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FCA Cases: Convincing DOJ to Move to Dismiss
During the nomination hearing before the Senate Judiciary Committee on January 15th, then United States Attorney General nominee William Barr backpedaled on earlier statements he had made about the False Claims Act being “an abomination.” Instead he testified that, with Barr at its helm, the Department of Justice would continue to vigorously enforce the statute. But recent actions by the DOJ suggest that although the DOJ may continue to prosecute certain relators' FCA cases, other relators may find themselves on the other side of a government motion to dismiss. For corporations facing not only treble damages but millions of dollars in attorneys' fees spent on defending against FCA cases, this may be viewed as welcome relief. In FY 2018 alone the DOJ collected over $2 billion from qui tams. Indeed, many companies find themselves embroiled in multiple FCA cases at a time. Most of the qui tams over the last few years have been in the healthcare industry. Now that military spending is ramping up, the expectation is qui tams in the defense industry will also increase.
The reason FCA cases are so popular is because once the plaintiff — or “relator” — files the complaint in the shoes of the United States, the DOJ steps in and investigates. The relator is in the enviable position of being able to walk off with his or her share of a potential treble damage award without having had to engage in all the investigative work or expend significant monies. The DOJ will have taken care of all that.
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