If a qui tam lawsuit is successful, under the FCA, the private plaintiff is entitled to a percentage of any financial award and, in some cases, to reimbursement for expenses and attorneys' fees.
The basic policy underlying the qui tam provisions is based on what Congress perceived to be a necessity for enlisting private individuals to assist in discovering and prosecuting frauds against the government and encouraging private citizens to come forward.
In 1986, Congress set out to encourage more private actions. To that end, through 1986 amendments to the FCA, Congress increased financial awards to plaintiffs, lowered a plaintiff's burden of proof, and allowed a private plaintiff to participate in actions in which the government chooses to intervene.
Under the rules of the FCA, the private plaintiff must serve a copy of the complaint and disclose all evidence in the plaintiff's possession to the federal government. The government then investigates the claim and decides whether to intervene and prosecute the case. If the government chooses not to intervene, the private plaintiff still has the right to prosecute the action on behalf of the government.
With the 1986 amendments, Congress attempted to strike a balance between encouraging private individuals to disclose information and prohibiting "parasitic" actions where an opportunistic plaintiff takes advantage of information already in the public domain.
However, qui tam actions that contain similar allegations, or even identical allegations to publicly disclosed information are not necessarily parasitic. Actions are parasitic only when the plaintiff's allegations are actually derived from the public disclosure.
In the amendments, Congress also repealed the limitation which barred all lawsuits based on information already in the government's possession, noting that simply because the government possesses information regarding fraud does not mean that the government is in a position to prosecute those claims. When enacting the amendments, Congress affirmatively determined information "that the government 'has,' but that was never publicly disclosed does not bar a qui tam suit."
The text of the FCA requires only that an original source: (1) have independent knowledge of the fraud alleged in the complaint; (2) have direct knowledge of that fraud; and (3) have disclosed his information to the government before filing suit.
Under the FCA, an original source is defined as "an individual who has direct and independent knowledge of the information on which the allegations are based and has voluntarily provided the information to the Government before filing an action under this section which is based on the information."
A plaintiff's knowledge is considered "direct" when the plaintiff acquires it through the plaintiff's own efforts without an intervening agency, and "independent" if it is not dependent upon information contained in any public disclosures.
Experts say the traditional "original source" is an inside whistleblower, whose knowledge derives from his or her own investigation conducted prior to any public disclosure of information.
In this case, Ms Poteet qualifies as an original source because through her position at Medtronic, she personally uncovered evidence of unlawful conduct and presented it with her complaint, and therefore, her knowledge is both direct and independent.
According to the lawsuit, Ms Poteet, was a former senior manager of travel services for Medtronic until 2003, responsible for setting up travel arrangements for doctors to attend conferences, and is familiar with the efforts to curry favor with the doctors.
In an amended complaint, Ms Poteet, alleges the company continued to make the improper payments to doctors in 2004 and 2005, leading them to perform unnecessary spinal surgeries.
She charges that any changes made in scaling back payments to doctors were temporary. Its "bribery program," she alleges, "has not only failed to cease, but continues unabated with increased payments made to many physicians."
She points out that although some payments to doctors were lowered in 2004, when the investigation began, the payments went back up in 2005. For instance, in 2003, Dr Hallett Mathews, was paid $300,000 in consulting fees, but in 2004, he was only paid $75,000. But then the next year, in the first 9 months of 2005, he was paid nearly $700,000 in consulting fees.
The basic policy underlying the qui tam provisions is based on what Congress perceived to be a necessity for enlisting private individuals to assist in discovering and prosecuting frauds against the government and encouraging private citizens to come forward.
In 1986, Congress set out to encourage more private actions. To that end, through 1986 amendments to the FCA, Congress increased financial awards to plaintiffs, lowered a plaintiff's burden of proof, and allowed a private plaintiff to participate in actions in which the government chooses to intervene.
Under the rules of the FCA, the private plaintiff must serve a copy of the complaint and disclose all evidence in the plaintiff's possession to the federal government. The government then investigates the claim and decides whether to intervene and prosecute the case. If the government chooses not to intervene, the private plaintiff still has the right to prosecute the action on behalf of the government.
However, qui tam actions that contain similar allegations, or even identical allegations to publicly disclosed information are not necessarily parasitic. Actions are parasitic only when the plaintiff's allegations are actually derived from the public disclosure.
In the amendments, Congress also repealed the limitation which barred all lawsuits based on information already in the government's possession, noting that simply because the government possesses information regarding fraud does not mean that the government is in a position to prosecute those claims. When enacting the amendments, Congress affirmatively determined information "that the government 'has,' but that was never publicly disclosed does not bar a qui tam suit."
The text of the FCA requires only that an original source: (1) have independent knowledge of the fraud alleged in the complaint; (2) have direct knowledge of that fraud; and (3) have disclosed his information to the government before filing suit.
Under the FCA, an original source is defined as "an individual who has direct and independent knowledge of the information on which the allegations are based and has voluntarily provided the information to the Government before filing an action under this section which is based on the information."
A plaintiff's knowledge is considered "direct" when the plaintiff acquires it through the plaintiff's own efforts without an intervening agency, and "independent" if it is not dependent upon information contained in any public disclosures.
Experts say the traditional "original source" is an inside whistleblower, whose knowledge derives from his or her own investigation conducted prior to any public disclosure of information.
In this case, Ms Poteet qualifies as an original source because through her position at Medtronic, she personally uncovered evidence of unlawful conduct and presented it with her complaint, and therefore, her knowledge is both direct and independent.
According to the lawsuit, Ms Poteet, was a former senior manager of travel services for Medtronic until 2003, responsible for setting up travel arrangements for doctors to attend conferences, and is familiar with the efforts to curry favor with the doctors.
In an amended complaint, Ms Poteet, alleges the company continued to make the improper payments to doctors in 2004 and 2005, leading them to perform unnecessary spinal surgeries.
She charges that any changes made in scaling back payments to doctors were temporary. Its "bribery program," she alleges, "has not only failed to cease, but continues unabated with increased payments made to many physicians."
She points out that although some payments to doctors were lowered in 2004, when the investigation began, the payments went back up in 2005. For instance, in 2003, Dr Hallett Mathews, was paid $300,000 in consulting fees, but in 2004, he was only paid $75,000. But then the next year, in the first 9 months of 2005, he was paid nearly $700,000 in consulting fees.
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