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Jan 10, 2024 by |

Los Angeles Whistleblower Attorney: Court Denies Relator’s Objection To False Claim Act Settlement


Roles Of Whistleblower And Government 

Recent Central District of California Opinion

Basic Of False Claims Cases

Citizens help the government recover 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 in these 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).   Relators received over $488 million in rewards during Fiscal Year 2022, and multiple large rewards have been made in 2023.  Once the government enters a case, however, the government is in charge, and, as a recent opinion indicates, a settlement approved by the government may proceed even over the relator’s objections.  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).

Recent Decision[1]

In 2015, a relator filed a qui tam lawsuit against California nursing homes that allegedly engaged in a kickback scheme, and the United States intervened in June 2021 after a lengthy investigation. The settlement included a consent judgment for over $45 million, payment schedules, and limitations on enforcement against the defendants. Relator objected to the settlement agreement on the basis that it was not fair, adequate, and reasonable. The relator requested and was granted a fairness hearing under 31 U.S.C. 3730(c)(2)(B), which permits the government to settle an action notwithstanding objections after a court evaluates, at a hearing, whether the “proposed settlement is fair, adequate, and reasonable under all the circumstances.” The relator sought discovery in addition to the hearing, but the court denied the request to take further discovery.

Relator argued that the actual payments the government expected to receive under the payment plans were too small and would be insufficient to cover the relator’s attorneys’ fees. 28 C.F.R. 0.160(a)(2) authorizes the government to “[a]ccept offers in compromise of claims asserted by the United States in all cases in which a qualified financial expert has determined that the offer in compromise is likely the maximum that the offeror has the ability to pay.” Relator alleged that the government did not adequately analyze other assets owned by the defendants or allegedly transferred to others.

The court determined that relator did not identify any assets that the government overlooked and did not show the government’s assessment of the defendant’s ability to pay was erroneous. Accordingly, the court did not find the relator’s concerns justified the court in second-guessing the government’s determination that it had sufficiently protected its interests or to require the government to proceed with claims that it wanted to settle. The court found the settlement fair, appropriate, and reasonable, denied the relator’s objection, and allowed the settlement to proceed.

Basics Of Qui Tam Actions

False Claims Act whistleblower cases begin when the relator files a complaint under seal in the federal district court where the 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, and, as the case discussed above illustrates, has the authority to settle. 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 Los Angeles 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=””></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 case in any way. 

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