Supreme Court Rules Against Whistleblower Involved in False Claims Action

Today’s Supreme Court ruling will make it harder for whistleblowers who utilize the False Claims Act to claim cash rewards when the government collects money from corporations found to have committed billing fraud against the government.

The False Claims Act allows regular citizens with evidence of financial corruption against the government (through contracts) to sue the company in question and recover up to three times the amount originally stolen. Such suits are called qui tam suits. The citizen (whistleblower) bringing the suit is entitled to 15 – 25 percent of the recovered money (If you would like to learn more about this process, Taxpayers Against Fraud details this really well)

Today’s ruling denied a whistleblower, James Stone, who was the original spark for an investigation into Rockwell International, which has been ordered to pay the government $4.2 million, any percentage of the recovered funds. The majority (a 6-2 vote) decided against Stone because, in their opinion, his information did not greatly influence the jury’s verdict against Rockwell. 

Corporations were hoping for this result, as they wish to discourage potential whistleblowers. The Bush administration sided with Stone, as qui tam suits bring money back to the government.

The two dissenting justices, Stevens and Ginsburg, wrote in their opinion that whistleblowers should only have to show their information leads the government to fraud in order to be compensated.

-- Dylan Blaylock