The Government is looking for whistleblowers with easy-to-prove cases worth
lots of money. Doubt it? Check out my recent blog series on the
Top 10 Ways to Make the Government Love Your Whistleblower Case.
But just how big does your case have to be for the Government to think
it is worth taking? Even more specifically, how do
you know whether
your whistleblower case is big enough to attract the Government’s attention?
The Amount the Government Says It Wants
I have heard many US attorneys say, straight up, that they are not interested
in cases where the single damages are less than a million dollars.
(“Single damages” is an odd-sounding term, but easy to understand.
Under the False Claims Act, a wrongdoer has to pay the Government back
three times as much as the wrongdoer stole. When a U.S. Attorney says
he is looking for a million dollars in “single damages”, he
means that the damages have to be a million dollars
before they are trebled.)
The Amount the Government Really Wants
While a million dollars may be a start, based on my experience as a lawyer
representing whistleblowers, I think many of the U.S. Attorney’s
offices are looking for cases worth a good deal more, and the statistics
bear out what I have experienced.
In 2015, the Government settled or resolved 153 qui tam cases. The smallest
lawsuit settled for $62,349 and the biggest for $495,000,000. (Ironically,
the Government refused to intervene in the largest case of all).
If you line up the cases in order of size, the case in the approximate
middle (the mean) is case number 77 of the 153 that settled. Case number
77 resolved for $4,000,000. In other words, in 2015, half the qui tam
cases resolved for more than $4,000,000 and half resolved for less. With
that experience, it makes sense that the Government is going to be on
the hunt for cases that at least hit the average value of $4,000,000.
And in fact, the real “magic number” could be even higher.
One of my mentors once told me, “When you file your case, that’s
the biggest the case is ever going to get. From then on, it gets smaller.”
When a whistleblower files a suit, he has only pieces of the information.
As the case develops, the Government will probe into the details of the
claims and the defendant will raise defenses. A defense contractor may
show that it had fewer employees who were overbilling than the whistleblower
thought, or a hospital may bring up evidence that even though it did submit
false claims, Medicare denied a percentage of those claims.
$4,000,000, then, is the mean value of the settlements
after the defendants had a chance to chip away at the amount. The Government
and the whistleblowers very likely thought the cases were worth more at
Do Smaller Cases Have a Chance?
Smaller cases may still have a chance, especially where three factors are involved:
I have heard numerous Assistant United States Attorneys say that they are
interested in cases that have a smaller dollar value if they can help
stop “human harm.”
- The Government is not a monolithic entity, and the different U.S. Attorneys’
offices operate independently to a large extent. DOJ has the right to
get involved, but generally leaves the smaller cases to the local office.
United States’ Attorneys who live in jurisdictions that have not
been heavily involved in False Claims Act cases in the past may take smaller
cases as they ramp up, in order to send a message that they are in business
and serious about recouping money stolen from the Government by fraud.
- The Government is motivated to resolve cases where the fraud is ongoing,
because the Government stands to lose even more money over time.