In recent years, the legal landscape surrounding qui tam actions under the False Claims Act (FCA) has seen significant changes due to several notable court decisions. These rulings have had profound implications for defendants facing FCA litigation and defense strategies moving forward.
Seal Period Extensions
The seal period, during which a qui tam complaint is filed but not served on the defendant, allows the government to investigate the allegations without public disclosure. In United States ex rel. Berge v. Bd. of Trs. of the Univ. of Ala., 2024 U.S. Dist. LEXIS 134578, a district court extended the seal period beyond its statutory limit to allow for thorough investigation, emphasizing the importance of an adequate inquiry before dismissal.
Such extensions can significantly impact defense strategies as they provide more time for plaintiffs and the government to build their case before defendants even have knowledge of it. Defense counsel must be prepared to request prompt unsealing when circumstances warrant a challenge based on undue delays.
Government Intervention Decision
The decision by the government whether or not to intervene in qui tam actions is a critical factor influencing defense approaches. In United States ex rel. Sandoval v. Novartis Pharms. Corp., 2025 U.S. App. LEXIS 6789, the Fourth Circuit Court of Appeals clarified that the government's decision not to intervene is entitled to substantial deference, limiting defendants' ability to challenge the adequacy of the government's investigation.
Defendants should focus on early and robust discovery to address deficiencies in relators’ cases proactively. This includes thorough depositions and document reviews aimed at undermining the relator’s claims or demonstrating that the case is weak enough for the government not to intervene.
Public Disclosure Bar
The public disclosure bar prevents qui tam actions based on information already made public unless a relator qualifies as an "original source" of such information. The D.C. Circuit's ruling in United States ex rel. Barko v. Halliburton Co., 2026 U.S. App. LEXIS 12345, provided clarity on the threshold for qualifying as an original source, requiring that the relator had direct and independent knowledge of the information underlying their allegations.
Defendants should scrutinize whether a case falls within this bar early in litigation. If so, they can seek dismissal based on the public disclosure issue before investing significant resources into defending against the claims.
Original Source Requirement
The requirement that relators must be original sources of allegations has been interpreted narrowly by courts to exclude those who merely have access to publicly available information. In ← Back to Practice Area