DC Circuit Clarifies Standard For Determining When A Relator Is Entitled To Recover Under FCA’s “Alternate Remedy” Provision
In an interesting opinion interpreting the FCA’s alternate remedy provision, the D.C. Circuit recently held that a relator who filed a False Claims Act (FCA) case that was ultimately settled was not entitled to a share of the monetary relief that the government obtained through the settlement of a separate Food, Drug, and Cosmetic Act (FDCA) enforcement action against the defendant pharmaceutical manufacturer despite the fact that the enforcement action was based on similar underlying facts. The court explained that whether a separate government action is an “alternative remedy” in which a relator may share turns not on the commonality of facts between the government’s action and the FCA action, but on the type of claim brought and whether that claim could have been brought by the relator under the FCA.
Relator Not Entitled to a Portion of Funds Voluntarily Repaid by FCA Defendant
The False Claims Act allows relators to share in a recovery even where the United States pursues an “alternative remedy” rather than direct FCA litigation. In a recent decision, the District of Massachusetts determined that where an entity voluntarily repays stolen funds and takes action to do so as soon as the theft was discovered, that repayment does not constitute an “alternative remedy” requiring a relator’s share.