Explainer: What is a "qui tam" lawsuit?
In Latin, the phrase qui tam pro domino rege quam pro se ipso in hac parte sequitur, means “who pursues this action on our Lord the King's behalf as well as his own.” And, no, I don’t speak Latin. But I’ll take the U.S. Supreme Court’s word for it. The Court gave that translation of the phrase in a case titled Vermont Agency of Nat. Res. v. U.S. ex rel. Stevens, which is the single most important Supreme Court decision for modern qui tam practice. I’ll write a separate piece explaining Vermont Agency later.
Qui tam cases of various sorts have existed in English and American law for hundreds of years. Currently, in U.S. law, they are the result of a federal statute called the False Claims Act, and various state statutes modeled on the federal False Claims Act. The False Claims Act does not actually contain the term “qui tam.” But it authorizes “private persons” to bring civil actions “in the name of the Government” for violations of the Act. And, in the law world, these “private person” actions “in the name of the Government” are routinely referred to as qui tam actions or qui tam lawsuits.
What makes qui tam actions different from other types of civil lawsuits? Lots of things, but I’ll point out what I think are the three key unique characteristics. First, and most importantly, as just noted, they are brought by a private person in the name of the Government. This means that the cases are not about injury or damages to the person bringing the lawsuit, but instead are about injury or damages to the Government. Normally, one person cannot bring a lawsuit to recover for injury or damages to another person. In fact this basic principal of law – generally referred to as “standing” – has a constitutional basis in U.S. law. And, indeed, one of the issues addressed by the Supreme Court in Vermont Agency was whether the “private person” provision of the False Claims Act violated this basic constitutional “standing” requirement. (Spoiler: the Court said “no problem.”)
Second, the private person who brings the qui tam lawsuit (generally referred to as the “relator”) can earn a reward if the case is successful. The False Claims Act provides that, in most cases, the relator will receive an award of between 15% and 30% of the amount of money recovered for the government. This reward provision is crucial to the functioning of qui tam cases because they provide the economic engine that makes these cases viable. One of the key purposes of the False Claims Act is to incentivize whistleblowing. In short, the government wants to know when it is being defrauded by violations of the False Claims Act, and it will pay handsomely for a whistleblower to bring and pursue a successful qui tam case.
And third, qui tam cases are filed “under seal.” Every other type of civil lawsuit begins with the filing of a complaint, which must then be served promptly on the defendants so that they can prepare their defense. But the False Claims Act affirmatively forbids this normal process. Instead, when the qui tam complaint is filed in court, it is automatically “sealed” by the court, which means it is kept secret, and the relator is prohibited from serving the complaint on the defendants, or even publicly acknowledging the existence of the lawsuit. Instead, the relator must give the complaint (and another document called a “disclosure statement” which I’ll explain in a later post) to the U.S. Department of Justice only. The complaint remains under seal while DOJ investigates the allegations of the complaint and then makes what is called the “intervention” decision – a process that typically take several years.
So, there you have it. Now you can impress your friends by reeling off a Latin phrase and explaining what it means. And you know the key characteristics of a qui tam lawsuit.
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