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One of the questions we routinely receive as False Claims Act attorneys is who is allowed to recover moneys as a Relator under the False Claim Act. There is a rule known as the first to file rule that prohibits recovery by a second (or later) Relators.
The False Claims Act first to file rule provides that “when a person brings a [false claims act action], no person other than the Government may intervene or bring a related action based on the facts underlying the pending action.” 31 U.S.C. § 3730(B)(5). The rule is jurisdictional meaning it prohibits a court from granting subject matter jurisdiction to any second (or later in time) Relators. United States Ex Rel Poteet v. Medtronic, Inc., 552 F.3d 503, 516 (6th Cir. 2009). “The basis for jurisdiction must be apparent from the facts existing at the time the complaint was brought.” Id. 511. As such, the rule “ambiguously establishes a first to file bar, preventing successive plaintiffs from bringing related actions based on the same underlying facts.” Walburn v. Lockheed Martin Corp., 431 F.3d 966, 971 (6th Cir. 2005). (“quoting United States Ex Rel Lujan v. Hughes Aircraft Co., 243 F.3d 1181, 1187 (9th Cir. 2001)).
In the event that a second in time or later Relator tries to file a claim, the District Court must compare the allegations in the first complaint to the allegations in the second filed complaint to determine if the first to file rule is implicated. See Walburn, 431 F.3d at 971. If both complaints alleged “all the essential facts of the underlying fraud,” then the second action will be barred as a matter of law. Id. The so-called policy behind this rule is that it “furthers the policies of emanating the False Claims Act by ensuring that the Government has notice of the essential facts of an allegedly fraudulent scheme while, at the same time, preventing “opportunists of plaintiffs from bringing parasitic lawsuits.” Poteet, 552 F.3d at 516. In other words, “duplicative claims do not help reduce fraud or return funds to the federal fisk, since once the government knows the essential facts of a fraudulent scheme, since once the government knows the essential facts of a fraudulent scheme, that has enough information to discover related frauds. United States Ex Rel LaCorte v. Smithkline Beecham Clinical Labs, Inc., 149 F.3d 227, 234 (3rd Cir. 1998).
For this reason, a purported Relator will lack standing to file a second, duplicative lawsuit and “collect the bounty. . .if someone else has filed the claim first.” See Poteet, 552 F.3d at 515-16. Courts across the country have agreed that the first to file rule is “exception free.” United States Ex Rel Duxbury v. Ortho Biotech Products, LP, 579 F.3d 13, 32 (1st Cir. 2009).
For these reasons, it is critical that if you or someone you know possesses information about a fraud against the government, whether it be Medicare fraud, governmental contracting fraud, or acting as an IRS whistleblower, that a false claim must be disclosed as soon as possible to an experienced qui tam attorney. For more information, please contact us.
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We help whistleblowers on a contingency basis, meaning there is no fee charged for our work unless there is a recovery. We also front any and all expenses. No matter where you are located — we will represent you. We will come to you, you will not have to come to us. Attorneys in our firm and attorneys that we work with on Whistleblower, Qui Tam, False Claims Act cases have represented a host of persons making claims, for violations of federal tax law, Medicare law and more. For more information, please contact our team of whitsleblower and qui tam attorneys today, or visit our False Claims Act Litigation Source.
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