Under 31 U.S.C. § 3730(d), whistleblowers who bring qui tam suits under the False Claims Act are entitled to a share of any recovery. The statute sets the range of the whistleblower’s potential share but leaves it to the whistleblower and government to negotiate the exact split, or if they can not (which isn’t often), to the district court to determine. Although the relator’s share of the recovery is not a frequently litigated issue, on occasion, the government and the relator disagree about the appropriate share.
In U.S. ex rel Fowler v. Evercare Hospice, Inc., after the government intervened and the defendant (now known as Optum) agreed to an $18 million settlement, the relators and the government disagreed how that money should be split, with the relators seeking a 23 percent share and the government arguing for an 18 percent figure. (In intervened cases, the statute sets the relator’s share between 15 and 25% of the recovery.)
The Colorado district court determined earlier this year that it had ample discretion in selecting the final share amount, guided by a few key principles. Although the court cited to the DOJ’s internal policy memorandum about such issues, the court ultimately applied the three factors identified in the FCA’s legislative history: “the significance of the information provided by the relator, the relator’s contribution to the final outcome, and whether the government was previously aware of the fraud.”
After walking through the evidence on these factors, as well as a few of the more salient considerations from the DOJ’s internal policy, the court ultimately split the difference in the government’s favor, awarding the relators a 20 percent share of the recovery. Twenty percent also happens to be the midpoint of the allowable range, which may be one of the reasons the court settled on this figure in a close case.
(In case you don’t want to do the math, the ruling resulted in the relators receiving $3.6 million and the government getting about $14.4.)