Given the unique relationship of the three parties to a Qui Tam suit—the whistleblower, the government and the defendant—cases filed under the False Claims Act contain unique procedural elements.
Statutes of Limitations
A whistleblower must bring an action under the federal False Claims Act within the time prescribed in the Act: either within six years of the date the violation was committed; or within three years of the time the responsible government official knew, or should reasonably have known, of the violation; and in any event, not later than ten years from the date of violation. Some states’ False Claims Acts have different statutes of limitations or no statute of limitations.
Filing the Complaint
A federal Qui Tam action may be brought in any federal district court where “any one defendant can be found, resides, transacts business” or where the violation occurred. The venue for state False Claims Act cases varies. Unlike most other types of complaints, a Qui Tam complaint, whether state or federal, is to be filed in camera and “under seal” so that neither the public, nor the defendant, is alerted to the existence of the claim. The whistleblower must then serve the government with a copy of the complaint and with a written disclosure of all information concerning the complaint in the whistleblower’s possession.
The action then shifts to the government. The federal government has 60 days to investigate the whistleblower’s allegations and determine whether it wants to join in the suit; the investigative deadlines for states varies. The government can extend this investigatory period by requesting more time from the court, which is customary. During its investigation, the federal or state government may involve several parties, including other law enforcement agencies, the governmental agency at which the fraud is directed, and often other states’ attorneys general. The U.S. or state attorney general may also require the defendant and others to give testimony, answer written questions and produce documents to be reviewed as part of the investigation. When a criminal investigation is also ongoing, the government may employ search warrants and other criminal investigation devices. The whistleblower’s complaint remains under seal during the entire period of the government’s investigation.
By the end of the authorized review period, the government must decide whether to intervene. If the government elects not to join in the suit, the whistleblower may still proceed under the federal and most state False Claims Acts. Even where the government initially declines to intervene, it may still monitor progress of the suit and ultimately change its decision and petition to intervene in the case.
When the government chooses to intervene, it assumes primary responsibility for prosecuting the action. After approval for intervention is received, the whistleblower’s complaint is unsealed and served on the defendant. At this point, still more years of discovery and litigation may follow before the case is resolved. As a practical matter, however, in cases where the government decides to intervene, many, but not all, defendants decide to settle the claim. Because of the high stakes for defendants, many corporations would rather save the cost of litigation and escape an admission of fault or a jury finding of wrongdoing.