§ 6.9.4.5.1 FALSE CLAIMS ACT OR QUI TAM PROTECTION.

• Jurisdiction: Arizona

§ 6.9.4.5.1 False Claims Act or Qui Tam Protection. Under the False Claims Act,¹⁹⁵ a private individual may bring suit on behalf of the United States government and recover damages when exposing persons or entities that are defrauding the government.¹⁹⁶ Such a lawsuit is referred to as a "qui tam" action,¹⁹⁷ and was devised by Congress to strike a balance between encouraging whistleblowing on the one hand, and discouraging opportunistic plaintiffs on the other.¹⁹⁸

The person bringing a qui tam action is known as a relator, and, if successful, the relator is entitled to a percentage of any money recovered on behalf of the government.¹⁹⁹ While the viability of bringing a qui tam action under the False Claims Act has historically not generated a great deal of debate, in recent years such actions have increasingly come under constitutional attack. In Vermont Agency of National Resources v. United States ex rel. Stevens,²⁰⁰ the Supreme Court quieted some concerns by holding that qui tam plaintiffs have constitutional standing to assert claims under the Act.²⁰¹ The Court refused to express any view, however, as to whether qui tam actions violate Article II of the United States Constitution in particular, the Appointments Clause of § 2 and the "take Care" clause of § 3.²⁰² Notably, lower courts that have addressed the constitutional implications under Article II with respect to qui tam actions have more or less uniformly upheld the viability of such claims.²⁰³

Constitutional concerns aside, qui tam actions continue to grow in popularity. From a procedural standpoint, to bring a qui tam action the relator must initially file in camera with the court a complaint and any material evidence.²⁰⁴ Once filed with the court, the complaint remains under seal for 60 days until the government decides whether to intervene or to allow the relator to proceed alone.²⁰⁵ Should the government choose not to intervene at the outset, it still may do so later upon showing good cause.²⁰⁶ When the government does intervene, the relator continues as a party to the suit,²⁰⁷ but the government controls the case and may even secure a court order limiting the relator's involvement.²⁰⁸ The potential recovery for the relator depends both upon the government's involvement and the relator's contribution to the case.²⁰⁹ When the government intervenes, the relator receives 15-25% of the recovery depending upon the relator's level of involvement.²¹⁰ When proceeding alone, the relator may be awarded 25-30% of the recovery.²¹¹

The relator's involvement in the action may be dismissed on jurisdictional grounds if the information used as the basis for the suit has previously been publicly disclosed, unless the relator is the "original source" of the information.²¹² The relator bears the burden of establishing jurisdiction.²¹³ "Public disclosure" of the damaging evidence has been defined by the Act to include "allegations or transactions in a criminal, civil, or administrative hearing, in a congressional, administrative, or Government [General] Accounting Office report, hearing, audit, or investigation, or from the news media."²¹⁴ This list of potential recipients that qualify as public disclosures has been strictly construed.²¹⁵ Nonetheless, it should be noted that most courts have held that unless the relator is the original source of information, a qui tam action is barred when the information has been publicly disclosed even if the relator did not use this publicly disclosed information as the...