-Caveat Lector-
Begin forwarded message:
From: [EMAIL PROTECTED]
Date: March 27, 2007 10:21:08 PM PDT
To: [EMAIL PROTECTED]
Cc: [EMAIL PROTECTED], [EMAIL PROTECTED], [EMAIL PROTECTED]
Subject: Bush's Supreme Court Gives Notice to Whistleblowers
http://www.washingtonpost.com/wp-dyn/content/article/2007/03/27/
AR2007032700894_pf.html
Court Rules Against Whistle-Blower
By MARK SHERMAN
The Associated Press
Tuesday, March 27, 2007; 4:15 PM
WASHINGTON -- The Supreme Court left an 81-year-old retired
engineer without a penny to show for his role in exposing fraud at
a former nuclear weapons plant in a ruling that makes it harder for
whistle-blowers to claim cash rewards.
James Stone stood to collect up to $1 million from a lawsuit he
filed in 1989 against Rockwell International, now part of aerospace
giant Boeing Co., over problems with environmental cleanup at the
now-closed Rocky Flats nuclear weapons plant northwest of Denver.
A court eventually ordered Rockwell to pay the government nearly
$4.2 million for false claims the company submitted. Stone could
have received up to a quarter of Rockwell's payment, under the
False Claims Act.
But Justice Antonin Scalia, writing in the 6-2 ruling Tuesday, said
Stone was not entitled to recover any money because he lacked
"direct and independent knowledge of the information upon which his
allegations were based." Scalia said Stone had little connection to
the jury's ultimate verdict against Rockwell.
The company must pay the entire penalty anyway. The only question
before the court was whether Stone would get a cut.
The outcome was cheered by business groups that wanted the court to
limit whistle-blowers in false claims lawsuits. Since Congress
reinvigorated the Civil War-era law in 1986, those suits have
returned $11 billion to the government. Recent high-profile cases
include settlements with leading pharmaceutical manufacturers.
Robin Conrad, senior vice president of the U.S. Chamber of Commerce
National Chamber Litigation Center, said the decision "is a very
important victory for every government contractor."
The decision will cause whistle-blowers, or relators, to think
twice before they file false claims lawsuits, said Peter B. Hutt
II, an expert in false claims lawsuits in Washington.
"The principal thing the court did is essentially try to preclude
relators from engaging in fishing expeditions," said Hutt, a lawyer
at the Miller and Chevalier firm.
James Moorman, president of the advocacy group Taxpayers Against
Fraud Education Fund, agreed. Individuals whose information leads
the government to pursue fraud can be told years later that they
can't collect anything, Moorman said.
"No whistle-blower can afford to pursue a case to resolution under
these circumstances," he said.
Sen. Charles Grassley, R-Iowa, a leading congressional supporter of
whistle-blower claims, said lawmakers should consider changes to
the False Claims Act to make sure people are rewarded when they
uncover wrongdoing.
"The Supreme Court has made it even more difficult to get to the
bottom of waste, fraud and abuse of taxpayer money," Grassley said.
The Bush administration sided with Stone, arguing that it was in
the government's interest to encourage whistle-blowers, even though
the government keeps more money now that Stone has lost.
Hartley Alley, a Colorado-based lawyer who represented Stone, said
the decision fails to recognize the importance of Stone's actions
at Rocky Flats, now a Superfund cleanup site. "He is the one
primarily responsible for exposing the criminal activities of
Rockwell International at Rocky Flats," Alley said.
In nearly four decades, some 70,000 plutonium triggers for nuclear
bombs were made at Rocky Flats. Production was halted in 1989
because of chronic safety problems, prompting a raid by FBI agents.
The Cold War ended before production could resume.
The company pleaded guilty in 1992 to violating federal
environmental laws.
Alley said Stone, who lives in Wheat Ridge, Colo., would not agree
to an interview. Stone is pursuing one remaining unresolved claim
about operations at Rocky Flats, Alley said.
Once allegations are disclosed publicly, often by the media,
individuals face a higher hurdle in bringing fraud suits on the
government's behalf. Otherwise, people could read a newspaper
account or an indictment and then rush to the courthouse to file suit.
The major exception to this rule is if an individual is an original
source of the information, which Stone said he was. Stone did not
file suit until after problems at Rocky Flats became public. He
did, however, approach federal investigators with information about
environmental issues before news accounts were published.
The company said his claim was implausible. Stone was laid off the
year before Rockwell began submitting false claims saying it was
meeting goals of treating low-level radioactive wastes at the
former atomic weapons plant.
Justice John Paul Stevens, in a dissent joined by Justice Ruth
Bader Ginsburg, said whistle-blowers should have to show only that
their information led the government to the fraud, not that the
claims ultimately proved to a jury must also have come from them.
Justice Stephen Breyer did not take part in the case.
The case is Rockwell International v. U.S., ex rel Stone, 05-1272.
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