When a relator files a False Claims Act case, it engages two branches of the Government: the federal courts in which the case is filed and the executive departments and agencies that work the case—including the Department of Justice and U.S. Attorney’s Office. These offices generally rely on funding from the federal Government. So what happens when that funding runs dry?
As anyone who hasn’t already moved into their doomsday bunker can tell you, the federal Government is partially shutdown until the legislature and president can agree on a budget. Over 800,000 federal employees are either furloughed or working without pay. As a result, False Claims Act cases are in limbo until funding is restored, with potential long-lasting and devastating effects.
As of December 21, when funding was cut off for the U.S. Attorney’s office, much of its staff was sent home. In fact, the government attorneys and investigators who work the qui tam cases are often prohibited from working, even voluntarily and without pay, with priority given to the criminal division. And so the majority of sealed investigations grind to a halt until an appropriation bill funds the office again.
The federal courts have additional sources of funding, such as filing fees and court costs, that allow them a grace period to remain open while the funding issues are resolved. In years past, this has been sufficient, as most shutdowns have lasted only days, not weeks. This year, the judiciary will continue to operate fully staffed until January 11. What happens after that has yet to be determined.
However, because FCA cases are brought on behalf of the Government, and the Government’s attorneys are not allowed to work those cases, many courts have taken preemptive measures to address this situation. The Northern District of Georgia, for example, where our firm is located and many of our cases are filed, has issued an Order staying all civil cases in which the United States is a party, meaning that whether our cases are sealed or unsealed, intervened or declined, the cases are temporarily frozen.
Other courts are less forgiving. During past shutdowns, some courts have required the Government to meet its deadlines regardless of staffing. This had led to decisions not to intervene in promising cases because there was nobody to work them.
But even once funding is restored, an impact will be felt. Because even as pending cases and investigations are put on hold, bad guys continue to commit fraud, whistleblowers continue to step forward, and qui tam attorneys continue to prepare and file cases. Most U.S. Attorney’s offices are already overworked and understaffed; “lack of resources” is one of the leading causes of declination. And so when the Assistant U.S. Attorneys return to work and find a number of brand new cases on their desks, they may have to triage their cases, potentially limiting investigations and moving more quickly to decline to intervene in cases. And in general, investigations across the board will undoubtedly slow down until the office has had a chance to catch back up.
But all is not lost! First, obviously, if your case has merit and was brought by competent counsel, it will remain high on their list. Second, your qui tam counsel can continue to work cases in the absence of the Government, particularly those in active litigation or with extensive document review projects. And third, the state governments are not affected by the shutdown, and so states with False Claims Acts of their own and MFCU (Medicaid fraud) offices will continue to work those cases.
And so it is business as usual here at Bracker & Marcus. We will continue to work hard on our existing and new cases so that when the shutdown is over, we will be prepared to move them forward without further delay!