2 DoJ Whistleblower Policies Explained
Four K&L Gates attorneys dissect two Justice Department policy statements and their impact on healthcare companies and their law firms in an online blog post. The attorneys first examine a 1/2018 memo issued by Civil Fraud Division director Michael Granston to determine what has happened over the last 18 months. In the memo, Granston told civil fraud attorneys to consider whether the government’s interests would be served by affirmatively dismissing whistleblower actions filed under the False Claims Act when evaluating recommendations to decline intervention in such cases.
While some attorneys feared the department would more aggressively and more frequently dismiss frivolous or marginal cases brought by whistleblowers seeking large windfalls, the attorneys say that given some courts’ apparent hostility to DoJ motions to dismiss whistleblower False Claims Act cases, and the fact that doing so would adversely affect the department’s bottom line, it does not appear that the memo is likely to have the impact that False Claims Act defense attorneys thought it would have.
The post reports that Granston himself said 6/24 that the department would “judiciously” exercise its authority to dismiss cases and that dismissal would be the exception and not the rule.
The post also looks at a DoJ 5/7 guidance for civil prosecutors to use in determining how to assess cooperation by entities and individuals in False Claims Act cases. The guidance identifies factors the department will consider and the credit that may be provided to individuals or entities who voluntarily self-disclose misconduct that could serve as the basis for False Claims Act liability or administrative remedies.
“The decision of whether to self-report misconduct of which the government may not already be aware is an extremely difficult one,” the attorneys write. “If the government does not already know of the misconduct, and would never have discovered it, a company or individual will have ‘served themselves up’ to the government by self-reporting, resulting in investigative and other costs, business disruption, anxiety, and fear, and perhaps even fines and imprisonment. Companies, individuals, and their advisors need clear guidance from the DoJ concerning the ‘reward’ portion of the ‘risk/reward’ calculation…. Until further settlements and their underlying facts and circumstances are publicly reported, self-reporting in False Claims Act cases will to some degree require participants in the healthcare industry to make a leap of faith.”