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A Supreme Response to the Chamber’s False Claims Act Attacks

The False Claims Act creates big cases that make big impacts. As a result, some litigants are willing and able to go all the way to the Supreme Court.

When the Supremes get these cases it creates an opportunity for all kinds of groups to say what they want about the law, the process, and the whistleblowers who file the cases. Up until now, the groups taking advantage of amicus briefs to make their point have leaned heavily towards the side of the defense bar. There has been an unfortunate attempt to trash plaintiff-relators as a group and create the false impression of frivolous suits. It’s hard to say if this tactic works, but there is an attempt to influence the Court into thinking the False Claims Act is somehow being abused and to get them to think the worst of whistleblowers.

Fortunately there is another side to this fight. The National Whistleblowers Center (where I used to work) filed an amicus brief this week in a Supreme Court case, which you can read in pdf format here.

The case is about the First to File rule under the Act, and the defense wants that rule enforced more strongly so as to throw out more cases in general and, in particular, the case brought before the Supreme Court.

Obviously those of us who are on the plaintiff-relator’s side in such cases have an interest any time there is any case appealed to the Supreme Court. We are not disinterested observers. On the other hand, the Chamber of Commerce in its amicus filings in such cases has gone out of its way to create the specter of over-filing of frivolous suits, etc., none of which it can support with evidence.

The National Whistleblowers Center’s brief captures the true state of whistleblower reporting under the FCA in two succinct paragraphs:

 

But the real problem is not the large

number of False Claims Act cases, it is the small

number of such cases. As the Chamber’s own

Institute for Legal Reform pointed out, although

the False Claims Act is the “most important tool

to uncover and punish fraud,” its reach still fails

to capture a majority of fraud committed against

the United States, which the Chamber estimated

at $72 billion per year. Chamber Report, p. 1.

 

The reason that the majority of fraud is

going undetected has nothing to do with

whistleblowers filing “serial” claims. The inability

of the government to detect and punish fraud is

fuelled by the continuing reluctance of the

overwhelming majority of employees to report

fraud to the government.

 

It’s simply tough to report fraud even with this law, because whistleblowers do still fear what may happen to them. The brief cites a study by the Ethics Resource Center to back up this fact:

 

Their 2011 survey of workplace culture concluded

that “retaliation against employee

whistleblowers” had “r[isen] sharply,” while at

the same time there was an “increase in pressure

to compromise their companies standards or

polices, or even break the law.”17

 

Yet, the push is on to inflict more harm on whistleblowers and portray them in a negative light.  The section of the National Whistleblowers Center’s amicus brief beginning on page 12 is entitled “The Harsh Attack on Relator’s Conduct is Without Merit.” The fact is that the Chamber’s attacks and the attacks on whistleblowers generally are part of a coordinated effort that is not restricted to Supreme Court filings. Its why when the Wall Street Journal reports on a major False Claims Act victory, one in which a jury found a company guilty of making faulty guardrails, the paper will refer to whistleblowers as “so-called relators.” They are called relators because the law sometimes refers to them as relators. They relate facts of interest to the government.

The Whistleblowers Center’s amicus brief answers slurs with studies by prestigious institutions:

 

A major study published in

the New England Journal of Medicine found that

whistleblowers were motivated by “integrity,”

“strong ethical standards,” concerns over “public

health,” and, to a far lesser extent, “fears that the

fraudulent behavior” made it necessary for the

employees to “protect themselves.”20

We need more not fewer whistleblowers. We need more protection and fewer obstacles to their collecting incentives. We also need more attempts to set the record straight as to what and who whistleblowers are if we are going to be serious about uncovering and stopping fraud in the country. Maybe amicus briefs move the Supreme Court and maybe they don’t. As long as there is an attempt to sway their opinion from one side, I’m grateful that the side of the whistleblower can be presented.