Calculating the Relator's Share: US ex rel Shea v. Verizon Communications, Inc.

A new blog began last month that is devoted to the False Claims Act, "The Original Source:  The Sidley Austin False Claims Act Blog."  They have done a number good blog articles in the short time they have been publishing.

I wanted to commend their recent blog discussion of US ex rel Shea v. Verizon Communications, No. 07-111(GK) (D.D.C. Feb. 23, 2012), 2012 U.S. Dist. LEXIS 22776.  This very interesting case discusses the criteria for awarding the relator a share of a False Claims Act award and the key contributions that a relator can make to the investigation and resolution of a qui tam.  As the Sidley Blog points out, the case highlights a number of contributions by the relator and his counsel that were instrumental to the success of the Government's case.  For example, the Court notes that the relator "directed the Government to focus" on two surcharges of the defendant, "thereby enabling the Government to save enormous amounts of lawyer time, auditor time, and staff time."  In another instance, the Government solicited the relator to prepare a legal memo explaining why "each surcharge" was prohibited by the applicable law and to rank the surcharges for investigation.  The opinion goes on that the relator assisted the Government in drafting subpoenas; identified witnesses; and "participated fully in all aspects of the Government's investigation and settlement" and devoted "hundreds of hours each year on the case."   This informative case summarizes the elements and contributions for determining the relator's share of an award.

Notwithstanding the relator's contributions to the case as outlined by the Court, the Government opposed awarding the relator anything more than 16% of the award, or only 1% more than the minimum to which the relator was entitled.  The Court criticized the Government for making a "profoundly unfair characterization of the nature and extent" of the contributions of the relator and his counsel and for arguing that the relator's "share of the proceeds depends upon the extent of the [relator's] contribution the case rather than the contribution of his counsel." The Court observed that case law does not base the relator's contribution on just what he or she individually contributed, finding than the "relator should be compensated for all of the ways in which his investment of time, resources, information, and assistance contributed to the Government's recovery." In the end, the Court ruled in favor of the relator, awarding him 20% of the lions share of the recovery.

A. Brian Albritton
3/6/12