Figuring out who can file a qui tam action is usually straightforward. However, there are several instances where certain limitations will prevent a particular individual or group of individuals from being allowed to file a qui tam action or otherwise recover a reward for exposing fraudulent activity against the federal government.
Who Can File a Qui Tam Lawsuit?
Qui tam actions are legal suits where someone brings a lawsuit against a defendant on behalf of the federal government. Usually, the defendant in a qui tam lawsuit is a corporation. Under the False Claims Act, the “relator” is the person (or whistleblower) who brings the qui tam lawsuit. Relators can include a wide range of individuals and organizations, including:
● Public interest group
● Corporation
● Private organization
● Unions
● Contractors and subcontractors
● Former employees
● Private employees
● State governments
● Local governments
● Public employees, including federal government employees
Most of these entities or individuals acting as relators aren’t that controversial, but a few are. One of the most contested groups of relators includes those who are federal government employees. This is controversial because of potential conflicts of interest and the issue of whether a federal employee should profit from inside knowledge it may obtain throughout the course of duties as a federal employee. Courts are very hesitant to allow federal employees to line their pockets based on information they’re supposed to be finding as a part of their job.
Sometimes, federal employees can act as relators, but they end up losing their qui tam case because they’re not able to meet other qui tam requirements, such as the public disclosure requirement that requires the knowledge provided by the relator be information that is not otherwise available to the general public. Many corporations have served as a relator, but have later lost their qui tam lawsuits because they are unable to meet the public disclosure requirement.
Generally speaking, most relators are employees or former employees of corporations who are doing business with the federal government.
Who Isn’t Allowed to File a Qui Tam Action?
The False Claims Act specifically identifies several situations or limitations on who can file a qui tam action. The first restriction involves relators who received a conviction in a criminal court related to the very fraud they are trying to report. Essentially, the False Claims Act will not allow someone to profit from their own wrongdoing.
A second restriction comes up after filing a qui tam lawsuit. When someone else is first to file a qui tam lawsuit, other qui tam lawsuits cannot go forward. These not-first-to-file whistleblowers are unable to file a qui tam lawsuit and are not allowed to take advantage of situations where someone else did all the whistleblowing legwork.
There is also a blanket restriction for anyone filing a qui tam lawsuit when the federal government is already involved in litigation concerning the alleged fraudulent activity. The federal government isn’t eager to reward whistleblowers who are providing information about false claims and fraud that the government is already aware of and is in the act of prosecuting.
Another blanket restriction exists if the qui tam lawsuit uses information already released to the general public. This is the public disclosure requirement. However, if the relator was the “original source” of the information that is now public, the relator will still be able to continue the qui tam lawsuit.
Who Are Common Qui Tam Defendants?
Many qui tam lawsuits are against government contractors, subcontractors, medical providers, and state and local government entities. Theoretically, almost any individual or person who receives money from the federal government in a business transaction can be subject to a qui tam lawsuit.
General contractors can also be liable for the False Claims Act violation of their subcontractors even if the general contractor did nothing wrong. Public policy emphasizes that general contractors must be responsible for the wrongs of their subcontractors to help protect the federal government from fraud (many subcontractors often have very little money for the federal government to recover in any False Claims Act lawsuit) and encourage general contractors to carefully choose their subcontractors.
What Is the Public Disclosure Requirement to File a Qui Tam Action?
The purpose of the public disclosure requirement is to prevent relators from collecting a reward based on information they had little involvement in providing to the federal government. Another qui tam lawsuit requirement related to the public disclosure requirement is the original source requirement. The original source requirement states that the relator must be a person who has independent knowledge of the alleged fraud that comes from no other source or otherwise substantially adds to already public information.
Contact Bothwell with Your Questions about How to File a Qui Tam Action
If you’re wondering whether you’ll be able to file a qui tam action, get the answers you need by contacting the Bothwell Law Group by calling 770-643-1606.
If you don’t have the slightest idea what qui tam actions are, don’t worry; we will break it down for you in this blog post. To understand qui tam, we first have to have a basic understanding of the False Claims Act (FCA.) Essentially, the FCA is a law that says it is a crime for any person or organization to attempt to defraud the U.S. government by submitting, or being involved in the submission of, false or fraudulent claims, documents or statements, in an attempt to receive payment or to lower or eliminate an obligation to make payments to the government.