Whistleblower Lawsuits: When Does The Government Get Involved?

Qui Tam, or whistleblower lawsuits are quite different from other lawsuits in that the government may become involved in the process. We asked Larry Golston, an Alabama attorney whose firm represents clients in Qui Tam litigation, as well as consumer fraud and bad faith insurance litigation, to explain the basic premise of a Qui Tam lawsuit and how and when the government might become involved.

Basic premise

Golston says that the basic premise of a Qui Tam lawsuit is that the relater, or whistleblower, comes to an attorney and says, “I think my employer may be defrauding or cheating the government.” He told us from that point on; an attorney will investigate the facts and try to learn as much as he can about the employer’s business and their relationship with the government. He explained:

If the lawyer thinks there is a potential False Claims Act suit, he needs to get it filed quickly. The Act has what we call a first-to-file rule which means that the first person to bring the lawsuit on that given issue gets to go forward and try to prove their case. Obviously, there’s some justification for that. There could be hundreds of people that know about it, but the way the statute works is that you’ve got to be the first person to file the lawsuit. So, the first step in the process is being the first person to the courthouse. Once you do that, then you have protected your interest as the relater or the whistleblower to potential recovery – if there is recovery in the case.

Lawsuits filed “in camera”

Golston says that Qui Tam lawsuits are filed “in camera”, meaning that it is filed under seal and is undisclosed. He explained, “That means it cannot be publicly viewed. In the best case scenario, no one knows it’s even filed besides you and the court. The contractor that’s defrauding the government doesn’t even know what’s going on and a judge keeps it that way for a definitive amount of time. The purpose of that is to give the government an opportunity to come in and investigate those allegations and see whether or not it wants to take the case over.”

The government may, or may not, chose to get involved

Under the False Claims Act statute, the government has the option to intervene, take the case over and prosecute it themselves vis-à-vis the Department of Justice and their U.S. Attorneys’ offices around the country. Golston explained how this works and the time frames involved:

The court gives the Department of Justice 60 days from the time you file the suit under seal to investigate the case and determine whether or not they want to get involved and take this case over. However, in reality, the government can ask for extensions on those 60 days. So, many times you may have a case that’s filed under seal where the government investigates for a year or more – especially if the issue is complicated. At the end of their investigation period, whether it’s 60 days or longer, the government has a few options.

The government’s options

According to Golston, the government has several options after the investigation process, including:

  • Intervene. They can decide to intervene in the case, which means that the U.S. Attorney will take over the primary day-to-day litigation of the case and the relater steps back into a secondary position where they’re still indicating that they’re going to be a key witness and testify, but the relater and their lawyer then basically assist the U.S. Attorney in the prosecution as opposed to being in the lead position.
  • Decline to intervene. The government can also decline to intervene. If that occurs, the relater and his or her attorney can go forward and prosecute the case on their own.
  • Move to dismiss. The government can also move to dismiss the case after the investigation if they don’t feel that anything fraudulent is taking place or that the litigation will be successful in that they can’t prove each and every element of the False Claims Act.
  • Settle. The government can also try and settle the case – which they frequently do. Before they get too deeply involved in the case, they can confront the contractor and say, ‘Here’s what’s going on. We have a whistleblower who’s told us what you’re doing and we think we can prove our case. Do you want to settle now or do you want to drag this out through court?’

As you can see, the government has many options and the process is quite complex. If you believe that you may have a Qui Tam lawsuit, contact an attorney whose practice focuses in this area of the law. Consultations are free, without obligation and are strictly confidential. To contact an experienced attorney, please click here.