Another Court Refuses to Lowball Successful Relators

The False Claims Act sets a range of awards for relator share between 15% and 25% to advance two goals. First, the 15% minimum was devised “in the nature of a ‘finder’s fee’ [in order] to develop incentives for people to bring information forward.” 132 Cong. Rec. H9389 (daily ed. Oct. 7, 1986) (statement of Rep. Berman). That amount is therefore paid “even if that person does nothing more than file the action in federal court.” Id. However, where a Relator’s contributions go beyond the mere filing of a complaint, an award well in excess of the statutory minimum is obligatory.

By offering relators the promise of an increased stake in the outcome of their cases based upon the extent to which they substantially contributed to the prosecution of the action, Congress created an incentive for relators and their counsel to commit time, money and resources needed to litigate aggressively on behalf of the taxpayers.

If the Department of Justice offers less of a relator share percentage than is properly due, the relator has the right to bring the issue before the court. The most recent successful challenge played out in an intervened qui tam action that exposed a residential youth center that was mistreating boys suffering from serious mental health. Ultimately, because of the relators’ actions, the mistreatment stopped and the center returned $6.85 million to the federal and Virginia governments. In assisting the government, the relators provided critical information about the fraud, attended all depositions and hearings, submitted briefs in support of the government, and secured the use of an expert who increased the defendants’ potential liability and encouraged the defendants to settle more quickly. Nonetheless, the government sought to limit the relators’ share to 17% of the recovery.

The court decided that a 20% share was more equitable. In reaching its decision, the court analyzed a number of factors, including the relators’ post-filing contributions. The court also acknowledged the gravity of the disclosure in reaching its decision: the significant safety issue posed to residents of the youth center who were not receiving the care they needed.

Hopefully, this decision sends a strong message to potential whistleblowers…and the Justice Department.

More information for whistleblowers is located at the Nolan Auerbach website.

 

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