Survey of Damages in False Claims Act Retaliation Cases
The FCA protects a potential relator from retaliation for “lawful acts done . . . in furtherance of an action under this section, including investigation” and provides “all relief necessary” to make him or her “whole.”1 This relief shall include:
reinstatement with the same seniority status that employee, contractor, or agent would have had but for the discrimination, 2 times the amount of back pay, interest on the back pay, and compensation for any special damages sustained as a result of the discrimination, including litigation costs and reasonable attorneys’ fees.2
The following is a survey of what courts have awarded for retaliation claims in False Claims Act cases.
In Godwin v. Visiting Nurse Association Home Health Services, the defendant discharged the plaintiff-employee because she refused to create and submit false documents to the defendant’s financial intermediary under federal Medicare program.3 As a result of this retaliation, the court held that the plaintiff was entitled to recover “twice her lost wages, reinstatement, and attorneys’ fees and costs she has incurred in prosecuting this lawsuit.”4
In Eberhardt v. Integrated Design & Const., Inc., the trial court instructed the jury that the plaintiff was entitled to interest, but the jury ignored this instruction and only awarded double back-pay damages.5 The trial court added prejudgment interest to the jury’s verdict. On appeal, the court held that the trial court did err in adding prejudgment interest to the verdict.6
In Neal v. Honeywell, the court held that compensation for emotional distress caused by an employer’s retaliatory conduct is available under 31 U.S.C. § 3730(h) and such damages may be classified as “special damages.”7 In awarding the plaintiff $200,000 for emotional injury, the court reasoned that $200,000 was not excessive in light of the threats of physical injury the plaintiff received.8 The court noted that without the threats, such an award probably would have been excessive.9
Regarding the issue of back-pay damages, the plaintiff argued that double back-pay damages should be calculated before subtracting interim earnings.10 The plaintiff also sought recovery she could have had under § 3730(d)(1)—up to 25% of the government’s possible recovery—had she commenced a qui tam action.11 The district court held that she could not recover damages that she would have earned in a qui tam suit. The court also held that back-pay damages should be doubled before subtracting relator’s interim earnings. Thus, her back-pay damages of $50,000 awarded by the jury were first doubled to $100,000 and then the $10,000 she had earned since her termination was subtracted from the $100,000, for a final award of $90,000 in back pay. The appellate court affirmed the district court’s damages ruling.12
In Hammond v. Northland Counseling Center, Inc., the plaintiff sought emotional distress damages as part of her FCA action.13The plaintiff offered evidence that she suffered emotional distress as a result of workplace discrimination and harassment, her unexpectedly early termination, her sudden transition to another job, and the overall impact of defendant’s alleged actions on her reputation, practice, and career.14 The court held that these allegations were sufficient to create a genuine issue of material fact regarding her entitlement to emotional distress damages under her FCA claim.15 The court commented in a footnote that the plaintiff’s decision to move out of state (which she claimed caused distress relating to her husband’s job and her children’s well-being) occurred more than a year after her termination and was therefore too attenuated and removed from the defendant’s alleged retaliatory actions to warrant an award of emotional distress damages.16
In Wilkins v. St. Louis Housing Authority, Wilkins, in his cross-appeal, argued that the district court erred by subtracting his interim earnings from the back-pay damages before doubling them.17 The district court had subtracted Wilkins’s interim earnings ($30,000) from the lost wages he suffered as a result of the retaliatory termination ($79,170), then multiplied the difference by two (($79,170-$30,000) x 2), for a total award of $98,340.18 The appellate court agreed with the district court’s calculation and held that the proper method of calculating back-pay damages is to double the back-pay damages after subtracting interim earnings.19
In U.S. ex rel. Satalich v. City of Los Angeles, the City contended that double back-pay damages were punitive, but the court disagreed and held that the FCA’s double back-pay provision is compensatory not punitive.20
- 31 U.S.C. § 3730(h)(1).
- 31 U.S.C. § 3730(h)(2).
- 831 F. Supp. 449, 451-52 (E.D. Pa. 1993) aff’d sub nom. U.S. ex rel. Godwin v. Visiting Nurse Ass’n Home Health Servs., 39 F.3d 1173 (3d Cir. 1994).
- Id. at 454.
- 167 F.3d 861, 872 (4th Cir. 1999).
- Neal v. Honeywell, 191 F.3d 827, 831-32 (7th Cir. 1999) abrogated on other grounds by Graham County Soil & Water Conservation Dist. v. U.S. ex rel. Wilson, 545 U.S. 409 (2005).
- Id.. at 832.
- 995 F. Supp. 889, 896-97 (N.D. Ill. 1998), aff’d, 191 F.3d 827 (7th Cir. 1999) abrogated on other grounds by Graham County Soil & Water Conservation Dist. v. U.S. ex rel. Wilson, 545 U.S. 409 (2005).
- Id. at 895-96.
- Id. at 896-97.
- 218 F.3d 886, 893 (8th Cir. 2000).
- Id. at 893 n.8.
- 314 F.3d 927, 934 (8th Cir. 2002).
- Id. at 934 n.10.
- Id. at 934; see also Hammond, 218 F.3d at 891-92 (holding that back-pay damages should be doubled after subtracting interim earnings).
- 160 F. Supp. 2d 1092, 1109 (C.D. Cal. 2001).
iAuthor of treatise, Federal False Claims Act and Qui Tam Litigation, Law Journal Press (2010), research source of the issues discussed in this article.
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