Rewarding Integrity: The Struggle to Protect Decentralized Fraud Enforcement through the Public Disclosure Bar of the False Claims Act

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Deleware Journal of Corporate Law (DJCL), Vol. 33, No. 2, 2008

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Linda J. Stengle
Delaware; Journal; Corporate; Law; FCA; False Claims; qui tam
paper description
Despite twenty years of success in returning billions of dollars to the U.S. Treasury, citizens attempting to recover damages under the False Claims Act (FCA) continue to face judicial hostility in their efforts to expose corporate fraud. Judges twist the public disclosure bar of the FCA to deny well-deserving plaintiffs a portion of the proceeds as envisioned by Congress when it resculpted the qui tam provision in 1986. Some courts have distorted the common sense meanings of words like "based upon" beyond recognition in what only can be a subterfuge for serious, underlying resentment toward citizen actions. This note provides the long history of qui tam actions, explains basic qui tam terminology, and describes relevant portions of the FCA. An examination of judicial hostility toward the FCA follows, highlighting key areas of dispute between the circuits in interpretation of the public disclosure bar. Arguments and rationales for judicial encouragement of citizen actions are presented. Finally, congressional attempts to end the courts' limitations on these actions through recent amendments are discussed.