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Posts from Joshua Newville, a Minnesota employment lawyer, civil rights attorney, and mediator.

Fed Court: Government Can Use Sample Evidence in Whistleblower Case

The False Claims Act exists to incentivize whistleblowing in areas such as Medicare fraud. Qui tam whistleblowers (known as “relators”) who bring the government’s attention to fraudulent practices of their employers or other institutions, are rewarded with a percentage of the recovery ranging from 15-30%. Proving the extent of a fraudulent practice can prove difficult, especially when employers go to great lengths to hide those practices.

Yesterday, in a win for whistleblowers and the U.S. government, a federal judge in Tennessee declared that government can extrapolate from a small sample of billing statements to show a significant amount of Medicare fraud.

The decision was especially important because there is relatively little case law on the question of whether extrapolation is an appropriate practice pursuant to the False Claims Act.  The judge ruled that, “[t]he purpose of the FCA, as well as the development and expansion of government programs as to which it may be employed, support the use of statistical sampling in complex FCA actions where a claim-by-claim review is impracticable,” and added, “[i]f Congress intended to preclude statistical sampling from being used in this context, it has had ample opportunity to have that intention reflected in the language of the FCA.”

The court’s ruling is good news for employees blowing the whistle on the practices of their employers that are defrauding state and federal governments. For one, it means the government is more likely to intervene. The government has several options when dealing with FCA cases:

1) intervene in one or more counts of the pending qui tam action. This intervention expresses the Government’s intention to participate as a plaintiff in prosecuting that count of the complaint. Fewer than 25% of filed qui tam actions result in an intervention on any count by the Department of Justice. 2) decline to intervene in one or all counts of the pending qui tam action. If the United States declines to intervene, the relator and his or her attorney may prosecute the action on behalf of the United States, but the United States is not a party to the proceedings apart from its right to any recovery. This option is frequently used by relators and their attorneys. 3) move to dismiss the relator’s complaint, either because there is no case, or the case conflicts with significant statutory or policy interests of the United States. 4) settle the pending qui tam action with the defendant prior to the intervention decision. This usually, but not always, results in a simultaneous intervention and settlement with the Department of Justice (and is included in the 25% intervention rate). 5) advise the relator that the Department of Justice intends to decline intervention. This usually, but not always, results in dismissal of the qui tam action.

One reason the government declines intervention has to do with the overall amount of Medicare dollars involved in the suit. Similarly, one reason attorneys representing the relators may decline to continue prosecuting the action after the government refuses intervention might be the overall amount of damages involved in the lawsuit.

Especially in cases where the latter assessment is made based on the limited data available to whistleblowers, yesterday’s ruling gives their attorneys reason to look more closely at that data before declining to prosecute non-intervention FCA cases.

Qui tam whistleblowers are often concerned about retaliation by their employers as a result of their whistleblowing. However, the False Claims Act does offer protection to its whistleblowers, in three ways.

First, the FCA has an anti-retaliation provision. Under this provision, an employer may not discharge, demote, suspend, threaten, harass or discriminate against an employee for bringing a qui tam case under the Act. If the employer violates that prohibition, the employee can then sue the employer for damages (such as lost wages) and other relief.

Second, when a qui tam case is filed, it is filed “under seal.” This means that, at least at the time of filing, an employee’s identity is kept a secret from the public. On average, the “seal period” last about 18 months. While the case does typically become public after the seal is lifted, the seal period gives whistleblowers some amount of time to plan for their future if they fear retaliation from their employer. In addition, at least in some cases, the courts can be persuaded to keep a qui tam whistleblower’s identity a secret even after the seal period has passed.

Third, the Act provides for substantial monetary awards for whistleblowers, which can then provide them with an economic cushion, should they need it.

Interestingly, though, qui tam whistleblowers are rarely motivated by the prospect of the recovery alone. Often, they are loyal employees, who turn to qui tam lawsuits only as a last resort: as a way to be heard, and to protect their fellow taxpayers. These qui tam whistleblowers tend to be very brave, principled people, that we as qui tam attorneys are honored to represent. We understand the risks that whistleblowers take when they stand up to their employers or other powerful interests, and we work aggressively to protect our client’s rights.

If you have information concerning a potential qui tam whistleblower case, do not hesitate to take action—you might be able to bring your own whistleblower suit under the False Claims Act. If you would like to consult with us about your potential qui tam case, please contact us today.


Joshua Newville is an attorney and mediator based in Minnesota. He litigates employment and civil rights cases, serves as a mediator for civil disputes, and provides employment law advice.


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