A pair of recent victories by defendants in False Claims Act lawsuits demonstrates the importance of speaking up quickly for whistleblowers who wish to share in fraud enforcement action recoveries.
Two companies, PharMerica and Biotronik, both came out victorious in FCA lawsuits filed by whistleblowers that contained somewhat overlapping allegations with previously filed FCA lawsuits. The whistleblowers in both cases were company insiders.
The Department of Justice had intervened and settled in the previous FCA suits related to these cases, which barred any subsequent whistleblower lawsuits involving similar fraud allegations. These rules even apply to cases in which the whistleblowers made allegations concerning which the Justice Department did not previously intervene, because the government already had become a party to the previous suit.
Under federal laws, there is a “first-to-file” bar that limits any subsequent FCA lawsuits containing similar allegations to those of previous allegations. In 2015, the United States Supreme Court ruled the bar does not apply to second actions raising similar allegations if the original FCA lawsuit was either dismissed or is no longer pending. However, PharMerica and Biotronik both settled in their previous lawsuits (for $31.5 million and $4.9 million, respectively). This meant they did not fall into the category of the exception identified by the Supreme Court in that ruling.
Therefore, if you are aware of wrongdoing within your company and hope to be able to earn awards in a False Claims Act lawsuit, it is important you come forward with the information as soon as possible so you can clear the “first to file” bar.
For more information on filing a False Claims Act lawsuit, work with a skilled Dallas whistleblower attorney at Whistleblower Law for Managers.