Qui Tam Actions Seminar Paper

5679 Words Jun 8th, 2013 23 Pages
SNITCHING FOR RICHES: WHISTLEBLOWER BOUNTIES AND THE $96 MILLION CHERYL ECKARD SETTLEMENT

Introduction Bounties have been employed by United States government over the history of our Nation. As differentiated from rewards, which offer payment for accomplishment of a specific act such as providing information that leads to the capture of a particular criminal, bounties are tailored to encourage the services or actions by some class of persons in pursuance of a governmental purpose. One of the earliest examples in the United States is the grant of bounty land grants during both the Revolutionary War and Civil War. For the purpose of encouraging longer military service, this bounty system would offer land to men fit for service in return
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The FCA enforces this statute, in part, by allowing a private person, typically an employee or other agent of the violator with particular knowledge of a violation, to bring suit on behalf of the government, otherwise known as a qui tam action. This qui tam plaintiff, referred to as a relator, is entitled to a bounty between 15% and 25% of the settlement amount in the situation where the government proceeds with the action brought by the relator. In the case where the government doesn’t proceed with the action, the relator is entitled to between 25% and 30% of the settlement amount.
Traditionally there was a bar that limited a relator from bringing a qui tam action under the FCA and thus being qualified to receive any whistleblower bounty resulting from the settlement. The bar was basically two-fold. The allegations or transactions underlying the action cannot have been publicly disclosed, unless the relator was the original source of the information. Prior to amendment in 2010, this bar required the court to dismiss the action if the allegations had been public disclosed or the relator was not the original source of the information, which resulted in this becoming the primary defense in FCA actions. However, with amendment in 2010, the power to dismiss was effectively shifted from the court to the government with the addition of the language “unless opposed by the Government”.