juries contain taxpayers and these individuals are generally less
likely to be sympathetic toward defendants who have stolen their
tax dollars through fraudulent activity.
Generally, in a FCA case, the jury will decide the defendant’s
mental state, materiality, falsity, and damages.462 For example, the
jury often determines whether a defendant acted with actual
knowledge, deliberate ignorance, or reckless disregard of the truth
or falsity of the statements.463
In developing a trial strategy, you should consider using themes to
help organize the presentation of your case. Suggested trial themes
for relators and the Government include: national security;
contractor integrity; patriotism; and law enforcement.464 These
themes underscore preserving the integrity of the judicial system
and underscore the duty of all citizens, including whistleblowers,
to fight against efforts to defraud the United States Government.
Another important trial strategy is making use of technology to
help the jury understand your case.465 Doing so can simplify your
case and make the trial shorter.466
Making use of statistical evidence to help prove violations of the
law is another useful technique.467 In fact, various circuits have
endorsed the use of statistical evidence “given the low risk of error
and the Government interest in minimizing administrative burdens,
the balance of interests favors . . . [statistical analysis].”468
A final strategy that you must keep in mind when planning your
qui tam case is the content of the jury instructions. You must be


vigilant to avoid adding nonexistent elements to the claims or the
insertion of words or phrases that can increase the burden of proof
on the Government beyond what is provided in the Act.469 Failure
to do so can have a serious detrimental effect on the success of
your case.



Chapter 18 – Recovery

A. Damages and Penalties
The current False Claims Act (FCA) allows for significant civil
monetary damages and penalties to be awarded against a defendant
who submits a fraudulent claim to the Government.470 Although
courts disagree as to whether the relator must prove injury or
damages as an element of a FCA violation,471 proof of damages is
not an essential element of a FCA case and recovery may be had
pursuant to the penalty provision of the Act when the Government
has suffered no actual damages.472
Note that on June 30, 2016, the Department of Justice issued an
“Interim Final Rule with Request for Comments” that adjusted for
inflation civil monetary penalties for FCA violations.473 This Rule
went into effect on August 1, 2016. It established that FCA civil
penalties increase to between $10,781.40 and $21,562.80 per
claim, plus three times the amount of damages that the
Government sustains because of the false claim.474
For violations that occurred prior to November 2, 2105, violators
are liable for a civil penalty of $5,500 to $11,000 per claim, plus
three times the amount of damages that the Government sustains
because of the false claim.475
B. Relator’s Share of the Government’s Damages and
In addition to the substantial financial incentive now provided to
encourage whistleblowers to come forward, the 1986 Amendments
to the FCA increased the relator’s share of the proceeds in a qui
tam case and established minimum and maximum percentage
recoveries while leaving the trial court with discretion to set
awards within the statutory ranges. As a result of the 1986
Amendments, if the Government conducts the action, a relator is to


receive not less than 15 percent and no more than 25 percent of the
proceeds.476 If the Government does not conduct the action and the
relator is successful in obtaining recovery, the relator is now
entitled to receive between 25 percent and 30 percent of the
recovery.477 This recovery, however, may be reduced if the court
finds that the relator “planned and initiated” the violation on which
the action is brought.478
Finally, if the qui tam action is based on the public disclosure of
specific information and the Government is proceeding with the
action but the relator is someone other than the person who made
the public disclosure, the court may award any sum to the relator it
deems appropriate, but not more than 10 percent of the recovery.479
C. Attorney’s Fees
The 1986 Amendments to the FCA provide that the relator is
entitled to receive attorney’s fees, costs, and expenses from the
defendant.480 These provisions apply even where the Government
takes over the action. However, you should keep in mind that,
where the Government does not proceed with the case and the
relator goes forward with an action in which the defendant
prevails, the court may choose to award to the defendant its
reasonable attorney’s fees and expenses where the court finds that
the relator’s claim was “clearly frivolous, clearly vexatious, or
brought primarily for purposes of harassment.”481
D. Settlement Goals
If given an opportunity to settle a case under the FCA, there are a
few things that you should consider. Generally, the overall goal of
a defendant in settling a FCA case is to minimize damages and to
avoid the risk of an adverse trial decision that could lead to treble
damages and debarment from further Government work.482 In
contrast, the relator’s settlement goals include, among other things,
the cessation of a practice or policy that defrauds the Government,
the recovery of damages to reimburse the Government for any

Chapter Eighteen: Recovery

losses suffered, and restitution for loss of earnings from
employment, loss of job security, mental anguish or suffering,
attorneys’ fees and expenses of litigation.483
You should be prepared to work with your relator to ensure that
both her personal goals and the societal goals of the FCA are met.
Most importantly, in the case where the Government has
intervened, you should also encourage your relator to work with
the Government to ensure that all settlement goals are met.484
In the event that the Government has chosen not to intervene in
your case, you must be prepared to respond to the defendant’s
argument that this failure to intervene demonstrates that the case
lacks merit and, therefore, has no settlement value.485 However,
even where the Government has chosen not to intervene, there are
courts that have refused to presume that this decision shows the
case lacks merit.486
The Sixth Circuit has held that the Government, even after
declining to join a qui tam suit, retains an absolute veto power over
a proposed settlement in the action.487 In short, qui tam lawyers
who try to creatively structure a settlement to deprive the United
States of its fair share do so at their peril.488


A Note
on State
Chapter 19
– A Note
on State
Claims Acts
Many states have adopted their own False Claims Acts (FCAs) that
work to discourage fraud perpetuated against state governments.
The following is a list of states that have adopted their own version
of the Federal False Claims Act.489

District of Columbia

New Hampshire
New Jersey
New Mexico
New York
North Carolina
Rhode Island

In addition to the states above, one city490 and at least two
counties491 have enacted some form of the FCA.
Many of the False Claims Acts enacted by states mirror the
provisions found in the federal FCA. For example, these statutes
provide that qui tam complaints are filed and remain under seal
while the state attorney general investigates the claims in secret
and determines whether the state will intervene in the case.492
Additionally, every statute permits the state government to monitor
the relator’s suit, even if it does not choose to intervene in the
case.493 Finally, any recovery obtained by the state government is
to be shared with the relator.494


Despite the above similarities, it is imperative that you locate and
read the statute in your state to ensure that you are aware of any
differences that may help or hinder your ability to bring a qui tam
case in your state. For example, you should note that not all state
False Claims Acts cover all types of frauds. Specifically, some
state False Claims Acts only cover Medicaid fraud.495 These states
include: Colorado, Connecticut, Louisiana, Maryland, Michigan,
New Hampshire, Texas, and Washington.496
Above all, you should also verify the amount of damages that each
state will permit the relator to recover in a qui tam case because
this often differs between states.


Final Thoughts: A Qui Tam Checklist

Chapter 20 – Final Thoughts: A Qui Tam Checklist
Unlike many other cases, the investigation of a qui tam lawsuit
must be done both efficiently and quickly. Plaintiff’s counsel will
serve their relators well if they ask and have answered the
following questions in determining whether the relator has a viable
qui tam lawsuit:

Who made a false statement to the Government for the
purposes of getting a claim paid, or for purposes of
avoiding paying money owed to the Government? To
whom? When, where and how?

How does your potential relator know this (i.e. is she an
“original source” as defined by the False Claims Act (FCA)
or is her knowledge based on publicly disclosed

Who else has knowledge of the information your relator

Are there any documents that refer to or support the alleged
fraudulent conduct? If so, where are these documents?

What Government funds are involved?

Are there any Government regulations related to the
disbursement of these funds?

Did the defendant violate these regulations?

Did your relator plan or initiate the false claim? If so, is
this relator likely to receive the 0 to 10 percent recovery
amount, if at all?


What is the relator’s motivation or rationale for being a
whistleblower in this instance and has the relator ever been
a whistleblower before?

Was the relator involved in presenting the false claims
and/or the fraudulent conduct at issue?

How was the Government harmed by the false claims? Did
the Government experience a small loss, large loss or no
actual loss at all?

If the relator is an employee of the defendant, what is the
relator’s background and history with this or any other
employers? Has the relator signed any contracts or
agreements while employed or contracted with the
defendant that may affect her ability to bring the qui tam

Does the relator allege that she has been retaliated against
because of acts done in furtherance of the FCA?

Blowing the whistle on a defendant that has committed fraud
against the Government is a daunting task and those that have the
courage to take action and expose this conduct deserve our utmost
support and assistance. As you have learned, whistleblowing laws
enable us as citizens to help our own country and government by
recovering funds that should never have been paid in the first
When serving as a whistleblower’s lawyer, you are in a unique
position to help her use these laws to ensure that this type of
conduct does not go unchecked. Often this journey is a difficult
one for both the attorney and the relator. Using the techniques and
strategies discussed in this book will allow you to more easily
navigate this process and ensure success.



Erika Anderson, Abraham Lincoln: 10 Quotes to Help You Lead Today,
FORBES (Dec. 17, 2012, 12:35 PM),
See Jack Smith, $37 Screws, a $7,622 Coffee Maker, $640 Toilet Seats;
Suppliers to Our Military Just Won’t Be Oversold, LOS ANGELES TIMES (July
30, 1986),
RESPONSIBILITY: A GLOBAL ASSESSMENT 22 (Ashgate Publishing, Ltd. 2006).
153 (6th ed. 2012); see also 31 U.S.C. § 3729 et seq.
See 31 U.S.C. § 3730(d).
Vermont Agency of Natural Resources v. U.S. ex rel. Stevens, 529 U.S. 765,
768 n.1 (2000).
See HELMER, supra note 4, at 562.
The False Claims Act is not the only whistleblowing law. The FCA is one of
the oldest, but newer laws have also been passed for specific circumstances, such
as tax fraud and corporate fraud.
See 31 U.S.C. §3730(h).
See id.
See HELMER, supra note 4, at 901.
See Brett Joshpe, Celebrating the 150th Birthday of ‘Lincoln’s Law’:
Privatized Fraud Fighting, FORBES (Mar. 6, 2013, 8:00 AM),
James B. Helmer, Jr., False Claims Act: Incentivizing Integrity for 150 Years
for Rogues, Privateers, Parasites and Patriots, 81 U. CIN. L. REV. 1261, 1264
(2013) (citing 132 Cong. Rec. H6482 (daily ed. Sept. 9, 1986) (statement of
Rep. Berman)).
VANDERBILT FAMILY, 1794-1940 77-84 (Harcourt Brace 1941)).
Id. (citing CONG. GLOBE, 37th CONG., 3D SESS. 955 (1863)).
Id. (citing Ron Soodalter, The Union’s ‘Shoddy Aristocracy’, N.Y. TIMES
OPINIONATOR (May 9, 2011, 9:30 PM),
2011/05/09/the-unions-shoddy-aristocracy); CLINT JOHNSON, A VAST AND


Shoddy Army Contracts, SACRAMENTO DAILY UNION (Sept. 27, 1861),
Id. at 1265 (citing CONG. GLOBE, 37th CONG., 3D SESS. 955 (1863)).
Mark Greenbaum, The Civil War’s War on Fraud, N.Y. TIMES OPINIONATOR
(Mar. 7, 2013 12:22 PM),
Helmer, supra note 14, at 1264.
THE MEANING OF FREEDOM 104 (The New Press 2005).
Robert Greenwald and Derrick Crowe, You Can Be a Patriot or a
Profiteer…but You Can’t Be Both, THE HUFFINGTON POST (Apr. 27, 2012 11:17
AM), (“Worse than traitors in arms are the men
who pretend loyalty to the flag, feast and fatten on the misfortunes of the Nation
while patriotic blood is crimsoning the plains of the South and their countrymen
mouldering the dust.”).
David L. Haron, Mercedes Varasteh Dordeski, & Larry D. Lahman, Bad
Mules, A Primer on the Federal and Michigan False Claims Acts, 88 MICH. B.J.
22, 22 (2009).
Act of March 2, 1863, ch. 67, §§ 1, 3, 12 Stat. 696-98 (1863).
Ch. 67, 12 Stat. 696 (1863).
Charles Doyle, Qui Tam: The False Claims Act and Related Federal Statutes,
Id. (quoting 33 CONG. GLOBE 952-960 (1863)).
See Act of Mar. 2, 1863, ch. 67, §§ 1, 3, 6, 12 Stat. 696-698 (1863).
See id.
See id.
Helmer, supra note 14, at 1267.
Id.; see also United States ex rel. Marcus v. Hess, 317 U.S. 537, 545-48
Hess, 317 U.S. at 539.
Id. at 540, 545.
Id. at 545.
Id. at 547.
Hess, 317 U.S. at 545-46.
Id. at 547.
Id. at 559-61 (Jackson, J., dissenting).
Helmer, supra note 14, at 1269.
Id. (citing 89 Cong. Rec. 7570, 7571 (1943)).
Id. (citing 89 Cong. Rec. 10698-99 (1943) (remarks of Sen. Langer); 89 Cong.
Rec. 7572 (1943) (statement of Sen. Van Nuys); 89 Cong. Rec. 10848 (daily ed.


Dec. 17 1943); United States ex rel. Coates v. St. Louis Clay Products Co., 65 F.
Supp. 645 (E.D. Mo. 1946)).
Id. (citing 89 Cong. Rec. 7598 (1943)).
31 U.S.C. § 232(c) (1943).
Act of December 23, 1943, ch. 377, 57 Stat. 608, codified as amended at 31
U.S.C. Sec. Sec. 232-235 (1976); U.S. v. Pittman, 151 F.2d 851, 853-54 (5th
Cir. 1945) (discussing the history of the 1943 amendments).
Act of Dec. 23, 1943, Ch. 377, 57 Stat. 608.
Helmer, supra note 14, at 1270.
Bill Keller, Navy Pays $660 Apiece for Two Ashtrays, N. Y. TIMES (May 29,
Fred Hiatt, Now, the $600 Toilet Seat, WASH. POST (Feb. 5, 1985),
Four of the subsections—§§ 3729(a)(1), (2), (3), and (7)—are commonly
pleaded in FCA litigation, while the remaining three—§§ 3279(a)(4), (5), and
(6)—are rarely invoked.
31 U.S.C. § 3729 (a)(1).
31 U.S.C. § 3729 (a)(2).
31 U.S.C. § 3729 (a)(3).
31 U.S.C. § 3729 (a)(4).
31 U.S.C. § 3729 (a)(5).
31 U.S.C. § 3729 (a)(6).
31 U.S.C. § 3729 (a)(7).
See, generally, 31 U.S.C. § 3729(a).
Gregory Booker, The False Claims Act: Congress Giveth and Congress
Taketh Away, 25 HAMLINE L. REV. 373, 392 (2002).
Joel M. Androphy & Mark A. Correro, Whistleblower and Federal Qui Tam
Litigation-Suing the Corporation for Fraud, 45 S. TEX. L. REV. 23 (2003).
See Gravitt v. General Elec. Co., 680 F. Supp. 1162 (S.D. Ohio 1988).
Elaine Woo, John G. Gravitt; His Suit Against GE Eased Path for Reporting
Fraud, LOS ANGELES TIMES (Mar. 8, 2001),
Woo, supra note, 64.
Gravitt, 680 F.Supp. at 1164-65.
HELMER, supra note 4, at 5.


Id.; Gravitt, 680 F. Supp. at 1163.
Gravitt, 680 F. Supp. at 1165.
Id. at 1164-65.
HELMER, supra note 4, at 5.
Id. at 5-6; see also Woo, supra note 64.
HELMER, supra note 4, at 6.
See Press Release, Office of Pub. Affairs, U.S. Dep’t of Justice, Justice
Department recovered over $3.5 Billion from False Claims Act Cases in fiscal
year 2015 (December 3, 2015),
See id.
Fraud Enforcement and Recovery Act of 2009, Pub. L. No. 111-21 § 4, 123
Stat. 617.
31 U.S.C. § 3729(a)(2).
See Allison Engine Co. v. United States ex rel. Sanders, 553 U.S. 662 (2008).
31 U.S.C. §§ 3729(a)(1) (2009) (emphasis added).
See United States ex rel. Totten v. Bombardier Corp., 380 F.3d 488 (C.A.D.C.
2004), cert denied, 544 U.S. 103, 125 S.Ct. 2257, 161 L.Ed.2d 1059 (2005).
See United States ex rel. Sanders v. Allison Engine Co., 471 F.3d 610 (2006).
Allison Engine Co., 553 U.S. at 128.
Id. 665-66.
Id. at 666.
Allison Engine Co., 553 U.S. at 666-67.
Id. at 667.
Id. at 671-72.
Id. at 667.
See Fraud Enforcement and Recovery Act of 2009, Pub. L. No. 111-21, §
4(a), 123 Stat. 1617, 1622 (May 20, 2009) (emphasis added).
See 31 U.S.C. § 3729(a)(1)(B).
See 31 U.S.C. §§ 3729-3733.
See 31 U.S.C. § 3730(e)(4)(A).
See id.
31 U.S.C. § 3730(e)(4)(B).
31 U.S.C. § 3730(a)(1)(G).
31 U.S.C. § 3729(b)(3).
See 42 U.S.C. §1320A-7k(d)(2).
See Justice Department Recovers Over $3.5 Billion From False Claims Act
Cases, supra note 81.


F. Joseph Warin, et al., 2016 Mid-Year False Claims Act Update, GIBSON
DUNN CLIENT UPDATE (July 7, 2016),
See Press Release, Office of Pub. Affairs, U.S. Dep’t of Justice, AstraZeneca
and Cephalon to Pay $46.5 Million and $7.5 Million, Respectively, for
Allegedly Underpaying Rebates Owed Under Medicaid Drug Rebate Program,
(July 6, 2015),
See Press Release, Office of Pub. Affairs, U.S. Dep’t of Justice, Medical
Equipment Company Will Pay $646 Million for Making Illegal Payments to
Doctors and Hospitals in Untied States and Latin America (Mar. 1, 2016),
See Dani Kass, Feds Announce Arrests in $900 Million Medicare Fraud
Takedown, LAW 360 (June 22, 2016),
See Press Release, Office of Pub. Affairs, U.S. Dep’t of Justice, Boeing Pays
$18 million to Settle False Claims Act Allegations (October 14, 2015),
See Press Release, Office of Pub. Affairs, U.S. Dep’t of Justice, URS E & C
Holdings, Inc. Agrees to Pay $9 Million to Resolve False Claims Act
Allegations (Jan. 6, 2016),
See Press Release, Office of Pub. Affairs, U.S. Dep’t of Justice, FloridaBased Centerra Services International Inc. Agrees to Pay $7.4 Million to Settle
False Claims Act Allegations Related to Wartime Contract (Feb. 1, 2016),
See Press Release, Office of Pub. Affairs, U.S. Dep’t of Justice, Defense
Contractor Armorsource LLC Agrees to Pay $3 Million to Settle False Claims
Act Allegations (Mar. 7, 2016),


See Press Release, Office of Pub. Affairs, U.S. Dep’t of Justice, United States
Settles False Claims Act Action against Estates and Trusts of Layton P. Stuart
for $4 Million (Oct. 16, 2015),
See Press Release, Office of Pub. Affairs, U.S. Dep’t of Justice, Manhattan
U.S. Attorney Announces $85 Million Settlement with Fifth Third Bankcorp
Over Failures to Self-Report Defective Mortgage Loans to FHA (October 6,
See Press Release, Office of Pub. Affairs, U.S. Dep’t of Justice, Freedom
Mortgage Corporation Agrees to Pay $113 Million to Resolve Alleged False
Claims Act Liability Arising from FHA-Insured Mortgage Lending (Apr. 15,
See Press Release, Office of Pub. Affairs, U.S. Dep’t of Justice, M&T Bank
Agrees to Pay $64 Million to Resolve Alleged False Claims Act Liability
Arising from FHA-Insured Mortgage Lending (May 13, 2016),
See Justice Department Recovers Over $3.5 Billion from False Claims Act
Cases, supra note 81.
See United States of America ex rel. Blake Percival, v. U.S. Investigations
Services, LLC, No. 14-cv-00726-RMC (D.D.Cir.).
See Beasley Allen Secures $30 Million Whistleblower Settlement in USIS
National Security Case, BEASLEY ALLEN LAW FIRM NEWS, (December 18,
31 U.S.C. § 3730(e)(1)-(2).


31 U.S.C. § 3729(d).
Assoc. 2001). See Vermont Agency of Natural Resources v. United States ex rel.
Stevens, 529 U.S. 765 (2000).
31 U.S.C. § 3730(d)(3).
31 U.S.C. § 3730(b)(5).
31 U.S.C. § 3730(e)(5).
31 U.S.C. § 3730(e)(4)(A).
See HELMER, supra note 4, at 10.
See id.
See, e.g., United States ex rel. Jones v. Horizon Healthcare Corp., 160 F.3d
326, 330-31 (6th Cir. 1998).
See HELMER, supra note 4, at 562.
See id. at 562-63.
31 U.S.C. § 3729(a)(1).
See United States ex rel. Augustine v. Century Health Servs., 289 F.3d 409,
413-14 (6th Cir. 2002).
See Petersen v. Weinberger, 508 F.2d 45 (5th Cir. 1975), cert. denied, 423
U.S. 830 (1975).
See United States ex rel. DRC, Inc. v. Custer Battles, LLC, 376 F.Supp. 2d
617 (E.D. Va. 2005).
See United States ex rel. DRC, Inc. v. Custer Battles, LLC, 562 F.3d 295,
301-05 (4th Cir. 2009).
31 U.S.C. § 3729(b)(2).
See Helmer, supra note 4, at 91 (emphasis added).
See United States v. Neifert-White Co., 390 U.S. 228, 233 (1968).
31 U.S.C. § 3729(d).
31 U.S.C. § 3729(b)(1).
See 31 U.S.C. § 3729(b)(3). See also United States v. Oakwood Downriver
Medical Center, 687 F. Supp. 302, 309 (E.D. Mich. 1988) and United States v.
Children’s Shelter, Inc., 604 F. Supp. 865, 866 (W.D. Okla. 1985).
See Hagood v. Sonoma County Water Agency, 929 F.2d 1416, 1421 (9th Cir.
See United States ex rel. Farmer v. City of Houston, 523 F.3d 333, 338 (5th
Cir. 2008). See also Androphy, supra note 62 at 36-37.
See United States v. DRC, Inc., 856 F. Supp.2d 159, 172 (D.D.C. 2012).
See Hagood v. Sonoma County Water Agency, 929 F.2d 1416, 1478-79 (9th
Cir. 1991).


See Dr. Carl Pacini & Michael Brett Hood, The Role of Qui Tam Actions
Under The False Claims Act in Preventing and Deterring Fraud Against
Government, 15 U. MIAMI BUS. L. REV. 273 (2007).
See Androphy, supra note 62, at 36-37.
See United States ex rel. Wilkins v. North American Construction
Corporation, 101 F.Supp. 2d 500 (S.D. Tex. 2000).
31 U.S.C. § 3729(a)(1)(B).
Id. (emphasis added).
31 U.S.C. § 3729(a)(1)(G) (emphasis added).
31 U.S.C. § 3729(b)(1)(A) – (B).
United States ex rel. v. Longhi v. Lithium Power Techs., 575 F.3d 458, 470
(5th Cir.), cert. denied, 130 S. Ct. 2092 (2010) (construing materiality
requirement found in case-law that is same as that added in 31 U.S.C. §
See HELMER, supra note 4, at 255 (citing United States ex rel. Matheny v.
Medco Health Solutions, 2012 U.S. App. LEXIS 3508, at *29-32 (11th Cir. Feb.
22, 2012)(defendants’ false claims certifications of compliance with corporate
integrity agreement that required return of excess government payments were
material misrepresentations) and United States v. Rogan, 517 F.3d 449, 452-53
(7th Cir. 2008) (omissions from medical center’s bills to United States that
services stemmed from compensated referrals or kickbacks qualified as material
under “natural tendency” or “capable of influencing” standard of materiality
because Stark amendment forbids payment of claims arising from improper
See HELMER, supra note 4, at 258 (citing United States ex rel. Laird v.
Lockheed Martin Eng’g & Sci. Servs. Co., 491 F.3d 254, 261-62 (5th Cir.), cert.
denied, 552 U.S. 1023 (2007) and United States ex rel. Landers v. Baptist Me’l
Health Care Corp., 525 F.Supp. 2d 972, 979 (W.D.Tenn. 2007) (granting
summary judgment on claims alleging violations of nurse staffing requirements
and policies governing surgical care)).
See e.g., United States ex rel. Yannacopoulos v. General Dynamics, 652 F.3d
818, 830-31 (7 th Cir. 2011); United States ex rel. Bennett v. Genetics & IVF
Inst., 1999 U.S.App. LEXIS 27911, at *9 – 10 (4th Cir. Oct. 28, 1999).
See Universal Health Servs. v. United States ex rel. Escobar, 136 S. Ct. 1989
Id. at 1995.
Id. at 1999.
Id. at 2000.
Id. at 2002.
See Androphy, supra note 62, at 35-36.
See United States ex rel. Marcus v. Hess, 317 U.S. 537, 63 S.Ct. 379, 87
L.Ed. 443 (1943).


See Wendy K. Arends et al., False Claims Act Penalties Double as of August
1, 2016, THE NATIONAL LAW REVIEW (July 19, 2016), http://www.natlaw
See 31 U.S.C. § 3729(b) (2006) wherein the FCA states that a penalty of
$5,000 to $10,000 per claim may be recovered; but see also Debt Collection
Improvement Act of 1996, Pub. L. No. 104-134, § 31001(s)(2), 110 Stat. 1321358, 373 (1996) (indicating that the Department of Justice increased the penalty
amount by 10 percent to adjust for inflation.).
31 U.S.C. § 3730(e)(4)(A) (1986).
31 U.S.C. § 3730 (e)(4)(B) (1986).
See HELMER, supra note 4, at 360.
Compare, e.g., United States ex rel. Minnesota Association of Nurse
Anesthetists v. Allina Health System, 276 F.3d 1032 (8th Cir. 2002) (holding that
a relator can qualify as an “original source” even if the information underlying
the action was in the public domain before the relator disclosed the information
to the federal government) with United States ex rel. Jones v. Horizon Healthcare
Corp., 160 F.3d 326 (6th Cir. 1998) (adopting a broad interpretation of the phrase
“based upon” and concluding that the relator’s lawsuit was based upon an earlier
state court action, although the basis for her qui tam action was her own personal
knowledge, because all that is required to trigger the public disclosure bar is that
the allegations or transactions in a complaint mirror the information in the public
domain and not that the relator actually derive her information from the public
See United States ex rel. Kreindler & Kreindler v. United Technologies, 985
F.2d 1148 (2d Cir. 1993), cert denied, 113 S. Ct. 2962 (1993); United States ex
rel. Stinson v. Prudential, 944 F2d 1149 (3rd Cir. 1991).
See United States ex rel. Mathews v. Bank of Farmington, 166 F3d 853 (7th
Cir. 1999), overruled on other grounds by Glaser v. Wound Care Consultants,
Inc., 570 F.3d 907 (7th Cir. 2009); United States ex rel. Ramseyer v. Century
Healthcare Corp., 90 F.3d 1514 (10th Cir. 1996); United States ex rel. Schumer
v. Hughes Aircraft Co., 63 F.3d 1512 (9th Cir. 1995), vacated 520 U.S. 939
(1997); United States ex rel. Springfield Terminal Ry. Co. v. Quinn, 14 F.3d
645, 653 (D.C. Cir. 1994).
31 U.S.C. § 3730(e)(4)(B).
See, e.g., United States ex rel. MJ Res. Corp. v. Applera Corp., 155 Fed
Appx. 291, 292 (9th Cir. 2005) and United States ex rel. Findley v. FPC-Boron
Empl. Club, 105 F.3d 675, 690 (D.C. Cir. 1997).
United States ex rel. LeBlanc v. Raytheon Co., Inc., 913 F.2d 17 (1st Cir.
See United States ex rel. Barth v. Ridgedale Electric, 44 F.3d 699, 704 (8th
Cir. 1995).


See Campbell v. Redding Med. Ctr., 421 F.3d 817, 817-18 (9th Cir. 2005)
and United States ex rel. Doe v. Doe Corp., 960 F.2d 318, 322 n.3 (2d Cir.
See United States ex rel. Davis v. District of Columbia, 679 F.3d 832, 400
U.S. App. D.C. 351 (D.C. Cir. 2012).
See United States ex rel. Lamers v. City of Green Bay, 998 F.Supp. 971
(E.D. Wis. 1998), aff’d, 168 F.3d 1013, 1017 (7th Cir. 1999) and United States
ex rel. McKenzie v. BellSouth Telcomms., 123 F.3d 935, 942 (6th Cir. 1997).
Pub. L. No. 111-148, § 10104(j)(2), 124 Stat. 119, 901-02.
Id.; see also HELMER, supra note 4, at 101.
31 U.S.C. § 3730(e)(4)(A).
31 U.S.C. §3730(e)(4)(B).
31 U.S.C. § 3730(e)(4)(A).
See, e.g., United States ex rel. Beauchamp v. Academi Training Center, LLC,
816 F.3d 37, 40 (4th Cir. 2016); United States ex rel. Osheroff v. Humana, Inc.,
776 F.3d 805, 807-808 (11th Cir. 2015); United States ex rel. May v. Purdue
Pharma L.P., 737 F.3d 908, 916 (4th Cir. 2013); Ping Chen ex rel. United States
v. EMSL Analytical, Inc., 966 F. Supp. 2d 282, 294 (S.D.N.Y. 2013); but see,
e.g., United States ex rel. Kester v. Novartis Pharm. Corp., 43 F. Supp. 3d 332,
346-47 (S.D.N.Y. 2014) (concluding that the 2010 amendment “did not alter the
jurisdictional nature of the public disclosure bar”); United States ex rel. Sanchez
v. Abuabara, No. 10-61673-CIV, 2012 WL 1999527, at *2 (S.D. Fla. June 4.
2012) (“Congress eliminated an absolute jurisdictional bar in favor of a
jurisdictional bar that can be lifted by government discretion.”).
See Robert T. Rhoad & Jason C. Lynch, FEATURE COMMENT: New
Questions Regarding the Jurisdictionality of the FCA’s Public Disclosure Bar:
Potential Hurdles and Increased Costs in Defending against Parasitic Qui Tam
Actions, 55 GOVERNMENT CONTRACTOR 12 ¶ 92 (West 2013).
Cf. Hager v. Fed. Nat. Mortg. Ass’n, 882 F. Supp. 2d 107, 110 (D.C. Cir.
See Rhoad, supra note 225, at ¶ 92.
HELMER, supra note 4, at 104.
31 U.S.C. § 3730(e)(4)(A) (emphasis added).
HELMER, supra note 4, at 105.
United States ex rel. Branch Consultants v. Allstate Ins. Co., 560 F.3d 371,
376 (5th Cir. 2009).
See HELMER, supra note 4, at 439.
United States ex rel. Precision Co. v. Koch Industries, Inc., 31 F.3d 1015,
1017-18 (10th Cir. 1994) (citing Erickson ex rel. United States v. American Inst.
Of Biological Sci., 716 F. Supp. 908, 918 (E.D. Va. 1989)).


See Webster v. United States, 217 F.3d 843 (4th Cir. 2000) and United States
ex rel. LaCorte v. Roche Biomedical Labs., 185 F.3d 188, 191 (4th Cir. 1999).
United States ex rel. Sanders v. East Ala. Healthcare Auth., 953 F. Supp.
1404, 1408 (M.D. Ala. 1996) (allowing multiple relators, even intervening
parties, so long as they are “related to the original plaintiff or sharing a common
question of law or fact with the original plaintiff”); United States ex. rel.
Precision Co. v. Koch Indus., 31 F.3d 1015, 1016 (10th Cir. 1994) (allowing the
addition of parties to a FCA complaint, but excluding those falling under Rule
24(b) intervention).
United States ex rel. Dorsey v. Dr. Warren E. Smith Cmty. Mental
Health/Mental Retardation & Substance Abuse Ctrs., 1997 U.S. Dist. LEXIS
9424 at *19 (E.D. Pa. June 25, 1997).
Id. at *4.
See United States ex rel. Lujan v. Hughes Aircraft Co., 243 F.3d 1181, 1189
(9th Cir. 2001), cert. denied, 534 U.S. 1040, 151 L. Ed. 2d 538, 122 S. Ct. 615
(2001); Grynberg v. Koch Gateway Pipeline Co., 390 F.3d 1276, 1279-1280
(10th Cir. 2004); United States ex rel. Hampton v. Columbia/HCA
Healthcare Corp., 318 F.3d 214, 217-18 (D.C. Cir. 2003) and United States ex
rel. LaCorte v. Wagner, 185 F.3d 188, 232-34 (4th Cir. 1999).
Hampton, 318 F.3d at 217 (quoting Lujan, 243 F.3d at 1189; citing LaCorte,
149 F.3d at 232-34 (3d Cir. 1998)).
See, e.g., United States ex rel. Ortega v. Columbia Healthcare, 240 F. Supp.
2d 8, 12 (D.D.C. 2003) and Lujan, 243 F.3d at 1188-89; Lacorte, 149 F.3d at
227; Grynberg, 390 F.3d at 1279-80.
HELMER, supra note 4, at 140.
United States ex rel. Carter v. Halliburton Co., 710 F.3d 171 (4th Cir. 2013)
(holding that “once a case is no longer pending the first-to-file bar does not stop
a relator from filing a related case”); United States ex rel. Chovanec v. Apria
Healthcare Group, Inc., 606 F.3d 361 (7th Cir. 2010) (noting that the doctrine of
claim preclusion may block later litigation once the initial suit is resolved, but
the first-to-file provision does not as the initial complaint is not “pending”); In
re Natural Gas Royalties Qui Tam Litigation, 566 F.3d 956, 964 (10th Cir.
2009) (same).
United States ex rel. Shea v. Cellco Partnership, 748 F.3d 338, 343 (D.C. Cir.
2014) (“We hold that the first-to-file bar applies even if the initial action is no
longer pending, because we read the term ‘pending’ in the statutory phrase
‘pending action’ to distinguish the earlier-filed action from the later-filed
See Kellogg Brown & Root Services, Inc. v. United States ex rel. Carter, 135
S. Ct. 1970, 1970 (2015).
Id. at 1979.
See, e.g., Grynberg, 390 F.3d at 1278.
See HELMER, supra note 4, at 135.


See Lujan v. Defenders of Wildlife, 504 U.S. 555, 560-61 (1992).
31 U.S.C. § 3730(b)(1).
See United States ex rel. Thompson v. Columbia/HCA Healthcare Corp., 20
F. Supp. 2d 1017, 1047 (S.D. Tex. 1998).
529 U.S. 765 (2000).
Id. at 772.
Id. at 773 and 778 (The combination of the historical record of qui tam
actions and the assignment theory left “no room for doubt that a qui tam relator
under the FCA has Article III standing.”)
See LeBlanc v. United States, 50 F.3d 1025, 1031 (Fed. Cir. 1995) (“[Q]ui
tam suits may only be heard in the district courts. 31 U.S.C. § 3732(a).”) See
also Stimson, Lyons & Bustamante, P.A. v. United States, 33 Fed. Cl. 474, 480
(1995) (applying LeBlanc and dismissing qui tam claim for lack of subject
matter jurisdiction).
31 U.S.C. § 3732(a).
See HELMER, supra note 4, at 359-60.
31 U.S.C. § 3731(b).
See, e.g., United States ex rel. Shemesh v. CA, Inc., 89 F. Supp. 3d 36, 53
(D.D.Cir. 2015); United States ex rel. Sanders v. North American Bus Indus.,
Inc., 546 F.3d 288, 294 (4th Cir. 2008); United States ex rel. Sikkenga v.
Regence Bluecross Blueshield of Utah, 472 F.3d 702, 726 (10th Cir. 2006) and
United States ex rel. Thistlethwaite v. Dowty Woodville Polymer, Ltd., 6 F.
Supp. 2d 263, 265 (S.D.N.Y. 1998).
See United States ex rel. Pogue v. Diabetes Treatment Centers of America,
474 F. Supp. 2d 75, 84-85 (D.D.Cir. 2007) (the same statutes of limitations
applies in qui tam actions whether or not the Government intervenes) and
United States ex rel. Hyatt v. Northrop Corp., 91 F.3d 1211, 1214 (9th Cir.
1996) (because the qui tam plaintiff acts in the name of the United States, the
three-year statute of limitations begins to run once the qui tam plaintiff knows or
reasonable should have known facts material to his right of action).
See Jana Inc. v. United States, 41 Fed. Cl. 735, 743, 1998 U.S. Cl. LEXIS
216, at *27 (Fed. Cl. Sept. 3, 1998); United States ex rel. Gonzalez v. Fresenius
Med. Care, 2010 U.S. Dist. LEXIS 37636, at *12 (W.D. Tex. Jan. 21, 2010);
United States ex rel. Bauchwitz v. Holloman, 671 F.Supp.2d 674, 685 (E.D. Pa.
See Jana Inc. v. United States, 41 Fed. Cl. 735, 743, 1998 U.S. Cl. LEXIS
216, at *27 (Fed. Cl. Sept. 3, 1998).
31 U.S.C. §3730(a) and (b).
See 31 U.S.C. §3730(b)(2). See also False Claims Act/Qui Tam FAQ,
resources/faq-page/false-claims-actqui-tam-faq#where%20should (Last visited
Aug. 30, 2016).
31 U.S.C. §3730(b)(2).


See Foster v. Savannah Communication, 140 Fed.Appx. 905, 908 (11th Cir.
See Janet L. Goldstein and Mark Allen Kleiman, A Qui Tam Attorney’s
Guide: Bringing Suit for the King, VOGEL, SLADE & GOLDSTEIN, LLP BLOG
(June 2010), (Last visited Aug. 29, 2016).
See United States ex rel. Grandeau v. Cancer Treatment Ctrs. of Am., No. 99
C 8287, 2005 U.S. Dist. LEXIS 10682 (N.D. Ill. Apr. 12, 2005).
See United States ex rel. Green v. Northrop Corp., 59 F.3d 953, 962 (9th Cir.
1995) (citing Newton v. Rumery, 480 U.S. 386, 392 (1987)).
See, e.g., U.S. ex rel. Grandeau v. Cancer Treatment Ctrs. of Am., 350 F.
Supp. 2d 765, 773 (N.D. Ill. 2004) (“[T]he confidentiality agreement cannot
trump the FCA’s strong policy of protecting whistleblowers who report fraud
against the government.”); X Corp. v. John Doe, 805 F. Supp. 1298, 1310 n.24
(E.D. Va. 1992) (noting that an agreement would be void as against public
policy if it would prevent “disclosure of evidence of a fraud on the
Joel M. Androphy, Sarah Frazier, & Rachel Grier, Gathering Evidence in
(Last visited Aug. 29, 2016).
31 U.S.C. § 3730(b)(2).
See HELMER, supra note 4, at 602.
See, e.g., United States ex rel. Summers v. LHC Group, 623 F.3d 287 (6th
Cir. 2010).
Suzanne E. Durrell, The Relator’s Role in False Claims Act Investigations:
See HELMER, supra note 4, at 564.
See Janet L. Goldstein, A Qui Tam Attorney’s Guide: Bringing Suit for the
See United States ex rel. Webb, 2014 U.S. Dist. LEXIS 163698, *28-29 (D.
Me. July 2, 2014) (citing U.S. ex rel. Gagne v. City of Worcester, 565 F.3d 40,


45 (1st Cir. 2009)) and United States ex rel. Karvelas v. Melrose-Wakefield
Hosp., 360 F.3d 220, 227-28 (1st Cir. 2004)).
See United States ex rel. Rost v. Pfizer, Inc., 507 F.3d 720, 733 (1st Cir.
See Gagne, 565 F.3d at 45 (quoting Alternative Sys. Concepts, Inc. v.
Synopsys, Inc., 374 F.3d 23, 29 (1st Cir. 2004)).
See Karvelas, 360 F.3d at 233.
See Gagne, 565 F.3d at 47.
See United States ex rel. Pickens v. Kanawha River Towing Co., 916 F.Supp.
702 (S.D. Ohio 1996), aff’d 194 F.3d 1314 (6th Cir. 1999)
See United States ex rel. Bender v. North Am. Telecomms., Inc., 686
F.Supp.2d 46, 52 (D.D.Cir. 2010).
See 31 U.S.C. §3730 (b)(2).
31 U.S.C. § 3730(b)(3).
FED. R. CIV. P. 4(m).
See HELMER, supra note 4, at 616.
Id. at 618.
Id. at 618.
See, e.g., United States ex rel. Roby v. Boeing Co., 100 F. Supp.2d 619, 623
(S.D. Ohio 2000).
See 31 U.S.C § 3731(c).
See Makro Capital of Am., Inc. v. UBS AG, 543 F.3d 1254, 1259 (11th Cir.
False Claims Act Cases: Government Intervention in Qui Tam
(Whistleblower) Suits, JUSTICE.GOV,
files/usao-edpa/legacy/2012/06/13/InternetWhistleblower%20update.pdf (Last
visited Aug. 28, 2016).
See HELMER, supra note 4, at 606.
31 U.S.C. § 3730(b)(2),(3). See HELMER, supra note 4, at 609.
False Claims Act Cases, supra note 311.
See 31 U.S.C. §3730(b)(3); 31 U.S.C. §3730(b)(4)(A)(B); and 31 U.S.C.
§3730(c)(2)(A) and (B).
31 U.S.C. § 3730(b)(3).
See HELMER, supra note 4, at 623.


Id. at 624.
See e.g., Under Seal v. Under Seal, 326 F.3d 479 (4th Cir. 2003).
LITIGATION, 183 (Law Journal Press 2016).
31 U.S.C. § 3730(d)(3).
31 U.S.C. § 3731(c).
31 U.S.C. § 3731(c).
31 U.S.C. § 3730(c)(1).
See United States, ex rel. Klump v. Dynamics Corp. of Am., 1998 U.S. Dist.
LEXIS 21930 (S.D. Ohio Sept. 30, 1998).
31 U.S.C. § 3730(c)(2)(C).
31 U.S.C. § 3730(c)(2) (B).
See, e.g., Kelly v. Boeing Co., 9 F.3d 743, 753-754 (9th Cir. 1993)
(interpreting legislative history to hold that the right to a hearing is not absolute,
and that Congress did not intend the notice and hearing requirement to be “a
significant burden” to Government settlement) and United States ex rel. Resnick
v. Weill Medical College of Cornell University, 2009 WL 637137, at *2-*3
(S.D.N.Y. March 5, 2009) (indicating that the “fairness” requirement for
settlements may be an unconstitutional restriction because it encroaches on the
Executive Branch’s power to conduct litigation on behalf of the United States.)
See, e.g., United States ex rel. McCoy v. California Medical Review, 133
F.R.D. 143, 148-149 (N.D. Cal. 1990)
31 U.S.C. § 3730(d)(1).
31 U.S.C. § 3730(c)(3).
31 U.S.C. § 3730(d)(2).
31 U.S.C. § 3730 (d)(1) and (2).
See, e.g., United States ex rel. Killingsworth v. Northrop Corp., 25 F.3d 715,
722-723 (9th Cir. 1994).
See, e.g., Ridenour v. Kaiser-Hill Co., 397 F.3d 925, 931 n.8 (10th Cir.
2005); United States ex rel. Doyle v. Health Possibilities, 207 F.3d 335, 340-341
(6th Cir. 2000); Searcy v. Philips Electronics North America Corp., 117 F.3d
154, 160 (5th Cir. 1997) and United States ex rel. Dimartino v. Intelligent
Decisions, Inc., 308 F. Supp.2d 1318, 1321-1322 (M.D. Fla. 2004).
See ANDROPHY, supra note 323 at 444.
See Pacini, supra note 180 at 287.
31 U.S.C. §3730(d)(3).
See 31 U.S.C. §3730(h).
See Dodd-Frank Act, 111 P.L. 203, Part 1 of 3, 124 Stat. 1376, 1384.


See 11 U.S.C.§ 362(b)(4). See also In re Commonwealth Co., Inc., 913 F.2d
518 (8th Cir. 1990) (§ 362(b)(4) (excepts False Claims Act action against
debtors from the automatic stay up to and including entry of a money judgment)
(collects and distinguishes contrary decisions, id. at 526, note 12.); accord
United States v. NBI, Inc., 142 B.R. 1 (D.D.Cir. 1992)(action to fix reasonable
attorneys fees, costs and expenses by qui tam relator under False Claims act in
which U.S. intervened could proceed under police and regulatory power
exception as long as action was a continuation of and integral to a governmental
proceeding); United States v. Mickman, 144 B.R. 259 (E.D. Pa. 1992)
(following Commonwealth, holds False Claims Act civil action excepted from
automatic stay); In re Selma Apparel Corp., 132 B.R. 968 (S.D. Ala. 1991)
(same); In re MMR Corp., Case No. 90-00401 (Bankr. M.D. La. April, 1991).
But see In re Bicoastal Corp., 118 B.R. 854 (Bankr. M.D. Fla. 1990) (False
Claims Act action not excepted under § 362(b)(4)).
See HELMER, supra note 4 at 517.
See United States ex rel. Jackson v. Univ. of N. Tex., No. 4:13-CV-734ALM-CAN, 2015 U.S. Dist. LEXIS 175688, at *15 (E.D. Tex. Nov. 18, 2015).
See United States ex rel. Gebert v. Transp. Admin. Servs., 260 F.3d 909, 911
(8th Cir. 2001).
See In re Nat. Gas Royalties Qui Tam Litig., No. 1293, 1999 U.S. Dist.
LEXIS 20892, at *3 (J.P.M.L. Oct. 20, 1999).
See HELMER, supra note 4, at 516.
See 31 U.S.C. § 3730(c)(4).
See HELMER, supra note 4, at 517.
See R. Scott Oswald, 5 Rewards – And Drawbacks – Of Being a
Whistleblower, CORPORATE COMPLIANCE INSIGHTS, (July 11, 2013)
See Adam Resnick, Advice from a Former Whistleblower, JUSTICE NEWS
FLASH.COM, (Mar. 26, 2014)
See Oswald, supra note 357.
See Pros and Cons of Whistleblowing, VISION LAUNCH BE THE CHANGE,
(Aug. 11, 2015)
See Oswald, supra note 357.
See Resnick, supra note 360.
See Oswald, supra note 357.


See Resnick, supra note 360.
42 U.S.C. § 1320a-7b(b)
42 U.S.C. § 1320a-7b(b)(2).
42 U.S.C. § 1320a-7(b)(7); 42 U.S.C. § 1320a-7a(a)(7).
This was so because as a condition of participation in the Medicare Program,
the defendant has agreed to abide by all Medicare Statutes and Regulations; this
would include abiding by the AKS.
See generally, Fed. R. Civ. P. 26; United States ex rel. Schwartz v. TRW,
Inc., 211 F.R.D. 388, 392 (C.D. Cal. 2002).
See 31 U.S.C. § 3733(a)(1) (CIDs may only be used before the Government
has intervened); Inspector General Act of 1978, S. Rep. No. 95-1071, 95th
Cong., 2d Sess. 1 (Aug. 8, 1978), 1978 U.S. Code Cong. & Admin. News 2676,
2678 (giving the IG authority to issue subpoenas).
See 31 U.S.C. § 3733(a)(1).
See 31 U.S.C. § 3733(b).
See 31 U.S.C. § 3733(a)(1) and (i)(2)(C).
See 18 U.S.C. § 3486(a)(1)(A) and (a)(1)(B).
United States v. Chevron U.S.A., Inc., 186 F.3d 644, 647 (5th Cir. 1999).
See HELMER, supra note 4, at 628.
Id. at 629.
Id. at 629.
31 U.S.C. § 3733(a)(1).
See HELMER, supra note 4, at 631-632.
Id. at 632.
Id. at 633.
Id. at 687.
6 C.F.R. § 5.45.
6 C.F.R. § 5.3(b).
Id., see also United States ex rel. Touhy v. Ragen, 340 U.S. 462 (1951).
See HELMER, supra note 4, at 687.


Fed. R. Civ. P. 26(b)(1).
See United States v. American Tel. & Tel. Co., 642 F.2d 1285, 1298
(D.C.Cir. 1980).
See HELMER, supra note 4, at 644.
Id. at 653.
See Brendice v. Doctors Hosp., 50 F.R.D. 249 (D.D.C. 1970), aff’d without
opinion, 479 F.2d 920 (D.C. Cir. 1973).
See United States ex rel. Sanders v. Allison Engine Co., 196 F.R.D. 310, 312
(S.D. Ohio 2000) rev’d on other grounds, 471 F.3d 610 (6th Cir. 2006), reh’g
en banc denied, 2007 U.S. App. LEXIS 10114 (6th Cir. Apr. 20, 2007),
remanded, 553 U.S. 662 (2008).
See United States v. Dexter Corp., 132 F.R.D. 8, 9 (D.Conn. 1990).
See United States ex rel. Fay v. Northrop Grumman Corp., 2008 U.S.Dist.
LEXIS 24481 (D. Colo. Mar. 27, 2008)(case dismissed because counsel refused
to apply for a security clearance).
See Halkin v. Helms, 690 F.2d 977, 990 (D.C.Cir. 1982) and Zuckerbraun v.
General Dynamics Corp., 935 F.2d 544, 546 (2d Cir. 1991).
See HELMER, supra note 4, at 692.
Four Common Defenses Raised in False Claims Act Lawsuits, BERGER &
MONTAGUE, P.C. BLOG (Sept. 25, 2015),
See e.g., U.S. v. Cannon, 41 F.3d 1462, 1468-9 (11th Cir. 1995), cert. denied,
516 U.S. 823, 116 S. Ct. 86, 133 L. Ed. 2d 44 (1995); U.S. ex rel. Anderson v.
Northern Telecom, Inc., 52 F.3d 810, 815-16 (9th Cir. 1995) and United States
ex rel. Trawick v. Sverdrup Tech., Inc., No. 1:94cv68GR, 2001 U.S. Dist.
LEXIS 27081, at *273 (S.D. Miss. Feb. 24, 2001) (citing U.S. ex rel. Lamers v.
City of Green Bay, 168 F.3d 1013, 1018 (7th Cir. 1999).
See Four Common Defenses, supra note 423.
See e.g., United States ex rel. Hagood v. Sonoma Cnty. Water Agency, 929
F.2d 1416, 1421 (9th Cir. 1991)(holding that “a defendant has disclosed all the
underlying facts to the Government may . . . show that the defendant had no
intent to deceive . . . . [But] the requisite intent is the knowing presentation of
what is known to be false [and] that the relevant Government officials know of
the falsity is not a defense.”)
See, e.g., United States v. Incorporated Village of Island Park, 888 F.Supp.
419, 442 (E.D.N.Y. 1995).
Order on Motion to Strike Affirmative Defenses, United States ex rel. Ribik
v. ManorCare Inc. et al., case number 1:09-cv-00013 *1 (E.D.Va. Dec. 9, 2015).


Id. at 2-3.
Id. at 2.
Id. at 3.
See id. and 31 U.S.C. § 3729. See also United States ex rel. Harrison v.
Westinghouse Savannah River Co., 176 F.3d 776, 785 n. 7 (4th Cir. 1999).
See HELMER, supra note 4, at 765.
Conley v. Gibson, 355 U.S. 41, 45-46 (1957).
See HELMER, supra note 4, at 768.
Id. at 769.
31 U.S.C. § 3730(b)(5).
See HELMER, supra note 4, at 771.
See e.g., United States ex rel. Corsello v. Lincare, Inc., 428 F.3d 1008 (11th
Cir. 2005)(per curiam).
See United States ex rel. Magid v. Wilderman, 2004 U.S. Dist. LEXIS 17494
(E.D.Pa. Aug. 18, 2004); United States ex rel. Bidani v. Lewis, 2003 U.S. Dist.
LEXIS 8368 (N.D.Ill. May 19, 2003); United States ex rel. Koch v. Koch
Indus., 1999 U.S. Dist. LEXIS 16621 (N.D.Okla. July 7, 1999).
See HELMER, supra note 4, at 784.
Id. at 779.
See HELMER, supra note 4, at 570.
31 U.S.C. § 3730(d)(l)(2).
See HELMER, supra note 4, at 790.
Id. at 791.
Id. at 793.
See HELMER, supra note 4, at 794.
See United States v. Campbell, 2011 WL 43013, at *8 (D.N.J. Jan. 4, 2011).
See HELMER, supra note 4, at 806-808.
Id. at 810.
Id. at 811.


See e.g., Home Health Serv. V. Sullivan, 931 F.2d 914 (D.C. Cir.) cert.
denied, 502 U.S. 1091 (1991); Illinois Physicians Union v. Miller, 675 F.2d 151
(7th Cir. 1982).
See HELMER, supra note 4, at 813.
See United States ex rel. Marcus v. Hess, 317 U.S. 537, 63 S.Ct. 379, 87
L.Ed. 443 (1943).
See Pacini, supra note 180 at 287.
See United States ex rel. Sanders v. Allison Engine Co., 471 F.3d 610, 617
(6th Cir. 2006).
See Arends, supra note 200.
See 31 U.S.C. § 3729(b) (2006) wherein the FCA states that a penalty of
$5,000 to $10,000 per claim may be recovered; but see also Debt Collection
Improvement Act of 1996, Pub. L. No. 104-134, § 31001(s)(2), 110 Stat. 1321358, 373 (1996) (indicating that the Department of Justice increased the penalty
amount by 10 percent to adjust for inflation.).
31 U.S.C. § 3730(d)(1).
31 U.S.C. § 3730(d)(2).
31 U.S.C. § 3730(d)(3).
31 U.S.C. § 3730(d)(1).
31 U.S.C. § 3730(d)(1), (2).
31 U.S.C. § 3730(d)(4).
See HELMER, supra note 4, at 1023.
Id. at 1027.
Id. at 1028.
See United States ex rel. Chandler v. Cook County, Ill., 277 F.3d 969, 974
n.5 (7th Cir. 2002), aff’d, 538 U.S. 119 (2003)(“There is no reason to presume
that a decision by the Justice Department not to assume control of the [qui tam]
suit is a commentary on its merits.”).
See United States v. Health Possibilities P.S.C. 207 F.3d 335, 339 – 341 (6th
Cir. 2000).
See United States ex rel. Gibeault v. Texas Instruments 104 F.3d 276 (9th
Cir. 1996) (ordering Relator’s counsel to repay to the government money that
should have been the government’s share of a recovery).
CLAIMS ACTS, (last visited Aug. 31,
See Chicago, IL Code of Ordinances §§ 1-21-010 to 1-22-060, 2-152-171.
See Allegheny County, Code of Ordinances §§ 485-1 to 485-6 (2011),
available at (last visited Aug. 31, 2016);
Miami-Dade False Claims Ordinance, Code of Miami-Dade County, Florida §§
21-255 to 21-266 (1999), available at


matter.asp?matter=992791&file=false&yearFolder=Y1999 (last visited Aug.
31, 2016).
See e.g., CAL. GOV’T CODE § 12652(c)(7)(C).
See e.g., FLA. STAT. ANN. § 68.084.
See e.g., NEV. REV. STAT. ANN. § 357.210.
TAXPAYERS AGAINST FRAUD, supra note 489 (last visited Aug. 31, 2016).



1943 Amendments – 7-9, 11-12, 34
1986 Amendments – 10-13, 38-39, 45-46, 55, 74, 107-108
ACA – 18-20, 45, 47-49, 82
Affirmative Defenses – 95-96, 101
Affordable Care Act – 18, 45, 47, 82
Allison Engine Decision – 14-16
Anti-Kickback Statute – 19, 22, 81
Attorney’s Fees – 70, 108
Attorney-Client Privilege – 91
Bankruptcy – 75
Biddle, Attorney General Francis – 5-7
Causation – 36, 42
Certificate of Conformance – 16
CID – 31, 33, 85-86
Civil Investigative Demands – 85, 88
Classified documents – 89, 92
Classified Material – 92
Cross-Charging – 83
Damages – 4, 12, 36, 39, 42-43, 57, 74-75, 96-97, 105, 107-108, 112
Depositions – 76, 88-89, 91
Document Requests – 85-88
Dodd-Frank Act – 74


Failure to Inspect – 83
Failure to Test – 83
FDA – 82
FERA Amendments – 16, 19, 39
First to File Bar – 31, 51-53
First-to-File Provision – 100
Fraud Enforcement and Recovery Act – 14, 36
Fraudulent Billing – 79
Golston, Larry – 27
Government Contracts – 12, 21, 23, 83, 87-88
Government Intervention – 52, 67, 69
Government Investigation – 67-68
Gravitt v. General Electric – 12-13
Housing and Urban Development – 24
Howard, Senator Jacob M. – 4
HUD – 24
Informer’s Act – 3-4
Interrogatories – 85-88
Lincoln, Abraham – 3
Lincoln’s Law – 3


Materiality – 17, 36, 39-40, 42, 105
Medicaid Drug Rebate Program – 22
Medicare – 19, 22, 40-41, 79-82
Miles, W. Daniel “Dee” – 27, 142
Mischarging – 83
Motions for Summary Judgment – 99, 101
Motions in Limine – 99, 101
Motions to Dismiss – 99
Multi-District Litigation – 76
Obama, Barack – 14, 18
Off Label Drug Marketing – 82
Original Source Exception – 18, 45-48, 51
Original Source Issues – 99
Parasitic Lawsuit – 5, 8, 51
Patient Protection and Affordable Care Act – 18, 45, 47, 82
Penalties – 13, 42, 56, 78, 82, 97, 107
Percival, Blake – 27-28
PPACA – 18-20, 45
Product Substitution – 83
Public Disclosure – 11, 32, 46-51, 55, 96, 99, 108
Public Disclosure Bar – 18, 31, 45-51
Reagan, Ronald – 13
Recovery – 2, 6, 13-14, 36, 41-42, 69, 75, 107-108, 111, 113
Requests for Admission – 85-86, 88
Requests for Inspection – 86, 89
Retaliation – 2, 74-75, 77
Retaliatory Discharge Claim – 74
Rule 9(b) – 63-65, 95, 100


Savings Clause – 18, 48, 50
Security clearances – 27-28, 89, 92
Self-Evaluative Privilege – 91-92
Settlement – 12-13, 21-23, 67, 70-71, 79, 108-109
Stark Act – 80-81
State secrets – 92
State Secrets Privilege – 92
Statute of limitations – 45, 57, 70, 95-96
Subpoenas – 62, 68, 85-86
TARP – 24
TINA – 84
Touhy Regulations – 90
Trouble Asset Relief Program – 24
Truth-in-Negotiations Act – 84
Unbundling – 80
Upcoding – 80
USIS – 27-28
Witnesses – 1, 12, 33-34, 60-61, 67-68, 76, 85-86, 88-89, 103
Work Product Doctrine – 91




I would like to express the deepest appreciation to my law firm and
law partners at Beasley Allen. This book would not have been
possible without the tremendous support of Beasley Allen. The
wealth of knowledge, experience, and talent at this law firm is
amazing. Working with lawyers like Jere Beasley, Dee Miles, and Tom
Methvin is invaluable. I’m thankful for all that I have learned and
experienced practicing law at Beasley Allen. I learned a lot about qui
tam litigation by researching the practice area, attending CLE
programs and through trial and error. Also, a great deal of my
knowledge in this area of the law came from reaching out to lawyers
experienced in qui tam litigation – too many to mention. I had access
to some of the best qui tam litigators in the country through groups
like Taxpayers Against Fraud, National Employment Lawyers
Association, American Association for Justice, and Alabama
Association for Justice. To everyone, thank you.


C. Lance Gould