In a previous post we wrote about why the Justice Department sometimes declines whistleblower cases. That post, “My Government Whistleblower Case Was Declined, Now What?” describes in great detail the steps one can take to resurrect a case that has been declined by the government. Not only is it possible to resurrect a declined case, whistleblowers and their lawyers have made tens of millions of dollars from these cases.
This post discusses the difference between a declined and intervened cases. We are writing this post after a reader asked what does it mean when the government “intervenes.” Great question.
First a tiny bit of history. The False Claims Act was enacted during the U.S. Civil War. Back then, the government was broke. All resources were diverted to support the Union Army and the war against the break-away Confederate states. The Justice Department simply didn’t have the money or personnel to pursue fraud claims.
Back then, dishonest vendors were selling the Union Army bad wagons, lame mules and gunpowder that wouldn’t ignite. President Abraham Lincoln and Congress had the ingenious idea to allow private citizens to file claims on behalf of the United States. The government then had the opportunity to either take over the case (intervene) or allow the whistleblower’s lawyer to continue the prosecute.
Fast forward to the 21st century and this system has not changed much. When the government takes over prosecution, it is said to have intervened. The term “intervened cases” therefore means cases that the Justice Department has decided to prosecute.
Let’s discuss what this means.
When a case is initially filed, the government is given the exclusive ability to investigate. False Claims Act cases are filed under seal meaning they secret. While the case remains under seal, the government will likely ask for one or more meetings with the whistleblower (called a relator). During those meetings, the prosecutor assigned to the case and often one or more special agents or auditors will also attend. The whistleblower and her lawyer will also be present.
The initial meeting is the opportunity for the government to meet the relator and ask general questions, determine strengths and weaknesses in the case, identify potential witnesses and examine any evidence the relator may have.
Subsequent meetings are often to review evidence and ask follow up questions.
While the government is investigating, the case is usually sealed and the whistleblower and his or her lawyer are restricted to active listening. We cannot subpoena records, interview witnesses or engage in our own investigation. Although the government may be investigating, it has not yet intervened.
Intervention occurs when the government decides to unseal the case and adopt it as their own. That generally means they retain exclusive control of the case. Intervention is a formal process in which the Justice Department notifies the court that it is adopting the case.
If the government intervenes early in the case, the whistleblower receives between 15% and 25% of any recovery. The whistleblower’s recovery is much higher in declined cases.
Next Steps in Intervened Cases
When the government intervenes, many cases immediately settle. Because the False Claims Act allows tripe damages and additional civil penalties, many defendants simply decide to settle in the hopes of getting a better deal. Much like criminal defendants will negotiate a plea bargain with prosecutors, defendants in whistleblower cases usually do the same.
Defendants know that taking a case to trial and losing almost always means the maximum penalties will be imposed. Defendants also know that the government has deep pockets and significant resources at its disposal.
A final reason so many intervened cases settle is the government’s ability to bar the defendant from further government contracts or participation in government programs. A hospital that can’t accept Medicare or a mortgage company that can’t write federally backed residential mortgages is probably going out of business.
If the case doesn’t settle, the complaint is served on the defendant and the court process begins. (In the typical lawsuit, the defendant is served the complaint immediately after the lawsuit is filed. In False Claims Act the lawsuit isn’t served until the Justice Department decides whether to intervene or decline.)
As we have previously stated in other posts, the percentage of intervened cases is roughly 20%.
Intervention is Often Dependent on Having the Best Whistleblower Lawyer
Although we have prosecuted declined cases, many lawyers simply walk away. They just don’t have the resources to prosecute a large hospital chain, bank or defense contractor. While the government does sometimes lose cases, the best shot at a recovery is getting the government to intervene. That means choosing the best lawyer possible.
There are roughly 700 False Claims Act whistleblower cases filed each year. In a country where tens of thousands of claims are filed each month, 700 per year distributed across the entire country is a small number. The prosecutors that handle these cases know the full time whistleblower lawyers that file these cases. Knowing the best places to file and what prosecutors are looking for are key to having the government intervene.
MahanyLaw – Experienced Whistleblower Lawyers
Having a good lawyer who knows what the government is looking for often means the difference between intervention and a declined case. We see many lawyers with little or no experience filing these cases each year. Those folks are often looking for a quick buck and simply hoping the government will intervene. (Hint: Always ask if your lawyer is a member of the Taxpayers Against Fraud. Although membership in the whistleblower bar association doesn’t mean that these lawyers are better, it is certainly a good indication of their experience and commitment to whistleblowers.)
If you are seeking a whistleblower lawyer, always ask if they have prosecuted declined claims and how many cases they have handled. Because so few are filed, don’t expect anyone to say “hundreds” but be wary of those that say one or none.
For more information, visit our whistleblower FAQ page. Please feel free to give us a call too. We never charge for consultations and never charge for legal fees or costs unless we first recover money for you. We have handled dozens of cases from start to finish. Chances are we know the answer to your question. (And remember, there is no such thing as a stupid question.)
For more information, contact attorney Brian Mahany at or by phone at (direct). All calls are protected by the attorney – client privilege and always kept confidential. (Please don’t call from a work phone, email address computer!)