Alternative Remedy Issues: Relator Share When The Government Takes An Alternate Remedy

In False Claims Act (FCA) litigation, one of the more arcane but strategically critical issues that can arise is how a whistleblower—or “relator”—is compensated when the government opts to pursue an alternative remedy rather than intervening directly in the relator’s qui tam case. This scenario, though rare compared to conventional FCA settlements or interventions, presents important questions about fairness, statutory interpretation, and the broader goals of the FCA.

In this article, our Hillsboro, OR whistleblower lawyer will break down what the alternative remedy provision is, how courts have interpreted the relator’s right to a share in these cases, and what risks and strategies both relators and defense counsel should be aware of when an alternative remedy path emerges.

What Is An “Alternate Remedy” Under The False Claims Act?

Section 3730(c)(5) of the FCA allows the government to pursue an “alternate remedy” to address false claims outside the procedural structure of the qui tam case. The statute provides:

“Notwithstanding subsection (b), the Government may elect to pursue its claim through any alternate remedy available to the Government, including any administrative proceeding to determine a civil money penalty. If any such alternate remedy is pursued… the person initiating the action shall have the same rights in such proceeding as such person would have had if the action had continued under this section.”

In practical terms, this means the government can bypass the relator’s FCA case and instead recover via another legal channel—such as a non-FCA administrative action, settlement, or even a different civil statute—but the relator is still entitled to a share of the recovery.

When Is This Provision Invoked?

Although rarely litigated, the alternate remedy provision typically arises in situations like:

• Parallel Proceedings: The government resolves the fraud claims through a different statute or enforcement mechanism, e.g., an agency-level civil monetary penalty proceeding.
• Declined Qui Tam Actions: The government declines to intervene but later negotiates a separate settlement with the defendant for similar conduct.
• Multifaceted Resolutions: The government resolves complex cases with multiple components (e.g., FCA, Stark Law, AKS violations) using non-FCA tools.

What Rights Does The Relator Have?

The key legal question is: What rights does the relator have when the government chooses this path?

The FCA statute answers partially: the relator “shall have the same rights… as if the action had continued.” But this still leaves courts to interpret:

• Whether the relator’s rights include notice, participation, and discovery in the alternative proceedings;
• Whether the relator is guaranteed a share of the recovery—and if so, what percentage;
• How courts will define an “alternate remedy” in contrast to a separate, unrelated enforcement action.

How Much Is The Relator Entitled To?

Relators typically argue they are entitled to the same 15% to 30% share they would receive under the FCA had the government intervened or the relator prevailed.

The government, by contrast, sometimes takes a narrower view—offering a reduced share or even arguing that the proceeding in question doesn’t qualify as an alternate remedy at all. This tension creates significant uncertainty for relators and can result in satellite litigation over the relator’s cut.

Courts generally side with the relator if the facts show that the government’s resolution arose from the allegations or investigation originally initiated by the relator. For example:

• In United States ex rel. Barajas v. United States, the Federal Circuit held that a relator was entitled to a share of the government’s administrative resolution because it was based on the same underlying conduct alleged in his qui tam suit.
• Similarly, in United States ex rel. Benaissa, the court found that the relator stated a plausible claim for a share under the alternate remedy clause.

But if the government’s enforcement is demonstrably based on independent discovery or unrelated conduct, courts may deny the relator’s claim.

Procedural Challenges And Strategy

Relators who suspect the government is pursuing an alternate remedy behind the scenes face significant obstacles:

• Lack of Transparency: Alternate remedies are often resolved confidentially or through mechanisms that don’t require notice to the relator.
• Timing Issues: By the time a relator learns of the alternate remedy, the resolution may be finalized—making it harder to intervene or demand a share.
• Proving Causation: The relator must often demonstrate that the government’s remedy was based on facts materially similar to those alleged in the relator’s complaint.

For defense counsel, this can be leveraged strategically—e.g., resolving matters through non-FCA channels to avoid qui tam complications—but it doesn’t guarantee immunity from a relator claim if the conduct overlaps.

Best Practices For Relators

To preserve the possibility of an alternate remedy recovery, relators should:

1. Monitor Government Activity: Stay alert for signs of parallel enforcement or settlement activity related to the alleged fraud.
2. Communicate Clearly: Keep lines of communication open with DOJ or the U.S. Attorney’s Office, even if the government has declined intervention.
3. Amend Promptly: Consider amending the complaint if new facts suggest broader misconduct or if government interest is renewed.
4. Be Ready to Litigate: If an alternate remedy appears to have occurred, relators must be prepared to file a motion or complaint asserting their right under 3730(c)(5).

Conclusion

The alternate remedy provision of the FCA is an underused but powerful tool to ensure relators are not bypassed when the government chooses to enforce fraud claims outside the four corners of a qui tam case. However, it also introduces complexity and unpredictability—especially when the government declines to intervene but later obtains a recovery via other means.

For relators, staying vigilant and proactive is key to securing their rightful share. For defendants, understanding the contours of this provision can help anticipate potential relator claims even in non-FCA resolutions. And for the courts, each case demands a careful balance between statutory text, policy objectives, and fundamental fairness.

As more sophisticated fraud schemes are resolved through creative, hybrid remedies, alternate remedy disputes are likely to become a more active battleground in FCA jurisprudence. Contact Whistleblower Law Partners today to discuss your case with an attorney.