Recently, I received an email from a national public interest organization dedicated to whistleblower advocacy. The message asked whether a relator (i.e., a whistleblower), while not a victim of fraud, has standing to seek corporate veil-piercing in a False Claims Act case where the government declined to intervene. It is an interesting question, and no one seems to know the answer. Having litigated complex veil-piercing cases and complex declined whistleblower cases, I wanted to dig a little deeper.

That answer requires some background. The False Claims Act (FCA), originally enacted in 1863, allows either the Attorney General or a private party to bring a civil lawsuit against anyone who knowingly submits a false claim to the government for payment. See 31 U.S.C. Section 3730(a), (b). In 2023, the government and whistleblowers initiated more than 1,200 new FCA cases, a record-high number, and the DOJ recovered approximately $2.7 billion through settlements and judgments. When an individual files a lawsuit on behalf of the government, it’s known as a qui tam action, and the private plaintiff is referred to as the relator.