What Is a Qui Tam Whistleblower Case?

A qui tam whistleblower case lets a private person sue on behalf of the federal government when they have information about fraud involving government funds. Most cases arise under the federal False Claims Act and follow a specific process. The whistleblower, known as a relator, files the case under seal while the government investigates and decides whether to take over the lawsuit. If the case results in a recovery, the whistleblower may be entitled to a portion of the money recovered.

If you are considering bringing a qui tam case, connect with a whistleblower attorney through the Super Lawyers directory to discuss your situation.

What Is a Qui Tam Action?

The term “qui tam” comes from a Latin phrase meaning “he who brings an action for the kind as well as for himself.” This is a complicated way of saying a private citizen can litigate against an entity that has committed fraud against the federal government.

Procedurally, qui tam lawsuits are filed under the False Claims Act (FCA). The FCA was enacted during the Civil War to address widespread fraud by military government contractors. Today, the FCA empowers private individuals to act as whistleblowers and bring legal action against a broad range of entities defrauding the government.

While the coverage is broad, some industries see qui tam litigation more often. Healthcare fraud is one example. The medical industry sees kickbacks to doctors, overbilling, and Medicare and Medicaid fraud. Procurement fraud is a common claim for government contracts. This happens when the contract misrepresents material facts about a product or service’s qualifications. The price is inflated while the quality is subpar.

What Does It Mean To File a Qui Tam Case Under Seal?

Filing a qui tam lawsuit is different from filing an ordinary civil lawsuit. Qui tam relators file their claim under seal. That means the defendant does not immediately receive the complaint or get served. The relator must also give the government a disclosure statement containing substantially all material evidence and information supporting the allegations.

The seal gives the government time to investigate without immediately alerting the defendant to the allegations. Under the False Claims Act, the initial seal period lasts at least 60 days. The government can ask the court for additional time when it has good cause, and these extensions can keep the case under seal while the investigation continues.

Filing under seal does not mean the case stays secret forever. Depending on what happens during the government’s investigation, the court may eventually unseal the complaint, and the defendant may be served. The seal primarily gives the government time to investigate before the lawsuit becomes public.

How Does a Qui Tam Whistleblower Case Work?

Qui tam claims follow a specific process and must include the required elements. To establish a common FCA claim, a whistleblower must show that the defendant knowingly presented, or caused the presentation of, a false or fraudulent claim for payment or approval.

The defendant must have acted knowingly, which can include actual knowledge, deliberate ignorance, or reckless disregard, rather than specifically intending to defraud the government. That fraud must also be material to the government’s decision to pay.

1. The Whistleblower Gathers Information

Before pursuing a qui tam complaint, a whistleblower should gather as much information as possible to support their claim. Evidence could include contracts, invoices, billing records, communications, and internal reports.

However, avoid taking any information or documents that you are not legally entitled to possess. Doing so can create a separate legal liability.

2. The Whistleblower Consults a Qui Tam Attorney

A qui tam claim can involve complex regulations and statutes of limitations. Speaking with a qui tam lawyer is essential.

Legal counsel will evaluate the allegations to determine if they fall under the FCA provisions. They will review the evidence, check whether another action was filed, identify potential filing issues, and confirm disclosure requirements.

3. The Complaint Is Filed Under Seal

Once the complaint is ready, the whistleblower files it in federal court under seal. The complaint is filed in the government’s name. The defendant is not served notice of the lawsuit at this time.

4. The Government Investigates

The government receives the complaint and supporting disclosure. After review, the government will decide whether to intervene or decline. If the government intervenes, it will take over the case and litigate. If it declines, it will allow the whistleblower to proceed independently.

What Happens If the Department of Justice Intervenes?

If the Department of Justice (DOJ) intervenes, the government takes primary responsibility for prosecuting the case. The whistleblower may remain involved to a certain extent. However, their involvement is limited by statute. The DOJ taking over doesn’t necessarily mean the government will pursue litigation. Depending on the circumstances, the government may seek to dismiss or settle the claim.

What Does the Whistleblower Receive If the Government Intervenes?

A successful qui tam whistleblower could receive a large portion of the recovered funds. The total amount could be up to 30%. However, the amount received depends on whether the government intervenes.

FCA whistleblower law generally provides the relator with 15% to 25% of the proceeds when the government proceeds with the action. The exact whistleblower reward can depend on the relator’s contribution to the prosecution and other statutory circumstances.

What Happens If the Government Declines To Intervene?

The government’s decision not to intervene doesn’t automatically end the claim or case. Under the FCA, the whistleblower can generally pursue the claim on their own. However, the government retains certain rights.

What Does the Whistleblower Receive If the Government Declines?

The FCA generally provides a whistleblower with 25% to 30% of the proceeds when the government does not proceed. However, that amount isn’t automatic simply because someone filed a complaint. The amount a whistleblower receives depends on a successful recovery. The statute may also allow reasonable expenses and attorneys’ fees.

What Protections Does the False Claims Act Give Whistleblowers?

Reporting suspected fraud can put a whistleblower in an uncomfortable position, particularly when the person works for the company accused of wrongdoing. The False Claims Act protects certain employees, contractors, and agents who take lawful steps to investigate, report, or help stop violations of the law. An employer generally cannot fire, demote, suspend, threaten, harass, or otherwise discriminate against a protected individual because of that activity.

The law also provides remedies when prohibited retaliation occurs. Depending on the circumstances, a successful retaliation claim may result in reinstatement, twice the amount of back pay plus interest, compensation for special damages, and reasonable attorneys’ fees and litigation costs.

However, not every negative workplace action automatically violates the FCA. The employee must have engaged in conduct protected by the statute. The retaliation must also be connected to that protected activity.

Speak with a Lawyer

A qui tam whistleblower case can let a private citizen help the federal government recover money lost to fraud. A lawyer familiar with False Claims Act cases can help you evaluate the evidence, understand your options, and navigate the filing process.

Use the Super Lawyers directory to find a qualified whistleblower attorney.