Qui Tam

New Opinion from the U.S. District Court for the Western District of Virginia interprets the public disclosure bar and release agreements

By Zachary A. Kitts

    In the ongoing saga of Purdue Pharma, an opinion published today by Judge Jones in the Western District of Virginia addresses whether a relator's signature on a general release precludes that relator from bringing a qui tam suit at a later date.  

    In other words, as readers of this blog are aware, a qui tam case involves the interests of the United States--as such, the relator has no authority to settle a qui tam case on his or her own.  The statute itself, at 31 U.S.C. 3730(b)(1), requires the consent of the Attorney General to any Order dismissing the case.
 
    So what happens when the relator signs a general release and waiver of all claims and then brings a qui tam action?  The issue is an important one, as many employees are presented with release agreements at the time of their termination, and offered a sum of money in exchange for waiving any and all rights they might have to bring a lawsuit or claim of any kind.    

    The issue of whether a general release is enforceable to bar a subsequent qui tam action has not been addressed by the Fourth Circuit, and so Judge Jones made reference to two Ninth Circuit decisions.  The first, in United States ex rel Green v. Northrop Corp., 59 F.3d 909 (9th Cir. 1995) stands for the proposition that any release of qui tam claims signed by a relator is void as against public policy.  

    The second opinion, in United States ex rel Hall v. Teledyne Wah Chang Albany, 104 F.3d 230 (9th Cir. 1997) outlines the exceptions to the general rule set forth in Green.  

    Bear in mind, qui tam claims are not the only types of claims which are not subject to waiver by a former employee.  As another example, if the EEOC is not a party to a release agreement, the employee does not waive his or her right to file an EEOC charge by signing such a document.  

    The employee does, however, waiver his or her right to any individual recovery out of any proceeding the EEOC might initiate.  Ultimately, if a relator initiated a qui tam action after having signed a general release, I think it would be a fair assumption that the relator would, at a minimum, suffer in the percentage of the recovery that he or she received.

    The opinion also contains a good discussion of the public disclosure bar, and the various nuances to that jurisdictional hurdle.  


Zachary Kitts 
Cook & Kitts, PLLC 

          

    

Full post as published by Virginia Qui Tam Law on October 28, 2008 (boomark / email).