Frequently Asked Questions

A word from Attorney John F. Murphy: “I’ve received quite a few calls from persons throughout the country over the past several years, and in response to some of following questions, I’ve had to say, unfortunately, that there is no False Claims case. Some of the questions below I am repeating in the hope of preventing you from contacting me with a case that, although it has a compelling set of facts, where even criminal conduct might have occurred, unfortunately does not fall within the purview of the False Claims Act. Sorry.”

Q: I’m a retired school administrator. The state has been misallocating millions of dollars in Federal funds by rerouting grants intended for needy children in urban areas to schools in the suburbs. The state systematically has certified compliance with Federal law in the allocation of these funds. Can I sue the state under the False Claims Act?

No. You can’t sue the state or state agencies under the False Claims Act. A recent Supreme Court decision ruled against this. Under no circumstances can you sue the state or local government entities under the False Claims Act. Remember, you are suing on behalf of the United States Government, and the Separation of Powers doctrine in the U.S. Constitution prohibits the United States from suing states or municipal entities.

Q: The Housing Authority has been misusing federal funds in public housing. Can I sue the city and the Housing Authority under the False Claims Act?

No. For the same reason that you can’t sue the state, (Separation of Powers doctrine) you can’t sue the city or any municipal entities, either, or the county or any of its agencies, or local boards of education, under the False Claims Act.

Q: I would like to “blow the whistle” on the nuclear power facility where I work because of illegal emissions of radiation that have been covered up. Does this type of “whistleblowing” come under the False Claims Act?

No. A broad spectrum of caring, courageous and committed citizens are known as “whistleblowers” – people who see that the company they work for is violating disclosure rules of the SEC, people whose corporation is cheating on its income taxes, or people who want to blow the whistle on illegal emissions from a nuclear power plant. These persons are correctly called whistleblowers, and the violations of the federal laws that they have observed and would like to sue about are very real and very often involve criminal conduct. But none of these whistle blowers are False Claims Whistleblowers and they cannot claim a reward. The False Claims Act does not apply to them; rather it is directed at a narrow range of Whistleblowers who blow the whistle on a company, or a hospital, or a drug company, or any other non state or municipal entity, that
1. has a Contract with the United States Government, and
2. cheats the Federal Government when it gets paid under that Contract.

Q: I read in the newspaper about some of the overcharging that’s going on at our local hospital, and I can see Medicare fraud all over the place. Can I blow the whistle if there is no other whistleblower case going on, and then collect the reward?

No. You are not the original source. You read about it in the newspaper. The claim is barred when there is evidence that you learned of the claims from public disclosure. The information about the overcharging must come from you and not be known already. (This makes sense, because if the information does not come from you, you are not a whistle blower - you are telling the Government something it already knows.) The District Court is said to lack jurisdiction when you fail to show that you are the original source of the information relating to the fraud. The law says that if the civil action you bring is based on information already known to the Government, then you as the employee are not entitled to get anything for the recovery.

Q: Will my employer find out that I’m the one who has blown the whistle?

Yes, eventually, but not right away. While the case is under seal, your employer will not even know that it has been sued. The case remains under seal while the Government decides whether this is a case that it wants to get involved with, whether it’s worth committing the Government’s resources to the case. This usually takes a great deal of time, depending on the complexity of the accusations you’ve made, and your employer will not know that you are the one while the investigation is going on. The law says that the Government has two months to make its investigation and to decide, but the Government routinely is granted extensions in the time periods, often more than a year. So your employer will not know for months, even for years, that you have blown the whistle. Your employer won’t know about your whistleblowing during the time the case is under seal, at least not through any public disclosure of the papers that have been filed.

This is the technical answer. Now, use some common sense. If for example you were complaining for years to your supervisors about the defective tires at the plant where you work that are being sent to the Army, and then you were fired, and so you went to the Office of the Inspector General of the United States Army, and then you brought your whistleblower lawsuit, and then, suddenly, someone from the Office of the Inspector General of the Army arrives at the plant and begins to make some inquiries about defective tires, your employer (sorry, your former employer) if it is using any common sense, will probably put two and two together and figure out that you are the one who has blown the whistle.

Q: Does the Whistleblower Law give any protection to the Whistleblower?

Yes. First of all, your identity is a secret from your employer while the case is under seal, because no one has yet informed your employer that you've brought the lawsuit. But you will not keep your identity a secret for long, because the Government will know your identity, and your name will also be disclosed to the defendant after the seal period ends. During the seal period, the defendant is not supposed to find out that you blew the whistle by filing the lawsuit. When there is a Government investigation, however, the defendant sometimes is able to figure it out.

You as a whistle blower also have statutory protection, so you still are protected. Section 3730 (h) of the False Claims Act gives any employee who is discharged, demoted, harassed, or otherwise discriminated against because of lawful acts by the employee in furtherance of an action under the Act all relief necessary to make the employee whole.
The key words here are “in furtherance of an action under the Act.” What this means is that you can’t get fired as a trouble maker and then afterwards, decide that you are going to become a whistleblower and claim that you got fired because you went to the government. You have to prove, in order to gain the protection under the Act, that your firing is directly connected to your whistleblowing activities.

Such relief may include reinstatement, double back pay, and compensation for any special damages, including litigation costs and reasonable attorneys' fees. What this means is that any whistle blowers who lose their jobs or suffer career discrimination as a result of bringing a suit can sue for damages.

The protection is given not only to those who bring the action in exposing fraud, but those involved in the investigation for fraud, in the initiation of testimony, or for any assistance to the Government in an action filed under this act. It includes "make whole" relief for anyone who in good faith assists the U.S. Government in exposing fraud. This provision is designed to halt the threat of economic retaliation against those who have helped expose wrongdoing and prevent harassment, demotion or loss of employment.

Q: The fraud happened fourteen years ago. Can I still bring a case?

No. Not if it happened more than 6 years ago. A civil action under section 3730 may not be brought –
“…More than six years after the date on which the violation of section 3729 is committed.”

Q: But the company is still cheating.

Oh, that’s different. If the Government overpaid for a shipment of bearings more than six years after the date you bring the lawsuit, you are barred from bringing a claim on that shipment. The time for doing so has expired. But you can bring a case for all the cheating and all the fraud that has taken place within the time span of the past 6 years. As to each claim, the 6 year period of the statute of limitations begins to run on the date the claim is paid. In other words, the payment of the fraudulent amount by the U.S. Government triggers the limitations period, and that is when the time starts to run.

Q: For as long as I can remember, my employer has been bribing the defense minister of a middle eastern country in order to sell military aircraft. Does this type of activity fall under the False Claims Act?

It might. The bribery payment is criminal conduct but is itself not something that is prohibited under the False Claims Act. However, if somehow the bribery payment is part of the claim to the United States Government, for example, and is listed under advertising as “a cost of doing business” in a sole source contract, and If somehow the United States Government is funding portions of the contract, then yes, False Claims are being submitted to the United States for payment. See the answer above about the need for a contract with the United States Government.

Q: If as a whistleblower I get a reward of 15 to 25% of any recovery, how is this determined?

Usually, the figure is negotiated with the United States Government. What this means is that both your attorney and the United States Attorney or someone from the Office of the Attorney General of the United States will come up with a figure representing the percentage of the recovery (the reward) that they agree is appropriate. The percentage usually is derived from your strength as a witness, your involvement as an original source, and your cooperation in putting the case together. If your attorney and the United States Attorney cannot agree – on a figure between the 15 and the 25% - you as the whistleblower are entitled to have a hearing before a Judge of the United States District Court. For this reason, it is important that you as the whistleblower keep a record of the times you cooperated, the time you went to the restaurant and worked as an informant wearing a wire, the times you contacted the U.S. Attorney with new information and helped with certain accounting tips that might not have been readily apparent to the Government’s investigators. All this information would be brought out in the hearing before the Judge as you attempt to be rewarded a figure that is closer to 25% .

At the end of the case, very often the United States Government through its attorneys, because of the range, will turn into your adversary. In other words, in spite of the fact that for the past three and one half years you have been helping the United States with inside information relating to the cheating, and, finally, the United States through its attorneys has brought the case to a satisfactory conclusion and gotten a sizable settlement or verdict, in order to maximize the amount that is going to the Government, the United States Attorney or someone from the office of the Attorney General will try to get you to accept a percentage in the range that is closer to the 15% statutory amount than the maximum of 25%. So you shouldn’t be surprised when, after all these years, after you’ve been fired and after you have endured considerable personal financial risk, the United States Government suddenly is saying, “Well, he didn’t really help us that much.”

Q: I called the Medicare Fraud unit and “blew the whistle,” then I started a lawsuit. Then I got fired. The case was under seal, but after the seal was lifted, the public relations people at the plant where I used to work told the newspapers that I’m a “disgruntled former employee.” Can they do this?

Sure they can. Once the file is unsealed and it is known that you are the one who has blown the whistle, the public relations people from the company, because it’s their job, will assure the press and the shareholders that the company didn’t do anything wrong, that the claims have no merit whatsoever, and that the lawsuit has been brought by a “disgruntled former employee.” You might be amazed at the number of cases that begin with a press release from the employer saying the allegations are “without merit” that they come from “disgruntled former employees.” You also might be amazed at the number of cases“without merit” where “disgruntled former employees” have been awarded millions of dollars.