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Criminal Resource Manual 932 Provisions For The Handling Of Qui Tam Suits Filed Under The False Claims Act

932

Provisions for the Handling of Qui Tam Suits Filed Under the False Claims Act

In 1986, Congress amended the False Claims Act, 31 U.S.C. §  3729 et seq. See generally False Claims Act Amendments of 1986, Pub.L. 99-562, 100 Stat. 3153 (October 27, 1986), reprinted in, 10A USCCAN (December 1986). One of Congress's objectives in modifying the Act was to encourage the use of qui tam actions in which citizens are authorized to bring, as "private Attorneys General," lawsuits on behalf of the United States alleging frauds upon the government. The private citizen plaintiff in such a lawsuit is often referred to as the "relator." To this end, Congress increased the amount by which a relator would share in any money recovered, liberalized the circumstances under which a private citizen could bring a qui tam action, and increased the relator's role in such litigation.
The relator must do the following to initiate a qui tam suit:
    1. file the civil complaint under seal with the court (the defendant is not served at this time); and
    2. serve a copy of the complaint and a "written disclosure of substantially all material evidence and information" possessed by the relator on both the Attorney General and the United States Attorney (USA) pursuant to Fed. R. Civ. P. 4. or Rule 4 of the Federal Rules of Civil Procedure.

    The government must then decide whether to take over the case as its own. If it does not notify the court that it is taking over the case, it becomes the relator's to litigate.

    The government has 60 days from the date service is completed and the statement of material evidence is submitted, whichever is late, to notify the court of its decision. Usually, the complaint and statement of evidence are served simultaneously on the USA, with service on the Attorney General occurring later. When confusion exists as to the tolling of the 60-day period, it is advisable to file a status report with the court (copy to the relator) advising it when the government's deadline expires and the complaint may be unsealed and served upon the defendant.
    Sometimes 60 days is simply insufficient. The government, "for good cause shown," may ask for additional time. The Congress indicated that such extensions should not be granted automatically and that it expected the courts to require proof of a serious inquiry and a legitimate need for more time before granting extensions of time.
    Given this brief period, it is necessary to gather as much information as quickly as possible. To this end, it is important that United States Attorneys promptly forward a copy of a qui tam complaint and statement of evidence to the Commercial Litigation Branch of the Civil Division, because relators frequently fail to serve the Attorney General or delay in doing so. The Commercial Litigation Branch will contact the agency involved, the Criminal Division, and, frequently, the Inspector General of the agency, to determine if the allegations are known to them and to obtain an assessment of the material evidence furnished by the relator. The Criminal Division will, in turn, check with appropriate United States Attorneys' offices USAOs and investigative agencies to determine if the allegations relate to a pending criminal investigation. Because of the 60-day deadline, it must be emphasized that a prompt response is required to these inquiries.
    Based on the information and recommendations provided by the relevant agency and the USAO and Department of Justice staff review, a decision whether to enter the case and take it over or to decline to do so will be made. After that decision is made, the Commercial Litigation Branch will coordinate as necessary with the USAO to ensure proper handling of the qui tam litigation and to ensure that it does not interfere with ongoing criminal investigations or prosecutions.
    PRACTICE TIP: Prosecutors and agents dealing with qui tam relators and their counsel should be very careful to follow Rule 6(e), Federal Rules Criminal Procedure, and its general prohibition against disclosing matters occurring before the grand jury. Prosecutors and agents should also be careful about sharing information with attorneys and agents or employees working on the civil aspects of criminal cases.

    [cited in USAM 9-42.001; USAM 9-42.440]

    Updated February 19, 2015