Qui tam laws originated in 14th century England and enabled private citizens to enforce the king’s legislative priorities. The king paid them a bounty if they won.
During the Civil War years, President Lincoln encouraged Congress to codify whistleblower bounty, or “qui tam,” laws to help prevent fraud by military contractors. Congress did so in 1863, enacting the False Claims Act (FCA). Also known as the “Lincoln Law,” the FCA’s purpose was to obtain the assistance of private citizens in preventing fraud against the Union by unscrupulous defense contractors. Today, the FCA covers all types of fraud on the federal government.
What Is a Qui Tam Lawsuit?
Today, qui tam lawsuits allow a private person or organization, known as a relator, to bring a lawsuit on behalf of the government and receive a reward if the action succeeds. Because the relator is reporting illegal and fraudulent activity, this individual frequently is referred to as a whistleblower.
Qui tam actions are still brought pursuant to the False Claims Act. After several amendments, the FCA (31 U.S.C. §3729-3733) provides that a person may file a civil lawsuit in the name of the federal government against anyone who defrauds the government. Fraudulent activity includes making false claims for payment, knowingly failing to return government property or funds, and under-reporting payments due to the government. This relator need not have suffered harm to have standing to file the lawsuit.
A whistleblower in California with knowledge of theft, fraud, or embezzlement from a California government entity may file a qui tam action under the California False Claims Act. Modeled after the FCA, this act encourages Californians to prevent people or entities from defrauding the state as well as counties, cities, tax or assessment districts, and other local government entities. The California FCA also rewards the relator following a successful action.
Who Can File a Qui Tam Lawsuit?
Though the federal government can file actions under the FCA, private citizens also may file on the government’s behalf.
Employees and Contractors
Employees or contractors working for a company may discover internal evidence of fraud against the federal government. Some may even have tried to stop the illegal actions. These individuals may file a qui tam action against their employer whether or not they remain employed with the company.
If a company is obtaining more government contracts or other benefits because it is engaged in fraud, a competitor may be motivated to file an FCA action. Though the relator does not need to have been harmed to bring a qui tam action, doing so in this situation may make competition in that field more fair.
Public Interest Groups
Certain public interest groups focus on safeguarding against government waste. These groups closely monitor for fraud in government spending areas such as Medicare, Medicaid, defense contracting, and government procurement and file qui tam actions when necessary.
What Happens After a Qui Tam Lawsuit Is Filed?
After filing a complaint in federal court, the relator serves the complaint on the federal government. The complaint is sealed while the government investigates and decides whether it wants to take over prosecuting the action.
The FCA rewards successful whistleblowers with a significant percentage of the amount awarded in the lawsuit as well as lawyer fees and costs. If the government proceeds with the action, the relator receives 15% to 25% of the proceeds of the action or settlement depending upon their contribution to the lawsuit. In cases where the government does not opt to take over the lawsuit, the relator may nonetheless go forward with the case. The whistleblower then receives 25% to 30% of any settlement or judgment.
Can My Employer Retaliate Against Me for Filing a Qui Tam Lawsuit?
No. The FCA prohibits an employer from firing, demoting, suspending, threatening, harassing, or discriminating against any employee, contractor, or agent because that individual filed or participated in an FCA lawsuit. If an employer retaliates, the FCA provides the following relief:
- Reinstatement with the same seniority status that the individual would have had but for the discrimination,
- Two times the amount of back pay,
- Interest on the back pay, and
- Compensation for any special damages including litigation costs and reasonable attorney fees.
The California FCA provides similar relief for California whistleblowers subjected to retaliation.
Consult King & Siegel LLP If You Suspect Someone Is Defrauding the Government
It can be daunting to report illegal activity, particularly if your current employer is the perpetrator. But the attorneys at King & Siegel LLP have extensive experience with qui tam actions and will work strategically with the government to get results. Because we handle employment cases too, we also know how to address any retaliation by your employer. This sets us apart from many qui tam attorneys. At King & Siegel LLP, our goal is to make litigation less stressful for our Los Angeles clients. And our clients routinely report that we have obtained outstanding results for them. Contact us today to discuss your qui tam complaint.