May 5, 2017 - Posts

Whose Whistleblower Case Is It Anyway?

A recent Florida decision highlights the sometimes odd relationship between whistleblowers and the government in False Claims Act cases.

There are a lot of quirks to False Claims Act whistleblower lawsuits—a fact we have noted many times in these news updates.  One of the more notable quirks is that whistleblowers file their cases on behalf of the United States, not on behalf of themselves.  When the case is first filed, the Justice Department gets at least 60 days—and usually much longer—to investigate, before deciding whether to intervene and take the case over.  If the government chooses to intervene, then it is the government, not the whistleblower, who litigates the case from that point forward—though the whistleblower is still entitled to a share of any money that is recovered.

But what happens when the government declines to intervene and the whistleblower decides to keep litigating?  There is no question that the case still “belongs” to the government.  After all, the False Claims Act covers false claims for payment made to the government, and it is the government that is harmed when it pays those false claims.  Accordingly, any money that the whistleblower recovers in a declined case still goes back to the government—minus the 25-30% that goes to the whistleblower as a reward for bringing the case.  However, other than entitlement to money, what right does the government have to participate in a whistleblower case after declining intervention?

In an unusual opinion last month out of the Middle District of Florida—U.S. ex rel. Ruckh v. Salus Rehabiliation, et al., 8:11-cv-1303-T-23TBM, (M.D. Fla. Apr. 26, 2017) (Doc. No. 456)—the court’s answer to that question was: not much at all.  In that case, the whistleblower pursued a declined case through trial and ultimately won $347,864,285.  The Defendant tried to overturn that award, and during the post-trial litigation, the government asked for permission to file a “statement of interest” setting forth its position on the matter.  But the court said no.

Under the court’s reasoning, once the government made its decision not to intervene in the case, its role in that litigation was over, and it accordingly lacked any real interest, other than money, worthy of the court’s consideration.

This opinion is notable in part because it is a major departure from the position of many other courts, which allow and in fact welcome statements of interest from the United States on contested legal issues.  This opinion also demonstrates how managing the relationship with the United States can be a tricky issue for whistleblowers once a case is declined, and it is all the more reason why whistleblowers should seek out experienced False Claims Act lawyers to represent them.

To learn more about our Whistleblower & Qui Tam practice, click here.  Our firm is located in Nashville, Tennessee, but we handle whistleblower cases all across the county.