Spotlight: Hot Topics in Research Law | Safeguarding Science: The False Claims Act and Research Integrity
Over the next three months the Spotlight will delve into prevailing topics in research law. Legal matters associated with sponsored research encompass a broad array of issues including compliance, misconduct, integrity, confidentiality, ethics, and conflict of interest practiced in multiple settings. This month, the False Claims Act is discussed as a tool to identify and litigate charges of potentially fraudulent activity and misrepresentation when using federal funds in scientific research. The upcoming months will examine the legal implications of using artificial intelligence in sponsored research projects.
Federal funding fuels a significant portion of scientific research in the United States. To ensure responsible use of these resources, the False Claims Act (FCA) serves as a powerful tool in combating research misconduct and other wrongdoing in federally-sponsored research.
The False Claims Act: A Watchdog for Public Funds
The FCA, also known as the Lincoln Law, was enacted in 1863 in response to shoddy goods being sold to the United States (U.S.) during the Civil War and the dearth of federal prosecutors to pursue such cases. The law deputizes every citizen to file a lawsuit on behalf of the U.S. government when others have made a false or fraudulent claim for payment. Although the FCA is traditionally associated with defense contracts or healthcare billing, it has also been applied to federally funded research projects. Damages assessed against the entity that filed the false claim are three times the amount that the entity sought to be paid by the government, plus attorney fees, plus fines. Thus, a $100,000 claim becomes a $300,000 liability for the institution, not the researcher.
Whistleblowers and Qui Tam Lawsuits
To entice individuals to file such suits, they are awarded a portion of the recovery costs. Whistleblowers, referred to as qui tam relators, file lawsuits on behalf of the government for the allegedly false claims for payment made, including those from grant funds. The lawsuit is filed under seal and the government is given an opportunity to intervene, i.e., take over the lawsuit on behalf of the government. The goal of most relators is to prepare the complaint so well that the government attorneys want to take over the case.
If the government does not intervene on the case, the relator is entitled to 30% of the amount recovered, plus all attorney fees expended in pursuing the case. If the government does take over the case, the relator may be awarded 25% of the amount recovered, plus attorney fees. If the government takes over the case, the relator does not need to fund the litigation as government lawyers pursue the matter and can enjoy a percentage of the recovery. There is a strong incentive for attorneys to file such actions, as attorney fees are also covered.
The FCA defines various ways in which a claim can be considered false. In the context of research, these can include:
- Falsifying/fabricating data
- Plagiarism in grant proposals (due to the certification of originality)
- Failure to disclose conflicts of interest
- Billing for non-existent research activities
The Knowingly Standard: Intent Matters
The FCA requires a knowingly standard, i.e., the researcher must have acted with deliberate intent to deceive or with reckless disregard of the truth. Honest mistakes or negligence generally would not trigger FCA liability.
Case Studies: The FCA in Action
Several high-profile cases illustrate the FCA's application to research misconduct. The earliest significant case is the Condie case wherein a researcher fabricated data while at two universities. Condie notified the relevant universities about his concerns, but their investigations did not find misconduct. Frustrated by the lack of institutional response, Condie filed a FCA lawsuit. Because the case involved research that spanned more than a decade, the claim was significant. Ultimately, the two public universities paid over $10 million and the states’ governors were involved in trying to negotiate the recovery down.
In 2019, Duke University settled FCA allegations for $112.5 million after a whistleblower exposed fabricated research data submitted to secure federal grants. Similarly, Stanford University agreed to pay $1.9 million to resolve allegations that it violated the FCA by submitting federal research proposals that failed to disclose current and pending support from foreign sources for 12 Stanford faculty members.
Finding the Balance
Many believe that the threat of an FCA complaint is more significant than possible federal agency action. Whistleblowers, frustrated with poor institutional responses, have a significant incentive to file FCA complaints. To mitigate the FCA risk, consider:
- Focus on Prevention: Invest in robust research integrity programs that promote ethical research practices.
- Streamlined Reporting Mechanisms: Create user-friendly channels for whistleblowers to report suspected misconduct.
- Education and Training: Equip researchers with a clear understanding of the FCA and research misconduct to deter misconduct.
Conclusion
Research misconduct and breach of research regulations can create significant reputational and financial risk for research institutions. Being aware of the FCA and its research implications is important. It will encourage institutions to create a culture of compliance and to respond to allegations in a manner that not only supports an ethical environment but creates a non-litigious way to resolve concerns.
Debra Parrish, Partner
Parrish Law Offices, LLC
J. Michael Slocum, JD, President
Slocum & Boddie, PC
SRAI Distinguished Faculty