Whistleblower Litigation Trends
The Federal Government Recovered $4.7 Billion in 2016
In the fiscal year ending September 30, 2016, the federal government recovered $4.7 billion from qui tam and government-initiated suits under the False Claims Act. This is the third highest annual recovery in False Claims Act history, bringing the average to nearly $4 billion since 2009, and the total recovery during that period to $31.3 billion. Many cases, especially those involving Medicaid, also recover funds for State governments.
Whistleblowers Received $519 Million in 2016
Whistleblowers filed 702 qui tam suits in fiscal year 2016, an average of 13.5 new cases every week, out of a total of 800 cases filed under the FCA. The United States recovered $2.9 billion in these and earlier filed whistleblower suits that resolved during fiscal 2016. The government awarded the whistleblowers $519 million out of those recoveries. Cases in which the government declined to intervene returned a significantly smaller percentage of the total federal recoveries this year as compared with 2015.
Whistleblowers Received More Than $4 Billion Between 2009 and 2016
The number of whistleblower lawsuits filed under the qui tam provisions of the FCA has grown significantly since the amendments to the law in 1986. Recoveries increased significantly during the Obama administration, from January 2009 to the end of fiscal year 2016, as the government recovered nearly $24 billion in settlements and judgments related to qui tam suits and paid more than $4 billion in whistleblower awards during that time.
The largest recoveries in the healthcare industry in 2016 – $1.2 billion – came from the drug and medical device industry. Drug manufacturers Wyeth and Pfizer Inc. paid $784.6 million to resolve federal and state claims that Wyeth knowingly reported false and fraudulent prices on two drugs used to treat acid reflux, Protonix Oral and Protonix IV.
Government Intervention: The Department of Justice Intervenes in Approximately 1 out of 5 Cases Filed by Whistleblowers
Most sources estimate that the federal government intervenes in approximately 18 – 22% of the qui tam cases that are filed, and that the government “success rate” dwarfs that of relators who pursue declined cases. It is difficult to find accurate statistics about the percentage of interventions or dollars attributable to intervened cases, however, for several reasons.
First, it is not uncommon for the government to intervene on some, but not all, claims in a case. Although most people would count that as an intervention, some might count it separately as a partially intervened and partially declined case.
Second, sometimes the government only intervenes as to one or several – but not all – defendants, but a relator might pursue the declined defendant. Although the dollars can be tracked quite clearly, the percent of cases deemed intervened versus declined is trickier.
Finally, it is not uncommon for the government to decline to intervene when a case is first unsealed, but then change course sometime further down the road. Indeed, if a case is showing positive results through discovery or motion practice, that increases the likelihood that the government will intervene, even if only at or near the time of settlement. Although most people will count that as an intervened case, it obviously skews the statistics about what dollars are recovered through intervened as compared to declined cases, especially if the intervention only occurs when a case is already well on its way to a settlement. Roughly speaking though, it is fair to say that the Department of Justice intervenes in approximately one out of five cases that are filed by private relators.
No Fees Without Recovery
Berger Montague’s Whistleblower, Qui Tam & False Claims Act Group litigates cases on a contingent fee basis, so whistleblowers do not pay attorneys’ fees unless there is a recovery.
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