What is a Qui Tam?

SAN FRANCISCO — Swiss pharmaceutical company Novartis AG is paying $72.5 million to settle a whistleblower lawsuit accusing it of improperly billing government programs for unapproved uses of a cystic fibrosis drug.

The U.S. Attorney's Office announced the settlement Tuesday and unsealed the lawsuit filed by former employees Robert Lalley, Courtney Davis and William Manos in 2006.

The lawsuit alleged that biotechnology company Chiron Corp., which Switzerland-based Novartis acquired in 2006, billed for unapproved uses of its drug TOBI between 2001 and 2006.

The federal government will receive $35.68 million. Ten states — California, Illinois, Florida, Texas, Georgia, Tennessee, Virginia, Massachusetts, Michigan and New York — will split $29 million.

The three whistleblowers and their lawyers will divide $7.8 million.

This is a quote from a press release from the Associated Press the other day.  You will frequently see these types of press releases these days in the newspaper.  Typically the relief  obtained by the Federal government and whistleblowers was through a qui tam action under the Federal False Claims Act.

The False Claims Act is 31 U.S.C. Sections 3729 through 3733. Qui tam, under the False Claims Act, allows persons and entities with evidence of fraud against federal programs or contracts to sue the wrongdoer on behalf of the United States Government. In Qui tam actions, the government has the right to intervene and join the action. If the government declines, the private plaintiff may proceed on his or her own. Some states have passed similar laws concerning fraud in state government contracts.

For instance, where employees are aware of medicare fraud conducted in doctors offices, this may be the subject of this type of case.  Where, pharmaceutical companies market drugs for the wrong type of ailments and the federal government gets billed for it, this may be the subject of this type of action.  Where, an employee is aware of tax fraud by the employer, this may also be the subject of this type of case.

So what types of claims would be included in this type of case?

• Knowingly presenting (or causing to be presented) to the federal government a false or fraudulent claim for payment
• Knowingly using (or causing to be used) a false record or statement to get a claim paid by the federal government
• Conspiring with others to get a false or fraudulent claim paid by the federal government
• Knowingly using (or causing to be used) a false record or statement to conceal, avoid, or decrease an obligation to pay money or transmit property to the federal government.

So who can bring this type of suit?  Any persons or entities with evidence of fraud against federal programs or contracts may file a Qui tam lawsuit. If the government or a private party has already filed a False Claims Act lawsuit based on the same evidence as you, you cannot bring a lawsuit.

If you are successful with your claim, violators of the False Claims Act are liable for three times the dollar amount that the government is defrauded and civil penalties of $5,000 to $10,000 for each false claim.

And if the claim is successful, the payoff to the employee can be substantial.  A qui tam plaintiff can receive between 15 and 30 percent of the total recovery from the defendant, whether through a favorable judgment or settlement. However, to be eligible to recover money under the Act, you must file a qui tam lawsuit. Merely informing the government about the violation is not enough. You only receive an award if, and after, the government recovers money from the defendant as a result of your suit.

In addition, you can't be retaliated against for bringing complaints against your employer under the Federal False Claims Act.  Any employee who is discharged, demoted, harassed, or otherwise discriminated against because of lawful acts by the employee in furtherance of an action under the Act is entitled to all relief necessary to make the employee whole. Such relief may include reinstatement, back pay and damages.

If you believe you may have a qui tam case against your employer, make sure to consult with an employment law attorney familiar with these types of claims.  The law has many complicated provisions that you will need guidance on.