Northern District of Illinois Finds That Plaintiff-Relators in Qui Tam Action Did Not Meet Pleading Standards in U.S. ex rel. Wildhirt v. AARS Forever, Inc.

January 23, 2012

the_capitol.jpgA "qui tam" action is one where a private individual unaffiliated with the government files a "whistleblowing" action against federal contractors that claims fraud against the government. People who file qui tam actions do so under the False Claims Act (also known as the "Lincoln Law"), which has the purpose of stopping fraudulent billings to the government. Those who file qui tam actions are usually people with inside knowledge of the false billings, which tend to come from health care, military, or other government programs. Qui tam "relators," as these whistleblowers are called, stand to benefit by collecting 15 to 25% of any money amount awarded by the jury. So while helping the government might be first and foremost on the relators' mind, the money reward surely adds incentive as well. Plus, those who bring qui tam actions also have their attorney's fees paid for -- so if you are in Illinois and want to file a qui tam action, don't hesitate to find the best Chicago qui tam lawyer possible.

In U.S. ex rel. Wildhirt v. AARS Forever, Inc., the relators brought a suit alleging that their former employers, AARS and Acquisition, violated the False Claims Act and the Illinois Whistleblower Reward and Protection Act by allegedly submitting false and fraudulent claims to the state and federal government. The relators also brought individual claims stating that in violation of the FCA and IWRPA anti-retaliation provisions, their employment was terminated due to their whistleblowing.

AARS had entered into a contract with the Veterans Administration to provide both home health care services and medical equipment to patients with respiratory illnesses in Illinois, Wisconsin, and Michigan. In early 2008, Acquisition took over AARS's business under the VA Medicare and Medicaid programs. Together, they were known as "Total Home Health." Relators Wildhirt and McArdle worked as respiratory therapists for both companies from 2007 until September 2008. During this time, both relators observed the defendants allegedly breaching several performance requirements under the contract and allegedly violating regulatory provisions of Medicare and Medicaid. As a result, nearly all of the claims sent by the defendants to the federal or state government were alleged "false" claims. The relators allegedly repeatedly informed their supervisors, but were ignored. Relator McArdle finally had a "run-in" with a senior official at Acquisition, which left her so upset that she informed her direct supervisor that she would not be coming in the following week because she was uncertain whether she could continue working under existing conditions. When McArdle did not come in the next week, she was terminated. Wildhirt was likewise terminated for "abandonment" even though he was home due to illness.

Judge Feinerman of the Northern District of Illinois weighed the relators' claims. Qui tam actions are subject to a heightened pleading standard compared to normal claims, which means that the qui tam relators must allege that the defendant actually submitted a claim for payment to the government and that the claim was knowingly false. The court found that the relators had failed to meet this standard. For instance, while the relators claimed that the defendants had "impermissibly billed the VA for follow-up visits" and "knowingly failed to return overpayments to the VA," they did not identify specific instances where this happened. The court also found that there was no specific evidence linking the relators' termination to their whistleblowing. The defendants showed no sign that they were aware of a pending lawsuit, or that the relators were investigating facts. In the end, the court dismissed the relators' claim, but gave them room to amend their complaint so that it conformed better to qui tam standards.

The attorneys at Chicago Overtime Law Center have decades of experience litigating wage and hour cases, including overtime, meal breaks, vacation pay, and tips. We also handle qui tam and whistle blower cases. We have offices conveniently located in Oakbrook Terrace and Chicago, Illinois. Contact a Peoria qui tam attorney at the Chicago Overtime Law Center today at 312-869-4095.