November 14, 2022
The reasons for pursuing a False Claims Act (or “FCA”) claim are significant: a person who comes forward with actionable evidence of fraud perpetrated against the federal government by a business – whether in the form of Medicare and/or Medicaid fraud, customs fraud. oil and gas royalty fraud, military procurement fraud, or any other basis – both stands to gain a significant financial reward and to do their civic duty in protecting taxpayers from profiteering by crooked market players.
However, many potential FCA whistleblowers (or “relators” as they are specifically referred to under the FCA statute) are concerned with the blowback they might receive for coming forward with a qui tam FCA lawsuit. After all, no one likes being sued, particularly when there are significant financial and reputational consequences, as is the case with an FCA lawsuit. And, furthermore, if a company has shown it is willing to illegally defraud the federal government, it is not out of the question that that same company would take similarly illegal actions against anyone who threatens to expose their fraud.
Make no mistake, the decision to become an FCA whistleblower is by no means an easy one. Again, on the one hand, there may be the opportunity to obtain an FCA reward in the millions of dollars for a successful relator, while at the same time holding lawbreakers accountable for their actions, but on the other hand, such a relator may be concerned for their own career and other interests.
In making this decision, it is important to understand that there are significant protections against retaliation under the FCA, and potential FCA whistleblowers are strongly encouraged to work with experienced whistleblower counsel to fully understand the protections they have, to avoid the potential of retaliation, and to assert their rights against retaliation should it occur.
False Claims Act Whistleblower Protections
Pursuant to 31 U.S.C. §3730(h)(1) of the FCA: “Any employee, contractor, or agent shall be entitled to all relief necessary to make that employee, contractor, or agent whole, if that employee, contractor, or agent is discharged, demoted, suspended, threatened, harassed, or in any other manner discriminated against in the terms and conditions of employment because of lawful acts done by the employee, contractor, agent, or associated others in furtherance of an action under this section or other efforts stop 1 or more violations of [the False Claims Act].”
The FCA goes on to provide at §3730(h)(2) that, should any employee, contractor, or agent be subject to such retaliatory discrimination as described in the above section, the relief due to that person “shall include reinstatement with the same seniority status that employee, contractor, or agent would have had but for the discrimination, 2 times the amount of back pay, interest on the back pay, and compensation for any special damages sustained as a result of the discrimination, including litigation costs and reasonable attorneys’ fees.”
Thus, significant protections do indeed exist for FCA whistleblowers, and businesses and individuals who attempt to engage in improper retaliation against FCA do so at great risk to themselves. Not only is such retaliation prohibited by the above statute, but the actions of an employer to retaliate against a whistleblower (regardless of whether the allegations made by the whistleblower are accurate and/or present evidence of a viable FCA claim) certainly do not reflect well on an organization that is now a defendant in a lawsuit alleging fraud against the federal government.
In any case, there is no doubt that an FCA whistleblower who is currently employed by the potential FCA defendant (or even in the same industry) should proceed prudently and wisely in pursuing their FCA case, and thus it strongly advised that such whistleblowers work with experienced FCA plaintiff’s counsel in order to both avoid and respond to any retaliatory measures against the plaintiff.
Can You Remain Anonymous in Bringing an FCA Claim?
In a qui tam FCA lawsuit, a private individual (or group of individuals) are acting on behalf of the government in bringing a lawsuit as a private plaintiff against the allegedly offending business or individual(s). The term qui tam as it is used in the FCA context is shorthand for the latin phrase qui tam pro domino rege quam pro se ipso in hac parte sequitur, which in the words of the U.S. Supreme Court, means “who pursues this action on our Lord the King’s behalf as well as his own.” Rockwell Int’l Corp. v. United States 127, S.Ct. 1397, 1403, n. 2 (2007).
Put another way, when a private plaintiff brings an FCA lawsuit, that person (or persons) is essentially stepping into the shoes of the federal government (or a state government in the case of state law FCA provisions) in pursuing redress against those entities who have allegedly defrauded the government. And, in the case of a successful FCA lawsuit, both the private plaintiff and the government share the benefits of the financial recovery.
There is thus often a “team effort” between a private plaintiff and the government in developing and pursuing FCA lawsuits, and the FCA provides protections to the private plaintiff which support this shared interest in pursuing fraud perpetrated against the federal government.
One key aspect of the FCA process that furthers this goal is that, at the time that an FCA lawsuit is initially filed, it is filed under seal, meaning that the public will not have access to the lawsuit. During the time the lawsuit is under seal, the government will have access to it, as the lawsuit will also be served on the relevant U.S. Attorney’s office. Federal prosecutors then have the opportunity to investigate the facts alleged in the lawsuit to determine whether the federal government should join in prosecuting the FCA lawsuit. (Note, while it is generally a more positive sign that the federal government does join the FCA lawsuit, it is not a requirement that the government do so, and a private plaintiff can pursue an FCA claim without the government’s participation, and indeed may obtain a larger financial reward in such case.)
The above process provides protections to whistleblowers, in that their identity as the plaintiff in a pending FCA lawsuit is not public record – nor indeed is the evidence of the lawsuit existing at all public record while still under seal – but it does not necessarily guarantee anonymity. At a very basic level, if you yourself tell a friend or coworker that you are filing an FCA lawsuit, and that person tells someone else, then your employer may learn of your plans. Also, if the government in its investigation asks questions of the company which imply their knowledge of facts that only a very small number of people are aware of, then it may be the case that the company can deduce your role as an FCA plaintiff.
Assuming a plaintiff does proceed with the FCA claim, at some point the lawsuit will no longer be under seal, and thus the identity of the individual plaintiff(s) will become clear. To be clear, however, this is typically a lengthy process, and a plaintiff concerned about their identity becoming known has time to work with their attorneys to both take action that may limit the fallout of their identity becoming known (i.e., obtaining a position in a different company) as well as to prepare to take any action in response to retaliation should it occur.
As an example of this lengthy process, in the recent case of an FCA claim against Novartis resulting in a settlement which provided the plaintiff with an estimated $100 million financial reward, the plaintiff filed the complaint under seal in 2011 and amended the complaint several times in the following two years, and the government intervened in 2013, with the final resolution of the case occurring much later in 2020.
Contact False Claims Act Whistleblower Protection Attorneys
For both whistleblower plaintiffs and defendants alike, the process of litigating an FCA claim is often long (many such lawsuits average 3-5 years in length) and filled with risk. It is important to work with experienced FCA counsel from the earliest stages of either asserting or responding to a FCA claim to protect your interests and maximize your chances of a positive outcome. Our attorneys have combined decades of experience in both the federal government and in the highest levels of private practice, and are ready to work with you to counsel you and/or your business on any FCA issues you may be facing.