In an opinion last week, Judge Sullivan concluded that the False Claims Act did not allow a “relator” (a private citizen suing on behalf of the government for fraud against the government) who voluntarily dismissed his case to share in the proceeds from a case that the government later filed on its own.
The False Claim Act states that, when a relator brings a claim, the government may choose whether to intervene and take over the case, or may “may elect to pursue its claim through any alternate remedy available,” and in either case the relator should typically share in the recovery. The relator argued that the government’s separate litigation was an “alternate remedy,” but Judge Sullivan, while acknowledging the issue was one of first impression in the Second Circuit, disagreed:
Section 3730(c)(5) governs the relator’s rights when the government “elect[s] to pursue its claim through any alternate remedy,” 31 U.S.C. § 3730(c)(5) – that is, an “alternate” to the remedies set forth in Section 3730(b)(4), which are limited to (a) intervening and “proceed[ing] with the [qui tam] action” or (b) “declin[ing] to take over the action” and providing the relator with “the right to conduct the action,” 31 U.S.C. § 3730(b)(4). The implication of this framework is clear: when there is no qui tam action for the government to “take over,” the government’s filing of its own action is not an “alternate” to taking over (or not taking over) a qui tam action.