The False Claims Act Provides Awards To Successful
False Claims Act provides for an award to a qui tam plaintiff in
the event the government settles a qui tam suit. If the
Government settles a qui tam action brought by a whistleblower
notifying the government of fraud, the whistleblower (often called
a "relator") is entitled to "receive at least 15 percent but not
more than 25 percent of the proceeds of the action or settlement of
the claim, depending upon the extent to which the person
substantially contributed to the prosecution of the action."
31 U.S.C. § 3730(d)(1).
Read more about Life of a Whistleblower Qui Tam Lawsuit and Why You
Want the Government to Intervene.
When the settlement involves the payment of cash to the
government, this calculation is straightforward. But what if
the settlement involves the provision of services by the qui tam
defendant, or some other non-monetary compensation to the
Qui Tam Relators Can Recove A Share Of The Value Of
Non-Cash Settlements Of Qui Tam Suits
Several courts have held that the term "proceeds" in the False
Claims Act has the same broad meaning as in other contexts, and
that a successful whistleblower is entitled to a share of the value
of non-cash components of a settlement as part of his/her relator's
award for reporting fraud.
For example, in U.S. ex rel. Barajas v. U.S., 258
F.3d 1004, 1010-13 (9th Cir. 2001), the qui tam defendant, a
defense contractor, agreed in a settlement to repair and replace
faulty flight data transmitters for missiles. The Court of Appeals
for the Ninth Circuit held that the successful relator was entitled
to recover a share of the value of the cost of repairs agreed to by
Similarly, the Fifth Circuit held in United States v.
Thornton, 207 F.3d 769, 770 (5th Cir.2000), that the value
of claims released pursuant to a settlement agreement should be
deemed part of the proceeds of the agreement, and that a
whistleblower was entitled to share in those proceeds.
The Government Should Value Any Non-Cash Recoveries From
A Qui Tam Settlement
Finally, when a qui tam settlement involves non-cash proceeds, a
question arises: who should value the non-cash portion of any
settlement? The Fifth Circuit in Thornton held
that the government should place a value on non-cash proceeds,
preferably before any settlement approval hearing. 207 F.3d
at 772. The qui tam relator may then accept or challenge the
By allowing non-monetary aspects of a qui tam settlement to
count as "proceeds" in which a relator can share, purposes of the
False Claims Act are served by providing qui tam whistleblowers
with strong incentives to report and prosecute fraud against the
If you have discovered evidence of government fraud,
contact an experienced False Claims Act attorney before blowing the
whistle. You may be entitled to a substantial reward and the legal
protections afforded to whistleblowers under state and federal
laws. The attorneys of Berger & Montague are nationally
recognized experts in Whistleblower/Qui Tam actions with over a
decade of experience pursuing these complex fraud cases. For more
information or to schedule your confidential consultation, use the
form on this page or call us at 1-800-424-6690.
For further reading:
What is the Federal
False Claims Act?
Tam Litigation Statistics and Trends
Seeking Qui Tam
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