The Supreme Court ruled in June that the Department of Justice can dismiss whistleblower lawsuits brought under the False Claims Act. The False Claims Act law allows private citizens to sue individuals and companies defrauding the government. The decision was nearly unanimous and affirmed the opinions of a district court and the U.S. Court of Appeals for the Third Circuit. Notably, the ruling will likely affect future whistleblowers, so it’s essential to talk to a lawyer specializing in whistleblower cases if you have a claim you may bring forward. The federal government has historically incentivized potential whistleblowers, but the new ruling could make things more complex.
What Is The False Claims Act?
To understand the recent Supreme Court decision, you must first know the False Claims Act (FCA) basics. It is a whistleblower law that allows private citizens to bring complaints against individuals and entities that are knowingly defrauding the government. The FCA allows for qui tam lawsuits, which means that whistleblowers can sue on behalf of the U.S. government. If a case succeeds under the False Claims Act, the whistleblower (known as a relator) receives a percentage of the total amount that the DOJ collects from the wrongdoer.
The whistleblower lawsuits filed under the False Claims Act most often involve the healthcare and defense contracting industries. The case brought before the Supreme Court, United States, ex rel. Polansky v. Executive Health Resources, Inc., centered on alleged fraud by physician advisor company Executive Health Resources. Dr. Jesse Polansky filed a complaint under the False Claims Act in 2012, alleging that the company was billing Medicare for inpatient services at a higher rate than it should have.
After a claim is brought under the False Claims Act, the DOJ responds in one of three ways. They can intervene and take over the case to pursue damages from the alleged fraudster. The DOJ can also decline to intervene and allow the whistleblower to move forward on their own without the federal government’s backing — but with the potential to receive a higher portion of the final award. The last option is for the DOJ to ask the court to dismiss the lawsuit, which happened in Polansky’s case after the DOJ initially declined to intervene. It was argued that the government couldn’t dismiss a case that it didn’t intervene in.
Why would the federal government move to dismiss a whistleblower case? It usually happens when the DOJ weighs that the costs of moving forward with the case outweigh the benefits. In the case of Executive Health Resources, the DOJ investigated the claims for two years before declining to intervene and moved for the dismissal in 2019. The government decided that the “varied burdens of the suit outweighed its potential value,” according to the Supreme Court headnote on the case. Over the years, Polansky incurred more than $20 million in litigation fees. The government’s dismissal could affect how future whistleblowers come forward with false claims.
Whistleblowers play an essential role in society, and the DOJ rewards them for coming forward with information about wrongdoing. Since the inception of the False Claims Act, the government has recovered more than $72 billion — in fiscal year 2022 alone, it was $2.2 billion. While whistleblowers are legally protected from employer retaliation and can receive repayment if mistreated, it can take great courage to come forward. Whistleblower cases are often complex and require thorough investigations, so it may take years for them to see the reward they are owed.
Filing A Whistleblower Lawsuit
If you witness fraud at your workplace, you may be unsure how to proceed. Your first step after discovering wrongdoing is contacting a law firm specializing in whistleblower cases. The False Claims Act holds entities that knowingly defraud government programs accountable for their actions, and a lawyer can help you navigate the process of filing a claim. While your employer is legally forbidden from retaliating against you, they may not follow the rules — and your attorney will advocate for you in court.
The Supreme Court ruling allows the DOJ to seek dismissal of whistleblower lawsuits, and hiring a lawyer with experience handling cases brought under the False Claims Act is essential. An attorney will fight for your rights and ensure you receive a fair reward for your sacrifice. Herman Herman Katz represents clients in Louisiana and beyond in qui tam lawsuits. Our skilled team has decades of experience with False Claims Act cases, including the government programs listed below that are common targets of fraud:
- Department of Defense
- Social Security
If you think you may have a whistleblower complaint, you should act quickly. Call HHK at 844-943-7626 or contact us to submit a free case evaluation.
Jed Cain is a partner with Herman, Herman & Katz, LLC. He has dedicated his career to representing injured folks and their families.