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Presented by Hodgson Russ, the Whistleblower Blog is written by a team of lawyers experienced in successfully guiding both whistleblowers and companies accused by whistleblowers of wrongdoing through the False Claims Act process.

Sharing Agreements Beat First-Relator Fights

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As cases become more complex and multiple allegations arise, it is more and more frequently the case that multiple relators will file complaints in different districts covering, at least for the most part, common subject matter. Rarely, however, in these types of cases, can one make a definitive judgment about whether the allegations overlap, either in whole or in part, are identical, or are distinctly separate. U.S. attorneys want to be able to consolidate cases and use all of the allegations in a single False Claims Act prosecution. So what to do about the relators?

In one remarkable case, four relators reached an agreement, with the knowledge of the government, to “share” in any recovery regardless of who might be dismissed by motion as not an original source and regardless of whether the allegations advanced by each separate relator were identical, overlapped, or were disparate.

The relators’ side agreement provided that they would evenly divide the relators’ share no matter who in the group received it from the government. While the government ultimately paid one relator, it used the information provided by each and adopted the allegations of each complaint. The sharing agreement also provided for the cooperation of all relators, even if a relator was dismissed or was found later not to be an original source.

In this case, everyone got the best of both worlds. The government was allowed to take advantage of all of the allegations and cooperation of the relators and none of the relators had to worry about not getting a fair share. It worked!

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