qui tam lawsuits

February 28, 2020

Reasons Why Most Qui Tam Cases Settle

benjamin-child-17946-copy-300x200 Any time a person needs to file a lawsuit, it is natural to worry about going to court. Most people do not want to face the person they are accusing in court, and just the process of appearing in court often means the case will be quite lengthy, meaning the person bringing the lawsuit will have to deal with the matter for some time. All of these factors hold true in qui tam lawsuits, too. Fortunately, whether you are bringing a lawsuit under the federal False Claims Act or the California False Claims Act, there is a likelihood that the case will settle. Below are just a few of the most common reasons why that is.

Reduce Legal Fees

Going to court always means that there are going to be more legal fees. When attorneys must prepare for court, it involves much more of their time and many lawyers charge higher fees for going to court than for reaching a settlement. The companies accused of making false claims know this and they will often settle to reduce the amount of legal fees they will have to pay because they also have to pay the relator’s legal fees.

June 23, 2017

Court Finds Attorney May Not Receive Attorney’s Fees in His Own Qui Tam Case

by Gregory J. Brod

To encourage private citizens to come forward regarding fraud against the government, qui tam cases entitle the citizen, also called the relator, to a portion of any settlement or jury award that arises from his or her evidence and allegations. Individuals can bring qui tam cases under the federal False Claims Act when there is fraud against the federal government or can sue under a state-specific false claims act when the fraud is against the state. However, this award has sometimes led individuals to move forward qui tam suits for profit and not altruistic motives. There may be an even more profound issue when attorneys act as both the relator in a qui tam suit and their own lawyer.

Attorney-Relator Cannot Benefit Twice in Qui Tam Suit in Illinois

This issue came up in Illinois when an attorney brought hundreds of qui tam suits against retailer My Pillow Inc. for failing to collect and remit tax on products sold in Illinois. The attorney acted as both the relator in the suit as well as the attorney. This meant the attorney not only received a portion of the judgment against the company, but he also asked for attorney’s fees.

June 16, 2017

Answers to Your Qui Tam Questions

by Gregory J. Brod

benjamin-child-90768-300x200 Qui tam suits often make the news, though you may not be sure of what they are and why they matter. Qui tam suits have to do with fraud against the federal or a state government. In recent years, the U.S. and individual states have made a concerted effort to recapture the money that individuals and businesses have wrongfully obtained or kept from them. By learning more about qui tam suits, you may be better able to recognize fraud when you see it and understand what you can do with this concerning information.

Common Questions Regarding Qui Tam Suits

What is a qui tam suit? A qui tam lawsuit is a civil lawsuit brought by a private citizen on behalf of the federal or a state government. It is also known as a whistleblower lawsuit since the private citizen is blowing the whistle on illegal actions against the government.

June 2, 2017

Whistleblower Cannot Intervene in Later FCA Suit Filed by US

by Gregory J. Brod

The Ninth Circuit recently held that a whistleblower could not intervene in a False Claims Act (FCA) suit filed by the U.S. despite it being based on allegations the whistleblower previously made in a lawsuit that was dismissed. This is another a holding that shows relators in qui tam cases do not get second chances. If the FCA cases to which they are a party do not directly lead to a settlement or jury award, the whistleblowers cannot recover any compensation.

Background for the Decision

In 2009, John Prather filed a qui tam action against Sprint and others stating the businesses overcharged the U.S. for wiretapping services. As in all qui tam cases, the U.S. government has time to investigate the allegations and then choose whether to intervene and become a formal party to the case or not intervene. In this case, the U.S. did not intervene and later the district court dismissed the relator’s claim because it determined he was not an original source for the information that led to the allegations.

March 3, 2017

Recent Qui Tam Decisions Around the U.S.

by Gregory J. Brod

Each week new qui tam suits, possible under the False Claims Act (FCA) are brought by private individuals against other individuals and businesses on behalf of the federal government. Many of these lawsuits take years to investigate and litigate. Additionally, each week sees some of these cases settled, finalized, or appealed. Here are a few cases that wrapped up this past week:

In February, a physician’s practice in Florida agreed to settle a FCA claim based on Medicare fraud for $750,000. The qui tam suit against Dr. Paul B. Tartell was filed by a former patient Theodore Duay. Duay alleged that Tartell would bill Medicare and the Federal Employee Health Benefits Program for procedures that were not medically necessary or not performed at all. Numerous federal agencies were involved in negotiating this settlement, and Duay will receive $135,000 for filing the action.
TeamHealth Holdings will pay $60 million plus interest due to allegations its business, IPC Healthcare Inc., committed fraud against Medicare, Medicaid, the Defense Health Agency, and the Federal Employees Health Benefits Program by billing for more expensive medical services than what were actually provided. Dr. Bijan Oughatiyan filed a qui tam action under the FCA alleging the practice of “upcoding.” The federal government investigated and chose to intervene, providing a detailed description of how IPC Healthcare used false codes to receive greater reimbursements. Oughatiyan will receive $11.4 million for his participation.

February 17, 2017

If You Voluntarily Dismiss Your Qui Tam Suit, You Cannot Benefit From a Later Settlement

by Gregory J. Brod

This February, a federal district judge from the Southern District of New York, part of the Second Circuit Court of Appeals, determined a whistleblower who voluntarily dismissed his False Claims Act (FCA) case against L-3 Communications EOTech Inc. in 2014 could not share in a settlement later reached between L-3 Communications and the federal government in 2015. While this ruling may not be law across the U.S., it is an important opinion for potential qui tam plaintiffs to consider since other federal judges would likely come to the same conclusions. Ultimately, whistleblowers will need to see the entire case through to benefit from a settlement or judgment in the government’s favor.

The L-3 Communications Case

The whistleblower against L-3 Communications was a quality control engineer for the company from May to June 2013. In August 2013, he stated that the company sold defective holographic firearm sights to the American military and law enforcement agencies. The sights were supposed to work in temperatures from negative 40 degrees to 140 degrees Fahrenheit and with humidity. However, they were allegedly defective because they were inaccurate in extreme hot and cold temperatures and humid conditions.

November 5, 2016

What is a Whistleblower Qui Tam Lawsuit?

by Gregory J. Brod

It can be perilous for a single individual to expose a company’s illegal acts. Whistleblowers, as these courageous people as called, risk losing their jobs, damaging their reputations, being ostracized by coworkers and neighbors, and other detriments by daring to speak up.

Federal and state legislatures recognize the dangers and have enacted whistleblower laws, which protect those who come forward from retaliation by the persons or businesses they identify as engaging in illegal conduct. False Claim statutes also provide whistleblowers with legal recourse. These laws allow for qui tam lawsuits, which allow a person to sue an individual or business believed to have defrauded the government of public funds to recover the illegally obtained money. The person bringing suit is referred to as a “qui tam plaintiff,” and can possibly receive a large percentage of the funds collected from the wrongdoers.

By allowing whistleblowers to bring a civil action, governments acknowledge the public service whistleblowers fulfill and the hardships they endure as a consequence of their exposing fraud.

October 12, 2016

Qui Tam Suit Settled by Three Orthopedic Clinics

by Gregory J. Brod

Accused of purchasing viscosupplements (medications used in the treatment of osteoarthritis) overseas and then billing Medicare and Medicaid at an inflated cost, three California orthopedic clinics have agreed to settle claims against them for a combined settlement of $2.39 million. Orthopedic Associates of Northern California has agreed to pay $815,794, San Bernardino Medical Orthopaedic Group will pay $971,903, and Reno Orthopaedic Clinic has agreed to pay $602,335 for their participation in a fraud scheme designed to overbill federal and state healthcare programs.

How the Scheme Worked and Was Discovered

The medications at issue in this case were manufactured in the United States and then exported to suppliers and others overseas. According to the allegations made against each of the defendants, the clinics would purchase osteoarthritis medications from these overseas suppliers and prescribe these medications to patients who had Medicare or Medicaid. The clinics were able to obtain the medications at a much lower cost than they would have had to pay if they had obtained the medications from suppliers in the United States. Because these state and federal programs reimburse clinics for viscosupplements at a set rate, each clinic was able to pocket the difference between the amount they were reimbursed by Medicare and the cost they had to pay to obtain the medications from international suppliers.