As False Claim Penalties Mount, Defendants Scramble for Answers Qui Tam Liability, 31 U.S.C. § 3729 et seq

Claims against those who defraud the Federal Government particularly in the health care industry are on the rise. Whistleblowers are using the False Claims Act to reap windfall benefits by filing suit on behalf of both themselves and the government against the wrongdoers. Payouts in such cases frequently exceed $ 1 million, fueling an explosion in the number of whistleblower suits. This article discusses a number of issues critical to the question of recovery under the False Claims Act. Among these are determining which parties have standing to bring suit and conversely which potential defendants are immune from suit. Also discussed are the elements that a false claim must possess in order to be actionable, how the number of false claims an individual defendant has filed should be counted, and when the civil penalties associated with the cumulative number of claims becomes an unconstitutionally excessive fine. Finally, the potential jurisdictional bar to a plaintiffs suit is considered with special emphasis given to the application of the "original source" element of that bar.