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'Mixed Messages': DOJ Efforts to Dismiss Qui Tam Actions
The False Claims Act (FCA), 31 U.S.C. §3729 et seq., was enacted in 1863 to punish fraud perpetrated against the government by Civil War profiteers. Since its enactment, Congress has amended the FCA to strike a balance between the FCA's dual purposes of rooting out fraud against the government and encouraging private individuals aware of such fraud to bring it to the government's attention. From 1986, the government has recovered over $59 billion in FCA settlements and judgments. See, U.S. Department of Justice, Fraud Statistics Overview (Dec. 21, 2018), (hereinafter DOJ Fraud Statistics 2018).
Background of Qui Tam Actions
The FCA provides for commencement of an action in either of two ways. First, the DOJ may bring a civil action for violation of the FCA. 31 USCS §3730(a). Second, a private person may bring a civil action on behalf of the United States for violation of the FCA. 31 USCS §3730(b). The second type of civil action, brought by the relator, is known as a qui tam action.
Qui tam actions brought by relators account for the vast majority of FCA actions. Of the $59 billion recovered by the government since 1986, $42.5 billion of that was recovered in qui tam actions. See, DOJ Fraud Statistics 2018. The number of qui tam actions filed annually has increased 20 fold since the 1986 amendment that increased awards to relators. See, DOJ Fraud Statistics 2018.
Guidance from the Granston Memo
Despite the historical trend of reduced government involvement in qui tam actions, the government is sending "mixed messages" regarding its view of FCA relators. On Jan. 10, 2018, the DOJ issued a memo "intended to provide a general framework for evaluating when to seek dismissal under section 3730(c)(2)(A) and to ensure a consistent approach to this issue across the Department." Memorandum from Michael D. Granston, Director, Commercial Litigation Branch, Fraud Section, to Attorneys, Commercial Litigation Branch, Fraud Section and Assistant U.S. Attorneys Handling False Claims Act Cases (Jan. 10, 2018) (hereinafter Granston Memo).
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