Department of Justice Releases FCA Stats to Grumbling Bar
The DOJ Statistics on False Claims Act awards are in and they created quite a bit of grumbling among those who practice this kind of law. I guess the big news is that the Act is still working roughly the same as it has in previous years. The U.S. collected $3 Billion in 2019 which was actually up slightly from $2.9 Billion the year before.
Yes indeed, so you would think the DOJ would want to put more resources into supporting these cases as, no matter what else is going on, the False Claims Act remains the most effective way to fight fraud, and any resources used to support such cases will help increase recoveries.
As always, collections today reflect cases filed anywhere from three to ten years ago so collections can be a lagging indicator of the pursuit of such cases. The number of new cases, was just slightly down from 646 to 635 reflecting a leveling off a bit as in we did see a few years of the number of cases filed being as high as 700 including in 2013 which is the highest on record at 757.
Reasons for the slight dip in the number of cases require speculation. I know for myself and many counsel we are actually handling more cases, but maybe filing less.
More U.S. Attorney’s offices are willing to discuss matters prior to filing and that leads to cases that might have been filed before not being filed. The idea that doing a False Claims Act case is “easy money” has now been completely dispelled, if anyone was ever idiotic enough to believe it, and only the very best cases are getting filed, this is perhaps a result of the Defense Bar’s aggressive misreading of the point of the Supreme Court’s Escobar decision, which they read almost as creating a new materiality requirement. Yes materiality matters it always has, but too often people do not assess what it is.
None of that caused the grumbling. I’d name names, but my source for the grumbling is a confidential website of colleagues. Several pointed to the lower Relator’s share on average than the Statute calls for which takes a long time to explain how it can happen, I’ll get into that some really grumpy day. The statistics are not clear on all that, but the overall point is, if you want to encourage and even if you want to fund whistleblower activity, you need to be willing to reward it. I’ve been a lone crusader for a flat rate whistleblower reward. X amount for non intervened cases X amount for intervened cases with the only way it can go up is if one or more parties settle their first to file disputes by joining together in litigation. I see no benefit in quarreling with the DOJ about Relator’s share either for the overall Relator’s bar (as it stands now we must on behalf of our client’s individual cases of course) nor ultimately for the DOJ in fighting us over the share when they could be spending time on new cases. So, when you see statistics somehow reflecting low Relator’s share awards it seems counter to the entire purpose of the Act to me, and the grumbling is understandable.
The grumbling may be warranted, but it is not the same as defeatism. The Relator’s bar wants to fight. We all got in this to help stop fraud and we are all here going back to work. We just want our Whistleblowers appropriately rewarded for years of effort. Nevertheless, whistleblowers and the bar that supports them will persist and will continue to succeed. Of course, whistleblower rewards, did amount to more than $270 million in awards last year so grumbling aside that is not nothing.
