U.S. Should OK Discovery in FCA Materiality Cases: Analysis

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Three Fried Frank attorneys say that if False Claims Act (FCA) cases that look at the materiality of the claims being made, the government should be required to provide full discovery to the parties. However, they write in a Washington Legal Foundation Legal Opinion Letter, in some recent cases, the Department of Justice has opposed defendants’ attempts to obtain from federal agencies evidence that would tend to show that the violations were not material to the agency payment of claims.

“While the government understandably may not want the curtain drawn back to reveal the actual agency record for the claims at issue as well as similar claims,” the attorneys write, “the government has no grounds to oppose such discovery once an FCA litigation has commenced. In fact, DoJ itself should evaluate the agency record as part of its litigation diligence before it launches FCA litigation or makes an intervention and/or dismissal decision in a qui tam (whistleblower) suit. The options are simple: the government can either allow an FCA matter to proceed and open up the agency to materiality discovery, or the government can shut the suit down. There is no third option. DoJ cannot properly allow an FCA case to be litigated but then deny legitimate discovery on this topic.”

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