Tuesday, December 29, 2015

Can a Relator Amend or Supplement Her Complaint

December 29, 2015 – Filing a complaint expeditiously for a whistleblower and her lawyer is a top priority for experienced qui tam attorneys.  As we previously discussed in the article titled, Reporting Fraud by Filing a Qui Tam Case, timeliness is of the essence to meet the first to file rule. And if the whistleblower’s case has jurisdictional defects, it has to be dismissed and completely filed anew in the proper court. This process puts the whistleblower at risk of losing claims to her case. However, recent events have coalesced to dissolve the jurisdictional hurdle to a relator's action.

Precedent Setting Opinion Clears the Way to Cure Jurisdictional Defects


The Dec. 16, 2015 opinion by Judge Bruce Selya of the Court of Appeals for the First Circuit of Rhode Island opens the door for a relator to amend and supplement her existing complaint. Judge Selya relied on several earlier rulings, including Federal Rule of Civil Procedure 15(d), the opinion in ConnectU vs. Zuckerberg, and the Supreme Court's May 26, 2015 ruling in Kellogg Brown & Root Services, Inc. v. United States ex rel. Carter.

Under Fed. R. Civ. Pr. 15(d), Judge Selya opined that a relator can supplement her complaint to remedy jurisdictional defects, instead of being required to file an entirely new case. The judge explained that "the Rule helps courts and litigants avoid pointless formality." Additionally, "supplementation of pleadings is encouraged 'when doing so will promote the economic and speedy disposition of the entire controversy between the parties.'" 

Judge Selya, also relied on the ruling in the ConnectU vs. Zuckerberg case, which holds that jurisdictional defects in an original complaint may be solved by amending the complaint, except when jurisdiction is based on diversity. And then the judge referenced the Supreme Court's decision in U.S. ex rel. Carter, that more clearly defines the word "pending," and which states that only pending qui tam cases may bar later qui tam cases. By combing the sum of theses previous rulings, a whistleblower is able to maintain her claim and overcome the first to file bar. 

Why is this Ruling Important?


Judge Selya's opinion is important because, a whistleblower who must file an entirely new case in such a situation will often lose her claims due to the statute of limitations expiring, protests from other relators competing for first-to-file, and public disclosure challenges. However, this decision will not only save time in the courts, it will help the whistleblower save valuable resources while allowing her to continue to hold onto her claims. Now that a whistleblower has the ability to amend or supplement her existing complaint, she and her attorney can focus more energy on the facts of her case and routing out fraud.


Waters & Kraus Can Help You Report False Claims Fraud


At Waters & Kraus, LLP, our lawyers are well versed in the application of the False Claims Act. If you are aware of a company or individual engaging in unlawful conduct to purposefully increase the claims paid for with public funds, there are remedies recognized by many states as well as the federal government. Please contact us.

Friday, December 11, 2015

False Claims Act Recoveries 2015 Year in Review

DOJ Reports $3.583 Billion in False Claims Act Recoveries for 2015


December 11, 2015 – The results are in. The U.S. Department of Justice (DOJ) has released its statistics on the False Claims Act (FCA) recoveries for fiscal year 2015 in a recent announcement. Though total recoveries for qui tam cases are down from 2014's record high, 2015 stands out as a winning year for whistleblowers in qui tam cases in which the government has declined to intervene.  Total recoveries remain over $3.5 billion for the fourth year in a row.

The False Claims Act empowers whistleblowers who uncover fraudulent practices in public programs to file a lawsuit on the government’s behalf. Whistleblowers, also referred to as “relators,” are rewarded with a portion of the government’s recovery, and may also recover any damages resulting from retaliation against them. As the statistics in the 2015 report show, the False Claims Act continues to be the most effective tool used to uncover and prosecute fraud against the government.

Of note, in 2015 the total dollar value of whistleblower awards for cases in which the government declined to intervene has surpassed the total whistleblower awards in cases where the government has taken over litigation. This is a first time event, and is evidence that whistleblowers and their attorneys are both willing and able to successfully litigate and resolve False Claims Act cases even where the government steps aside.

Whistleblower Recoveries 2010-2015

Some of the other highlights extrapolated from the Civil Division's Fraud Statistics report include: 


  • 632: Fewest FCA cases filed since 2010
  • $1.9 billion: Healthcare fraud cases continued to lead FCA recoveries in 2015
  • $1.1 billion: Government contracts recoveries also remained high
  • Relator’s share awards have increased in declined cases
  • Best year ever for relator recoveries in declined qui tam cases, and first year to exceeded relator recoveries in cases where the government intervened
  • More recoveries obtained from declined qui tam cases than all previous years combined (2015: $1.149 billion; 1987-2014: $1.006 billion)
  • Total recoveries down 38% from 2014, but still remain over $3.5 billion for the fourth consecutive year

Contact Waters & Kraus to Report False Claims Act Violations


At Waters & Kraus, LLP, our lawyers are well versed in the application of the False Claims Act. If you are aware of a company or individual engaging in unlawful conduct to purposefully increase the claims paid for with public funds, there are remedies recognized by the government. Please contact us to report violators defrauding the government. 

Tuesday, December 1, 2015

The False Claims Act Takes Over Canada? Maybe

December 3, 2015 – The United States’ neighbor to the north, Canada, has commenced steps to adopt a law similar to the False Claims Act to protect government contracts and promulgate a culture of protections for those individuals willing to come forward and report fraud. A commission comprised of individuals from the Quebec government recommends reform against companies and individuals who commit fraud and protection for whistleblowers who come forward. The commission was charged with investigating the bidding and awarding of government contracts in the construction sector, and found that organized crime had infiltrated the industry. In an almost 2,000 page report, the commission recommended:

  • Creation of an independent authority to oversee public contracts.
  • Better protection for whistleblowers.
  • Requirement that construction companies report acts of intimidation or violence.
  • Increased penalties for construction companies that break the law, up to and including cancelling their license under Quebec's building authority, la Régie du bâtiment du Québec.
  • Increased penalties for people who make use of so-called "strawman" schemes.
During the course of its investigation, the commission heard from over 291 witnesses, most of whom blew the whistle on illegal activities. By placing an emphasis on whistleblower protections, the commission intends to support and foster an environment where individuals can come forward when they see wrong doing. Of the many false claims act statutes enacted throughout the United States, the commission recommended enacting a law similar to New York State's False Claims Act. This is definitely a step forward in eliminating and reducing corruption. 

Contact Waters & Kraus to Report False Claims and Medicare Fraud


At Waters & Kraus, LLP, our lawyers are well versed in the application of the False Claims Act. If you are aware of a company or individual engaging in unlawful conduct to purposefully increase the claims paid for with public funds, there are remedies recognized by many states as well as the federal government. Please contact us

This article was contributed by Louisa Kirakosian, a qui tam attorney at Waters & Kraus, in the firm’s Los Angeles office. She represents whistleblowers who have uncovered fraud against the government in the pharmaceutical, Medicare/Medicaid, and government contracting industries.