Featured Expert Contributor, False Claims Act

Stephen_Wood_03032014Stephen A. Wood, Chuhak & Tecson, P.C.

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The False Claims Act’s qui tam provisions permit private persons or entities to bring suit in the name of the government against defendants who are claimed to have violated the law.  An action is commenced by filing a complaint under seal and serving upon the government “substantially all material evidence and information the person possesses.”  31 U.S.C. § 3730(b)(2).   Once filed, the government has 60 days to investigate the case.  Id.  At the end of its investigation, the government must make an election—either take over the case or decline to intervene.  31 U.S.C. § 3730(b)(4).  The government may also move to dismiss the action or attempt to settle with the defendant during this time period.  See 31 U.S.C. § 3730(c)(2).

Neither the statute itself nor the legislative history of the FCA contemplates that the government should have an indefinite period of time in which to investigate a potential False Claims Act violation.  Yet, that has been an unfortunate reality in many qui tam cases, where the proceedings have remained under seal at the request of the government for years.  This practice is not only contrary to the statutory language and legislative history, it is abusive and potentially threatens a defendant’s fundamental right to due process.  It is incumbent upon both courts and defendants to put a stop to this abuse and require the government to live within the statutory dictates and Congress’ stated intent.