by Ben Vernia | February 1st, 2012
On January 31 in the Great Hall at the Department of Justice, a large crowd of current and former government fraud attorneys and investigators gathered to commemorate the 25th anniversary of the 1986 overhaul of the False Claims Act. The amendments are recognized as having invigorated enforcement under the Act, and have led to $30 billion in recoveries for the Treasury.
Attorney General Eric Holder spoke at the event, along with Civil Division Assistant Attorney General Tony West. Also speaking were two Democratic lawmakers instrumental in the 1986 amendments: Senator Patrick Leahy (VT) and Rep. Howard Berman (CA).
After the prepared remarks, Deputy Assistant Attorney General Michael Hertz (formerly director of the Civil Division’s Fraud Section) led a panel discussion. Participating on the panel were Assistant U.S. Attorney Joan Hartman (formerly assistant director in the Fraud Section), relator attorneys John Phillips of Phillips & Cohen and Neil Getnick of Getnick & Getnick, qui tam whistleblower (and former GlaxoSmithKline employee) Cheryl Eckard, and defense counsel Jack Boese of Fried Frank.
AUSA Hartman’s presentation included a review of False Claims Act case filing and recovery statistics. Describing the record-setting 640 new qui tam filings in 2011, she said that although a very large number of cases were under investigation, three factors would lead to the breaking of the logjam: guidelines issued by Fraud Section Director Joyce Branda to reach decisions quickly on new qui tam cases; improved access to Medicare data needed to assess health care cases; and the widespread use of Civil Investigative Demands following the delegation to U.S. Attorneys of authority to issue these subpoenas. AUSA Hartman said that in the Eastern District of Michigan alone, 90 CIDs had been issued.
Although all panelists presented prepared remarks, they each remarked on AUSA Hartman’s proposal to at least consider revising the reward structure of the qui tam provisions, e.g., by capping a relator’s share in large cases, or implementing a sliding scale. John Phillips and Neil Getnick opposed such a move. Phillips described his firm’s experience bringing much-needed resources to cases to assist the government, and noted that a cap would require private attorneys to settle cases at or near the cap in order to protect whistleblowers’ interests, depriving the government of potential recoveries beyond that limit. Getnick remarking that because relators’ awards depend on fraud recoveries, what the country needs is a cap on fraud itself. Cheryl Eckard described her experience as a relator, giving much credit to the government employees who worked on the case she filed, including the FDA investigator she first contacted and District of Massachusetts Assistant U.S. Attorneys. She ended her remarks by comparing the proposal to cap relator’s awards to the unwise cost-cutting measures by her former employer which led to its $750 million settlement with the government. Jack Boese closed the panel by lamenting the use of the False Claims Act to police regulatory violations that he considered far afield from the fraud the Act was intended to combat.
