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So you want to be a whistleblower? Part III

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John Thomas

John Thomas

This is the third and final article in a series by John R. Thomas, Jr., a lawyer at Gentry Locke who represents whistleblowers in a variety of False Claims Act cases.  His first article discussed the background of the False Claims Act (“FCA”) and how it might apply to scientific misconduct, and his second article provided advice on how to know if you have a viable FCA case. In this installment, he writes about the procedure for bringing an FCA case and how the damages and whistleblower’s share are calculated.

Suppose you are a potential whistleblower. You believe that your PI is manipulating data in publications. You suspect that a fellow lab technician is tampering with experiments. You are a PI who knows that your colleague is “double dipping” on Federal grants. What should you do?

As a practical matter, the first step for someone aware of potential scientific fraud is to seek qualified counsel, which is discussed in more detail below.

To bring a case under the FCA, the whistleblower (also called the “relator”) and her counsel must carefully assemble and analyze all the facts relating to the scientific research misconduct.  Keeping in mind what must be proven in an FCA case (that someone knowingly submitted a false statement to the government for payment or knowingly created a false record material to a claim), the relator and her attorney must analyze what is false, why it is false, and what is the claim for payment to the government.  (I discussed this in more detail in my second article.)

The whistleblower and their attorney will next prepare two documents: a material disclosure statement and a complaint.  The material disclosure statement is a document that the whistleblower provides to the government that outlines all the facts of the case.  Any relevant documents or other materials should be attached to the disclosure statement as well.

The complaint is the legal document that initiates the FCA lawsuit.  The relator files this complaint under seal in Federal court, and only the government receives a copy.  The complaint remains under seal until the government decides whether to “intervene” in the case.

Once the disclosure statement is provided to the government and the complaint is filed, the government has 60 days to investigate the case.  The government may ask the court for more time, which is often granted.  During this investigation phase, which can last several years, the relator and his attorneys should cooperate with the government and help them to understand the case and develop investigatory leads.  While this close working relationship between the relator and the government exists in most FCA cases, it is particularly necessary in complex cases such as scientific research misconduct cases.

Next, the government will decide whether to “intervene.”  If the government intervenes, it takes control of the case, files an intervention complaint, serves the lawsuit on the defendant, and moves forward with litigation.  If you are the relator, this is very good news — in cases where the government intervenes, it “wins” 95% of the time, mostly ending in a favorable settlement.  If the government declines to intervene, the relator may pursue the case on his own, but he faces an uphill battle, with a success rate of approximately 5% from 1986 to 2010.  (Relators’ success rates in declined cases have improved slightly in recent years, however.)

Once the case is in active litigation, it will look more like a normal civil lawsuit – with the normal discovery process, motions for summary judgment, and eventually trial.  Most FCA cases settle. One key aspect of this process is determining what money the government should recover, and the relator’s share.

In the context of grants, case law is clear: The amount that the government is entitled to recover at trial is the full amount of the grant award trebled (tripled).  The government is also entitled to civil penalties of $5,500 to $11,000 per false claim.  In an FCA settlement, the government is free to depart downward from the treble “multiplier,” and may forego civil penalties, but will nonetheless usually require the doubling of the total grant amount.

At the conclusion of an FCA qui tam case, the relator is entitled to a share of the government recovery.  In cases where the government intervenes, the relator is entitled to a share of 15 – 25% of the government recovery, along with their attorneys’ fees and costs.  If the government did not intervene in the case and relator succeeds in obtaining a recovery for the government, the relator share is 25 – 30%, along with statutory attorneys’ fees and costs.  The court will ultimately select the appropriate relator share after taking into account a variety of factors, such as the amount of assistance that the relator provided the government, whether or not the government would have ever discovered the fraud without the relator, and the degree to which the relator is innocent of any wrongdoing in the fraud, along with a several other factors.  The court will also order the defendant to pay reasonable attorneys’ fees and costs of the relator.

Looking at our article series as a whole, what are the key takeaways for potential whistleblowers?

First, potential whistleblowers should be on the lookout for the irrefutable signs of a valid case:  Are research results being presented in an objectively false manner?  Are research results being fabricated?  Who else knows this?  Are Federal research grants involved?

If that crucial checklist is present, a potential whistleblower should seek qualified counsel. The FCA is a highly specialized area – not all attorneys will have even heard of it – so it is very important for a potential whistleblower to choose their counsel carefully. Attorneys familiar with this area will help a potential whistleblower navigate the many issues involved, such as verifying that actionable research misconduct or grant fraud exists, protecting the whistleblower against retaliation, avoiding any personal liability in the research misconduct themselves, and evaluating the proper way to report the misconduct (internally vs. externally). An attorney will also help determine if the FCA is the best way to pursue the misconduct case.

Finally, a potential whistleblower must understand what is involved in reporting research misconduct, either through a qui tam lawsuit or any other channel.  A whistleblower will not be able to simply make a complaint and walk away.  To see the matter through, a whistleblower will need to assist the investigators to understand the problem and get to the truth.  Sometimes whistleblowers suffer retaliation as a result of bringing research misconduct to light.  While being a qui tam relator can offer significant financial benefit to relators, such cases are long and arduous.  All that being said, most scientists understand that it is vital for the integrity of scientific research and human safety that research misconduct be addressed.  As Marcus Tullius Cicero once stated in a passage that seems particularly appropriate here:

The Intellect engages us in the pursuit of Truth.  The Passions impel us to Action.

John R. Thomas, Jr., leads the Qui Tam Relator Practice at Gentry Locke in Virginia. He is the Chair of the Federal Bar Association Qui Tam Section and represents whistleblowers in a variety of False Claims Act cases. He can be reached at jthomas@gentrylocke.com.

Written by Alison McCook

October 8th, 2015 at 2:30 pm

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