Qui Tam Whistleblower

A qui tam lawsuit starts with the submission of a sealed complaint to a federal district court and service of a confidential disclosure statement on the government. After investigating, the government (usually the U.S. Department of Justice) may intervene and unseal the complaint, officially converting the submission into a public lawsuit.

Qui tam lawsuits are brought by a private individual on behalf of the U.S. government and several state governments concerning fraudulent claims made to a particular agency or program which has resulted in financial losses to the government.

The qui tam whistleblower who brings legal action is known as the “relator.” Relators may be able to receive up to 30% of any damages recovered by the government if a lawsuit is successful. This helps incentivize people to report fraud and rewards people for bringing a qui tam lawsuit.

Anyone with information that’s not already public can file a qui tam lawsuit, as long as they haven’t been convicted of criminal conduct in connection with the fraud. If the qui tam action is based on publicly disclosed information, an individual may still bring suit if they’re an “original source” of the information.

However, qui tam submissions based on publicly available data may have lower reward rates.

What does qui tam mean?

Qui tam, pronounced “key-tam,” means “who also.” It comes from a Latin phrase that translates to “who sues on behalf of the King as well as for himself.”

Long ago, it meant someone who brought a legal case both for the benefit of the monarch and for their own benefit.

In today's world, it means a person who files a lawsuit not only for their own potential reward but also to help the government recover money taken through fraud.

The False Claims Act (FCA) is a federal statute created to hold people and entities financially liable for knowingly submitting false claims. Many states have enacted their own versions of the federal act.

A false claim is when an individual (or entity) knowingly makes, submits or uses false records or statements to claim payment from the government or get approval for government funds. False claims that fall under the FCA can apply to a range of situations, including health care, construction contracts and customs violations.

Violations under the FCA may include:

• Acquiring government contracts through kickbacks or bribery
• Billing for equipment or services never ordered or provided
• Billing for unapproved or expired pharmaceuticals
• Creating a false record or statement related to a false claim
• Inflating the cost of goods, services or contract pricing data
• Marketing pharmaceuticals for purposes not approved by the Food and Drug Administration (FDA)
• Misrepresenting research findings
• Presenting a false claim for payment or approval
• Providing worthless products or misrepresenting a product’s certification

If someone cheats the federal government by submitting false claims, they can face stiff penalties. They can be forced to pay back triple the amount the government lost, plus a significant fine for every single false claim they filed. Whistleblowers can receive up to 30% of this amount.

If you believe you have information about an FCA violation, you may have a qui tam whistleblower lawsuit. A qui tam attorney with Motley Rice can review the information you possess and discuss your legal options.

Nearly anyone can bring a qui tam action and act as a relator. The most important part of being a qui tam relator is knowledge. People who file qui tam lawsuits must actually know of fraudulent wrongdoing. As a result, most people who file a qui tam lawsuit are current or former employees of the individual or entity accused of committing fraud.

This knowledge must be information not already available to the public, or the relator must be the “original source” of the public information.

Examples of qui tam relators might include:

• A nursing home employee with documentation proving that the care facility they work for is billing Medicaid and Medicare for unnecessary services
• A purchaser for a government-contracted construction company with proof that their employer is billing the government for materials they never ordered or used

When pursuing a qui tam lawsuit, time is of the essence. If someone else has already filed a lawsuit about the same wrongdoing, you can't file your own case about it. In simple terms, the early bird (first relator) gets the worm (reward).

The steps required to file a qui tam case are complex. Attorneys with whistleblower experience can help you navigate the process.

Unlike other lawsuits, qui tam cases are initially filed under seal, which allows the government to investigate the allegations privately before the case is made public. Cases under the federal FCA are filed in United States District Court. Once a complaint is filed, it is not accessible to the public for at least 60 days while the government investigates the allegations. After that, the government will notify the court that it’s either moving forward (known as “intervening”) or declining to act on the case. If the government declines, the relator can still proceed with the action alone.

If the government steps in, the case is taken over by the relevant agency, usually the Department of Justice (DOJ), who then becomes responsible for prosecuting the lawsuit. In this case, the person who initially reported the fraud may have a smaller role to play.

A relator can seek to dismiss or settle the case, but they must obtain the government’s consent. The government can dismiss or settle the suit even if the relator objects. If the relator objects, they are entitled to a hearing, and a court will decide if the settlement is fair or not.

Pursuing whistleblower claims can be challenging, and qui tam rules can be hard to navigate. If you have evidence of an FCA violation, a qui tam lawsuit attorney with experience can protect your rights and advocate for you. The FCA prohibits individuals from filing a qui tam lawsuit without an attorney, so it’s important to find one that works for you. Motley Rice has represented numerous clients in whistleblower lawsuits, including qui tam claims. We can:

• Provide sound legal advice and guide you through the qui tam provisions
• Collect and preserve evidence
• Collaborate with the government
• Protect your identity while the case is under seal
• Document instances of retaliation
• File additional retaliation claims if your employer acts against you

According to the FCA, qui tam actions must be filed in civil court within six years of the date when the alleged violation occurred, or within three years of when the government learned (or should’ve learned) of the fraud. However, no matter what, a whistleblower has a maximum of 10 years from when the fraud happened to file suit. These deadlines are known as statutes of limitations. If the statute of limitations expires, the court will likely refuse the case.

If a qui tam case is successful, the government can recover triple the money it lost, plus extra penalties that increase with inflation. In cases where the government intervenes, the whistleblower’s award is reduced to between 15% and 25% of the recovery. However, if the whistleblower goes it alone and wins, they could get up to 30%.

A relator’s award may be further reduced to 10% or less under certain circumstances. If the relator planned or initiated the FCA violation, the court can reduce their compensation without limitation.

In 2023, the U.S. recovered over $2.68 billion in FCA settlements and judgments in 543 qui tam claims. Of this $2.68 billion, over $1.8 billion is related to instances of fraud in the healthcare industry.

In total, recoveries for fraud exceed $75 billion since 1986.

Many of the most well-known qui tam cases involve significant healthcare fraud recoveries. Examples include:

• GlaxoSmithKline (GSK): In 2012, a qui tam action recovered the largest healthcare fraud settlement in U.S. history from GSK. The global biopharma company paid $3 billion to resolve civil and criminal liability for the unlawful promotion of some of its prescription medications.
• Pfizer: In 2009, pharmaceutical manufacturer Pfizer agreed to pay a $2.3 billion settlement over the illegal promotion of its products and paying kickbacks to healthcare providers.
• Johnson & Johnson: In 2013, Johnson & Johnson paid $1.72 billion in FCA settlements and $485 million in criminal fines over allegations related to the drugs Risperdal, Invega® and Natrecor. The qui tam claim involved the misbranding of psychotic medications, the promotion of off-label drug use, and payment of kickbacks to physicians.
• HCA Healthcare: In 2003, HCA paid $1.7 billion in settlements over medical fraud allegations. This payment included $356 million in whistleblower claims regarding multiple schemes to defraud Medicare, Medicaid and TRICARE — the military’s healthcare program.

Motley Rice was not involved in these cases.

Sometimes, all it takes is one person to move the wheels of justice. Motley Rice attorneys have helped numerous whistleblowers bring about legal actions that have ultimately benefited and protected the public.

Our experience includes representing one of the most well-known whistleblowers in American history, Jeffrey Wigand. Wigand blew the whistle on his employer Brown & Williamson Tobacco for intentionally adding chemicals to its cigarettes to increase nicotine delivery to smokers. His story became the basis of a popular film, The Insider. Motley Rice attorneys were with him through every stage of the case.

In addition to qui tam lawsuits, we handle claims involving Commodity Futures Trading Commission (CFTC), IRS and other whistleblower programs, along with U.S. Securities and Exchange Commission (SEC) whistleblowers.

Learn more about our whistleblower litigation experience.