July 26, 2021

Released on July 26, 2021, Federal Deception Law, Chapter 9, “The Federal False Claims Act and Other Whistleblower Laws,” National Consumer Law Center Digital Library, was updated by Cohen Milstein’s Gary L. Azorsky and Jeanne A. Markey, Co-Chairs of Cohen Milstein’s Whistleblower / False Claims Act practice, with the assistance of Raymond M. Sarola, Of Counsel. The updated chapter addresses federal and state False Claims Act whistleblower protections, as well as whistleblower protections under the SEC, CFTC, IRS and DOT programs, the rights of relators under the FCA, FCA litigation procedure, mandatory arbitration requirements, remedies, and exemplar cases by industry.

9.1.1 Introduction

The federal False Claims Act (FCA) imposes liability on entities and individuals that make false or fraudulent claims to the government for payment for services and products, or that improperly avoid an obligation to repay overpayments to the government. Although FCA cases have traditionally been used to file claims against government defense and health care contractors and suppliers, they arise as well in other areas—such as insurance, housing, government entitlement programs, government loan programs, and environmental and labor laws—that offer potential use by consumer lawyers.

Unlike almost all other fraud statutes or common law causes of action, the FCA, with its unique qui tam provisions, allows private individuals to file and prosecute a lawsuit in the name of the United States. Because FCA cases are brought on behalf of the government, the individual whistleblower plaintiff—or “relator”—need not suffer any personal harm to bring the action. By authorizing suits in these situations, the FCA offers a tremendous opportunity for individuals and organizations to remedy and prevent fraud and other marketplace conduct that harms the government.

The FCA empowers individuals and organizations with knowledge of fraud against the government to file lawsuits to recover damages and penalties for the government. Its express intent is to encourage qui tam suits by giving consumers the tools and incentive to represent the government in actions against those that falsely bill the government for services or goods.

As powerful a tool as the FCA is, the inexperienced practitioner should also recognize its challenges. The Supreme Court has noted that “[t]he False Claims Act’s qui tam provisions present many interpretative challenges,” such that it may not always be possible, even for the Supreme Court itself, “to make them operate together smoothly like a fine tuned machine.”

The outline for Chapter 9 The Federal False Claims Act And Other Whistleblower Laws follows:

9.1 Background

9.2 The Rights of Relators and the Government Under the False Claims Act

9.3 Elements of an FCA Case

9.4 The False Claims Act’s Litigation Procedures

9.5 The False Claims Act Claims on Behalf of the Government Should Not Be Subject to Arbitration Requirements

9.6 Remedies

9.7 Financial Incentives Available to the Relator

9.8 Examples of False Claims Act Cases

9.9 The False Claims Act’s Whistleblower Protection

9.10 State False Claims Acts

9.11 Other Statutes That Give Rewards to Whistleblowers

9.12 The False Claims Act Checklist

The complete treatise, Federal Deception Law, can be accessed here via NCLC’s Digital Library.

About the Authors

Gary L. Azorsky, contributing author, is Co-Chair of Cohen Milstein’s Whistleblower/False Claim Act practice, has recovered nearly $2.5 billion in defrauded funds for federal and state governments, including a $784.6 million settlement in USA, ex re. Kieff v. Wyeth (D. Mass.), the seventh-largest FCA recovery on record and the second-largest recovery in history involving a single class of drugs. Mr. Azorsky has also provided expert FCA guidance in congressional hearings and at the state level and has testified in federal and state courts as an expert witness concerning the False Claims Act.

Jeanne A. Markey, contributing author, is Co-Chair of Cohen Milstein’s Whistleblower/False Claim Act practice, is recognized among the Lawdragon “500 Leading Plaintiff Financial Lawyers” in the United States. Ms. Markey has successfully represented whistleblowers in federal and state cases across the country in some of the highest-profile qui tam litigation in the healthcare, defense, and financial services industries, including USA, ex re. Kieff v. Wyeth (D. Mass.), which resulted in a $784.6 million settlement, the seventh-largest FCA recovery on record and the second-largest recovery in history involving a single class of drugs.

Other Contributors

Raymond M. Sarola is Of Counsel Cohen Milstein’s Whistleblower/False Claims Act and the Ethics and Fiduciary Counseling practice groups. Mr. Sarola represents whistleblowers in qui tam cases brought under the federal and state False Claims Act statutes in industries that conduct business with the government, including health care, defense, and financial services.  As a member of the firm’s Ethics and Fiduciary Counseling practice, Mr. Sarola calls on his experience as a trustee on the New York City pension fund boards in counseling public pension funds fiduciary issues.