Encroachment, Loss of Five Yards: Government Attorneys and the No- Contact Rule's Place in Civil False Claims Act Investigations
| Publication year | 2017 |
Encroachment, Loss of Five Yards: Government Attorneys and the No- Contact Rule's Place in Civil False Claims Act Investigations
Erica L. Burchell
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A telephone rings, interrupting the otherwise quiet hum of a Tuesday afternoon's work in a government attorney's office. A pair of eyes dart quickly from a blinking cursor on the computer screen to the receiver of the multiline telephone. A hand reaches forward from the keyboard to grasp the telephone receiver, and, as the receiver is raised up to the attorney's ear, with the single uttering of "good afternoon," an ethical dilemma arises. The voice on the other end of the line has information—information to share—and now the attorney must decide whether continuing the conversation would comply with the applicable rules of professional conduct.
When an attorney for the government answers the telephone and is put on notice of a qui tam suit being brought under the Civil False Claims Act (the Act),1 what obligations arise under the professional rules against contacts with represented and unrepresented persons? How far should the prohibitions against attorney contacts with represented persons and unrepresented persons extend in Act investigations?
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The Civil False Claims Act is the primary litigative tool used by the government to redress false claims for payment and property under government contracts and programs.2 The government uses the Act to recover losses resulting from false or fraudulent claims3 in areas such as military or defense contracts, medical benefits for the elderly or lower-income persons, veterans' benefits, and federally-insured mortgages.4
The United States Court of Appeals for the Eleventh Circuit, in United States ex rel. Atkins v. McInteer,5 referred to Act violations as quasi-criminal in nature.6 The Eleventh Circuit explained that Act violations can be interpreted as quasi-criminal in nature because of the availability of treble damages.7
This Comment will compile, summarize, and explore the various authorities that control a government attorney's professional and ethical considerations regarding investigations under the Civil False Claims Act umbrella. In particular, this Comment will focus on the government attorney's interactions with represented and unrepresented persons in the initial, intervention, and investigative phases of an Act prosecution. This Comment takes the approach that attorneys for the government, when investigating violations of the Civil False Claims Act, should have at their disposal the range of legitimate investigatory tactics that are available to attorneys pursuing pre-indictment, pre-custodial criminal investigations.
A. What is the Civil False Claims Act?
The Civil False Claims Act bestows upon the attorney general a duty to investigate and bring civil actions against persons for, inter alia, making false claims for payment against the government.8 Violators of 31
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U.S.C. § 37299 are liable to the United States government for civil penalties of between $5000 and $10,000, subject to adjustments necessitated by the Federal Civil Penalties Inflation Adjustment Act of 1990,10 in addition to three times the amount of damages sustained by the United States because of the violator's act.11
Section 3729 provides, in part, that a violator is liable for knowingly presenting, or causing to be presented "a false or fraudulent claim for payment or approval;"12 knowingly making, using, or causing to be made or used "a false record or statement material to a false or fraudulent claim;"13 conspiring to commit a violation of a variety of the subparagraphs;14 having "possession, custody, or control of property of money used, or to be used, by the [g]overnment" and knowingly delivering or causing to be delivered less than the full sum of that property or money;15 with the intent to defraud the government, making or delivering a receipt that the person does not have complete knowledge to be true;16 knowingly buying public property, or receiving as a pledge for a debt or an obligation, from a government employee or officer, or an Armed Forces member, who is not authorized to sell or pledge property;17 or knowingly making, using, or causing to be made or used, "a false record or statement material to an obligation to pay or transmit money or property to the [g]overnment, or knowingly conceal[ing] or knowingly and improperly avoid[ing] or decreas[ing] an obligation to pay or transmit money or property to the [g]overnment."18
B. Who Are qui tam Plaintiffs?
Under its qui tam19 provision, the Act also allows private persons, called "relators,"20 to bring a civil action for a violation of 31 U.S.C. § 3729
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on behalf of themselves and the government.21 Actions brought by private persons are filed in the government's name and can be dismissed only if both the court and the Attorney General consent in writing to the dismissal and provide reasons for their consent.22 The qui tam provision has at least two goals: (1) to alert the government to fraud that has not been publicly disclosed, and (2) to incentivize the discovery by private citizens of fraudulent conduct.23 The government is the sole entity that can intervene in an action brought by a private person, and no other private person can bring an action based on the same underlying facts as the pending action.24
Private persons, for their roles in exposing violations of 31 U.S.C. § 3729, can be paid a percentage of the proceeds of the actions or settlements of claims.25 The award to the qui tam plaintiff varies based on whether the government chose to intervene or declined to intervene26 and whether the plaintiff planned or initiated the violation of 31 U.S.C. § 3729 giving rise to the action.27 If the government declines to intervene and the defendant is victorious over the plaintiff, the court may award the defendant reasonable attorney fees, upon a finding that the plaintiff's claim was "clearly frivolous, clearly vexatious, or brought primarily for purposes of harassment."28 Private persons bringing cases under the Act stand to gain substantially from successful prosecutions under the Act.
C. The Intervention Process for Actions Brought by Private Persons
When private persons bring an action under the Act, a copy of the complaint, along with "written disclosure of substantially all material evidence and information the person possesses," is served on the government pursuant to Federal Rule of Civil Procedure 4(d)(4).29 The
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complaint itself is filed in camera,30 remains under seal31 for a minimum of sixty days, and cannot be served on a defendant absent the court's order.32 After the government receives a copy of the complaint and the material evidence and information, it has sixty days within which to intervene and proceed with the action.33 With a showing of good cause, the Government may move the court to extend the time the complaint remains under seal.34
Before the expiration of the sixty-day period, or before the expiration of any court-granted extension, the government must either elect to proceed with the action35 or notify the court that the government declines to take over the action.36 If the government chooses to proceed with the action, the government will conduct the action.37 Conversely, if the government declines to take over the action, the private person bringing the action has the right to conduct the action.38 During the sixty-day period, however, the government has an important duty to determine the validity of the relator's claim and to try to establish for itself whether continuing to be a part of the action is prudent and just.
D. Rights of the Parties to qui tam Actions
The government, should it elect to proceed with an action brought by a private person, has the primary responsibility to prosecute the action.39 Further, if the government chooses to proceed with the action brought by
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a private person, it is not bound by the private person's acts.40 Notwithstanding the government's choice to intervene, the private person still holds the right to continue as a party to the action, subject to some limitations.41 For instance, the government can choose to dismiss the action, over the objection of the initiating private person, if the government notifies the private person of the motion's filing and provides the private person with an opportunity for a hearing on the motion.42 In addition, the government retains the right to settle the action over the objection of the private person, so long as "the court determines, after a hearing, that the proposed settlement is fair, adequate, and reasonable under all the circumstances."43 The government can also move the court to limit the private person's participation during the course of litigation—with a showing that the private person's continued unrestricted involvement would result in undue delay, would interfere with the government's prosecution of the action, or would be repetitive, irrelevant, or even harassing.44 The government, then, if it intervenes, is largely in control of how the action will proceed and of the role the relator will play in the action.
If the government declines to proceed with the action, the private party who initially brought the action retains the right to conduct the action.45 Even if the government elects not to intervene, the government can still request that it be served copies of all pleadings and be provided with deposition transcripts at its own expense.46 In some instances, upon a showing of good cause, the court may allow the government to intervene in the action at a later point.47 However, if the court does allow later government intervention, the intervention must not limit the rights and status of the private party initiator.48 So...
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