Northeast Courts Dominate False Claims Act Filings by Whistleblowers

The top choices for whistleblower attorneys filing qui tam lawsuits are Philadelphia, New York City and Boston according to an article today in the Legal Intelligencer.  The article emphasizes the emergence of the Southern District of New York as a favorable place to take cases, particularly financial litigation, after U.S. Attorney Preet Bharara made the False Claims Act a priority in the office.

The Eastern District of Pennsylvania, which has held the top spot in the past, is facing “stiff competition” according to the legal paper.  The EDPA has still been the starting point for a number of large settlements over the past few years, including the $2.2 billion Johnson & Johnson settlement over the antipsychotic drug Risperdal.  The Supreme Foodservice lawsuit, which resulted in approximately $400 million in penalties between civil lawsuits and criminal prosecutions in December, also started in Philadelphia.

The False Claims Act permits whistleblowers to file a lawsuit on behalf of the government but the U.S. has the right to intervene in the lawsuit and take over prosecution.  Gaining the support of the Department of Justice has been historically important because these cases have a higher success rate.

If the U.S. declines to take the case, the whistleblower, known as the relator, is entitled to proceed with the lawsuit on behalf of the federal government and receives a higher percentage of the reward if they are successful in the recovery of money from the defendant.  In the past few years, more law firms have been taking declined cases to court rather than dismiss them.

This may have to do with the increase in the number of filings under the United States’ most powerful weapon in the fight against fraud.  The number of cases filed has nearly doubled over the past ten years.

For additional information about where to report your evidence of fraud, contact one of our Philadelphia False Claims Act lawyers.