In 2017, False Claims Act (FCA) recoveries totaled more than $3.7 billion, down from more than $4.7 billion in total recoveries in 2016. More than $3.4 billion of the 2017 recoveries came from settlements and judgments in matters commenced under the qui tam provisions of the FCA, up from $2.9 billion in 2016. In contrast, recoveries in non-qui tam matters totaled $265 million, a significant decrease from the more than $1.8 billion in non-qui tam recoveries in 2016.
Industry specific data reflects recoveries holding steady for the healthcare industry at more than $2.4 billion (down from $2.6 billion in 2016), while recoveries in cases involving the defense industry nearly doubled to $219 million (up from $122 million in 2016), and were cut in half for all non-healthcare and non-defense industries at $1 billion (down from more than $2 billion in 2016). Whether these figures are reflective of enforcement trends or merely cyclical remains to be seen.
The Department of Justice under Attorney General Jeff Sessions early on expressed a commitment to root out fraud on government programs, but then trimmed its corporate strike force numbers, reigned in aggressive theories of recovery under the FCA by limiting reliance on agency "guidance documents" and expressed willingness to exercise with greater frequency its authority to seek dismissal of "meritless" qui tam claims.
Perhaps a factor in DOJ's evolving enforcement shift was the increasing trend of cases with outcomes favorable to the defense bar. Post-Escobar rulings applying the Supreme Court's "rigorous" and "demanding" materiality requirement resulted in major defense victories. So, too, have cases addressing the pleading requirements under Federal Rule of Civil Procedure 9(b), the "reverse false claims" doctrine, the causation element, the "public disclosure" and "first to file" bars, and whistleblower retaliation allegations largely favored of the defense.
Now, two months into 2018, a look ahead suggests the enforcement and jurisprudential trends may remain on their current trajectories.