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Whistleblower Owes Costs in Failed False Claims Act Suit

February 4, 2015

Author: Tiffany Wynn.

Putative whistleblowers were just reminded that they are sometimes issued a bill, instead of a check, at the end of litigation. In United States v. Huron Consulting Group, Inc., et al., Judge Jed S. Rakoff of the Southern District of New York affirmed over $14,000 in costs awarded to prevailing defendants Huron Consulting Group, Inc. and Empire Health Choice Assurance, Inc. Judge Rakoff rejected the whistleblower’s argument that unless a relator’s suit is frivolous, vexatious, or intended to harass − a restriction set forth by 31 U.S.C. § 3730(d)(4) on “attorneys’ fees and expenses” − an award of “costs” against a non-prevailing relator is prohibited by the FCA. Pointing to the statutory language of the FCA itself, Judge Rakoff reasoned that expenses and costs are distinct categories with different meanings, and dismissed the relator’s interpretation of § 3730(d)(4).