How Does a Qui Tam Case Work Procedurally?

Assuming you have a case, after assessing the fraud and conceptualizing it in terms the government can relate to, your lawyer is ready to draft the complaint. Counsel must determine what federal causes of action are available and whether any analogous or potentially applicable state law exists and possibly other claims altogether.

After settling on the appropriate legal theories, your lawyer must prepare a disclosure statement. The disclosure statement is not filed in court, but must be served on the government. The disclosure statement should include all the details of the alleged false claims.

Unlike most other lawsuits, a complaint under the False Claims Act is filed under seal. This means that the complaint is served on the government but must not be served on the defendant until ordered by the court. A comprehensive memorandum detailing the factual underpinnings of the complaint with copies of all relevant documents is also given to the government, but is not filed in court. It is not permissible for the attorney or you, the plaintiff or relator, to discuss the case or to disclose its existence to anyone, including the defendant, the media, your friends, family, or current or former employers as to do so could impair the government’s ability to investigate the allegations in secret. Failure to follow these unique statutory requirements can result in dismissal of the action.

Within 60 days after the complaint is filed, the government may intervene, decline to intervene or request an extension of time to determine whether to intervene, seek dismissal of the action, or settle the case. Usually, the government will request numerous extensions of the 60-day initial investigatory period, as 60 days typically seems to be an unrealistically short period of time for the government to complete an investigation.

Upon completion of its investigation, the government has the option to take over the case (“intervene”). The government intervenes in about one-fifth of the cases that are brought. Even if the government declines to intervene the whistleblower (if he or she followed the proper procedures and is not otherwise barred from recovery) may pursue the case on behalf of the government and still be entitled to a share of the recovery.

The goal in a qui tam case should be to persuade the government to intervene. The government must be convinced that your claims contain all the elements of a prima facie case, can be proven at trial, can be understood by a jury, and involves sufficient damages to justify the expenditure of resources necessary to recover them. Unlike other civil fraud and tort cases, where much of the work takes place in depositions and other discovery after suit is filed, in a qui tam case, the work relator’s counsel does before filing suit – “packaging” the case for the government – may be the most important work done on the case.

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