Approaching Environmental False Claims Act Cases

The following is excerpted from an interview with False Claims Act attorney Tony Munter, where he answers questions about environmental False Claims Act cases.

What are the main factors you consider when presented with an environmental False Claims Act case?

Tony Munter: I usually look for a clear definition of why the defendant is liable and what they lied about. Did they lie about something material to the contract or something tangential to the contract? Did they specifically lie about what they were doing when they asked to get paid? Did they lie about something that is a legal requirement? What did they lie about when they were charging the government to do whatever it was they were doing? I want to know very clearly what it was and how integral to their getting paid it really is. That is true for any type of False Claims Act case, but it is particularly true in the environmental area because they are relatively fewer cases.

It’s going to require lawyers for the government to clearly understand what it was that the defendants were doing that was a lie. Here’s the tricky part: a False Claims Act case is not a matter of the defendant just doing a bad job and it’s not a matter of the defendant being negligent. Defendants can be negligent and they can do a poor work on a contract. They have to lie to the government, for example they have to say they used iron when in fact they used sand. That is the difference. It has to be clear what the government has been lied to about.

What specific information does someone need in order to bring an environmental FCA case?

Tony Munter: You would need information that isn’t already out in the public. You need to have a reason why the government should pay attention to your case and does not already know about it. Yes, it is possible to file a case based on some public information if you are the original source of that information; that is true for all False Claims Act cases. The stronger your information is, the less likely it is that anyone else has it, and the less likely it is that the government knows about it, the more likely your case is to succeed. You want to have information that the government is not aware of, that nobody knows about, and that really involves fraud against the government.

How does the False Claims Act relate to environmental contracts?

Tony Munter: It can have a great relation. First of all, much of the environmental remediation work done in the United States is funded by the government in one form or another or mandated by the government in one form or another. It usually involves some form of government money. There is federal government money and state government money involved in all of it, for example wetlands or sewer remediation work. There is a tremendous amount of work being done because of Clean Water Act requirements and because of global warming, so there is a fair amount of work being done. All of those are government contracting funds. Any time there is that kind of government money involved and somebody is committing fraud, it is possible that a False Claims Act case may come into play. Those are big construction projects and they involve huge amounts of money.

What forms of fraud do you typically see in environmental FCA cases?

Tony Munter: I usually see fraud in construction contracts and that sort of thing. The question really becomes whether the contractor is doing the work that they say they’re going to do and whether the specifications for what they’re building are up to code. Most environmentally-based construction contracts are going to have pretty strict specifications with respect to what gets built and why in order to be able to treat the situation, whether it’s water or protection against flooding. They’re going to have some pretty strict specifications. The question is: did the defendant knowingly violate those specifications? Did they certify that they met those specifications? Did they get a ton of money for saying that they were going to build something to a certain height or with certain construction requirement? Any construction project depends on what the defendant claims they will do or have done on behalf of the government and what they actually did.

What are the most common environmental FCA cases that you see?

Tony Munter: Most of the work being done for environmental purposes potentially involves construction fraud. There was a case many years ago where a ship on the great lakes kept two sets of books. In one set of books they kept what they said they did and in the other set of books it showed that they had actually polluted the lake. Because they knew they had polluted the lake and because they had two sets of books, they were deliberately avoiding fines. It was the Clean Water Act and they were the subject of a False Claims Act violation.

It may be possible under environmental regulations to enforce a knowing violation of the Clean Water Act, the Clean Air Act, or anything like that with respect to the False Claims Act assuming that the facts are egregious enough and provable. It is usually very difficult to prove it, but some of these laws do have specified fines. If you can show that somebody is deliberately avoiding it, some courts may give you a chance to collect under that theory. Usually companies that are doing something like that are cheating in some other way as well. It’s not hard to imagine that a company involved in that type of activity on a regular basis is doing several things that violate the law.

How have environment protection regulations impacted environmental FCA cases?

Tony Munter: They haven’t yet had much of an impact. There will be more of an impact as environmental construction becomes more of an issue, as there are more industries that call themselves environmental industries, and as there are more environmental remediation issues. Recently, the Supreme Court reaffirmed the right of the Environmental Protection Agency (EPA) to regulate environmental issues. That type of trend will lead to more money going into this area, more government land going into this area, and stricter requirements with regard to environmental concerns going into this area. That is going to lead, at least in part, to more False Claims Act cases based on environmental law and regulations. I think that’s inevitable based on the trends.

If someone has information on a potential EPA violation, why should they contact a whistleblower attorney?

Tony Munter: You would want to contact a whistleblower attorney, or at least a competent attorney of any kind, before you file anything because you want to know what you have. You could have 12 different kinds of cases, but if you have a case under the Federal False Claims Act, that is probably the strongest tool available to file your case and the one that is more advantageous to you. As a plaintiff, you have an opportunity to collect a share of whatever the government collects. You also have the opportunity to file your case under seal and remain anonymous, at least for a little while. You have to follow the procedures in the False Claims Act to do that.

If you just report it without talking to an attorney first, you won’t know what your rights are and not knowing what your rights are when dealing with complicated matters of construction, environment, or any type of fraud committed against the government is a dangerous place to be.

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