United States: Under What Circumstances Can a Private Qui Tam Plaintiff Overrule Government Agency Experts' Use of Administrative Discretion to File False Claims Act Actions in the Post-Escobar FCA World?

Key Points

How have appellate courts applied the Supreme Court's ruling in Escobar?

If the government is aware of the relator's allegation, but does not undertake any administrative action to address the defendant's alleged violation of law or contract, does that show that the relator's allegations are not material to the government's determination to pay?

If the government is aware of the relator's allegation, but continues to pay for the defendant's product, does that show that the relator's allegations are not material to the government's determination to pay?

If the government is aware of the relator's allegation, and investigates and concludes that the relator's allegations are unfounded, does that show that the relator's allegations are not material to the government's determination to pay?

Under What Circumstances Can a Private Qui tam Plaintiff Overrule Government Agency Experts' Use of Administrative Discretion to File False Claims Act Actions in the Post-EscobarFCA World?

The False Claims Act (FCA) qui tam provisions authorize private citizens, known as "relators", to file lawsuits where they have suffered no personal injury. Instead, they allege that the federal government has been defrauded and obtain a substantial bounty if there is ultimately a recovery. A number of courts have described the FCA qui tam process as one where a "posse of ad hoc deputies" is unleashed to enforce the legal obligations of the United States.1 But what if the posse actually supplants the efforts of law enforcement rather than supplementing them?

One instance in which the relator's action may thwart effective law enforcement rather than enhance it occurs when the relator contends that knowingly material false statements or claims were tendered to the government, but the government itself either believes that there is no violation of law or agency experts would prefer, to better administer the programs they are charged with overseeing, that the violation be addressed through administrative sanctions.

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Footnote

1 United States ex rel. Grubbs v. Kanneganti, 565 F.3d 180, 184 (5th Cir. 2009); United States ex rel. Sanderson v. HCA-The Healthcare Co., 447 F.3d 873, 876 (6th Cir. 2006); United States ex rel. Karvelas v. Melrose-Wakefield Hosp., 360 F.3d 220, 224 (1st Cir. 2004).

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