In the last post, I was discussing how the court in a recent whistleblower case determined the percentage of recovery that would be awarded to the whistleblower (relator). In this case, there were clearly factors that justified a higher percentage of recovery, but also factors that weighed against the relator.
In its analysis, the court first recognized that the award to the whistleblower depended upon the extent to which the relator substantially contributed to the prosecution of the action pursuant to the False Claims Act statute. Because the statute provides no further guidance, the court looked to various other sources for guidance to determine the appropriate award. First, the court looked to the Senate Report factors which consist of:
1. the significance of the information provided to the government;
2. the contribution of the person bringing the action to the result obtained; and
3. whether the information that formed the basis of the suit was known to the government
The court also considered DOJ guidelines that justify a higher reward including:
1. the relator reported the fraud promptly;
2. the filing and subsequent investigation caused the offender to halt the fraudulent activity;
3. the relator provided extensive first hand details to the government;
4. the government had no knowledge of the fraud;
5. the relator provided suibstantial assistance during the investigation and/or pre-trial phases of the case;
6. the relator and his counsel supported and cooperated during the entire proceeding;
7. the case went to trial; and
8. the FCA recovery was relatively small.
The court also noted a few factors that were relevant to a possible decrease in the award, consisting of:
1. the relator publicized the case while it was under seal;
2. the relator did not provide any help after filing the complaint and hampered the government investigation;
3. The case required substantial efforts of the government to develop the facts to win the lawsuit; and
4. the suit was settled shortly after the filing of the complaint with little discovery.
Based upon the weight the court gave to each factor, it awarded the relator 19% of the recovery. This case demonstrates how the government and the relator may perceive contribution differently. It is also illustrative of how the relator need good counsel to try and maximize his or her recovery.
If you have any knowledge of fraud against the government, feel free to contact us for a free confidential consultation. The rewards can be significant with the relator receiving a portion of the recovery. Also, there is a “first to file rule” that can prevent you from recovering if someone else files before you so it is important to consult with an attorney quickly.