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ABA Journal on qui tam expansion

Last year, as part of the Deficit Reduction Act of 2005, Sen. Chuck Grassley (R-Iowa), patron saint of qui tam/False Claims Act lawyers from coast to coast, inserted a provision "to prod states into passing their own false claims acts with incentives to increase their share of recoveries in Medicaid fraud cases. The inducements would allow states to up their takes by 10 percentage points, provided their false claims acts follow the federal model. By involving more states and more lawyers, supporters hope to increase recovery amounts across the board." The ABA Journal has now published an article surveying the early results. Janet L. Goldstein, a plaintiffs lawyer from Washington, D.C., tells the journal �I think you'll see a real shift in focus toward state cases. We've got state attorneys general who are very excited about these cases.�

In addition to quoting supporters of the expansion, the ABA Journal also gives some space to the less enthusiastic "tort reform arguments from some quarters" concerning the new developments. For example, "Washington, D.C., defense lawyer John T. Boese, author of one of the leading texts on the federal act and co-chair of this past June�s ABA national institute on qui tam enforcement", is heard from:

Boese says that qui tam plaintiffs lawyering in recent years has come to resemble what he describes as the �franchise model� of the highly criticized 1990s state tobacco litigation, where the handful of plaintiffs firms in control spread their costs and made billions of dollars in fees by farming out much of the actual work to local counsel.

Boese says he regularly encounters plaintiffs lawyers in false claims cases who appear to use a similar tag-team approach. �Will this become tobacco?� Boese asks. �It already has.�

...[Also of] concern to Boese is a separate provision in the Deficit Reduction Act that requires nearly every provider to conduct employee education programs on fraud and how to file false claims complaints. Besides their potential for increasing the number of new cases, Boese says such programs also undermine the stricter internal company compliance plans and financial controls that have become hallmarks of post-Enron corporate self-accountability.

Worker training in the False Claims Act could become the functional equivalent of a company hiring a plaintiffs lawyer and suing itself, Boese complains.

More on qui tam here and here, and, at Overlawyered, here and here.



Rafael Mangual
Project Manager,
Legal Policy

Manhattan Institute


Published by the Manhattan Institute

The Manhattan Insitute's Center for Legal Policy.