I am very pleased to announce that Virginia Attorney General Ken Cuccinelli has broken new legal ground in Virginia’s fight against fraudulent claims on our tax dollars. To some of you, today’s events may not that seem important, but to those of us in the qui tam legal community they are nothing less than a total shift in the way the Virginia Attorney General’s office handles fraud.
Today, General Cuccinelli announced his intervention in a California qui tam case against JM Eagle manufacturing. For those of you new to this blog and to qui tam litigation, a false claims case is initiated by a relator who files a complaint under seal, and then serves it on the government, but not on the defendant.
This case for example was filed under seal in the U.S. District Court for the Central District of California, as there is a federal claim that gives the federal court jurisdiction. Because defendants also do business with most states, the complaint contains pendent state claims for each state with a state false claims act, including Virginia.
After service on the U.S. Attorney General and on the U.S. Attorney for the Central District of California, the government investigates, and then determines whether it will intervene or not intervene in the case. (The government has a third option, and that is asking the relator, or the court, to dismiss the case.)
Where the government intervenes, it assumes control of and responsibility for the litigation. When it does not, the relator assumes control of the litigation, subject to the government’s supervision. The relator cannot settle the case without the government’s approval, and the relator cannot dismiss the case without the government’s approval.
This JM Eagle case is important because it represents the first time a Virginia Attorney General has intervened in a non-healthcare case in another state. Previously, the office had declined intervention and waited for the check to come in the mail. Even when a state does not intervene, it still receives a minimum of 70% of the money recovered, so that is not that bad of an option for the Commonwealth.
Still, the fact that Cuccinelli has decided to intervene signals a more assertive approach to this case specifically and to qui tam cases filed under the Virginia Fraud Against Taxpayers Act generally. As readers of this blog are aware, I have not been shy in the past about expressing my desire for an Attorney General that takes a more involved approach to these cases; thus, so far General Cuccinelli is getting a “A+” grade in my book, plus a gold star.
This comes on the heels of General Cuccinelli announcing the leadership of his administration. As I opined previously, his picks of Chuck James, Steve Buck, Duncan Getchell, and others to the top positions of his administration represents in my opinion the single most qualified legal team to ever head the Virginia OAG.
Finally, his office did a press release on the intervention decision. This may seem like an unimportant thing to some, but it is actually crucial. For law enforcement of any kind to be effective, people must have a healthy respect for it. Instilling healthy respect for law enforcement starts by making everyone aware that authorities do and will take action to enforce the law.
Hopefully, this will not be a flash in the pan, but rather will be the first steps toward a number of long needed overhauls in the way the OAG handles non-healthcare qui tam cases.
So far, so good.
By Zachary Kitts on February 13, 2010 in Qui Tam practice in Virginia, Virginia Fraud Against Taxpayers Act, Virginia Whistleblowers
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