Does the Government Shutdown Have Any Impact on My Qui Tam Case?

It has been 17 years since the United States government faced a partial shutdown as the result of a dispute between members of Congress. This is a tumultuous and uncertain time for our government and for all American citizens, and the simple reality is that we may not know answers about many aspects of the shutdown until the process fully plays out.

There are endless conversations playing out every day about the impact of the shutdown on major government programs such as the military, government-subsidized lifestyle services like the WIC program, and more personal issues like the US mail, trash, and even passport services. Buried underneath these more common discussions are inevitable questions about the impact of the shutdown on False Claims Act cases. FCA cases necessarily rely on the government- specifically on the US Department of Justice and local U.S. Attorney’s Offices- to be investigated and resolved through prosecution or settlement. Because of that relationship, it is understandable for whistleblowers and potential whistleblowers to be asking “What will this mean for us?”

The short answer is that there will undeniably be a direct impact on the prosecution of False Claims Act cases during the shutdown. Some have already taken effect, others are looming depending on the length of the shutdown. For example, immediately after the shutdown took effect, False Claims Act practitioners around the country received requests from the Department of Justice to agree to “stay” cases (meaning to put everything on hold) until further notice. The Department of Justice has indicated that, with minimal exceptions, its attorneys are prohibited from working on any cases that do not involve “emergencies involving the safety of human life or the protection of property.”

Following suit with the Department of Justice, certain courts have issued automatic stays of all cases involving the federal government, which includes qui tam cases. On October 3, 2013, just three days after the shutdown officially began, the Eastern District of Kentucky issued an automatic stay on all cases involving the United States of America or any party represented by the Department of Justice or the U.S. Attorney’s Office, citing a “lapse of congressional appropriations funding the federal government” and “workforce reductions.” It is not unreasonable to expect that other federal courts will follow suit with similar blanket orders.

Several Department of Justice attorneys who specifically work on False Claims Act cases, as well as a limited number of attorneys in the U.S. Attorney’s Offices around the country, are considered “essential employees” who will continue to work through the shutdown. However, as a practical matter, those employees are handling their own over-burdened workload in addition to the workloads of their furloughed colleagues, so the likelihood of seeing substantial progress made on any cases is minimal.

As False Claims Act practitioners, we have seen direct impacts on several of our cases in the past week. In at least one case, a defendant has paid the government for a settlement amount, but the individuals responsible for processing that money and paying out the relator’s share are on furlough, so the money is essentially being held in abeyance during the shutdown. In another case, a long-sought settlement is pending and the main parties on the case are available to sign off, but individuals who need to provide required signatures from several government offices are not available. As mentioned above, other cases have simply been stayed pending the resolution of the shutdown- a frustrating delay for cases that are known for their longevity in the best of circumstances.

So What Should I Do Now?

If you are a whistleblower in an active case, the most important thing to do is to keep in continuous contact with your attorney so you are prepared to provide any needed information if and when the government requests it. If your attorney advises that your case has been stayed, or placed on hold, then there are few options other than waiting it out.

If you are considering a False Claims Act case, do not let the government shutdown dissuade you or convince you to delay the case. There is no indication that the shutdown will have any impact on major case dispositive issues like the statute of limitations or the first-to-file bar, so it is still important to get a case on file as soon as practicable. As usual, False Claims Act attorneys will make a pre-filing disclosure to the appropriate governmental agency before filing a case, but there appears to be enough “essential employees” available that the process will not be interrupted.

If you believe you have information regarding fraud against the government and are considering bringing a False Claims Act case, please contact James Hoyer for an evaluation of your claims. Click here for more information about the firm and to submit your information electronically, or you may contact our office at 813-397-2300.

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