the relator to be heard on the matter. (§ 1871.7, subd. (e)(2)(A).) The district attorney or the commis-
sioner may notify the court that they will not intervene. If they decide not to inter- vene, then the person [relator] that origi- nally brought the action shall have the right to proceed and conduct the action. (§ 1871.7, subd. (e)(4)(B).) The district attorney or insurance commissioner can request to be served with copies of all pleadings filed in the action including deposition transcripts, although at their expense. (§ 1871.7, subd. (f)(3).) Even if the relator proceeds with the action, the state authorities can still intervene at a later date upon a showing of good cause. (Ibid.)
Relator’s share of damages Similar to the False Claims Act, a
person who brings a successful action is entitled to a share of the proceeds that are recovered. The successful claimant is entitled to between 30 percent and 50 percent of the proceeds depending on government intervention. If the district attorney or the insur-
ance commissioner elects to intervene, the claimant relator shall receive not less than 30 percent and not more than 40
percent of the recovery. (§ 1871.7, subd. (g)(1)(A)(i).) The share will depend on the contribution made by the relator in the prosecution of the case. In addition, the claimant is entitled to their attorney’s fees and costs incurred in the action. (§ 1871.7, subd. (g)(1)(A)(iii)(I).) It should be noted that different than false claims act cases, the attorney’s fees and costs are deducted for the gross proceeds before the relator’s share is calculated. The court will determine, after a hearing, the share of the remaining amount to be awarded to the claimant. If the district attorney or the insur-
ance commissioner declines the case and does not intervene, the successful relator is entitled to not less than 40 percent and not more than 50 percent of the recovery. (§ 1871.7, subd. (g)(2)(A).) In addition, reasonable costs and attorney’s fees shall be awarded. The fees and costs shall be paid by the defendant. (Ibid.) This statute has a unique damages
provision that the practitioner should be aware of in the event his or her client actually paid money to the defendant as opposed to a claimant that exposed the fraud but had no personal losses. The statute provides that in the event the per- son bringing the action has paid money
to the defendant or its attorneys acting on its behalf in the underlying claim, the person is entitled to double the amount paid to the defendant if that amount is greater than 50 percent of the proceeds. (§ 1871.7, subd. (g)(2)(B).) In addition, the successful claimant gets their expens- es, fees and costs awarded against the defendant. (Ibid.) The successful claimant can recover
between 30 and 50 percent of the pro- ceeds recovered plus costs and attorney’s fees. The range is dictated by whether the government intervenes. In addition, the significance of the claimant’s infor- mation and the role they played in the litigation will be deciding factors by the court used in determining the appropri- ate percentage award.
Differences between section 1871.7 and False Claims Act cases
The original federal False Claims Act
was enacted in 1863. (Presently codified at 31 U.S.C. § 3729 et. seq.; see Minnesota Ass’n of Nurse Anesthetics v. Allina (8th Cir. 2002) 276 F.3d 1032, 1040.) The False Claims Act is a pure qui tam statute that creates authority for a private citizen to sue on behalf of the United States gov- ernment for contract fraud against the
JANUARY 2012 The Advocate Magazine — 67
Page 1 |
Page 2 |
Page 3 |
Page 4 |
Page 5 |
Page 6 |
Page 7 |
Page 8 |
Page 9 |
Page 10 |
Page 11 |
Page 12 |
Page 13 |
Page 14 |
Page 15 |
Page 16 |
Page 17 |
Page 18 |
Page 19 |
Page 20 |
Page 21 |
Page 22 |
Page 23 |
Page 24 |
Page 25 |
Page 26 |
Page 27 |
Page 28 |
Page 29 |
Page 30 |
Page 31 |
Page 32 |
Page 33 |
Page 34 |
Page 35 |
Page 36 |
Page 37 |
Page 38 |
Page 39 |
Page 40 |
Page 41 |
Page 42 |
Page 43 |
Page 44 |
Page 45 |
Page 46 |
Page 47 |
Page 48 |
Page 49 |
Page 50 |
Page 51 |
Page 52 |
Page 53 |
Page 54 |
Page 55 |
Page 56 |
Page 57 |
Page 58 |
Page 59 |
Page 60 |
Page 61 |
Page 62 |
Page 63 |
Page 64 |
Page 65 |
Page 66 |
Page 67 |
Page 68 |
Page 69 |
Page 70 |
Page 71 |
Page 72 |
Page 73 |
Page 74 |
Page 75 |
Page 76 |
Page 77 |
Page 78 |
Page 79 |
Page 80 |
Page 81 |
Page 82 |
Page 83 |
Page 84 |
Page 85 |
Page 86 |
Page 87 |
Page 88 |
Page 89 |
Page 90 |
Page 91 |
Page 92 |
Page 93 |
Page 94 |
Page 95 |
Page 96