The federal False Claims Act (“FCA”) allows an individual with knowledge of fraud upon the federal government, often known as a whistleblower or qui tam relator, to bring a lawsuit on the federal government’s behalf to recover the funds. Many states have adopted similar laws that apply to fraud upon state and local government entities.
Both the federal and state FCAs provide very substantial financial rewards to whistleblowerss who successfully recover money for the government. Indeed, as described below, the federal FCA alone has resulted in the award of billions of dollars to relators. This article focuses on the relevant provisions of the federal FCA, but the state FCAs contain very similar provisions.
Whistleblower Rewards Under the False Claims Act
Under the federal FCA, a whistleblower must file the lawsuit under seal and provide notification of the lawsuit only to the federal government. The federal government is then provided with an opportunity to investigate the relator’s claims and decide whether it wants to “intervene” in the lawsuit. This means that the government makes a decision as to whether it wants to formally participate in the lawsuit. Even if the government does not intervene, the whistleblower can still pursue the case on their own with the assistance of their attorneys.
If the case results in a recovery for the government, then the relator is entitled to a portion of the government’s recovery. The whistleblower’s portion of the recovery is known as the relator’s share. The amount of the relator’s share depends on whether the government intervened in the case:
- A range of 15-25% of the government’s recovery if the government intervenes in the lawsuit
- A range of 25-30% of the government’s recovery if the government does not intervene in the lawsuit and relator, with the assistance of counsel, pursues the lawsuit on their own
Within these ranges, the precise amount of a relator’s share is sometimes reached by agreement between the whistleblower and the government. For example, in an intervened case, the relator and the government might agree that the relator will receive a 20% relator’s share.
Other times, however, the whistleblower and the government are not able to reach an agreement. This occurs when the relator believes they are entitled to a higher relator’s share than the government thinks is appropriate. For example, in a non-intervened case, the whistleblower may think that a relator’s share of 30% is appropriate while the government will only agree to a relator’s share of 25%. If this occurs, then the judge presiding over the case will decide the relator’s share within the ranges.
Judges have tremendous discretion in making this decision. In exercising that discretion, judges will consider a variety of factors including the length and complexity of the case, the significance of the information provided by the whistleblower, the contribution of the relator to the lawsuit, whether the information provided by the whistleblower was previously known to the government, whether the relator promptly provided the information, whether the whistleblower tried to stop the fraud, whether the relator’s attorneys assisted the government during the investigation and lawsuit, and the size of the government’s recovery.
Under this framework, the amount of the relator’s share is largely driven by the size of the governments’ recovery: the bigger the government’s recovery, the higher the relator’s share will be. Since 2010, whistleblowers have received more than $4.5 billion in relator’s shares in cases under the federal FCA.
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 31 U.S.C. § 3730(b).
 31 U.S.C. § 3730(b).
 31 U.S.C. § 3730(d)(1).
 31 U.S.C. § 3730(d)(2).
 U.S. ex rel. Alderson v. Quorum Health Grp., Inc., 171 F. Supp. 2d 1323, 1331 (M.D. Fla. 2001) (“The parties acknowledge that determination of the relator’s share is left largely to the Court’s informed discretion.”); U.S. ex rel. Johnson Pochardt v. Rapid City Reg’l Hosp., 252 F. Supp. 2d 892, 897 (D.S.D. 2003) (“The actual percentage awarded is within the court’s discretion.”); U.S. ex rel. Johnson v. Universal Health Servs., Inc., 889 F. Supp. 2d 791, 794 (W.D. Va. 2012) (‘The FCA itself provides little guidance with regard to implementing this standard, leaving district courts with great discretion in determining the relators’ share.”).
 U.S. ex rel. Alderson v. Quorum Health Grp., Inc., 171 F. Supp. 2d 1323, 1331-36 (M.D. Fla. 2001).
 DOJ, Fraud Statistics-Overview (Dec. 21, 2018), available at https://www.justice.gov/civil/page/file/1080696/download?utm_medium=email&utm_source=govdelivery.