In a qui tam (pronounced Kee-tam) action a private party (person or entity) brings an action by filing a lawsuit or claim on behalf of the government. The private party is called the relator and the government is the real plaintiff.
For example, under the federal False Claims Act a private party may bring a qui tam action against a party who has defrauded the federal government by submitting false claims for goods or services. See 31 U.S.C. §3279. If the lawsuit or claim is successful, the relator may receive up to 30% of the government’s recovery.
Because the relator is bringing the fraud to the attention of the federal government they are sometimes referred to as whistleblowers and the lawsuit or claim may be referred to as a whistleblower action.
Qui tam actions may originate in most any of the federal government’s departments, but two of the most common are the military (defense contractors selling goods and services to the U.S. government) and health care (Medicare and Medicaid services sold to the U.S. government). The Fraud Section of the United States Department of Justice generally investigates qui tam claims.
Most states also have a law known as the False Claims Act that that provides for qui tam or whistleblower actions brought on behalf of the state government. These laws vary from state to state and are usually located in a state’s statutes.
In Texas, qui tam actions are facilitated by both federal and state laws. Under the federal False Claims Act (31 U.S.C. § 3729), private parties, known as relators, can file lawsuits on behalf of the U.S. government against individuals or entities that have submitted fraudulent claims to the government. If the action is successful, the relator may receive a portion of the recovered funds, typically up to 30%. These actions are often related to defense contracting or healthcare services involving Medicare and Medicaid. The relator is considered a whistleblower for exposing the fraud. Texas has its own version of the False Claims Act, which allows for similar qui tam actions at the state level. The Texas Medicaid Fraud Prevention Act (Texas Human Resources Code Chapter 36) is one such statute that enables private parties to bring actions against those defrauding state healthcare programs. The specifics of the state law can differ from the federal law, but the general principles of allowing private individuals to sue on behalf of the state and potentially receive a reward for successful claims are consistent.
