Civil Investigative Demands & The False Claims Act
Prior to 1983, the government relied primarily on two sources to investigate civil FCA cases: the work of agency Inspector Generals and material developed in criminal investigations, usually through the use of grand jury subpoenas. In United States v. Sells Engineering, Inc., 463 U.S. 418 (1983), the Supreme Court held that Rule 6(e) of the Federal Rules of Criminal Procedure prohibits the use of grand jury materials for civil use without a court order. After Sells, if the government wants to use grand jury materials for civil use, it must make a showing of particularized need for the materials, which is an extremely tough burden.
In light of the Sells decision, Congress determined that there was a need for an investigative tool to aid the government in obtaining information relating to possible violations of the civil False Claims Act. Accordingly, in 1986, Congress amended the FCA to include a provision which enables the government to serve civil investigative demands (“CID”) in FCA investigations. Congress intended that this CID authority would permit the DOJ’s civil division to gain access to evidence of fraud which might be otherwise unavailable to it under Rule 6(e). See S. Rep. No. 345, 99th Cong. 2d Sess. 33 (1986), reprinted in 1986 U.S.C.C.A.N. at 5298; see also United States v. Markwood, 48 F.3d 969, 984 (6th Cir. 1995) (discussing legislative history of the FCA's CID provision).
Under 31 U.S.C. § 3733(a)(1), the Attorney General or a designee may issue CIDs to “any person [who] may be in possession, custody, or control of any ... information relevant to a false claims law investigation.” CIDs may seek documents as well as interrogatory responses and oral testimony. See 31 U.S.C. § 3733(a)(1)(A)-(D). CIDs may only be used during the pre-litigation investigatory phase of an FCA matter. Once the government files an FCA complaint or makes an election to intervene (or to decline intervention), it may no longer issue CIDs. 31 U.S.C. § 3733(a)(1).
The 2009 FERA amendments to the FCA expressly permit the government to share any information obtained via a CID with qui tam relators. See 31 U.S.C. § 3733(a)(1) (“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.”). Accordingly, defense counsel should be aware that to the extent the government is relying on a relator and relator’s counsel to assist the government in reviewing a defendant’s document production in response to a CID, a relator may be selective about the documents it chooses to show to the government. For example, a relator may bring only those documents supporting the relator’s claims to the government’s attention, while failing to point out that there are documents in a defendant’s production that negate or weaken the relator’s claims. To counter the bias that may occur as a result of a relator cherry-picking through a defendant’s CID production, defense counsel should consider informing the government of helpful documents in a response letter at the time the defendant makes its production or in a face-to-face presentation to the government shortly thereafter.
