In The News

Fraud Whistleblowers Face Big Split Over Race to Courthouse Rule

Bloomberg Law

05/22/2019

A recent federal appeals court ruling flipping a $34M award from one whistleblower to another highlights what can be at stake under the False Claims Act’s first-to-file rule. Companies accused of fraud can raise first-to-file challenges at any time in a case, even if the case advanced to trial and is being litigated at the appeals court level.

Morrison & Foerster Government Contracts co-chair Alex Ward was quoted in Bloomberg Law’s article, saying “This is important because a defendant might not even know there is a case against. Cases can be under seal for a long time. Being able to raise a challenge at any time really does matter.”

“In nonjurisdictional circuits, you can definitely jeopardize the right to raise a first-to-file challenge if you fail to include it in the first pleading in response to a complaint,” Alex said. “It may be possible to raise a challenge later, but you certainly risk waiver. And if a case has proceeded to trial, at that point, you have definitely waived the right.”

“It’s not universally true, but generally, if you are a whistleblower trying to fend off others, you probably want to limit the scope of inquiry,” Alex said.

Close

Feedback

Disclaimer

Unsolicited e-mails and information sent to Morrison & Foerster will not be considered confidential, may be disclosed to others pursuant to our Privacy Policy, may not receive a response, and do not create an attorney-client relationship with Morrison & Foerster. If you are not already a client of Morrison & Foerster, do not include any confidential information in this message. Also, please note that our attorneys do not seek to practice law in any jurisdiction in which they are not properly authorized to do so.