Whistleblower Lawsuit Under The False Claims Act: The Process

Whistleblower Lawsuit Under The False Claims Act: The Process

If you have filed a whistleblower lawsuit under the False Claims Act and wonder what will happen next, you are not alone. Sometimes, not being sure of what will happen after filing a whistleblower lawsuit can make you feel uncomfortable about the entire process.

The False Claims Act has provided the process that will follow the filing of a whistleblower lawsuit by private persons. You need to consult the best lawyer to explain the process under the False Claims Act.

The Process of a Whistleblower Lawsuit Under the False Claim Act

After you have filed a complaint, a copy of the complaint and a written disclosure of all material evidence and information you rely on shall be served on the Government.

The complaint which shall be filed in camera, shall be under seal for 60 days, and shall not be served on the defendant until ordered by the court.

Afterwards, the Government has two options:

  1. The Government may elect to proceed with the action within 60 days after receiving the complaint and the material evidence and information, or
  2. The Government may, for good cause shown, move the court to extend the time during which the complaint will remain under seal.

While the complaint is under seal, the defendant shall not be required to respond until 20 days after the complaint is unsealed and served upon him.

Before the expiration of the 60 days or any extensions granted by the court, the Government shall:

  1. Proceed with the action
  2. Notify the court that it declines to take over the action

Where the Government, through the Department of Justice, proceeds with the action, it shall conduct the action itself. But where the Government declines to take over the action, the person bringing the action shall have the right to conduct the action.

Rights of the Parties Where the Government Proceeds with a Whistleblower Lawsuit

  • The Government shall have the primary responsibility for prosecuting the action and shall not be bound by the act of the person bringing the action.
  • The Government may dismiss the action notwithstanding the objections of the person initiating the action if the person has been notified by the government of the dismissal motion and the court has provided an opportunity the person an opportunity for a hearing of the motion.
  • The Government may settle the action with the defendant notwithstanding the objections of the person initiating the action if the court determines that the proposed settlement is fair, adequate, and reasonable under all circumstances.
  • The court may on the application of the Government restrict the participation of the person initiating the action if it considers that he would interfere with, or unduly delay the Government’s prosecution of the case or the case would be repetitious, irrelevant, or was initiated for purpose of harassment.

Some of the limitations that the court may place on a person include:

  1. Limiting the number of witnesses
  2. Limiting the length of the testimony of such witnesses
  3. Limiting the person’s cross-examination of witnesses
  4. Limiting the participation of the person in the litigation.

The court may also limit the unrestricted participation of the person filing the action if the defendant proves in the course of the litigation that the person initiated the action for purposes of harassment, or that the action would cause the defendant undue burden or unnecessary expenses.

Where the Government Declines to Proceeds with a Whistleblower Lawsuit

  • If the Government elects not to proceed with the action, the person who initiated the action shall have the right to conduct the action.
  • The Government may request and it shall be served with copies of all pleadings, and depositions transcripts filed in the action at the Government’s expense.
  • Where a person proceeds with an action, the court, without limiting the status and rights of the person initiating the action, may nevertheless permit the Government to intervene at a later date upon a showing of good cause.

Whether or not the Government proceeds with the action, the court can still stay certain action of discovery by a claimant for a period of not more than 60 days upon a showing by the Government that the process would interfere with the Government’s investigation or prosecution of a criminal or civil matter arising out of same facts.

The court, however, may extend the 60 days upon a further showing in camera that the Government has pursued the criminal or civil investigation or proceedings with reasonable diligence and any proposed discovery will interfere with the ongoing criminal or civil investigation or proceedings.

Alternate Remedies in a Whistleblower Lawsuit.

Notwithstanding subsection (b), the government may elect to pursue its claim through any alternate remedy available to the Government to determine a civil money penalty.

If the Government elects to pursue an alternate remedy, the person initiating the action shall have the same rights in such proceedings as such person would have in court.

Any finding of fact or conclusion of law in such alternative proceedings shall be conclusive on all parties to the action.

Compensation where the Government Proceeds with an Action

Where the Government proceeds with an action, the claimant shall receive between 15% and 25% of the proceeds of the action or settlement of the claim depending on the claimant’s contributions in the action.

The court will award compensation of not more than 10% where the action is based primarily on disclosures of specific information relating to allegations or transactions in a

  • Criminal, civil, or administrative hearing
  • Congressional, administrative, or Governmental Accounting Office report, hearing, audit, or investigation
  • News media

The claimant shall also receive reasonable attorney’s fees and an amount for reasonable expenses which the court finds to have been reasonably incurred. Any amount determined by the court in favor of the claimant shall be awarded against the defendant.

Compensation where the Government Declines to Proceed with an Action

  • Where the Government does not proceed with an action, the relator shall receive an amount which the court decides reasonable for collecting the civil penalty and damages. The amount that will be awarded to a claimant in this situation, which will be paid out of the proceeds of the action, shall not be less than 25% and not more than 30% of the proceeds of the action or settlement.
  • In addition, the claimant shall receive an amount for reasonable expenses which the court finds to have been necessarily incurred, plus reasonable attorneys’ fees and costs. All these amounts determined by the court in favor of the claimant shall be awarded against the defendant.
  • Where the court finds that the relator was the person who planned and initiated the violation of the False Claims law, the court may reduce the share of proceeds of the action that the person would otherwise receive under the Act.
  • Where a claimant is convicted of criminal conduct arising from his or her role in the violation of False Claims law, that person shall be dismissed from the civil action and shall not receive any share of the proceeds of the action. The Government has the right to continue the action after such dismissal.
  • Where the Government does not proceed with the action and the claimant conducts the action, the court may award to the defendant its reasonable attorneys’ fees and expenses if it finds that the claim of the claimant was clearly frivolous, vexatious, or brought primarily for purposes of harassment.

Finally on the Process of a Whistleblower Lawsuit

What happens after a person files a Whistleblower lawsuit under the False Claims Act depends on a lot of factors.

Understanding the process that follows the filing of a whistleblower lawsuit under the False Claims Act will help whistleblowers adequately prepare for the action.

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