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Whistleblower Suit Claims DuPont Chemical Plant Leaked Cancer-Causing Gas

Here’s a case to watch, reported by The Times Picayune in New Orleans. I am always interested when somebody wants to collect on behalf of the government for fines avoided by a company. Now, somebody is trying to do just that in Louisiana.

According to the newspaper’s online addition, a False Claims complaint recently unsealed in Louisiana alleges major environmental damage by DuPont. In addition to the serious allegations, what makes this case fascinating is the attempt to collect federal government fines as damages through the False Claims Act.

“Jeffrey Simoneaux, who worked for 22 years at the sulfuric acid plant in Burnside — most recently as an operator in the safety and protection department, the suit says — claims the company violated the False Claims Act, which allows individuals to sue on the government’s behalf and potentially receive a share of funds recovered through the lawsuit.”

OK, if DuPont did this — and yes they have denied it — they would have caused environmental damages. But what funds are available for the government to recover, you might ask.

“The suit claims DuPont owes the U.S. government $25,000 for every day spanning about five months in which it violated the Toxic Substances Control Act by leaking sulfur trioxide, a carcinogenic — or cancer causing — gas used in its manufacturing process,” according to The Times Picayune.

The False Claims Act has long had a provision for collecting so called “reverse false claims.” To be precise, that is now Section 3729(a)(1)(G) and it creates liability for anyone who “knowingly makes, uses, or causes to be made or used, a false record or statement material to an obligation to pay or transmit money or property to the Government, or knowingly conceals or knowingly and improperly avoids or decreases an obligation to pay or transmit money or property to the Government…”

That provision of the False Claims Act was strengthened by a new definition of “obligation” as something “whether or not fixed.” Somebody who really knew what they were doing put the new definition of “obligation” in the law as part of The Fraud Enforcement and Recovery Act amendments in 2009. That change struck down some previous cases and may mean that the obligation to pay the government can be created through a fine such as the one cited by the plaintiffs in this case. Hide from that obligation and the fine can be the subject of damages under the Federal False Claims Act.

So, assuming the allegations are correct, if DuPont acted to avoid notifying the government to avoid having to pay a fine, they could be liable for this obligation.

You can read about all the allegations in the complaint which is helpfully attached to the online version of the article by the Times-Picayune. (Why don’t all newspaper websites attach relevant court documents online?)

DuPont of course denies all this.

Still, if environmental enforcement cases result in the collection of money in this way, we could usher in a new era of environmental protection in the U.S.

It’s a long way from unsealing a complaint to proving any allegations. A lot can happen to a case under the False Claims Act, which may have nothing to do with the ability to collect a reverse false claim for environmental fines. Still, if you care about enforcing environmental law and standards in the United States this is worth watching.