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FeaturesGeneral Counsel and In House CounselLitigationLJN NewslettersRegulationThe Corporate Counselor

The Continuing Evolution of the False Claims Act

BY Jonathan S. Feld, Jason M. Ross
February 01, 2017

The number of lawsuits brought under the False Claims Act (FCA), 31 U.S.C. § 3729 et seq., continues to increase. In 2015 alone, relators filed over 600 qui tam complaints — and courts awarded over $3.5 billion — under the FCA. In these cases, the United States government is the real party in interest, while individual relators (also known as “whistleblowers”) may bring a complaint on behalf of the government. Accompanying this growth are significant FCA decisions including, most recently, Universal Health Services, Inc., v. United States, ex rel.Escobar, 579 U.S. __ (2016), decided in June 2016. In Escobar, the U.S. Supreme Court: 1) examined the materiality requirement of the FCA; and 2) approved “implied” false certification as the basis for the FCA claim. Other important decisions continue to make their way through the courts.

Violating the Seal

On Dec. 6, 2016, in United States ex rel. Rigsby v. State Farm (580 U.S. ___ (2016)), the Supreme Court issued a unanimous decision resolving a circuit split over whether a case-dispositive sanction must follow when a relator violates the sealing provision of the False Claims Act. Before this decision, courts had not reached consensus on whether a relator who discloses facts about the lawsuit during the sealing period must be sanctioned with dismissal of the case. Under the FCA, a relator's complaint must remain under seal for at least 60 days. During this time, the United States may confidentially review the complaint and supporting evidence to decide whether to intervene and proceed as the primary plaintiff or to decline participation, allowing the relator to pursue its lawsuit as a private litigant.

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