A Primer The False Claims Act (FCA), 31 U.S.C. §§ 3729

The False Claims Act: A Primer

The False Claims Act (FCA), 31 U.S.C. §§ 3729 - 3733 was enacted in 1863 by a Congress

concerned that suppliers of goods to the Union Army during the Civil War were defrauding the

Army. The FCA provided that any person who knowingly submitted false claims to the

government was liable for double the government’s damages plus a penalty of $2,000 for each

false claim. Since then, the FCA has been amended several times. In 1986, there were

significant changes to the FCA, including increasing damages from double damages to treble

damages and raising the penalties from $2,000 to a range of $5,000 to $10,000. The FCA has

been amended three times since 1986. Over the life of the statute it has been interpreted on

hundreds of occasions by federal courts (which sometimes issue conflicting interpretations of the

statute). The purpose of this primer is not to explain how the FCA evolved over the decades or

to discuss judicial interpretations of its provisions. Rather, in this primer we simply explain the

most significant elements of the FCA to give one new to the statute an introductory

understanding of the FCA and how it works. The complete text of the False Claims Act is

provided at the end of this primer.

Liability

The statute begins, in § 3729(a), by explaining the conduct that creates FCA liability. In very

general terms, §§ 3729(a)(1)(A) and (B) set forth FCA liability for any person who knowingly

submits a false claim to the government or causes another to submit a false claim to the

government or knowingly makes a false record or statement to get a false claim paid by the

government. Section 3729(a)(1)(G) is known as the reverse false claims section; it provides

liability where one acts improperly – not to get money from the government, but to avoid having

to pay money to the government. Section 3729(a)(1)(C) creates liability for those who conspire

to violate the FCA. Sections 3729(a)(1)(D), (E), and (F) are rarely invoked.

Damages and penalties

After listing the seven types of conduct that result in FCA liability, the statute provides that one

who is liable must pay a civil penalty of between $5,000 and $10,000 for each false claim (those

amounts are adjusted from time to time; the current amounts are $5,500 to $11,000) and treble

the amount of the government’s damages. Where a person who has violated the FCA reports the

violation to the government under certain conditions, the FCA provides that the person shall be

liable for not less than double damages.

The knowledge requirement

A person does not violate the False Claims Act by submitting a false claim to the government; to

violate the FCA a person must have submitted, or caused the submission of, the false claim (or

made a false statement or record) with knowledge of the falsity. In § 3729(b)(1), knowledge of

false information is defined as being (1) actual knowledge, (2) deliberate ignorance of the truth

or falsity of the information, or (3) reckless disregard of the truth or falsity of the information.

Definition of a claim

The FCA also defines what a claim is and says that it is a demand for money or property made

directly to the Federal Government or to a contractor, grantee, or other recipient if the money is

to spent on the government’s behalf and if the Federal Government provides any of the money

demanded or if the Federal Government will reimburse the contractor or grantee.

Tax claims exclusion

In § 3729(d), the FCA states that the statute does not apply to tax claims under the Internal

Revenue Code.

The qui tam provisions

The FCA allows private persons to file suit for violations of the FCA on behalf of the

government. A suit filed by an individual on behalf of the government is known as a “qui tam”

action, and the person bringing the action is referred to as a “relator.”

a. Filing a qui tam complaint

The qui tam provisions begin at § 3730(b) of the FCA; § 3730(b)(1) states that a person may file

a qui tam action. Section 3730(b)(2) provides that a qui tam complaint must be filed with the

court under seal. The complaint and a written disclosure of all the relevant information known to

the relator must be served on the U.S. Attorney for the judicial district where the qui tam was

filed and on the Attorney General of the United States.

b. Government investigation

The qui tam complaint is initially sealed for 60 days. The government is required to investigate

the allegations in the complaint; if the government cannot complete its investigation in 60 days,

it can seek extensions of the seal period while it continues its investigation. The government

must then notify the court that it is proceeding with the action (generally referred to as

“intervening” in the action) or declining to take over the action, in which case the relator can

proceed with the action.

c. Rights of the parties in a qui tam action

If the government intervenes in the qui tam action it has the primary responsibility for

prosecuting the action. § 3730(c)(1). It can dismiss the action, even over the objection of the

relator, so long as the court gives the relator an opportunity for a hearing (§ 3730(c)(2)(A)) and it

can settle the action even if the relator objects so long as the relator is given a hearing and the

court determines that the settlement is fair. § 3730(c)(2)(B). If a relator seeks to settle or dismiss

a qui tam action, it must obtain the consent of the government. § 3730(b)(1). When the case is

proceeding, the government (§ 3730(c)(2)(C)) and the defendant (§ 3730(c)(2)(D)) can ask the

court to limit the relator’s participation in the litigation.

d. Award to the relator

If the government intervenes in the qui tam action, the relator is entitled to receive between 15

and 25 percent of the amount recovered by the government through the qui tam action. If the

government declines to intervene in the action, the relator’s share is increased to 25 to 30

percent. Under certain circumstances, the relator’s share may be reduced to no more than ten

percent. If the relator planned and initiated the fraud, the court may reduce the award without

limitation. The relator’s share is paid to the relator by the government out of the payment

received by the government from the defendant. If a qui tam action is successful, the relator also

is entitled to legal fees and other expenses of the action by the defendant. All of these provisions

are in § 3730(d) of the FCA. The FCA also provides that if the government chooses to obtain a

recovery from the defendant in certain types of proceedings other than the relator’s FCA suit,

this is known as an alternate remedy and the relator is entitled to the same share of the recovery

as if the recovery was obtained through the relator’s FCA suit. §3730(c)(5).

e. Statutory bars to qui tam actions

The FCA provides several circumstances in which a relator cannot file or pursue a qui tam

action:

1. The relator was convicted of criminal conduct arising from his or her role in the

FCA violation. § 3730(d)(3).

2. Another qui tam concerning the same conduct already has been filed (this is

known as the “first to file bar”). §3730(b)(5).

3. The government already is a party to a civil or administrative money

proceeding concerning the same conduct. §3730(e)(3).

4. The qui tam action is based upon information that has been disclosed to the

public through any of several means: criminal, civil, or administrative hearings in which the

government is a party, government hearings, audits, reports, or investigations, or through the

news media (this is known as the “public disclosure bar.”) §3730(e)(4)(A). There is an

exception to the public disclosure bar where the relator was the original source of the

information.

We repeat that this primer does not discuss every section of the False Claims Act and is not

intended to provide legal advice or take formal positions. It is intended only to provide a general

introduction to the False Claims Act to those new to the area.

Below is the complete text of the False Claims Act:

§ 3729. False claims

(a) LIABILITY FOR CERTAIN ACTS.—

(1) IN GENERAL.—Subject to paragraph (2), any person who—

(A) knowingly presents, or causes to be presented, a false or

fraudulent claim for payment or approval;

(B) knowingly makes, uses, or causes to be made or used, a

false record or statement material to a false or fraudulent;

(D), (E), (F), or (G);

(D) has possession, custody, or control of property or money

used, or to be used, by the Government and knowingly

delivers, or causes to be delivered, less than all of that

money or property;

(E) is authorized to make or deliver a document certifying

receipt of property used, or to be used, by the Government

and, intending to defraud the Government, makes or

delivers the receipt without completely knowing that the

information on the receipt is true;

(F) knowingly buys, or receives as a pledge of an obligation or

debt, public property from an officer or employee of the

Government, or a member of the Armed Forces, who

lawfully may not sell or pledge property; or

(G) knowingly makes, uses, or causes to be made or used, a

false record or statement material to an obligation to pay or

transmit money or property to the Government, or

knowingly conceals or knowingly and improperly avoids or

decreases an obligation to pay or transmit money or

property to the Government,

is liable to the United States Government for a civil penalty of not

less than $5,000 and not more than $10,000, as adjusted by the

Federal Civil Penalties Inflation Adjustment Act of 1990 (28

U.S.C. 2461 note; Public Law 104-410), plus 3 times the amount

of damages which the Government sustains because of the act of

that person.

(2) REDUCED DAMAGES.—If the court finds that—

(A) the person committing the violation of this subsection

furnished officials of the United States responsible for

investigating false claims violations with all information

known to such person about the violation within 30 days

after the date on which the defendant first obtained the

information;

(B) such person fully cooperated with any Government

investigation of such violation; and

information about the violation, no criminal prosecution,

civil action, or administrative action had commenced under

this title with respect to such violation, and the person did

not have actual knowledge of the existence of an

investigation into such violation,

the court may assess not less than 2 times the amount of damages

which the Government sustains because of the act of that person.

(3) COSTS OF CIVIL ACTIONS.—A person violating this subsection shall

also be liable to the United States Government for the costs of a

civil action brought to recover any such penalty or damages.

(b) DEFINITIONS.—For purposes of this section—

(1) the terms “knowing” and “knowingly”—

(A) mean that a person, with respect to information—

(i) has actual knowledge of the information;

(ii) acts in deliberate ignorance of the truth or falsity of

the information; or

(iii) acts in reckless disregard of the truth or falsity of

the information,; and

(B) require no proof of specific intent to defraud;

(2)

the term “claim”—

(A) means any request or demand, whether under a contract or

otherwise, for money or property and whether or not the United

States has title to the money or property, that—

(i) is presented to an officer, employee, or agent of the

United States; or

(ii) is made to a contractor, grantee, or other recipient,

if the money or property is to be spent or used on

the Government’s behalf or to advance a

Government program or interest, and if the United

States Government —

(I) provides or has provided any portion of the

money or property requested or demanded;

(II) will reimburse such contractor, grantee, or

other recipient for any portion of the money

or property which is requested or demanded;

and

(B) does not include requests or demands for money or property

that the Government has paid to an individual as

compensation for Federal employment or as an income

subsidy with no restrictions on that individual’s use of the

money or property;

(3) the term “obligation” means an established duty, whether or not

fixed, arising from an express or implied contractual, grantor-

grantee, or licensor-licensee relationship, from a fee-based or

similar relationship, from statute or regulation, or from the

retention of any overpayment; and

(4) the term “material” means having a natural tendency to influence,

or be capable of influencing, the payment or receipt of money or

property.

XEMPTION FROM DISCLOSURE.—Any information furnished pursuant to

subsection (a)(2) shall be exempt from disclosure under section 552 of title 5.

(d) E

XCLUSION.—This section does not apply to claims, records, or statements made

under the Internal Revenue Code of 1986.

§ 3730. Civil actions for false claims

(a) RESPONSIBILITIES OF THE ATTORNEY GENERAL.—The Attorney General diligently

shall investigate a violation under section 3729. If the Attorney General finds that

a person has violated or is violating section 3729, the Attorney General may bring

a civil action under this section against the person.

(b) ACTIONS BY PRIVATE PERSONS.—

(1) A person may bring a civil action for a violation of section 3729

for the person and for the United States Government. The action

shall be brought in the name of the Government. The action may

be dismissed only if the court and the Attorney General give

written consent to the dismissal and their reasons for consenting.

(2) A copy of the complaint and written disclosure of substantially all

material evidence and information the person possesses shall be

served on the Government pursuant to Rule 4(d)(4) of the Federal

Rules of Civil Procedure. The complaint shall be filed in camera,

shall remain under seal for at least 60 days, and shall not be served

on the defendant until the court so orders. The Government may

elect to intervene and proceed with the action within 60 days after

it receives both the complaint and the material evidence and

information.

(3) The Government may, for good cause shown, move the court for

extensions of the time during which the complaint remains under

seal under paragraph (2). Any such motions may be supported by

affidavits or other submissions in camera. The defendant shall not

be required to respond to any complaint filed under this section

until 20 days after the complaint is unsealed and served upon the

defendant pursuant to Rule 4 of the Federal Rules of Civil

Procedure.

(4) Before the expiration of the 60-day period or any extensions

obtained under paragraph (3), the Government shall—

(A) proceed with the action, in which case the action shall be

conducted by the Government; or

(B) notify the court that it declines to take over the action, in

which case the person bringing the action shall have the

right to conduct the action.

(5) When a person brings an action under this subsection, no person

other than the Government may intervene or bring a related action

based on the facts underlying the pending action.

(1) If the Government proceeds with the action, it shall have the

primary responsibility for prosecuting the action, and shall not be

bound by an act of the person bringing the action. Such person

shall have the right to continue as a party to the action, subject to

the limitations set forth in paragraph (2).

(2) (A) The Government may dismiss the action notwithstanding

the objections of the person initiating the action if the

person has been notified by the Government of the filing of

the motion and the court has provided the person with an

opportunity for a hearing on the motion.

(B) The Government may settle the action with the defendant

notwithstanding the objections of the person initiating the

action if the court determines, after a hearing, that the

proposed settlement is fair, adequate, and reasonable under

all the circumstances. Upon a showing of good cause, such

hearing may be held in camera.

participation during the course of the litigation by the

person initiating the action would interfere with or unduly

delay the Government’s prosecution of the case, or would

be repetitious, irrelevant, or for purposes of harassment, the

court may, in its discretion, impose limitations on the

person’s participation, such as—

(i) limiting the number of witnesses the person may

call;

(ii) limiting the length of the testimony of such

witnesses;

(iii) limiting the person’s cross-examination of

witnesses; or

(iv) otherwise limiting the participation by the person in

the litigation.

(D) Upon a showing by the defendant that unrestricted

participation during the course of the litigation by the

person initiating the action would be for purposes of

harassment or would cause the defendant undue burden or

unnecessary expense, the court may limit the participation

by the person in the litigation.

(3) If the Government elects not to proceed with the action, the person

who initiated the action shall have the right to conduct the action.

If the Government so requests, it shall be served with copies of all

pleadings filed in the action and shall be supplied with copies of all

deposition transcripts (at the Government’s expense). When a

person proceeds with the action, the court, without limiting the

status and rights of the person initiating the action, may

nevertheless permit the Government to intervene at a later date

upon a showing of good cause.

(4) Whether or not the Government proceeds with the action, upon a

showing by the Government that certain actions of discovery by

the person initiating the action would interfere with the

Government’s investigation or prosecution of a criminal or civil

matter arising out of the same facts, the court may stay such

discovery for a period of not more than 60 days. Such a showing

shall be conducted in camera. The court may extend the 60-day

period upon a further showing in camera that the Government has

pursued the criminal or civil investigation or proceedings with

reasonable diligence and any proposed discovery in the civil action

will interfere with the ongoing criminal or civil investigation or

proceedings.

(5) 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 in

another proceeding, 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. Any finding of fact or

conclusion of law made in such other proceeding that has become

final shall be conclusive on all parties to an action under this

section. For purposes of the preceding sentence, a finding or

conclusion is final if it has been finally determined on appeal to the

appropriate court of the United States, if all time for filing such an

appeal with respect to the finding or conclusion has expired, or if

the finding or conclusion is not subject to judicial review.

(d) AWARD TO QUI TAM PLAINTIFF.—

(1) If the Government proceeds with an action brought by a person

under subsection (b), such person shall, subject to the second

sentence of this paragraph, receive at least 15 percent but not more

than 25 percent of the proceeds of the action or settlement of the

claim, depending upon the extent to which the person substantially

contributed to the prosecution of the action. Where the action is

one which the court finds to be based primarily on disclosures of

specific information (other than information provided by the

person bringing the action) relating to allegations or transactions in

a criminal, civil, or administrative hearing, in a congressional,

administrative, or Government [General] Accounting Office report,

hearing, audit, or investigation, or from the news media, the court

may award such sums as it considers appropriate, but in no case

more than 10 percent of the proceeds, taking into account the

significance of the information and the role of the person bringing

the action in advancing the case to litigation. Any payment to a

person under the first or second sentence of this paragraph shall be

made from the proceeds. Any such person shall also receive an

amount for reasonable expenses which the court finds to have been

necessarily incurred, plus reasonable attorneys’ fees and costs. All

such expenses, fees, and costs shall be awarded against the

defendant.

(2) If the Government does not proceed with an action under this

section, the person bringing the action or settling the claim shall

receive an amount which the court decides is reasonable for

collecting the civil penalty and damages. The amount shall be not

less than 25 percent and not more than 30 percent of the proceeds

of the action or settlement and shall be paid out of such proceeds.

Such person shall also receive an amount for reasonable expenses

which the court finds to have been necessarily incurred, plus

reasonable attorneys’ fees and costs. All such expenses, fees, and

costs shall be awarded against the defendant.

(3) Whether or not the Government proceeds with the action, if the

court finds that the action was brought by a person who planned

and initiated the violation of section 3729 upon which the action

was brought, then the court may, to the extent the court considers

appropriate, reduce the share of the proceeds of the action which

the person would otherwise receive under paragraph (1) or (2) of

this subsection, taking into account the role of that person in

advancing the case to litigation and any relevant circumstances

pertaining to the violation. If the person bringing the action is

convicted of criminal conduct arising from his or her role in the

violation of section 3729, that person shall be dismissed from the

civil action and shall not receive any share of the proceeds of the

action. Such dismissal shall not prejudice the right of the United

States to continue the action, represented by the Department of

Justice.

(4) If the Government does not proceed with the action and the person

bringing the action conducts the action, the court may award to the

defendant its reasonable attorneys’ fees and expenses if the

defendant prevails in the action and the court finds that the claim

of the person bringing the action was clearly frivolous, clearly

vexatious, or brought primarily for purposes of harassment.

(e) C

ERTAIN ACTIONS BARRED.—

(1) No court shall have jurisdiction over an action brought by a former

or present member of the armed forces under subsection (b) of this

section against a member of the armed forces arising out of such

person’s service in the armed forces.

(2) (A) No court shall have jurisdiction over an action brought

under subsection (b) against a Member of Congress, a

member of the judiciary, or a senior executive branch

official if the action is based on evidence or information

known to the Government when the action was brought.

(B) For purposes of this paragraph, “senior executive branch

official” means any officer or employee listed in

paragraphs (1) through (8) of section 101(f) of the Ethics in

Government Act of 1978 (5 U.S.C. App.).

(3) In no event may a person bring an action under subsection (b)

which is based upon allegations or transactions which are the

subject of a civil suit or an administrative civil money penalty

proceeding in which the Government is already a party.

(4) (A) The court shall dismiss an action or claim under this

section, unless opposed by the Government, if substantially

the same allegations or transactions as alleged in the action

or claim were publicly disclosed--

(i) in a Federal criminal, civil, or administrative hearing, in

which the Government or its agent is a party;

(ii) in a congressional, Government Accountability Office,

or other Federal report, hearing, audit, or investigation: or

(iii) from the news media,

unless the action is brought by the Attorney General or the person

bringing the action is an original source of the information.

(B) For purposes of this paragraph, “original source” means an

individual who either (i) prior to a public disclosure under

subsection (e)(4)(a), has voluntarily disclosed to the

Government the information on which allegations or

transactions in a claim are based, or (2) who has knowledge

that is independent of and materially adds to the publicly

disclosed allegations or transactions, and who has

voluntarily provided the information to the Government

before filing an action under this section.

(f) GOVERNMENT NOT LIABLE FOR CERTAIN EXPENSES.—The Government is not

liable for expenses which a person incurs in bringing an action under this section.

(g) FEES AND EXPENSES TO PREVAILING DEFENDANT.—In civil actions brought under

this section by the United States, the provisions of section 2412(d) of title 28 shall

apply.

(h) RELIEF FROM RETALIATORY ACTIONS.—

(1) IN GENERAL.—Any employee, contractor, or agent shall be entitled

to all relief necessary to make that employee, contractor, or agent

whole, if that employee, contractor, or agent is discharged,

demoted, suspended, threatened, harassed, or in any other manner

discriminated against in the terms and conditions of employment

because of lawful acts done by the employee, contractor, or agent

on behalf of the employee, contractor, or agent or associated others

in furtherance of other efforts to stop 1 or more violations of this

subchapter.

(2) R

ELIEF.—Relief under paragraph (1) 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. An action

under this subsection may be brought in the appropriate district

court of the United States for the relief provided in this subsection.

§ 3731. False claims procedure

(a) A subpena [subpoena] requiring the attendance of a witness at a trial or hearing

conducted under section 3730 of this title may be served at any place in the United States.

(b) A civil action under section 3730 may not be brought—

(1) more than 6 years after the date on which the violation of section

3729 is committed, or

(2) more than 3 years after the date when facts material to the right of

action are known or reasonably should have been known by the

official of the United States charged with responsibility to act in

the circumstances, but in no event more than 10 years after the date

on which the violation is committed, whichever occurs last.

3730(b), the Government may file its own complaint or amend the complaint of a person who

has brought an action under section 3730(b) to clarify or add detail to the claims in which the

Government is intervening and to add any additional claims with respect to which the

Government contends it is entitled to relief. For statute of limitations purposes, any such

Government pleading shall relate back to the filing date of the complaint of the person who

originally brought the action, to the extent that the claim of the Government arises out of the

conduct, transactions, or occurrences set forth, or attempted to be set forth, in the prior complaint

of that person.

(d) In any action brought under section 3730, the United States shall be required to

prove all essential elements of the cause of action, including damages, by a preponderance of the

evidence.

(e) Notwithstanding any other provision of law, the Federal Rules of Criminal

Procedure, or the Federal Rules of Evidence, a final judgment rendered in favor of the United

States in any criminal proceeding charging fraud or false statements, whether upon a verdict after

trial or upon a plea of guilty or nolo contendere, shall estop the defendant from denying the

essential elements of the offense in any action which involves the same transaction as in the

criminal proceeding and which is brought under subsection (a) or (b) of section 3730.

§ 3732. False claims jurisdiction

(a) ACTIONS UNDER SECTION 3730.—Any action under section 3730 may be brought

in any judicial district in which the defendant or, in the case of multiple defendants, any one

defendant can be found, resides, transacts business, or in which any act proscribed by section

3729 occurred. A summons as required by the Federal Rules of Civil Procedure shall be issued

by the appropriate district court and served at any place within or outside the United States.

(b) C

LAIMS UNDER STATE LAW.—The district courts shall have jurisdiction over any

action brought under the laws of any State for the recovery of funds paid by a State or local

government if the action arises from the same transaction or occurrence as an action brought

under section 3730.

government that is named as a co-plaintiff with the United States in an action brought under

subsection (b), a seal on the action ordered by the court under section 3730(b) shall not preclude

the Government or the person bringing the action from serving the complaint, any other

pleadings, or the written disclosure of substantially all material evidence and information

possessed by the person bringing the action on the law enforcement authorities that are

authorized under the law of that State or local government to investigate and prosecute such

actions on behalf of such governments, except that such seal applies to the law enforcement

authorities so served to the same extent as the seal applies to other parties in the action.

§ 3733. Civil investigative demands

(a) IN GENERAL.—

(1) ISSUANCE AND SERVICE.—Whenever the Attorney General, or a

designee (for purposes of this section), has reason to believe that

any person may be in possession, custody, or control of any

documentary material or information relevant to a false claims law

investigation, the Attorney General, or a designee, may, before

commencing a civil proceeding under section 3730(a) or other

false claims law, or making an election under section 3730(b),

issue in writing and cause to be served upon such person, a civil

investigative demand requiring such person—

(A) to produce such documentary material for inspection and

copying,

(B) to answer in writing written interrogatories with respect to

such documentary material or information,

material or information, or

(D) to furnish any combination of such material, answers, or

testimony.

The Attorney General may delegate the authority to issue civil

investigative demands under this subsection. Whenever a civil

investigative demand is an express demand for any product of

discovery, the Attorney General, the Deputy Attorney General, or

an Assistant Attorney General shall cause to be served, in any

manner authorized by this section, a copy of such demand upon the

person from whom the discovery was obtained and shall notify the

person to whom such demand is issued of the date on which such

copy was served. Any information obtained by the Attorney

General or a designee of the Attorney General under this section

may be shared with any qui tam relator if the Attorney General or

designee determine it is necessary as part of any false claims act

investigation.

(2) CONTENTS AND DEADLINES.—

(A) Each civil investigative demand issued under paragraph (1)

shall state the nature of the conduct constituting the alleged

violation of a false claims law which is under investigation,

and the applicable provision of law alleged to be violated.

(B) If such demand is for the production of documentary

material, the demand shall—

(i) describe each class of documentary material to be

produced with such definiteness and certainty as to

permit such material to be fairly identified;

(ii) prescribe a return date for each such class which

will provide a reasonable period of time within

which the material so demanded may be assembled

and made available for inspection and copying; and

(iii) identify the false claims law investigator to whom

such material shall be made available.

demand shall—

(i) set forth with specificity the written interrogatories

to be answered;

(ii) prescribe dates at which time answers to written

interrogatories shall be submitted; and

(iii) identify the false claims law investigator to whom

such answers shall be submitted.

(D) If such demand is for the giving of oral testimony, the

demand shall—

(i) prescribe a date, time, and place at which oral

testimony shall be commenced;

(ii) identify a false claims law investigator who shall

conduct the examination and the custodian to whom

the transcript of such examination shall be

submitted;

(iii) specify that such attendance and testimony are

necessary to the conduct of the investigation;

(iv) notify the person receiving the demand of the right

to be accompanied by an attorney and any other

representative; and

(v) describe the general purpose for which the demand

is being issued and the general nature of the

testimony, including the primary areas of inquiry,

which will be taken pursuant to the demand.

(E) Any civil investigative demand issued under this section

which is an express demand for any product of discovery

shall not be returned or returnable until 20 days after a copy

of such demand has been served upon the person from

whom the discovery was obtained.

(F) The date prescribed for the commencement of oral

testimony pursuant to a civil investigative demand issued

under this section shall be a date which is not less than

seven days after the date on which demand is received,

unless the Attorney General or an Assistant Attorney

General designated by the Attorney General determines

that exceptional circumstances are present which warrant

the commencement of such testimony within a lesser period

of time.

(G) The Attorney General shall not authorize the issuance under

this section of more than one civil investigative demand for

oral testimony by the same person unless the person

requests otherwise or unless the Attorney General, after

investigation, notifies that person in writing that an

additional demand for oral testimony is necessary.

(b) P

ROTECTED MATERIAL OR INFORMATION.—

(1) I

N GENERAL.—A civil investigative demand issued under

subsection (a) may not require the production of any documentary

material, the submission of any answers to written interrogatories,

or the giving of any oral testimony if such material, answers, or

testimony would be protected from disclosure under—

(A) the standards applicable to subpoenas or subpoenas duces

tecum issued by a court of the United States to aid in a

grand jury investigation; or

(B) the standards applicable to discovery requests under the

Federal Rules of Civil Procedure, to the extent that the

application of such standards to any such demand is

appropriate and consistent with the provisions and purposes

of this section.

(2) E

FFECT ON OTHER ORDERS, RULES, AND LAWS.—Any such demand

which is an express demand for any product of discovery

supersedes any inconsistent order, rule, or provision of law (other

than this section) preventing or restraining disclosure of such

product of discovery to any person. Disclosure of any product of

discovery pursuant to any such express demand does not constitute

a waiver of any right or privilege which the person making such

disclosure may be entitled to invoke to resist discovery of trial

preparation materials.

ERVICE; JURISDICTION.—

(1) BY WHOM SERVED.—Any civil investigative demand issued under

subsection (a) may be served by a false claims law investigator, or

by a United States marshal or a deputy marshal, at any place within

the territorial jurisdiction of any court of the United States.

(2) SERVICE IN FOREIGN COUNTRIES.—Any such demand or any

petition filed under subsection (j) may be served upon any person

who is not found within the territorial jurisdiction of any court of

the United States in such manner as the Federal Rules of Civil

Procedure prescribe for service in a foreign country. To the extent

that the courts of the United States can assert jurisdiction over any

such person consistent with due process, the United States District

Court for the District of Columbia shall have the same jurisdiction

to take any action respecting compliance with this section by any

such person that such court would have if such person were

personally within the jurisdiction of such court.

(d) SERVICE UPON LEGAL ENTITIES AND NATURAL PERSONs.—

(1) L

EGAL ENTITIES.—Service of any civil investigative demand issued

under subsection (a) or of any petition filed under subsection (j)

may be made upon a partnership, corporation, association, or other

legal entity by—

(A) delivering an executed copy of such demand or petition to

any partner, executive officer, managing agent, or general

agent of the partnership, corporation, association, or entity,

or to any agent authorized by appointment or by law to

receive service of process on behalf of such partnership,

corporation, association, or entity;

(B) delivering an executed copy of such demand or petition to

the principal office or place of business of the partnership,

corporation, association, or entity; or

the United States mails by registered or certified mail, with

a return receipt requested, addressed to such partnership,

corporation, association, or entity at its principal office or

place of business.

(2) NATURAL PERSONS.—Service of any such demand or petition may

be made upon any natural person by—

(A) delivering an executed copy of such demand or petition to

the person; or

(B) depositing an executed copy of such demand or petition in

the United States mails by registered or certified mail, with

a return receipt requested, addressed to the person at the

person’s residence or principal office or place of business.

(e) PROOF OF SERVICE.—A verified return by the individual serving any civil

investigative demand issued under subsection (a) or any petition filed under subsection (j) setting

forth the manner of such service shall be proof of such service. In the case of service by

registered or certified mail, such return shall be accompanied by the return post office receipt of

delivery of such demand.

(f) D

OCUMENTARY MATERIAL.—

(1) S

WORN CERTIFICATES.—The production of documentary material

in response to a civil investigative demand served under this

section shall be made under a sworn certificate, in such form as the

demand designates, by—

(A) in the case of a natural person, the person to whom the

demand is directed, or

(B) in the case of a person other than a natural person, a person

having knowledge of the facts and circumstances relating to

such production and authorized to act on behalf of such

person.

The certificate shall state that all of the documentary material

required by the demand and in the possession, custody, or control

of the person to whom the demand is directed has been produced

and made available to the false claims law investigator identified in

the demand.

(2) PRODUCTION OF MATERIALS.—Any person upon whom any civil

investigative demand for the production of documentary material

has been served under this section shall make such material

available for inspection and copying to the false claims law

investigator identified in such demand at the principal place of

business of such person, or at such other place as the false claims

law investigator and the person thereafter may agree and prescribe

in writing, or as the court may direct under subsection (j)(1). Such

material shall be made so available on the return date specified in

such demand, or on such later date as the false claims law

investigator may prescribe in writing. Such person may, upon

written agreement between the person and the false claims law

investigator, substitute copies for originals of all or any part of

such material.

(g) INTERROGATORIES.—Each interrogatory in a civil investigative demand served

under this section shall be answered separately and fully in writing under oath and shall be

submitted under a sworn certificate, in such form as the demand designates, by—

(1) in the case of a natural person, the person to whom the demand is

directed, or

(2) in the case of a person other than a natural person, the person or

persons responsible for answering each interrogatory.

If any interrogatory is objected to, the reasons for the objection shall be stated in the certificate

instead of an answer. The certificate shall state that all information required by the demand and

in the possession, custody, control, or knowledge of the person to whom the demand is directed

has been submitted. To the extent that any information is not furnished, the information shall be

identified and reasons set forth with particularity regarding the reasons why the information was

not furnished.

(h) ORAL EXAMINATIONS.—

(1) PROCEDURES.—The examination of any person pursuant to a civil

investigative demand for oral testimony served under this section

shall be taken before an officer authorized to administer oaths and

affirmations by the laws of the United States or of the place where

the examination is held. The officer before whom the testimony is

to be taken shall put the witness on oath or affirmation and shall,

personally or by someone acting under the direction of the officer

and in the officer’s presence, record the testimony of the witness.

The testimony shall be taken stenographically and shall be

transcribed. When the testimony is fully transcribed, the officer

before whom the testimony is taken shall promptly transmit a copy

of the transcript of the testimony to the custodian. This subsection

shall not preclude the taking of testimony by any means authorized

by, and in a manner consistent with, the Federal Rules of Civil

Procedure.

(2) PERSONS PRESENT.—The false claims law investigator conducting

the examination shall exclude from the place where the

examination is held all persons except the person giving the

testimony, the attorney for and any other representative of the

person giving the testimony, the attorney for the Government, any

person who may be agreed upon by the attorney for the

Government and the person giving the testimony, the officer before

whom the testimony is to be taken, and any stenographer taking

such testimony.

(3) WHERE TESTIMONY TAKEN.—The oral testimony of any person

taken pursuant to a civil investigative demand served under this

section shall be taken in the judicial district of the United States

within which such person resides, is found, or transacts business,

or in such other place as may be agreed upon by the false claims

law investigator conducting the examination and such person.

(4) TRANSCRIPT OF TESTIMONY.—When the testimony is fully

transcribed, the false claims law investigator or the officer before

whom the testimony is taken shall afford the witness, who may be

accompanied by counsel, a reasonable opportunity to examine and

read the transcript, unless such examination and reading are

waived by the witness. Any changes in form or substance which

the witness desires to make shall be entered and identified upon the

transcript by the officer or the false claims law investigator, with a

statement of the reasons given by the witness for making such

changes. The transcript shall then be signed by the witness, unless

the witness in writing waives the signing, is ill, cannot be found, or

refuses to sign. If the transcript is not signed by the witness within

30 days after being afforded a reasonable opportunity to examine

it, the officer or the false claims law investigator shall sign it and

state on the record the fact of the waiver, illness, absence of the

witness, or the refusal to sign, together with the reasons, if any,

given therefor.

(5) C

ERTIFICATION AND DELIVERY TO CUSTODIAN.—The officer before

whom the testimony is taken shall certify on the transcript that the

witness was sworn by the officer and that the transcript is a true

record of the testimony given by the witness, and the officer or

false claims law investigator shall promptly deliver the transcript,

or send the transcript by registered or certified mail, to the

custodian.

(6) F

URNISHING OR INSPECTION OF TRANSCRIPT BY WITNESS.—Upon

payment of reasonable charges therefor, the false claims law

investigator shall furnish a copy of the transcript to the witness

only, except that the Attorney General, the Deputy Attorney

General, or an Assistant Attorney General may, for good cause,

limit such witness to inspection of the official transcript of the

witness’ testimony.

(7) C

ONDUCT OF ORAL TESTIMONY.—

(A) Any person compelled to appear for oral testimony under a

civil investigative demand issued under subsection (a) may

be accompanied, represented, and advised by counsel.

Counsel may advise such person, in confidence, with

respect to any question asked of such person. Such person

or counsel may object on the record to any question, in

whole or in part, and shall briefly state for the record the

reason for the objection. An objection may be made,

received, and entered upon the record when it is claimed

that such person is entitled to refuse to answer the question

on the grounds of any constitutional or other legal right or

privilege, including the privilege against self-incrimination.

Such person may not otherwise object to or refuse to

answer any question, and may not directly or through

counsel otherwise interrupt the oral examination. If such

person refuses to answer any question, a petition may be

filed in the district court of the United States under

subsection (j)(1) for an order compelling such person to

answer such question.

(B) If such person refuses to answer any question on the

grounds of the privilege against self-incrimination, the

testimony of such person may be compelled in accordance

with the provisions of part V of title 18 [18 USCS §§ 6001

et seq.].

(8) W

ITNESS FEES AND ALLOWANCES.—Any person appearing for oral

testimony under a civil investigative demand issued under

subsection (a) shall be entitled to the same fees and allowances

which are paid to witnesses in the district courts of the United

States.

(i) CUSTODIANS OF DOCUMENTS, ANSWERS, AND TRANSCRIPTS.—

(1) DESIGNATION.—The Attorney General shall designate a false

claims law investigator to serve as custodian of documentary

material, answers to interrogatories, and transcripts of oral

testimony received under this section, and shall designate such

additional false claims law investigators as the Attorney General

determines from time to time to be necessary to serve as deputies

to the custodian.

(2) RESPONSIBILITY FOR MATERIALS; DISCLOSURE.—

(A) A false claims law investigator who receives any

documentary material, answers to interrogatories, or

transcripts of oral testimony under this section shall

transmit them to the custodian. The custodian shall take

physical possession of such material, answers, or

transcripts and shall be responsible for the use made of

them and for the return of documentary material under

paragraph (4).

(B) The custodian may cause the preparation of such copies of

such documentary material, answers to interrogatories, or

transcripts of oral testimony as may be required for official

use by any false claims law investigator, or other officer or

employee of the Department of Justice. Such material,

answers, and transcripts may be used by any such

authorized false claims law investigator or other officer or

employee in connection with the taking of oral testimony

under this section.

documentary material, answers to interrogatories, or

transcripts of oral testimony, or copies thereof, while in the

possession of the custodian, shall be available for

examination by any individual other than a false claims law

investigator or other officer or employee of the Department

of Justice authorized under subparagraph (B). The

prohibition in the preceding sentence on the availability of

material, answers, or transcripts shall not apply if consent is

given by the person who produced such material, answers,

or transcripts, or, in the case of any product of discovery

produced pursuant to an express demand for such material,

consent is given by the person from whom the discovery

was obtained. Nothing in this subparagraph is intended to

prevent disclosure to the Congress, including any

committee or subcommittee of the Congress, or to any

other agency of the United States for use by such agency in

furtherance of its statutory responsibilities.

(D) While in the possession of the custodian and under such

reasonable terms and conditions as the Attorney General

shall prescribe—

(i) documentary material and answers to interrogatories

shall be available for examination by the person

who produced such material or answers, or by a

representative of that person authorized by that

person to examine such material and answers; and

(ii) transcripts of oral testimony shall be available for

examination by the person who produced such

testimony, or by a representative of that person

authorized by that person to examine such

transcripts.

(3) USE OF MATERIAL, ANSWERS, OR TRANSCRIPTS IN OTHER

PROCEEDINGS

.—Whenever any attorney of the Department of

Justice has been designated to appear before any court, grand jury,

or Federal agency in any case or proceeding, the custodian of any

documentary material, answers to interrogatories, or transcripts of

oral testimony received under this section may deliver to such

attorney such material, answers, or transcripts for official use in

connection with any such case or proceeding as such attorney

determines to be required. Upon the completion of any such case

or proceeding, such attorney shall return to the custodian any such

material, answers, or transcripts so delivered which have not

passed into the control of such court, grand jury, or agency through

introduction into the record of such case or proceeding.

(4) CONDITIONS FOR RETURN OF MATERIAL.—If any documentary

material has been produced by any person in the course of any

false claims law investigation pursuant to a civil investigative

demand under this section, and—

(A) any case or proceeding before the court or grand jury

arising out of such investigation, or any proceeding before

any Federal agency involving such material, has been

completed, or

(B) no case or proceeding in which such material may be used

has been commenced within a reasonable time after

completion of the examination and analysis of all

documentary material and other information assembled in

the course of such investigation,

the custodian shall, upon written request of the person who

produced such material, return to such person any such material

(other than copies furnished to the false claims law investigator

under subsection (f)(2) or made for the Department of Justice

under paragraph (2)(B)) which has not passed into the control of

any court, grand jury, or agency through introduction into the

record of such case or proceeding.

(5) APPOINTMENT OF SUCCESSOR CUSTODIANS.—In the event of the

death, disability, or separation from service in the Department of

Justice of the custodian of any documentary material, answers to

interrogatories, or transcripts of oral testimony produced pursuant

to a civil investigative demand under this section, or in the event of

the official relief of such custodian from responsibility for the

custody and control of such material, answers, or transcripts, the

Attorney General shall promptly—

(A) designate another false claims law investigator to serve as

custodian of such material, answers, or transcripts, and

(B) transmit in writing to the person who produced such

material, answers, or testimony notice of the identity and

address of the successor so designated.

Any person who is designated to be a successor under this

paragraph shall have, with regard to such material, answers, or

transcripts, the same duties and responsibilities as were imposed by

this section upon that person’s predecessor in office, except that

the successor shall not be held responsible for any default or

dereliction which occurred before that designation.

(j) JUDICIAL PROCEEDINGS.—

(1) P

ETITION FOR ENFORCEMENT.—Whenever any person fails to

comply with any civil investigative demand issued under

subsection (a), or whenever satisfactory copying or reproduction of

any material requested in such demand cannot be done and such

person refuses to surrender such material, the Attorney General

may file, in the district court of the United States for any judicial

district in which such person resides, is found, or transacts

business, and serve upon such person a petition for an order of

such court for the enforcement of the civil investigative demand.

(2) P

ETITION TO MODIFY OR SET ASIDE DEMAND.—

(A) Any person who has received a civil investigative demand

issued under subsection (a) may file, in the district court of

the United States for the judicial district within which such

person resides, is found, or transacts business, and serve

upon the false claims law investigator identified in such

demand a petition for an order of the court to modify or set

aside such demand. In the case of a petition addressed to an

express demand for any product of discovery, a petition to

modify or set aside such demand may be brought only in

the district court of the United States for the judicial district

in which the proceeding in which such discovery was

obtained is or was last pending. Any petition under this

subparagraph must be filed—

(i) within 20 days after the date of service of the civil

investigative demand, or at any time before the

return date specified in the demand, whichever date

is earlier, or

(ii) within such longer period as may be prescribed in

writing by any false claims law investigator

identified in the demand.

(B) The petition shall specify each ground upon which the

petitioner relies in seeking relief under subparagraph (A),

and may be based upon any failure of the demand to

comply with the provisions of this section or upon any

constitutional or other legal right or privilege of such

person. During the pendency of the petition in the court, the

court may stay, as it deems proper, the running of the time

allowed for compliance with the demand, in whole or in

part, except that the person filing the petition shall comply

with any portions of the demand not sought to be modified

or set aside.

(3) P

ETITION TO MODIFY OR SET ASIDE DEMAND FOR PRODUCT OF

DISCOVERY

.—

(A) In the case of any civil investigative demand issued under

subsection (a) which is an express demand for any product

of discovery, the person from whom such discovery was

obtained may file, in the district court of the United States

for the judicial district in which the proceeding in which

such discovery was obtained is or was last pending, and

serve upon any false claims law investigator identified in

the demand and upon the recipient of the demand, a

petition for an order of such court to modify or set aside

those portions of the demand requiring production of any

such product of discovery. Any petition under this

subparagraph must be filed—

(i) within 20 days after the date of service of the civil

investigative demand, or at any time before the

return date specified in the demand, whichever date

is earlier, or

(ii) within such longer period as may be prescribed in

writing by any false claims law investigator

identified in the demand.

(B) The petition shall specify each ground upon which the

petitioner relies in seeking relief under subparagraph (A),

and may be based upon any failure of the portions of the

demand from which relief is sought to comply with the

provisions of this section, or upon any constitutional or

other legal right or privilege of the petitioner. During the

pendency of the petition, the court may stay, as it deems

proper, compliance with the demand and the running of the

time allowed for compliance with the demand.

(4) PETITION TO REQUIRE PERFORMANCE BY CUSTODIAN OF DUTIES.—

At any time during which any custodian is in custody or control of

any documentary material or answers to interrogatories produced,

or transcripts of oral testimony given, by any person in compliance

with any civil investigative demand issued under subsection (a),

such person, and in the case of an express demand for any product

of discovery, the person from whom such discovery was obtained,

may file, in the district court of the United States for the judicial

district within which the office of such custodian is situated, and

serve upon such custodian, a petition for an order of such court to

require the performance by the custodian of any duty imposed

upon the custodian by this section.

(5) J

URISDICTION.—Whenever any petition is filed in any district court

of the United States under this subsection, such court shall have

jurisdiction to hear and determine the matter so presented, and to

enter such order or orders as may be required to carry out the

provisions of this section. Any final order so entered shall be

subject to appeal under section 1291 of title 28. Any disobedience

of any final order entered under this section by any court shall be

punished as a contempt of the court.

(6) APPLICABILITY OF FEDERAL RULES OF CIVIL PROCEDURE.—The

Federal Rules of Civil Procedure shall apply to any petition under

this subsection, to the extent that such rules are not inconsistent

with the provisions of this section.

(k) DISCLOSURE EXEMPTION.—Any documentary material, answers to written

interrogatories, or oral testimony provided under any civil investigative demand issued under

subsection (a) shall be exempt from disclosure under section 552 of title 5.

(l) DEFINITIONS.—For purposes of this section—

(1) the term “false claims law” means—

(A) this section and sections 3729 through 3732; and

(B) any Act of Congress enacted after the date of the enactment

of this section [enacted Oct. 27, 1986] which prohibits, or

makes available to the United States in any court of the

United States any civil remedy with respect to, any false

claim against, bribery of, or corruption of any officer or

employee of the United States;

(2) the term “false claims law investigation” means any inquiry

conducted by any false claims law investigator for the purpose of

ascertaining whether any person is or has been engaged in any

violation of a false claims law;

(3) the term “false claims law investigator” means any attorney or

investigator employed by the Department of Justice who is charged

with the duty of enforcing or carrying into effect any false claims

law, or any officer or employee of the United States acting under

the direction and supervision of such attorney or investigator in

connection with a false claims law investigation;

(4) the term “person” means any natural person, partnership,

corporation, association, or other legal entity, including any State

or political subdivision of a State;

(5) the term “documentary material” includes the original or any copy

of any book, record, report, memorandum, paper, communication,

tabulation, chart, or other document, or data compilations stored in

or accessible through computer or other information retrieval

systems, together with instructions and all other materials

necessary to use or interpret such data compilations, and any

product of discovery;

(6) the term “custodian” means the custodian, or any deputy custodian,

designated by the Attorney General under subsection (i)(1);

(7) the term “product of discovery” includes—

(A) the original or duplicate of any deposition, interrogatory,

document, thing, result of the inspection of land or other

property, examination, or admission, which is obtained by

any method of discovery in any judicial or administrative

proceeding of an adversarial nature;

(B) any digest, analysis, selection, compilation, or derivation of

any item listed in subparagraph (A); and

subparagraph (A); and

(8) the term “official use” means any use that is consistent with the

law, and the regulations and policies of the Department of Justice,

including use in connection with internal Department of Justice

memoranda and reports; communications between the Department

of Justice and a Federal, State, or local government agency, or a

contractor of a Federal, State, or local government agency,

undertaken in furtherance of a Department of Justice investigation

or prosecution of a case; interviews of any qui tam relator or other

witness; oral examinations; depositions; preparation for and

response to civil discovery requests; introduction into the record of

a case or proceeding; applications, motions, memoranda and briefs

submitted to a court or other tribunal; and communications with

Government investigators, auditors, consultants and experts, the

counsel of other parties, arbitrators and mediators, concerning an

investigation, case or proceeding.