When the False Claims Act was instituted in 1863, the motivations of the government were pretty clear: penalize companies or people who defraud the government. When the government enacted higher potential rewards and easier filing procedures in 1986 and then again in 2009, the number of whistle-blower filings exploded, with annual filings nearly doubling over five years from 2009 to 2013. However, something else exploded as well—the growth of serial whistle-blowers
Serial whistle-blowers file suit after suit in the hopes of landing the “big one.” Often these are healthcare–related cases. Since 1986, over 25 people or groups fall into this category of serial whistle-blowers with five suits or more filed in the last two decades. The phenomenon is also reflected in the number of frivolous lawsuits that do not result in any settlement or judgment, which were 74 percent of suits filed from 1987 to 2010, according to the Justice Department.
One investigation into a serial whistle-blower found that a physician who received $38 million, and was praised by a federal prosecutor for this “good citizenry,” had filed 12 suits against different laboratories with a string of allegations surrounding unfair drug pricing practices and false performance claims. While the physician claims that all his filings were based on “non public” documents and his original sources, many have been thrown out or abandoned because of deficient allegations. In 2016, that same physician was due to receive another $59 million from another price-fixing allegation against a large pharmaceutical company. However, the government continues to see value in the whistleblowing incentives, particularly in the health-care industry. From 2009 to 2013, it collected $12.3 billion in civil recoveries.
1. Is it appropriate to file more than one whistle-blower claim?
2. Are the incentives too high for whistle-blowers, thus putting some people into the whistle-blowing “business?”
3. Beyond the whistle-blower, who benefits from the pursuit and settlement of these claims?