• Follow the Money: Pleading and Pursuing Qui Tam and Whistleblower Cases
  • September 14, 2010 | Author: Dean Gresham
  • Law Firm: Gresham PC - Dallas Office
  • Introduction

                It is estimated that almost 10 percent of the United States’ annual budget (or $300 billion) is paid to companies or persons as a result of defrauding the federal government each year.  Fraud against the government affects everyone and can take many forms.  It can occur in virtually every arena in which federal and/or state funds are used directly or indirectly to purchase goods or services from private entities.  In general, fraud follows the money and occurs most often in the areas where the government is spending the most money.  In the 1980s, many qui tam (or whistleblower) actions were brought against Department of Defense contractors.  Since the 1990s, the majority of qui tam actions involved fraud against the federally funded medical health insurance programs like Medicare, Medicaid, and Tri-Care.  Recently, however, the False Claims Act is being used to prosecute fraud resulting from violations of labor, trade, and environmental laws.  Because fraud is only limited by the ingenuity of those who perpetrate it, attorneys and their whistleblower clients must remain diligent in investigating, understanding, and prosecuting fraud against the government.  This paper discusses the background and purpose of qui tam actions, how to investigate and prove a claim under the False Claims Act, and the various types of government fraud that exist today.

     
    Background of Qui Tam Actions

                The term “qui tam” is short for the Latin phrase qui tam pro domino rege quam pro ipso in hac parte sequitur, which means “who pursues this action on our Lord the King’s behalf as well as his own.”[1]  Use of the qui tam actions developed as part of the English common law and dates back to at least the time of Blackstone.[2]  In common law England, qui tam actions were used to aid the government’s primitive law enforcement capabilities.  The success of common law qui tam actions led to the British Parliament’s enactment of statutes, which authorized private “informers” (n/k/a “relators”) to prosecute others on behalf of the government for violation of certain laws.[3]  If the informer was successful, he was rewarded with a share of the government’s recovery.[4] 

     
                Although some of the statutes enacted by Parliament permitted only injured persons to bring suit on behalf of the government, Parliament enacted other statutes which authorized any person to prosecute a wrongdoer on behalf of the government.[5]  Eventually, the use of qui tam actions expanded from criminal prosecutions to civil actions.[6]  However, the practice of private law enforcement became the subject of widespread abuse.[7]  As a result, qui tam actions “fell into disfavor and, from the 16th century forward, their use was progressively curtailed.”[8]

     
    The False Claims Act

                The use of qui tam actions in the United States dates back to the late 1790’s.[9]  However, Congress later codified the common law qui tam action by enacting the False Claims Act (“FCA”) in 1863-also known as “Lincoln’s Law”-to combat fraud committed on the Union Army by weapons contractors.[10]  The law was designed to encourage private citizens to help fight fraud by acting as whistleblowers.  However, qui tam actions under the FCA were rare until the FCA was substantially amended in 1986 to incentivize whistleblowers with evidence of fraud to commit their time and money to assist the government’s efforts to fight fraud.[11] 

     
                Today, the FCA, 31 U.S.C. §§ 3729-33, is a powerful tool that creates a public-private partnership between citizens and the government in the fight against fraud against the federal fisc.  The FCA provides whistleblowers with financial motivation and protections against retaliation that are essential to encourage them to come forward in today’s business environment and blow the whistle on government fraud.  Whistleblowers provide a wealth of information that can expose other forms of actionable fraud, and it is important for attorneys to understand the breadth of the FCA in order to harness all of a client or potential client’s knowledge and information. 

     
                The FCA provides that a person who knowingly[12] presents or causes to be presented a false or fraudulent claim to the government is liable for up to three times the amount of the false claim, plus hefty civil penalties.[13]  The whistleblower (known as the relator) can file suit on behalf of the government to report the fraud.[14]  If the qui tam action is successful, the relator is entitled to a percentage of the recovery based on the level and importance of the relator’s participation in the action.[15]  Qui tam actions under the FCA are filed under seal in federal district court and are not served on the defendant for at least sixty days, during which time the government investigates the claim to decide whether it will join or take over the prosecution of the action.[16]

     
                If the government does not intervene, the relator can prosecute the lawsuit on his or her own.  If the action is successful (regardless of whether the government intervenes), the statute requires that the defendant pay three times the amount wrongfully obtained from the government, in addition to mandatory civil penalties between $5,000 and $11,000 for each false claim.  The relator is then entitled to a percentage of the government’s recovery that ranges between 15 and 30 percent. 

     
    How Is a Whistleblower Compensated?

                The answer is not simple and depends upon many factors, including government involvement and the nature and extent of the relator’s contribution to the action.  Since the FCA was amended in 1986, more than 4,000 qui tam actions have been filed, the government has recovered over $6 billion, and over $960 million has been paid to qui tam relators. 

    As discussed above, a qui tam relator files a complaint, under seal, in federal district court and serves a copy on the U.S. Attorney General and local U.S. Attorney for the judicial district where the action is filed.  Along with the complaint, the relator must also provide the government with a “written disclosure of substantially all material evidence and information the person possesses” so that it has the information necessary to investigate to determine whether to intervene in the action.  The defendant is not served with the complaint and generally, has no idea that the action has been filed or that the government is investigating the issue.

     
                The government (U.S. Department of Justice) has a minimum of 60 days to investigate the action once the complaint is filed to determine whether it will intervene.  In practice, however, the government will often seek an extension to allow it additional time to investigate.   It is not uncommon for the government’s investigation to take several years while the complaint remains under seal.  While courts routinely grant the government additional time, a relator does have the right to contest an extension and have the seal lifted.

     
                While under seal, the government has several options.  It can elect to intervene in the action, decline to intervene, move to dismiss the action, or seek to settle the action prior to formal investigation.  If the government intervenes in the action, it controls the action, assumes primary responsibility for prosecuting the case, and can seek to limit the relator’s involvement in the action.  If the government does not intervene, the relator is entitled to prosecute the action, and usually, the government requires the relator’s attorney to keep it reasonably informed.  Also, DOJ approval of any settlement offer made by the defendant is required.  The government rarely moves to dismiss the action, yet will so move when there has been a previous public disclosure of the information upon which the relator’s FCA allegations are based.  Most often, the government politely declines to intervene and allows the relator to prosecute the case on his or her own.

     
                If the government does not intervene, the relator can prosecute the case. However, the government has the right to intervene at a later date if it feels there is good reason to do so.  If the government does not intervene at any time and the relator is successful in recovering funds for the government, the relator will generally receive a larger percentage of the recovery.

     The 1986 amendments to the FCA increased the relator’s share of the recovery in qui tam actions.  Prior to 1986, a relator was not guaranteed more than 10 percent of the recovery.  The 1986 amendments increased the relator’s share to a minimum of 15 percent and a maximum of 30 percent.  The amount of the relator’s share depends on the following factors:

     
     If the government intervenes, and successfully prosecutes the case, and the relator was not involved in the wrongdoing, the relator can receive between 15 and 25 percent depending on the extent of the relator’s contribution to the action;
     

     If the government does not intervene and the relator successfully prosecutes the action, the relator is entitled to receive between 25 and 30 percent of the recovery.  The defendant may also be liable for the relator’s attorney’s fees;
     

     If it is determined that the relator was involved in the fraud, the court can reduce the relator’s share at its discretion depending upon the nature and extent of the relator’s involvement; and
     

     It the relator is convicted of criminal conduct arising from the fraud alleged in the FCA action, the court will dismiss the relator from the action and prevent him from sharing in any recovery.
     

                According to the Taxpayer’s Against Fraud Education Fund website,  of the 4,281 qui tam actions filed from 1986 to 2003, the government intervened in only 750, or roughly 17.5% of those cases.  As discussed above, the amount of a relator’s share in the recovery is directly dependent on whether the government intervenes.  In those cases in which the government intervenes, the total proceeds from 1986 to 2003 amounted to approximately $7.5 billion.  In cases in which the government declined to intervene, the total proceeds recovered by private attorneys on behalf of the government amounted to $362 million.  Over that same period, recoveries for qui tam relators in cases in which the government intervened totaled $1.395 billion, or 15 percent of the total proceeds.  In contrast, recoveries for qui tam relators in cases where the government chose not to intervene totaled $85.08 million, or 25 percent of the total proceeds.[17]

     

    Subject Matter Jurisdiction

                Perhaps the most important consideration an attorney must undertake when deciding whether to represent a qui tam relator is where the relator’s knowledge of the fraud is derived.  While the economic incentives can be quite motivating to potential whistleblowers, they can also lead to actions based on bad information. 

    The FCA’s Public Disclosure Bar.
     

                Section 3730(e)(4)(A) of the FCA states:

     
    No court shall have jurisdiction over an action under this section based upon the public disclosure of allegations or transactions in a criminal, civil, or administrative hearing, in a congressional, administrative, or Government Accounting Office report, hearing, audit, or investigation, or from the news media, unless the action is brought by the Attorney General or the person bringing the action is an original source of the information.[18]

     
    The public disclosure bar is based on the proposition that, where the government is already in possession of information regarding allegations or transactions that would put it on notice that some person is obtaining government funds through fraud or false pretenses, no public benefit is derived from permitting a private party to proceed with the case unless that party was the original source of the information.[19]

     
    The Three-Prong Jurisdictional Inquiry.

                In determining whether an FCA action is barred by the public disclosure bar, a court must answer the following three questions:

    Have the allegations made by the relator been “publicly disclosed” in one of the listed forums?
    If so, is the lawsuit “based upon” those publicly disclosed allegations?
    If so, is the relator an “original source” of the information?[20]
     
                If the Court’s answer to either question Number 1 or Number 2 above is “no,” then the  jurisdictional inquiry is over and the Court has subject matter jurisdiction.  If the Court’s answer to both questions Number 1 and Number 2 is “yes,” then, and only then, is the Court required to analyze whether the relator is an “original source.”[21] 

                Original source status is an exception that saves a relator with direct and independent knowledge even if there has been a public disclosure in one of the listed forums.[22]  If there is no public disclosure of the allegations within one of the enumerated forums listed in section 3730(e)(4)(A), then the jurisdictional inquiry ceases, regardless of whether the relator qualifies as an “original source.”[23]

    Rockwell International Corp. and Its Progeny.

                Recently, in Rockwell Int’l Corp. v. United States,[24] the United States Supreme Court did not discuss the first part of the section 3730(e)(4)(A) analysis (whether there had been a public disclosure in one of the listed forums) because the relator in that case “acknowledged that his successful claims were based on publicly disclosed allegations” in the news media.[25]  Rather, the Supreme Court resolved the split among the circuits over the definition of “information” as used in section 3730(e)(4)(B) (the “original source” exception).[26]  In analyzing the original source subparagraph, the Supreme Court held, inter alia, that the original source provision is jurisdictional and that the statutory phrase “information on which the allegations are based” refers to the relator’s allegations, not the publicly disclosed allegations.[27] 

                 In Rockwell, the relator, an engineer at a nuclear weapons plant run by Rockwell International, brought a qui tam suit alleging that Rockwell made false claim submissions to the Government when it failed to comply with environmental regulations that were a required part of its contract with the Department of Energy.[28]  While he was employed at Rockwell, the relator predicted that Rockwell’s system for creating solid “pondcrete” blocks from toxic pond sludge and cement would fail due to a piping problem.[29]  Rockwell successfully made the pondcrete blocks until sometime after the relator had been laid off, when it discovered defects.[30] 

     
                By way of background, in June 1987, the relator, Stone, went to the FBI with allegations that Rockwell had committed environmental crimes.  Although the relator did not mention the piping issue, he provided the FBI with thousands of pages of documents, “buried among which was his 1982 engineering report” predicting that a piping system proposed by Rockwell was faulty and would produce “pondcrete blocks” that would ultimately disintegrate, leaking toxic wastes into the environment.[31]  The pondcrete blocks did ultimately leak, but for a reason different from and unrelated to that which the relator had predicted.[32]  The FBI used the information to obtain a search warrant for Rockwell.  The allegations in the search warrant were published in the media.[33]  In May, 1988, the Department of Energy became aware of the problem and the media reported on the leaking blocks.[34]

     
                The relator then filed a qui tam suit.[35]  The alleged false claims involved “award fees” that the Government paid to Rockwell based on its evaluation of Rockwell’s performance in operating the plant, including its performance concerning environmental safety.  Stone and the Government contended that Rockwell would have been paid less had it disclosed the pondcrete problems.[36]  Initially, the Government declined to intervene.  But in 1996, the Government intervened and filed a joint amended complaint, which did not mention the piping problem.[37] 

    The case went to trial in 1999.
     

                At trial, the jury found against Rockwell only on claims submitted during a particular period (from April 1987 through September 1988), rejecting the claims for earlier periods.  Because Stone left Rockwell in March of 1986, he had no direct knowledge regarding what had occurred during the 1987-88 period. 

     
                Rockwell filed a post-verdict motion to dismiss, reiterating that the pondcrete allegations were based on publicly disclosed allegations and that the relator was not an original source.  The district court found that the relator was an original source.[38]  The Tenth Circuit affirmed in relevant part, but remanded to determine whether the relator had provided the information to the Government before filing suit.[39]  On remand, the district court found that the relator’s pre-suit disclosures to the Government were insufficient to communicate his allegations to the Government, but the Tenth Circuit disagreed.[40]  The Supreme Court granted certiorari to determine whether the relator was an original source.

     1)      The “Original Source” Analysis.

                 The Supreme Court held that Stone was not an original source.  The Rockwell majority held that a relator is unable to qualify for the original source exception unless he has personal knowledge of the facts underlying the specific claims he asserts and upon which he ultimately prevails.  The Supreme Court agreed that the public disclosure bar is jurisdictional in nature.[41]

                 The Supreme Court began its examination of the jurisdictional question by examining in detail the first requirement of original source status:  that the relator has “direct and independent knowledge of the information on which the allegations are based.”[42]  The Court examined whether the term “allegations” in the original source provision refers to the relator’s allegations or the publicly disclosed allegations.[43]  Reading section 3730(e)(4)(B) on its own, the Court concluded that “allegations” refers to the relator’s allegations.[44]  The Court pointed out that section 3730(e)(4)(A) bars actions based on publicly disclosed allegations whether or not the information underlying the allegations itself is made public.[45]  The Court reasoned:

     
    It is difficult to understand why Congress would care whether a relator knows about the information underlying a publicly disclosed allegation (e.g., what a confidential source told a newspaper reporter about insolid pondcrete) when the relator has direct and independent knowledge of different information supporting the same allegation (e.g., that a defective process would inevitably lead to insolid pondcrete).[46]
     

    The Court found that it would cause “nettlesome procedural problems” for courts struggling to compare relators’ information with the basis of disclosure.[47]

    2)      The Jurisdictional Analysis.

                 The Supreme Court then examined which of the relator’s allegations were relevant to the original source exception.[48]  The majority held that “allegation” includes not only those allegations in the original complaint, but also allegations in any amended complaints.[49]  The Court—apparently concerned that an unscrupulous relator could plead trivial fraud claims in an original complaint and later amend his allegations according to information publicly disclosed afterwards—declined to infer a limitation to the relator’s original complaint only.[50]  The Government itself conceded that “new allegations regarding a fundamentally different fraudulent scheme require reevaluation of the court’s jurisdiction.”[51]  Accordingly, all of a relator’s allegations are relevant for determining original source status.

                The Supreme Court considered and rejected two theories on which Stone might, under the circumstances, be considered an “original source.  The Court first concluded that Stone’s earlier prediction that the pondcrete would fail did not qualify as direct and independent knowledge, because it had failed not for the reason he predicted, but for a completely independent reason—as the result of actions of an employee who started working for Rockwell after Stone left.[52]  Second, the Court rejected Stone’s contention that his status as the original source of information regarding a completely separate alleged fraud did not qualify him as an original source for his claims concerning pondcrete.[53]  “Specifically, the Court determined that Stone could not bootstrap his original source status regarding one theory of fraud into original source status for an entirely different theory.”[54]  In this regard, the Court’s conclusion was consistent with its discussion earlier in the decision that a relator may not plead “a trivial theory of fraud for which he has some direct and independent knowledge and later amend the complaint to include theories copied from the public domain” and that “new allegations regarding a fundamentally different fraudulent scheme require reevaluation of the relator’s original source status.”[55]

                 In light of its foregoing analysis, the Supreme Court ruled that Stone’s knowledge fell short of the “direct and independent knowledge” necessary to satisfy section 3730(e)(4)(B) because the jury’s verdict covered Rockwell’s compliance over a one-and-a-half-year period when Stone was no longer employed by Rockwell.[56]  The Supreme Court did not directly address the interpretation of the “based upon” language in section 3730(e)(4)(A) because it was conceded that the claims upon which the relator prevailed at trial “were based upon publicly disclosed allegations within the meaning of § 3730(e)(4)(A).”[57]

                 Clearly, the FCA’s subject matter jurisdiction analysis is an extremely complicated and evolving area of the law and always a defendant’s first line of attack after the seal is lifted.  It is imperative that you consult with an attorney experienced in FCA litigation before attempting to navigate around the public disclosure and original source landmines. 

    Common Types of Fraud on the Government.
     
                Because fraud can take many forms and is constantly changing, it is impossible to provide an exhaustive list of the types of fraud that can be reported and prosecuted under the FCA.  However, the following list provides examples of the nature and scope of false claims that have been uncovered and prosecuted:

     
    1. Billing for services or goods that were not rendered or delivered;

    2. Billing for marketing, lobbying or other non-contract related corporate activities;
     
    3. Submitting false service records or samples in order to show better-than-actual performance;
     
    4. Presenting broken or untested equipment as operational or tested;
     
    5. Performing an appropriate or unnecessary medical procedure in order to increase federally funded medical program reimbursement;

    6. Billing for work or tests not performed;

    7. Abuse of student loan subsidy programs by private lenders;
     
    8. Yield burning - skimming off the profits from the sale of municipal bonds;

    9. Falsifying natural resource production records ¿ pumping, mining or harvesting more natural resources from public lands than is actually reported to the government;
     
    10.  Being over paid by the government for the sale of a good or service and not reporting the overpayment;

    11.  Misrepresenting the value of imported goods or their country of origin for tariff purposes;

    12.  False certification that a contract falls within certain guidelines (i.e., the contractor is a minority or a veteran when he is not);
     
    13.  Failing to report known product defects in order to continue to sell or bill the government for the product;

    14.  Billing for research that was never conducted orfalsifying research data that was paid for by the government;

    15.  Obtaining a contract through kickbacks or bribes;

    16.  Obtaining federal funds by claiming quasi-governmental status;

    17.  Billing for premium equipment while only providing inferior equipment;

    18.  Automatically running a lab test whenever the results of another test fall within a certain range, even though second test was not requested;

    19.  Certifying that something has passed a test when it has not;

    20.  “Lick and stick” prescription rebate fraud and “marketing the spread” prescription fraud (i.e., lying to the government about the true wholesale price of prescription drugs);

    21.  Unbundling - using multiple billing codes instead of a single billing code for a drug panel test in order to increase reimbursement;

    22.  Bundling - billing more for a panel of tests when only a single test was requested;

    23.  Double billing - charging more than once for the same service or good;
     

    24.  Upcoding - inflating bills by using diagnosis billing codes that suggest a more expensive illness or treatment;

    25.  Billing for brand - billing for brand-name drugs when generic drugs are actually provided;

    26.  Phantom employees and altered time slips - billing for employees that were not actually on the job or billing for hours that were not actually worked;

    27.  Upcoding employee work - billing at physician rates for work that was actually conducted by a nurse or resident intern;

    28.  Prescribing a medication or recommending a treatment or diagnosis regimen in order to obtain kickbacks from hospitals, labs, or pharmaceutical companies;

    29.  Billing for unlicensed or unapproved prescription drugs (off-label usage); and

    30.  Forging physician signatures when such signature is required for reimbursement from Medicare or Medicaid.


    Top 10 FCA Cases

     In July 2003, CG Nutritionals, a subsidiary of Abbott Laboratories, Inc. agreed to pay $400 million to resolve FCA allegations that it defrauded Medicare and Medicaid by selling “enternal” products which pump special foods into the digestive systems of patients who cannot ingest food normally. 

                 While many of the largest recoveries under the FCA involve healthcare fraud, there are a plethora of other circumstances in which fraud on the government can take place.  The following are other situations in which a whistleblower with knowledge of fraud may be able to recover:

    1. Preparing a false record or statement in order to get a false or fraudulent claim paid by the government;
     
    2. Conspiring with anyone to have a false or fraudulent claim paid by the government;
     
    3. Holding property of the government intending to defraud the government;
     
    4. Creating or delivering a false or fraudulent receipt to the government for its property;
     
    5. Fraudulently buying property belonging to the government from someone not authorized to sell the property for the government;
     
    6. Making a false statement to avoid paying a debt to the government or to avoid delivering property to the government; and
     
    7. Causing someone else to submit a false or fraudulent claim to be paid by the government.
     

    In sum, a client with information regarding any circumstance in which the federal government appears to have been defrauded (either directly or indirectly) is a potential qui tam relator and the facts should be closely scrutinized by an attorney experienced in FCA litigation to determine whether the fraud is actionable under the FCA.

     
    State False Claims Acts

                Thirteen states have enacted laws similar to the FCA that discourage fraud perpetrated against their respective state government.  These states include: (1) California; (2) Delaware; (3) District of Columbia; (4) Florida; (5) Hawaii; (6) Illinois; (7) Louisiana; (8) Massachusetts; (9) Nevada; (10) New Mexico; (11) Tennessee; (12) Texas; and (13) Virginia.  Each state’s law is different and the intricacies of each are beyond the scope of this paper.
     
                Although not part of the FCA, Congress recently passed legislation that incentivizes private citizens to blow the whistle on tax fraud and created the Whistleblower Office at the IRS.  Since the legislation became effective in December 2006, the IRS Whistleblower Office has received claims seeking rewards based on more than $10 billion in unpaid taxes, with many of the claims reportedly involving Fortune 500 companies.  This Tax Whistleblower statute was partially modeled on the FCA and establishes awards for whistleblowers of between 15 and 30 percent of the tax, interest, and penalties recovered by the government based on information provided by the whistleblower.  Like the FCA, the Tax Whistleblower statute is complicated and you must strictly adhere to the statute’s requirements in order to protect your client’s interest in any recovery.  As such, it is important to consult with an attorney experienced in Tax Whistleblower reporting before submitting a whistleblower’s report or information to the IRS.

     
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    [1] See Vermont Agency of Nat. Resources v. U.S. ex. rel. Stevens, 529 US 765, 769 n.1 (2000) (citing 3 William Blackstone, Commentaries on the Laws of England 160 (1st ed. 1768)).

     
    [2] Id.

     
    [3] Opinion of The Office of Legal Counsel: Constitutionality of the Qui Tam Provisions of the False Claims Act, available at http://www.ffhsj.com/quitam/barrmemo.pdf (last visited on February 7, 2006).

    [4] Id.

    [5] Id.

    [6] Id.

    [7] Id.

    [8] Id.

    [9] Understanding Qui tam: The Facts, available at http://www.fraudusa.com/understandingquitam.php (last visited February 7, 2006). 

    [10] Id.

    [11] See Francis E. Purcell, Jr., Comment, Qui tam Under the False Claims Amendments Act of 1986: The Need for Clear Legislative Expression, 42 CATH. U. L. REV. 935, 943-44 (1993).

    [12] The term “knowing” as used in the FCA is not limited to actual knowledge.  The 1986 amendments to the FCA broadened the scope of the FCA to include submitting or causing to be submitted false claims with deliberate ignorance or reckless disregard for the truth or falsity of the statements made in the claim.

    [13] 31 U.S.C. §§ 3729-3733.

    [14] 31 U.S.C. § 3730(b)(1).

    [15] 31 U.S.C. § 3730(d).

    [16] 31 U.S.C. § 3730(b)(2).

    [17] All statistical information from TAF Education Fund, “The False Claims Act Legal Center: Qui tam Statistics.”  Available at http://www.taf.org/statistics.html (last visited December 30, 2005).

    [18] 31 U.S.C. § 3730(e)(4)(A); Rockwell Int’l Corp., 127 S. Ct. at 1405.  The 1986 Amendments to the FCA evince a general intention by Congress to increase citizen involvement.  “Therefore, it may be assumed that Congress enacted appropriate limitations for the FCA and that courts do their duty by construing the statute so as to recognize Congress’ purpose to increase citizen involvement in FCA cases.  United States v. Smith, 760 F. Supp. 72, 74 (E.D. Pa. 1991).  In 1943, Congress amended the FCA to eliminate “parasitic cases” by providing that a relator’s suit was barred if the government had knowledge of the relator’s allegations prior to filing suit.  The broad statutory bar resulted in the dismissal of many non-parasitic actions in which the relator was the original source of the information but had disclosed the information to the government before filling a FCA lawsuit.  In 1986, Congress amended the FCA to permit relator’s to bring suits when there was no public disclosure of the information or when the relator was the original source of the information.

    [19] United States ex rel. Wilson v. Graham County Soil & Water Conservation Dist., 528 F.3d 292, 299 (4th Cir. 2008) (“[W]e recognize that the public disclosure bar was the product of Congress’s repeated efforts to further the ‘twin goals of rejecting suits which the government is capable of pursuing itself, while promoting those which the government is not equipped to bring on its own.’”); United States ex rel. Mathews v. Bank of Farmington, 166 F.3d 853, 858 (7th Cir. 1999) (“the jurisdictional bar is not to be excessively narrowly construed. Our basic task in statutory interpretation is ‘to give effect to the intent of Congress.’ (citation omitted). The provision is therefore to be understood in the context of the 1986 amendments, which, as explained, broadened the qui tam provisions, increasing incentives for the exposure of fraud.”); Campbell v. Redding Med. Ctr., 421 F.3d 817, 822-23 (9th Cir. 2005); United States ex rel. Cericola v. Federal Nat. Mortgage Ass’n, 2007 U.S. Dist. LEXIS 95783, *13 (C.D. Cal.  November 27, 2007).

    [20] See Reagan v. East Texas Medical Center Regional Healthcare Sys., 384 F.3d 168, 173-74 (5th Cir. 2004); Federal Recovery Serv., Inc. v. United States ex rel. Piper, 72 F.3d 447, 450 (5th Cir. 1995); United States ex rel. Wilson v. Graham County Soil & Water Conservation Dist., 528 F.3d 292, 299 (4th Cir. 2008); United States ex rel. Rost v. Pfizer, Inc., 507 F.3d 720, 728 (1st Cir. 2007); United States ex rel. Boothe v. Sun Healthcare Group, Inc., 496 F.3d 1169, 1173 (10th Cir. 2007); United States ex rel. Wright v. Comstock Res., Inc., 363 F.3d 1039, 1042 (10th Cir. 2004);  Minnesota Ass’n of Nurse Anesthetists v. Allina Health Sys. Corp., 276 F.3d 1032, 1042 (8th Cir. 2002); United States ex rel. Gear v. Emergency Med. Assoc. of Ill., Inc., 436 F.3d 723, 728 (7th Cir. 2006); United States v. Bank of Farmington, 166 F.3d 853, 859 (7th Cir. 1999); United States ex rel. Mathews, 166 F.3d at 859; Cooper v. Blue Cross and Blue Shield of Florida, Inc., 19 F.3d 562, 564 n.4 (11th Cir. 1994); United States ex rel. Hagood v. Sonoma Cty. Water Agency, 929 F.2d 1416, 1420 (9th Cir. 1991); United States ex rel. Haight v. Catholic Healthcare W., 445 F.3d 1147, 1151 (9th Cir. 2006); United States ex rel. Doe v. John Doe Corp., 960 F.2d 318, 323 (2d Cir. 1992); United States ex rel. Maxwell v. Kerr-McGee Oil & Gas Corp., 486 F. Supp. 2d 1217, 1225 (D. Col. 2007); United States ex rel. Anti-Discrimination Ctr. of Metro N.Y., Inc. v. Westchester County, N.Y., 495 F. Supp. 2d 375, 380 (S.D. N.Y. 2007); Hockett v. Columbia/HCA Healthcare Corp., 498 F.Supp.2d 25, 32 (D. D.C. 2007); Cericola v. Federal Nat. Mortgage Ass’n, 2007 U.S. Dist. LEXIS 95783, *13 (C.D. Cal.  November 27, 2007).

    [21] Hagood, 929 F.2d at 1420 (holding that “[t]here is no need for Hagood to show that he is “the original source” of the information.  The statutory phrase in 31 U.S.C. § 3730(e)(4)(B) comes into play only if an exception is sought to the bar of 4(a).  As the bar to 4(A) does not apply, there is no need to invoke the exception.”); Wright, 363 F.3d at 1042 (“A court should address the first three public disclosure issues first.  Consideration of the Fourth, ‘original source’ issues is necessary only if the court answers the first three questions in the affirmative.”); United States ex rel. Fine v. Advanced Sciences, Inc., 99 F.3d 1000, 1004 (10th Cir. 1996) (holding that the first issue is whether the plaintiff’s claims are based upon a public disclosure.  If they are not, there is no jurisdictional bar).  

    [22] United States ex rel. Wilson v. Graham County Soil & Water Conservation Dist., 528 F.3d 292, 299 (4th Cir. 2008).

    [23] Rost, 507 F.3d at 728; United States ex rel. Holmes v. Consumer Ins. Group, 318 F.3d 1199, 1208 (10th Cir. 2003).

    [24] Rockwell Int’l Corp. v. United States, 549 U.S. 457, 127 S. Ct. 1397, 167 L.Ed.2d 190 (2007).

    [25] Id., 127 S. Ct. at 1404-05.

    [26] 31 U.S.C. § 3730(e)(4)(B).

    [27] Rockwell Int’l Corp., 127 S. Ct. at 1406-07; see also In re: Pharmaceutical Indus. Average Wholesale Price Litig., 538 F. Supp. 2d 367, 378 (D. Mass. 2008).  In Rockwell, the Supreme Court held that a relator must have direct and independent knowledge of the information on which the relator’s allegations, including those in the original and any amended complaints, are based, not of the publicly disclosed information.[27]

    [28] Id. at 1402.

    [29] Id.

    [30] Id.

    [31] Rockwell Int’l, Corp., 127 S. Ct. at 1402 n.1.

    [32] Id.., 127 S. Ct. at 1402.

    [33] Id. at 1403.

    [34] Id.

    [35] Id. at 1403.

    [36]  127 S. Ct. at 1401-02.

    [37] Id. at 1404.

    [38] Id. at 1404-05.

    [39] Id. at 1405.

    [40] Id. at 1405.

    [41] Rockwell, at 1405.

    [42] Id. at 1405.

    [43] Id. at 1405.

    [44] Id. at 1407.  The Supreme Court’s holding in Rockwell abrogated the Fifth Circuit’s holding in United States ex rel. Laird v. Lockheed Martin Engineering and Science Svs. Co., 336 F.3d 346 (5th Cir. 2003), although not on all grounds.  The Supreme Court left intact the Fifth Circuit’s interpretation of the terms “direct” and “independent.”

    [45] Rockwell, at 1407.

    [46] Id. at 1408.

    [47] Id. at 1408.

    [48] Id. at 1408.

    [49] Id. at 1408.

    [50] Rockwell,at 1408.

    [51] Id. at 1408 (citing Brief for United States 40, Transcript of Oral Argument 40) (emphasis added).

    [52] Id. at 1409-10; United States ex rel. Kennedy v. Aventis Pharm., Inc., 2007 U.S. Dist. LEXIS 79417, *6-7 (N.D. Ill. Oct. 23, 2007).

    [53] Id. at 1410.

    [54] Kennedy, 2007 U.S. Dist. LEXIS 79417, at *6 (discussing Rockwell Int’l, 127 S. Ct. at 1410).

    [55] Rockwell Int’l, at 1408; see also Kennedy, 2007 U.S. Dist. LEXIS 79417, at *6-7.

    [56] Id. at 1409.

    [57] Id., at 1405.

    [58] Of the $1 billion FCA settlement, the federal government recovered $668,514,830 and the state governments recovered  $331,485,170.  Under the FCA, the relator’s award is based on the amount recovered only by the federal government.