Non-Intervened Qui Tam Cases: When the Government Declines, We Litigate
A non-intervened qui tam case is one the Department of Justice declines to join, leaving the whistleblower to litigate it. The relator receives 25 to 30 percent of any recovery, and a defendant that loses or settles can be required to pay the relator’s attorney fees. Our attorneys obtained a 9 million dollar settlement in a declined case against a private equity firm and its principals.
$9 million settlement in a non-intervened fentanyl qui tam case
What changes when the government declines
While the government investigates, a qui tam complaint stays under seal. When the Department of Justice declines to intervene, the court lifts the seal, the complaint is served on the defendant, and the relator conducts the case.
The government does not disappear. It receives copies of the pleadings, it can intervene later on a showing of good cause, and the case cannot be settled or voluntarily dismissed without the written consent of the Attorney General.
What it takes to carry a declined case
A declined case is litigated against a defendant that now knows exactly what it is accused of and usually has far more resources than the person who reported it. The work the government would otherwise share falls on the relator’s counsel:
- Pleading the fraud with the particularity Rule 9(b) requires, and defeating the motion to dismiss that almost always follows
- Proving materiality, the requirement the Supreme Court tightened in Universal Health Services v. Escobar (2016)
- Taking discovery from a defendant that will contest every request
- Retaining experts on billing, damages and the underlying clinical or technical questions
- Funding all of it on contingency, for as long as the case takes
- Being ready to try the case, because a defendant that believes you will not go to trial does not settle
The government can still end a declined case
In United States ex rel. Polansky v. Executive Health Resources (2023), the Supreme Court held that the government may move to dismiss a qui tam case even after it declined to intervene, provided it intervenes to do so, and that courts apply the ordinary standard for voluntary dismissal.
In practice a declined case has to be run with the government in mind: keeping it informed, staying within theories it supports, and building a record it would not want to see dismissed.
Our declined case: 9 million dollars
Our attorneys obtained a 9 million dollar settlement in a non-intervened False Claims Act case against private equity firm Belhealth Investment Partners, its principals, and its pharmacy portfolio companies Linden Care and Quick Care.
The case concerned prescriptions of Subsys, a rapid-onset fentanyl spray, dispensed for off-label and non-medically necessary uses and billed to Medicare, Medicaid and TRICARE. The government did not join. The case was carried, litigated and settled, and liability reached the private equity owner and its principals, not only the operating companies.
Who pays for a declined case
We handle whistleblower cases on contingency, so there is no fee unless there is a recovery, and the firm carries the litigation costs.
If the case succeeds, the False Claims Act requires the defendant to pay the relator’s reasonable expenses, attorney fees and costs, separate from the relator’s share. A defendant can recover fees from a relator only where the claim was clearly frivolous, clearly vexatious, or brought primarily to harass.
Questions to ask any firm before you file
Every firm will take a case the government is likely to join. Ask what happens if it does not:
- Has the firm carried a declined case to a recovery, and which one?
- Who pays for experts and discovery if the government declines?
- Will the same attorneys stay on the case through trial?
Frequently asked questions
How often does the government decline qui tam cases?
The government intervenes in a minority of qui tam cases, so a declination is the common outcome. It often reflects resources, timing or the novelty of the theory rather than a conclusion that no fraud occurred.
What is my share if the government declines?
Between 25 and 30 percent of the recovery, compared with 15 to 25 percent when the government intervenes.
Will the defendant learn who I am?
Once the seal is lifted the complaint becomes public and names the relator. The seal protects your identity during the government investigation, not permanently. The False Claims Act separately prohibits retaliation against employees.
Can a declined case still recover a large amount?
Yes. Our attorneys obtained 9 million dollars in a case the government declined to join.
Can the government still settle or dismiss my declined case?
The case cannot be settled or voluntarily dismissed without the Attorney General’s written consent, and under the Polansky decision the government may intervene to seek dismissal. A well-run declined case keeps the government informed throughout.
The attorneys who handle these cases
Related reading
Talk to a whistleblower attorney before you report
A conversation costs nothing and is confidential. We will tell you honestly whether what you have describes a case, and what the first-to-file rule means for your timing.