False Claim Act Recoveries During 2020: A Strong Year for the Department of Justice
On January 14, 2021, the United States Department of Justice (DOJ) announced that it had recovered $2.2 billion from False Claim Act (FCA) Cases during 2020. Each year, the DOJ publishes statistics about its recoveries under the FCA and the number of new FCA matters that were filed during the prior year. These FCA statistics provide useful information and offer a window in the DOJ’s enforcement activity and its reliance on private whistleblowers (often called “relators”) who bring FCA cases forward and help the DOJ recover significant sums of money.
When COVID-19 first started shutting courtrooms across the country in early 2020, and shifted employers large and small – including the DOJ – to a telework model, many wondered whether this substantial change would impact the DOJ’s FCA enforcement efforts. Despite the DOJ’s $2.2 billion haul during 2020 being the smallest recovery amount since 2008, two important facts demonstrate that the DOJ had a successful year that was not significantly hampered by the pandemic.
First, the timeframe used to compile the FCA statistics, which ran through September 30, 2020, excluded the DOJ’s massive $2.8 billion settlement with Purdue Pharma LP, which occurred on October 21, 2020. If this critical settlement were included in the 2020 totals, it would bring the DOJ’s recoveries to a whopping $5 billion, marking its best year since 2014.
Second, the DOJ’s data also clearly signals a shift towards the Government bringing its own enforcement actions, those which are not based on whistleblower lawsuits. Because the FCA allows a private whistleblower to bring a FCA action on behalf of the United States, the year-end statistics distinguish the number of new matters and total recoveries that stem from cases that originate from DOJ (the “non qui tam” matters) and those based on relator lawsuits (the “qui tam” matters).
During 2020, while the number of new qui tam matters outpaced the non qui tam actions 672 to 250, there was a 100-matter increase in the number of non qui tam actions filed by the DOJ compared to the year before. The 250 matters initiated by DOJ in 2020 without the assistance of whistleblowers is the largest number in 25 years. While qui tam actions still account for 78% of new matters, this year’s statistics may show that the DOJ is charting and pursing its own enforcement priorities, rather than taking their cues from the relators.
Overall, the DOJ made a strong appearance in 2020, despite initial concerns and uncertainty. With major settlements already on the scoreboard for 2021, a likely increase in FCA litigation driven by COVID-19 relief programs, and a new administration which is deeply committed to pursuing fraud against government programs, there is no reason to anticipate that enforcement actions will slow down in the coming year.