ATTORNEY NEWSLETTER
Attorneys’ Fees In False Claims Cases
Fees In Addition To Claim Settlement
How Qui Tam Cases Work
Private citizens and businesses help the government recover billions every year in cases of fraud against the government. The private citizens and businesses assisted the government in recovering these funds by bringing civil lawsuits on behalf of the government under the False Claims Act, (“FCA”), 31 U.S.C. § 3729 et seq. The private individuals or businesses bringing the actions are known as “relators,” and the cases themselves referred to as “qui tam” cases. If the government recovers, the relators are eligible for rewards. 31 U.S.C. § 3730(d). Attorneys’ fees and expenses are mandatory for relators who successfully recover funds for the government. 31 U.S.C. § 3730(d)(1). Relators of fraudulent conduct are often employees, accountants, controllers or managers, or former employees or managers, or competitors of the business engaging in the fraud. If you have credible information of fraud against the government in violation of the FCA in San Francisco or elsewhere in California, call us today at (415)441-8669 and we can help. Our toll-free number is 1-888-50EVANS (888-503-8267).
Attorneys’ Fees Case[1]
In late March 2023, the former owner of a chain of ophthalmology practices, agreed to pay $1.1 million to the U.S. Department of Justice to settle false claims act allegations. This case arose from a qui tam complaint brought by two whistleblowers alleging that over a five-year period, defendant had paid kickbacks to optometrists to induce referrals for patients for cataract surgeries. The settlement included a non-admission clause, denying liability and disputing the relators’ entitlement to attorneys’ fees, and the court entered a Stipulation of Partial Dismissal and Consent to Dismissal on Behalf of the United States shortly thereafter.
However, the relators then filed a motion for attorneys’ fees and costs which kicked off a series of motions, additional discovery, a referral to a magistrate judge, and a number of hearings and oral arguments. After an additional year of litigation, the court partially granted relators’ motion for attorney’s fees and costs, ultimately awarding over $400,000 to relators over defendant’s objections. The court applied the “lodestar” approach to determine a reasonable amount for fees, considering the hourly rates and the number of hours reasonably expended on the litigation.
This decision demonstrates the court’s discretion in awarding attorneys’ fees in qui tam actions brought under the False Claims Act. Perhaps more importantly, it also underscores the reality that an FCA defendant’s exposure is never simply limited to the settlement payment; rather, defendants are also responsible for reasonable attorney’s fees.
How Qui Tam Actions Work
Any False Claims Act whistleblower case begins by a relator filing a complaint under seal in the federal court usually for the United States District Court for the district where defendant is located or does business. At the same time, the relator submits a disclosure to the DOJ outlining the material evidence the relator has of the alleged false claims. 31 U.S.C. § 3730(b). The seal period of the complaint lasts 60 days during which the DOJ investigates the claims. 31 U.S.C. § 3730(b)(2). (If necessary, the government can, and often does, extend the 60-day period during which the allegations are kept under seal.) If the government decides to intervene in the case, the government essentially takes over the litigation. 31 U.S.C. § 3730(c)(1). If the government declines to intervene, the relator may proceed with the litigation on his or her own. 31 U.S.C. § 3730(c)(3).
Contact Us
If you have credible information of government fraud in San Francisco or elsewhere in California, call Ingrid M. Evans at (415) 441-8669, or toll-free at 1-888-50EVANS (888-503-8267) or by email at <a href=”mailto:info@evanslaw.com”>info@evanslaw.com</a>. In addition to FCA and CFCA whistleblower cases, Ingrid and Evans Law Firm, Inc. also handle bank fraud whistleblower cases under FIRREA/FIAFEA, commodity trading and securities fraud under the Commodities Futures Trading Commission Whistleblower Program and the Securities and Exchange Commission Whistleblower Program, and tax fraud under the Internal Revenue Service Whistleblower Program.
[1] Evans Law Firm, Inc. was not involved in the reported case in any way.
