Importance of false claims act qui tam complaints in FCA litigation
Today’s blog post is part one a several part post concerning a question from a regular reader of this blog. Specifically, he asked my opinion on best-practices for preparing an initial Complaint in a qui tam case under the federal False Claims Act and/or the Virginia Fraud Against Taxpayers Act.
As regular readers know from past posts, I am a big believer in executing on the fundamentals, and I think that is mostly what separates the winners from the losers.
This blog post assumes that counsel is knowledgeable about the basic requirements of jurisdiction, venue, and so forth. These requirements of course differ somewhat depending on whether a case is filed in federal court – and thus under the federal FCA – or in state court under an applicable state FCA statute. Instead of focusing on these basic legal requirements, this post focuses on what you put in your initial Complaint over and above the basic requirements.
To be sure, the basic legal requirements of an initial Complaint are somewhat few in number. Federal Rule of Civil Procedure 8, for example, requires only a short and plain statement of the facts entitling the plaintiff to relief. Fed. R. Civ. P. 10 provides other requirements like captions and numbered paragraphs, “each limited as far as practicable to a single set of circumstances.” Particularly important for FCA litigation is Fed. R. Civ. P. 9(b) which requires pleading with specificity in FCA cases.
Beyond those basic requirements counsel is free to do a great many things with the initial Complaint.
THE INITIAL COMPLAINT SETS THE TONE FOR THE ENTIRE CASE AND PROVIDES A ROAD MAP FOR THE REST OF THE LITIGATION – IT SHOULD THEREFORE BE CLEAR, CONCISE, AND EASY TO UNDERSTAND
The initial Complaint sets the tone for the entire case. It should therefore be complete and thorough; it should also be clear and concise. These goals are not at odds with each other. Many lawyers – including some very good ones – confuse “complete and thorough” with “long and wordy.”
If I had to give one piece of advice to counsel it would be to understand how to draft a Complaint that is complete and thorough while being clear and concise without being long and wordy.
Here is one way to do it. Put yourself in the shoes of the Judge’s law clerk. This is important for two reasons. First, a law clerk is by definition a newly minted lawyer with limited experience. Second, law clerks are often preparing for the next day’s hearings at the end of a long day. When you combine these two things you get an inexperienced young lawyer who is mentally exhausted and ready to go home when they read your Complaint.
In other words you should make your Complaint easy to understand to a person who is tired and wants nothing more than to go home at the end of a long day. Lawyers always respond to this by saying “But my case is very complicated.” A case may very well be complicated — but one of your most important jobs as a qui tam lawyer is to make a complicated case simple.
I know of no better way to do this than making the numbered paragraphs deal with one concept each – or as some people call it, one “factlet” each. Including only one factlet in each paragraph helps the reader to follow you as you build the allegations of the Complaint. There is nothing worse for a reader than paragraphs that include six or seven factlets each. Such allegations are hard to understand and difficult to follow.
You should then group your factlets and arrange them under subheadings that help to guide the reader. The specifics of your Complaint will vary depending on the kind of case and the nature of the allegations, but in a case alleging false claims in a costs plus contract I think it is wise to set forth the clear accounting standards in a part of the Complaint called something like “Applicable Legal Standards.”
Along those lines, I am including the Complaint from US ex rel Rigsby v. State Farm et al. This is a well-known qui tam case that ended in a jury verdict a year or two ago. While the Complaint may differ in some ways from the style that I use, I can tell you first hand that when I started reading this Complaint I had no earthly idea how flood insurance worked, or how federal money was involved. But I got the idea very quickly, which means the Complaint did its job.
Above all else, I normally do not believe in waiting until the very last page of the Complaint to explain how the defendants knowingly broke the law. I see this quite often — plaintiffs list 20 or 30 pages of allegations and then include on the last page something like this:
COUNT ONE — ALL OF THE ACTIONS ALLEGED ON THE PREVIOUS PAGES CONSTITUTE A VIOLATION OF THE 31 U.S.C. 3729(a)(1)(A) OF THE FEDERAL FALSE CLAIMS ACT
Sometimes this approach may make sense, but those instances are few and far between I think. Normally, I submit that it is better to weave the statutory language in with your factual allegations.
STAY TUNED FOR PART II…
Stay tuned readers, next time we will look at weaving the facts and the law together in a Complaint to make it clear and concise while being complete and thorough…