House Judiciary Committee Holds Hearing on Oversight of the False Claims Act

Last Thursday one of the subcommittees of the House Judiciary Committee held a hearing on Oversight of the False Claims Act.  Four stakeholders represented the diverse viewpoints of the plaintiffs’ bar, a compliance program reform initiative, the defense bar, and in-house counsel (copies of their prepared written testimony can be found here, here, here, and here).

  • The representative of the plaintiffs’ bar attempted to cut off efforts at FCA reform by highlighting the many so-called “filters against folly” already protecting companies from being victimized by frivolous qui tam suits.
  • A member of the Ethics & Compliance Initiative’s Blue Ribbon Panel urged the government to create “concrete, predictable incentives for companies” to create first-class compliance programs, which would include a reduction in FCA penalties “when inevitable wrongdoing does occur.”
  • The defense bar perspective emphasized the real-world nature of the FCA dynamic, which often renders efforts to fight qui tam suits financially impossible.  He advised Congress to take steps to remediate the current incentives for relators, including by encouraging internal self-disclosure and communicating to DOJ an expectation that it act on its statutory authority to dismiss meritless cases.
  • Finally, the president of a hospital that went through a three-year investigation as a result of a computer billing error presented his company’s challenges and ultimate vindication after fighting an expansive government inquiry.

The House hearing follows an announcement earlier in the week of the formation of a bipartisan House Whistleblower Protection Caucus.  The Caucus is dedicated to defending the rights of whistleblowers, and it may provide an organizing force for future relator-friendly FCA amendments.