False Claims Gold Rush
WSJ | bling bling

Chuck Grassley (R-IA, asshat) has proposed a bill to drastically expand qui tam claims. This is a terrible idea, mostly for reasons enumerated in the article above.

One point that the WSJ piece doesn't make is that qui tam claims are also prone to abuse as parallel filings to support other, non-governmental claims. Case in point - a contract dispute in a highly regulated industry will often hinge on technical issues. However, those same technical issues often have tax consequences, or similar consequences for other government contracts.

Suddenly, the dispute between private litigants (which may or may not be a good-faith dispute) has turned into two cases. Not only is the defendant subject to damages under the contract action, but it is now subject to TREBLE damages under the qui tam claim. For those of you counting, that makes any defendant in a sufficiently-regulated industry immediately subject to 4x liability for a range of contract disputes, without much in the way of legal maneuvering on the part of plaintiffs. All this before punitive damages. Can we say "bargaining chip"?

The fact that only 20% of the current qui tam claims are acted on suggests that the plaintiff's bar is already well aware of this, and is throwing out as many qui tam claims as it can to see if they stick. It is also a powerful indication that, if anything, the current statute is too broad and should be more limited rather than wasting valuable time at Main Justice investigating these (often frivolous) claims.

A final point - it should be abundantly clear that loosening restrictions on federal employees bringing qui tam actions is a TERRIBLE IDEA. It will seriously damage the confidentiality of government information, will hinder internal government reporting (as government employees take their claims to the court rather than solving them within their agency), and will substantially increase mistrust in regulators. Seriously, the American Association for Justice (nee ATLA) can go f**k itself with this one.