The Effect Of The Government’s Decision To Intervene in False Claims Act Cases
The False Claims Act (FCA) allows the government to recover from those who knowingly present fraudulent claims to the United States for payment or who make a record or statement that is material to a fraudulent claim. Known as qui tam cases, FCA suits are brought by plaintiffs, known as relators, who have knowledge of the fraud and on behalf of the government. As such, the government may intervene in the matter and participate in litigating the case. However, often the government chooses not to intervene, leaving relators to prosecute the claims on their own. When the government chooses to intervene, though, the results are quite different.
When The Government Decides To Intervene
The Department of Justice (DOJ) intervenes in only about a quarter of FCA cases brought for review. Interestingly, those cases tend to result in larger settlements than cases where the relator pursues the suit after the DOJ declines intervention. While it has long been understood by the bar that intervention by the government should not necessarily imply that the merits of a case are weak, the figures demonstrate that chances of increased recovery are greater with the government at the helm, which suggests that intervened cases are legally more favorable for plaintiffs.
Certainly there are detriments to the government’s involvement is an FCA case. When it intervenes, the government takes over handling the case, which means relator’s counsel will be limited to assisting the government, ensuring a good settlement amount, and handling any non-intervened counts. As such, relator’s counsel loses some control over the movement of the case. However, having the full resources of the federal government come to bear on a defendant is quite powerful and perhaps in part why the settlement amounts are larger in intervened cases.
Getting the Government To Intervene
A variety of reasons beyond the merits exist as to why the government may or may not intervene, not the least of which is lack of resources, time, and an overwhelming caseload. Additionally, a relator’s assumptions and insinuations do little to convince the government to intervene given these circumstances. Realtor’s counsel will do well to step into the shoes of DOJ counsel and provide a meritorious case that to the extent possible has been thoroughly investigated. Counsel will want to present as many provable/corroborated facts as possible, how they fit into the statuary elements of the cause of action, clearly quantifiable damages, whether the agency involved knew about the fraud, and articulate and demonstrate preparedness and a willingness to assist.
In 2016 alone settlements and judgments just from healthcare related FCA suits netted the government $2.4B. A myriad of FCA cases have been settled or are pending related to procurements, particularly selling non-compliance goods to the government. While relators can certainly and quite successfully go it alone, intervention by DOJ obviously has its benefits, as recoveries are higher. Therefore, a careful and thorough presentation for intervention by way of a strong legal case and an assurance of a reliable partnership will assist in getting a positive intervention decision.