For nearly 150 years, the civil False Claims Act (“FCA”) has been a valuable instrument in the government’s efforts to combat fraud and protect the public fisc. One feature of the FCA, its provision for qui tam suits, has been responsible for the most of the government’s success in thwarting fraud on the government since 1986 when the FCA was rewritten. Indeed, of the $20 billion that the government has recovered pursuant to the FCA since 1986, qui tam suits have accounted for $12.6 billion – nearly two thirds of the total recovery.1 Not all qui tam suits, however, are created equal. The government has declined to intervene in more than 75% of the nearly 5000 qui tam suits in which the government has made an intervention decision .2 Not with standing earlier protestations by the government that its decisions not to intervene in cases were no indication of its view of the merit of such cases, defendants have long suspected otherwise, a suspicion supported by the statistics – the 75% of non-intervened cases account for less than $282 million (1.4%) of the $20 billion recovered since 1986.3 Further support has been provided in recent testimony by a Deputy Assistant Attorney General for the U.S. Department of Justice’s Civil Division. Citing similar statistics, he testified that this “reveals that the Department has been appropriately judicious in its review of qui tam matters and has been highly successful in intervening in those cases that have true merit.”4 Notwithstanding that observation, the government has sought to dismiss as meritless only a handful of the nearly 4000 non-intervened cases. What has to date been largely ignored is the cost – monetary and otherwise – associated with those nearly 4000 qui tam suits that have accounted for only 1.4% of the government’s recovery. These cases have resulted in burdensome costs on defendants, some of which are eventually passed on to the taxpayer because they are often chargeable back to the government when the defendants ultimately prevail. Federal courts, in turn, bear the costs of managing these cases, sometimes for many years.
