Hidden Hazards

Hidden Hazards of the False Clams Act

There are a few twists within the False Claims Act of which every whistleblower should be aware.

First-to-File. Once you have evidence of fraud, it is in your interest to act quickly. The False Claims Act has a “first in time” rule that permits only the first person who files a lawsuit to maintain a case. Even if you have significant evidence of fraud, you must be the first-to-file to ensure your success as a qui tam relator. If you are aware of the possibility that another person could possibly beat you to the courthouse, you should let your lawyer know immediately.

Public Disclosure. A qui tam case may also be thrown out if “substantially the same allegations or transactions”were publicly disclosed, and the relator is not an “original source” as defined in the statute. Different courts have interpreted these provisions of the False Claims Act differently. As a result, it is best to file suit before your allegations of fraud are disclosed publicly.

The Seal. Qui tam lawsuits must be filed in secret or “under seal,” meaning that they are hidden from public view. It is essential that, both before and after suit is filed, a whistleblower doesn’t disclose the suit or the allegations to anyone else. Allegations that are “publicly disclosed” may prevent you from successfully bringing your suit.

Limitations.  Finally, the False Claims Act has time limits that restrict the amount of time you have in which to file a case. In general, lawsuits must be filed within six years of the date the fraud is committed. The time period may be extended an additional four years for a total of ten years under certain circumstances when a case is filed within three years “after the date when facts material to the right of action are known or reasonably should have been known by the official of the United States charged with responsibility to act in the circumstances.” Claims under the Act’s whistleblower protection and anti-retaliation provisions must be filed within three years of when the retaliation occurred