Introduction

Under the False Claims Amendments Act of 1986, the qui tam relator can receive between 15%-25% of a government claim. The exact amount depends on how much the relator contributed to the prosecution.  The recent settlement between GlaxoSmithKline (GSK) and the United States Department of Justice (DoJ) has brought to light the importance of qui tam relators (whistleblowers) in government investigations.

Background

Without the information provided by the relator, DoJ would not have evidence against GSK. Greg Thorpe, the main relator, was a former GSK employee who worked for the company for many years. On numerous occasions he asked the company to change its practices without success. Since his warnings were disregarded, he brought his concerns to the government and an investigation was started. Today, 11 years later, he expects to receive a percentage of the $3 billion settlement.

Issue

Will the GSK settlement produce opportunistic qui tam relators looking for similar results?

Rule

In order to have opportunistic qui tam relators, the following are needed:

  • The possible rewards for bringing a suit forward are high
  • The consequences for producing immaterial or insufficient evidence are low

Analysis

As seen in the GSK case, the possible rewards for being a whistleblower under the False Claims Act are high. The law firm of Phillips and Cohen states that their clients will receive a combined $1.5 billion of the GSK settlement. The Baum, Hedlund, Aristei, and Goldman law firm has whistleblower clients who will be getting $96 million from a faulty manufacturing lawsuit. Whistleblowers in Minnesota are to receive $1.5 million in a pharmacy fraud case. There are many similar examples that show how being a whistleblower can be quite lucrative under the False Claims Amendments Act.

The consequences for producing immaterial or insufficient evidence against companies are low. For example, Bryan Sandager filed all the whistleblower paperwork with the government against Dell Marketing using information previously submitted by a different relator. His claim was later dismissed and he did not receive any punishment. However, the legal team for Dell Marketing still had to defend their client. Since the whistleblowers are plaintiffs, and are not charged for representation unless there is a settlement, they do not have anything to lose. The defendants do not have the same luxury. They need to spend large amounts of time and money to defend themselves, even if the allegations are not legitimate.

Conclusion

The advantages given to whistleblowers by the False Claims Act have created a culture of opportunistic qui tam relators.

For more information, contact the Kulkarni Law Firm.