The FCA Complaint – There’s an art to it

best quizzical dogEvery once in a while, I get called to consult/advise – whatever you want to call it – on a wrongful termination case for defense.  DEFENSE!?! I know, right?  Me and defense counsel getting together is almost always a recipe for mayhem.

Almost always.

The one exception is when I am asked to take a look at another attorney’s False Claims action.  The FCA complaint requires a diverse, and not easily replicated, set of skills.  The relator’s complaint in a False Claims case has a lot of goals to accomplish.  It has to cover the relator’s claims for the life span of the investigation and government litigation.  They tend to evolve. The complaint has to demonstrate to government prosecutors why they should invest time and money in the investigation.  It has to look like a “fully baked cake” of fraud allegations and damage estimates, even when the relator does not and cannot find out all the information she needs to fully understand how the scheme impacts government funds.  And, in my world, it has to be bold in terms of advancing the Fraud Enforcement Recovery Act.  I focus on finance industry claims; health care cases enjoy almost thirty years of FCA law.  The finance industry is a new target for FCA actions.  I spin arguments that have never been spun before.  It’s new territory for FCAs.

So, when I look at someone else’s FCA claim, I am intrigued to see what counsel is trying to accomplish.  Is it simply a wrongful termination action dressed up with a False Claims Act reference?  Does it advance anti-fraud efforts by articulating a new fraud mechanism?  Is it one of those “bread and butter” pharma off label marketing cases? Was it written by a TAF (Taxpayers Against Fraud) member?  Which one?  Did counsel satisfy FRCP 9(b)?  How?  Which counts were pled?  Did counsel run it as a tandem federal/state filing?  Does it target an individual or a closely held corporation or a public corp?  What are the underlying violations?  Which court is it in? And most important, is there anything here that  might be something I want to consider snatching for my complaints?

Usually, I get invited by defense to look at a wrongful termination action that is dressed up with a False Claims Act reference, usually a 31 USC 3730(h) count.  The “h” claim, as I like to call it, is one small, itty bitty part of the federal False Claims Act.  I was looking at one such animal recently and had a million questions because it was not drafted by an experienced qui tam attorney.  Drafting counsel used unorthodox terminology, so I was not entirely sure what he was trying to say.  For example, he said the relator “applied” to be a qui tam relator.  “Applied”? In the world of FCA claims, one does not “apply” to be a qui tam relator.  What could counsel have meant??? Did the relator share information with some branch of the federal government?  How? Was there a formal disclosure? To DOJ? To Eric Holder??  Little misusages of terminology, like this one, signal the presence of inexperienced counsel, at least for an FCA action.  It’s not something that will be apparent to a relator, or even to most attorneys.  Sure enough, when I checked into drafting counsel, I found he was an experienced employment attorney with no significant FCA experience.  He may have prevailed on an h count somewhere along the way, but I can tell just by laying eyes on the complaint, this is not an FCA heavy hitter.

So what came next was no surprise.  The complaint went down in flames on a motion to dismiss in federal court.  A tenacious fellow, drafting counsel next morphed the same set of facts into a state complaint, with wrongful termination as the leading count. The state case also failed, and I am sure it hemorrhaged money all along the way.

I’m a plaintiff’s attorney, through and through, and when I see claims like this, I get concerned about how such cases benefit future defendants and current fraudsters.  In this situation, I was unconcerned about the death of the FCA action because the allegations did not seem to have any merit, but sometimes, I am horrified when a poorly drafted FCA complaint dies a premature death.  I’ve seen instances where the relator has worked very, very hard to expose an important, sometimes deadly, fraud scheme, only to have the fraud investigation short circuited because an employment attorney decided to handle the case like a wrongful termination action dressed in False Claims Act clothing.  Not good for anyone – not the government, not the public, and not the whistleblower.

Anyhow, this is one of the few times when you will find me having a good time with defense counsel.  It’s fun and helpful for me to see how John Q. Attorney is working an FCA action.  I tend to forget how newcomers react to the False Claims Act; I work qui tam almost exclusively, and its quirks and nuances are things I accept without much thought.  My occasional defense buddies are usually relieved because I typically report that the qui tam is easily defeated.  Ah, well.  I always try to protect relators from the problems of filing a lousy FCA complaint, but they are headstrong.  What can I say?  Relators, use inexperienced FCA counsel at your own peril.  There’s a lot involved in FCA actions that they don’t teach you in law school.

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