The Relator Share and What Moves It
The statute fixes two ranges and leaves the number inside them to argument. A third provision caps the award where the case rested on information the relator did not supply, and a fourth cuts it where the relator helped cause the loss.
The rule in short
Section 3730(d)(1) gives a relator in an intervened case at least fifteen and not more than twenty-five percent of the proceeds, depending on the contribution to the prosecution. Section 3730(d)(2) gives a relator in a declined case not less than twenty-five and not more than thirty percent. Where the action rested primarily on public information the relator did not supply, the court may award no more than ten percent.
A relator's payment is a percentage of what the government recovers, taken from two statutory ranges that depend on whether the government took the case over. The ranges are narrow. Almost all the argument concerns where inside a range a particular relator lands, and two separate provisions can push the number below the floor or to zero.
The two bands
Section 3730(d)(1) applies where the government proceeds with the action. The relator receives at least fifteen percent but not more than twenty-five 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.
Section 3730(d)(2) applies where the government declines and the relator conducts the action. The relator receives an amount the court decides is reasonable, not less than twenty-five percent and not more than thirty percent. The higher band reflects the obvious fact that the relator carried the whole cost and risk of the litigation. Which band applies is fixed by the government's election between intervention and declination.
What moves the number inside a band
The statutory phrase is contribution to the prosecution, and in practice it is assessed against a familiar set of considerations. Did the relator report internally first and give the organization a chance to fix the problem. Was the disclosure statement complete and organized. Did the relator identify the specific claims and the people who could explain them, or hand over a general allegation the government had to develop from scratch.
Conduct after filing matters as much. A relator who sat for interviews, explained industry practice, identified custodians and helped read the data adds value that government counsel can describe. A relator who filed and then went quiet, or who created friction with the investigating team, lands at the floor. Where the recovery is very large, the government sometimes argues that the percentage should be lower because the absolute number is already substantial, and courts have not settled how much weight that carries.
In most intervened cases the share is negotiated rather than litigated. Government counsel proposes a figure, the relator's counsel responds with a memorandum describing the contribution, and the number is written into the settlement. Where the parties cannot agree, the relator moves for a share determination and the court decides on a record consisting largely of declarations from the lawyers on both sides. Those motions are uncommon, partly because the range is narrow enough that the difference rarely justifies the fight.
Relators often assume the percentage attaches to the government's loss. It attaches to the proceeds of the action or settlement, which includes the penalty component and the effect of the multiplier described in damages, trebling and per-claim penalties. In cases with many small claims that difference is enormous. It also means a settlement structured to reduce the labeled damages figure while paying the same total does not reduce the share, provided the agreement is clear about what the payment resolves.
The ceiling for cases built on public information
The second sentence of section 3730(d)(1) contains a cap that is easy to miss. 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 Accountability 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 ten percent.
The channels listed are the same ones that appear in the public disclosure bar and original source exception. The relationship between the two provisions is that a relator may survive the bar as an original source and still be capped at ten percent because the case was primarily built on the public material. The court is also directed to take into account the significance of the information and the role of the person in advancing the case.
Reductions for culpable relators
Section 3730(d)(3) addresses the relator who was part of the fraud. If the court finds that the action was brought by a person who planned and initiated the violation, it may reduce the share to whatever extent it considers appropriate, taking account of the person's role in advancing the case to litigation and any relevant circumstances pertaining to the violation. There is no floor on that reduction.
If the person is convicted of criminal conduct arising from the role in the violation, the consequence is automatic: the person is dismissed from the civil action and receives no share at all. The dismissal does not prejudice the government's own claim, which continues without the relator.
| Situation | Floor | Ceiling | Source |
|---|---|---|---|
| Government proceeds with the action | Fifteen percent | Twenty-five percent | Section 3730(d)(1) |
| Government declines and relator litigates | Twenty-five percent | Thirty percent | Section 3730(d)(2) |
| Case based primarily on public information | None stated | Ten percent | Section 3730(d)(1), second sentence |
| Relator planned and initiated the violation | None; reduction is discretionary | Otherwise applicable band | Section 3730(d)(3) |
| Relator convicted for the underlying conduct | Nothing | Nothing | Section 3730(d)(3) |
Fees, costs and the award that runs the other way
In addition to the share, a successful relator receives an amount for reasonable expenses necessarily incurred, plus reasonable attorney fees and costs, all of which are awarded against the defendant. That recovery is separate from the percentage and is not netted out of it.
The statute also allows an award against a relator. Under section 3730(d)(4), where the government does not proceed and the defendant prevails, the court may award the defendant its fees and expenses if it finds the claim was clearly frivolous, clearly vexatious, or brought primarily for purposes of harassment. The standard is high and awards are uncommon, but the provision is the reason declined cases are not costless to pursue. Relators comparing this framework with the alternatives should read the securities, commodities and tax award programs compared, where the percentages, the ceilings and the appeal rights all work differently.
Points to carry away
- An intervened case yields a share of fifteen to twenty-five percent of the proceeds.
- A declined case the relator litigates yields twenty-five to thirty percent.
- Where the action rests primarily on public information the relator did not supply, the ceiling is ten percent.
- The share is calculated on the proceeds of the action, including the penalty component.
- A relator who planned and initiated the violation may have the share reduced at the court's discretion.
- A relator convicted of criminal conduct arising from the role is dismissed and receives nothing.
Questions readers ask
Is the share calculated before or after attorney fees?
Before, and the two are separate recoveries. The percentage is applied to the proceeds of the action or settlement, and the relator's reasonable expenses, attorney fees and costs are recovered from the defendant in addition under section 3730(d). That structure matters when a case settles for a lump sum without allocating between the components, because the parties then have to agree how much of the payment is proceeds subject to the percentage and how much is fees. Settlement agreements normally state the split expressly to avoid the fight.
Can there be more than one relator sharing an award?
Yes, where two relators filed related actions that were consolidated, or where a single action was brought by several people. The court divides the share among them, and the division follows contribution rather than filing order once both are properly in the case. Where the second case was barred at the outset, the barred relator has no statutory entitlement at all and any payment comes from a private agreement with the first filer. Disputes between relators are usually resolved after the government's recovery is fixed.
What happens to the share if the government settles through a different mechanism?
Section 3730(c)(5) covers it. The government may pursue its claim through any alternate remedy available to it, including an administrative proceeding to determine a civil money penalty, and if it does, the relator has the same rights in that proceeding as in the qui tam action. That includes a share of the recovery. The difficult cases are those in which the alternate proceeding resolves conduct that overlaps only partly with the sealed complaint, and the allocation then turns on comparing the released conduct with the pleaded allegations.
Sources
- Cornell Legal Information Institute — 31 U.S.C. 3730, Civil Actions for False ClaimsThe share bands, the ten percent ceiling, the reduction provisions and the fee award.
- Cornell Legal Information Institute — 31 U.S.C. 3729, False ClaimsThe damages and penalty components that together make up the proceeds of the action.
- Cornell Legal Information Institute — 31 U.S.C. 3731, False Claims ProcedureThe procedural framework for the judgment on which the share is computed.
- United States Department of Justice — The False Claims ActThe government's description of qui tam recoveries and payments to relators.
- Cornell Legal Information Institute — 31 U.S.C. 3733, Civil Investigative DemandsThe investigative record used to assess what the relator actually contributed.
- Cornell Legal Information Institute — 31 U.S.C. 3732, False Claims JurisdictionThe court with authority to fix the share and to resolve disputes about it.
Liberty Law Library is a publication, not a law firm. This article states general rules and cites its sources; it is not advice about any particular case, and the law differs by state and changes over time.
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