Legal Memorandum: The False Claims Act and recovery under a qui tam action

Issue: Does the FCA prohibit an individual from assigning his or her recovery under a qui tam action to one not a party to the action?

The False Claims Act (FCA), states that "a person may bring a civil action for a violation of section 3729 for the person and for the United States Government" (31 U.S.C. § 3730(b)(1) (2012)), and prescribes the rights and obligations of the relators who bring that action (31 U.S.C. § 3730(c), (d) (2012)). The FCA further provides that if the government decides to intervene in the qui tam action, the relators shall receive "at least 15 percent but no more than 25 percent of the proceeds or settlement." 31 U.S.C. § 3703(d) (2012). Yet, no provision of the FCA prohibits a named relator from freely contracting (or assigning, or agreeing, or merely giving, for that matter) a portion of his recovery to someone else (to another named relator or even to a nonparty), just as anyone who receives proceeds from any suit may do.

Chandra v. Chandra, No. 1-14-3858 2016.IL.0000272 (Ill. Ct. App. Feb. 10, 2016) (VersusLaw).

Date: March 1, 2016
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