Tuesday, March 13, 2012

Insights from a Qui Tam Plaintiff's Lawyer

In a recent interview with Corporate Crime Reporter, qui tam attorney Joseph E.B. "Jeb" White of the firm Nolan & Auerbach, P.A. described what kind of plaintiff/relator cases his firm is interested in and, more importantly, the kinds of cases in which the government will intervene.

White says that the government does not want "low hanging fruit.  They want boxed fruit."  He notes that the government intervenes in "only about 25 percent" of False Claims Act (FCA) cases, and due to "tightening budgets," the government's approach to taking FCA cases is changing.  Increasingly, the government delays its decision to intervene because "sometimes the case simply isn't ready.  The relator hasn't fully flushed out the allegations sufficiently for the government to intervene."  Moreover, courts frequently "pressure the government to make up its mind before the government is ready to make up its mind."  These pressures, he says, lead the government to often say in qui tam cases that they are "not intervening at this time" but nevertheless "signaling to the relator's lawyer" to keep the case alive because they government is "going to come back later."  While it may not be able to investigate or intervene in a case due to a lack of resources, says White, the government encourages relators to "move forward" with meritorious cases, letting the relator use what may be his or her superior resources to develop the case further.  In short, the government, White explains, often declines, but in doing so it frequently indicates to the relator to "pick up the ball and move it forward for us."

White's firm, Nolan & Auerbach, only does FCA cases on behalf of relators.  He says the firm takes roughly one in ten FCA cases, and that they can only bring a "handful of cases in any given year."  White states that when his firm brings a case to the government, they want the government to have "some level of confidence" that the case has been "fully vetted."  In considering whether to take a case, White explains that the firm is looking for several things: (1) "evidence of systematic fraud" as opposed to just some "rogue employee," hopefully involving a "scheme from the top of the company;" (2) a "credible witness" who can withstand scrutiny at trial; and (3) whether there are "common road blocks," such as the public disclosure bar.

White estimates that there are 100 FCA cases every year, of which "five of them are blockbusters."  He estimates that the remaining "95 settle for about $10 million each," and that the average whistleblower award is around 16.2 percent.

The entire interview is at 26 Corporate Crime Reporter 8, February 20, 2012 print edition.

A. Brian Albritton

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