The Federal False Claims Act has a whistleblower, or “qui tam,” provision that allows private citizens who have knowledge of a fraud against the government to file a False Claims Act lawsuit on behalf of the government. As an incentive to report fraudulent activity against the government, the Act awards the citizen a share in the lawsuit’s proceeds. 31 USC § 3730(b). The citizen’s share may range from 15% to 30%, depending on several factors including whether the government decides to pursue the lawsuit, and the level of participation of the citizen.
As an additional incentive to filing a qui tam lawsuit, an attorney fee shifting provision applies (28 USC § 2412). 31 USC § 3730(g). This means that the prevailing party in the litigation will be entitled to have its attorney fees and litigation expenses paid by the other, losing party.
However, there are certain instances in which a private citizen will be barred from filing a False Claims Act. Specifically, a private citizen will not be able to successfully pursue a qui tam lawsuit in the following three situations:
- The citizen files a qui tam lawsuit after the issue is already publically disclosed, i.e. the “public disclosure” bar (§ 3730(e)(4)(A));
- The citizen files a qui tam lawsuit when someone else has already filed a false claims act lawsuit on the same grounds, i.e. the “first to file” bar (§ 3730(b)(5)); or,
- The citizen files a qui tam lawsuit where the government is already addressing the fraudulent activity under the False Claims Act or via another civil or administrative proceeding, i.e. the “government was first” bar. (§ 3730(e)(3).).
The above three situations emphasize the importance of acting promptly if you are aware of fraud being committed against the government. Qui tam lawsuits are complex and involve several considerations, so you should consider contacting an attorney with experience handling these lawsuits before you act. The attorneys at Dhillon Law Group have such experience and would be happy to speak with you to assess the strengths of your case.
Dorothy Yamamoto is an associate at Dhillon Law Group Inc.