Whistleblower Law Blog

New York Settles False Claims Act Suit for $540 Million

July 24, 2009

The state and city of New York have agreed to pay a total of $540 million to resolve allegations of Medicaid fraud.  The suit, originally brought under the qui tam provisions of the False Claims Act, alleged that between 1990 and 2001 the state of New York knowingly submitted claims for reimbursement to the federal government for school-based health care services that did not qualify for Medicaid reimbursement.  The whistleblower who exposed the fraudulent billing practices will receive $10 million as his relators’ share of the settlement proceeds.  To learn more about The Employment Law Group® law firm’s False Claims Act Practice, click here.

Law 360 Quotes The Employment Law Group® Law Firm on the Prospects of Whistleblower Litigation under the Obama Administration

July 20, 2009

In an article titled, “Whistleblowers May Do Better Under Obama Administration,” Law 360 reports that the Department of Labor (“DOL’) continues to side with employers in its investigation of whistleblower retaliation claims filed under the Sarbanes-Oxley Act (“SOX”).  Despite the discouraging statistics, Jason Zuckerman of The Employment Law Group® law firm has expressed optimism about the prospects of prevailing in whistleblower retaliation actions before DOL under the Obama Administration.  According to Zuckerman, “Merit findings will increase with President Barack Obama in office and Secretary of Labor Hilda Solis running the DOL.”  Zuckerman explained that as written, SOX is potent, but it has been narrowly construed, and the defense bar has been able to create loopholes Congress never contemplated and that “during the Bush administration, the DOL went out of its way to limit whistleblower protection laws, but now, the department will focus less on protecting employers and instead “enforce whistleblower protection laws as mandated by Congress.”  Recently, the DOL’s Administrative Review Board issued a landmark decision in favor of a SOX whistleblower in Kalkunte v. DVI Financial Services, Inc., a case litigated by The Employment Law Group® law firm.  For information on The Employment Law Group® law firm’s Whistleblower Practice, click here.

ARB Rules that Attorney Fee Award Need Not be Proportional to Damages Award

July 07, 2009

The Department of Labor’s Administrative Review Board (“ARB”) has affirmed an Administrative Law Judge’s decision to award a whistleblower nearly $70,000 in attorney fees and costs in a case where the whistleblower recovered $50,000 in back pay and compensatory damages.  In Collins v. Village of Lynchburg, Ohio, the Village argued that the Board should reverse the fee award of nearly $70,000 “[b]ecause the amount of the award is so large in comparison to the actual loss to [the] Complainant.”  The ARB expressly rejected this argument, concluding that “the fee in [a] whistleblower case need not be proportional to the recovery for the Complainant.”  For information on The Employment Law Group® law firm’s Whistleblower Practice, click here.

Seventh Circuit Clarifies that False Claims Act Retaliation Claims Do Not Preclude Subsequently Filed Qui Tam Claims

July 02, 2009

The Seventh Circuit has held that the outcome of a False Claims Act retaliation claim does not preclude a plaintiff from filing a subsequent qui tam action.  In Lusby v. Rolls-Royce Corporation, Curtis Lusby filed a complaint against his former employer Rolls-Royce alleging that Rolls-Royce terminated him for raising concerns about the company’s misrepresentation of the quality of engine parts it sold to the U.S. military.  The retaliation claim was dismissed, and Lusby filed a qui tam action.  Rolls-Royce moved to dismiss the qui tam claim on the basis that the dismissal of his retaliation claim barred him from bringing a related qui tam action.  The Seventh Circuit reversed the district court’s dismissal of the qui tam action, holding that “the resolution of personal employment litigation does not preclude a qui tam action, in which the relator acts as a representative of the public.”  In reaching its decision, the Seventh Circuit concluded that the United States would be prejudiced by the dismissal of the relator’s qui tam action and thus, as a practical matter “ a private [retaliation] suit never precludes a qui tam action.”  The Seventh Circuit also clarified the pleading requirement for qui tam claims.  According to the court, a relator need not exclude all possibility of innocence in the complaint but rather, an employee must “show, in detail, the nature of the charge, so that vague and unsubstantiated accusations of fraud do not lead to costly discovery and public obloquy.”  Thus, the Seventh Circuit reversed the district court’s dismissal of the relator’s qui tam claim under section 3739(a)(1).  For more information about the False Claims Act and The Employment Law Group® law firm’s False Claims Act Practice, click here. 

The Employment Law Group® Law Firm Publishes Article on Representing Whistleblowers in Wrongful Discharge Actions

July 01, 2009

 

The Maryland Bar Journal has published an article by Scott Oswald and Jason Zuckerman of The Employment Law Group® law firm on Adler wrongful discharge actions.  The article provides an overview of the Adler common law wrongful discharge tort and provides practical tips for representing whistleblowers under Adler, including maximizing damages; selecting the appropriate theme; and naming a supervisory employee in the Adler complaint.  To read the article, click here.  Additional information on The Employment Law Group® law firm’s Wrongful Discharge Practice is available here.

 

The Employment Law Group® Law Firm Speaks at D.C. Bar CLE on New Whistleblower Protection Laws

June 30, 2009

Jason Zuckerman, a Principal of The Employment Law Group® law firm spoke at a D.C. Bar CLE event titled, “Changing Currents in Employment Law:  Recent Developments Update.”  Mr. Zuckerman provided an update on whistleblower protections, including the recently enacted whistleblower provision in the American Recovery and Reinvestment Act and the recent amendment to the False Claims Act Retaliation Provision.

MSPB Vacates Decision Denying Corrective Action to TSA Whistleblower in Whistleblower Protection Act Case

June 02, 2009

The Merit Systems Protection Board (MSPB) has vacated the Administrative Judge’s (AJ) decision in Miller v. Department of Homeland Security, holding that the AJ erroneously concluded that Miller’s disclosures were not protected under the Whistleblower Protection Act (WPA).  Miller, a Transportation Security Specialist for the Transportation Security Administration (TSA) alleged that he was retaliated against for raising concerns about the proposed changes in TSA’s standard operating procedures (SOPs) for explosives screening at airports.  In particular, Miller claimed that the agency violated the WPA by eliminating some of his leadership duties and proposing to suspend him for 14 days because he criticized the changes in the SOPs that he reasonably believed posed a substantial and specific danger to public safety.

The Board’s AJ held that Miller’s disclosures were not protected under the WPA because he did not have a reasonable belief that the proposed changes to the SOPs would make it easier to place explosive devices on an aircraft.  In reaching its decision, the AJ held that Miller’s claims were based on his work experience rather than specific education or training related to explosives and further, management officials did not agree with his findings.  The MSPB rejected the AJ’s conclusions, holding that the standard for determining the reasonableness of a complainant’s belief is “based on facts known to and readily ascertainable by him.”  Finding that Miller had relevant experience in attempting to pass explosive contaminants through screening, the MSPB held that Miller had sufficient experience to support a reasonable belief in the “fallibility of the [new SOPs].”  Accordingly, the MSPB vacated the initial decision denying corrective action to Miller and remanded the case to the AJ.

Scott Oswald and Nicholas Woodfield at The Employment Law Group® law firm are representing Mr. Miller.   For more information about the firm’s Whistleblower Practice and the Whistleblower Protection Act, click here.

Law360 Quotes The Employment Law Group® Law Firm on New False Claims Act

May 19, 2009

In an article titled, “Financial Anti-Fraud Act Advances For Final Approval,” Law 360 reports about the recently enacted Fraud Enforcement Recovery Act (FERA).The article discusses the ways in which FERA will assist the government in combating fraud.  The article quotes The Employment Group® law firm, which observed that “strengthening the whistleblower statutes will give the government a better shot at shutting down fraud in its earliest stages,” and that these “technical changes to the FCA will restore the original intent of the 1986 amendments, which have been the most effective tool in prosecuting fraud against government contractors.” 

Workforce Management Quotes The Employment Law Group® Law Firm on Whistleblower Litigation

May 19, 2009

In an article titled, “Outcry on Exec Pay May Spur Rise in Whistle-Blower Suits,” Workforce Management reports on the widespread uproar about the scrutiny regarding executive pay and the potential impact that it may have on whistleblower litigation.  According to the article, experts have suggested that there will be an increase in whistleblower suits filed by employees alleging that they were discharged for opposing their executive compensation packages.  To support this theory, the article points to two recent lawsuits that were filed in March, a month after President Obama placed a cap on executive compensation. The article states in part: “Employees are feeling more empowered to report corporate fraud because they recognize the consequences of upper management ignoring fraudulent activity,” says Jason Zuckerman, a principal at the The Employment Law Group® law firm, a Washington-based firm that represents whistle-blowers. “If management hadn’t ignored employees’ efforts to blow the whistle, then the current economic crisis might not be as severe as it is today.” 

Congress Reinvigorates False Claims Act

May 19, 2009

Yesterday Congress enacted the Fraud Enforcement Recovery Act of 2009 (S.386) to curb fraud in the financial services industry and strengthen the False Claims Act (FCA), a statute that was originally enacted in 1863 to deter fraud against the government.  Under the qui tam provision of the FCA, a whistleblower can bring a lawsuit on behalf of the government and is eligible to receive 15% to 30% of the government’s recovery.   Whistleblower disclosures under the FCA have led to the recovery of more than $14 billion in fraud.  In light of the Government’s substantial appropriation of funds to stimulate the economy, it is critical to protect taxpayer dollars against fraud.  The amendments to the FCA, which are designed in part to eliminate loopholes that courts have read into the statute, include:

• expanding FCA liability to include any false claim for government money or property, regardless of whether the claim was submitted directly to a government official or employee;
• extending liability to any person who knowingly conceals, avoids or decreases an obligation to pay money to the government;
• expanding the definition of “claim” to include any request or demand for money or property to a contractor or grantee where the government will pay any portion of the claim, regardless of whether or not the government has title to the money or property;
• authorizing the Department of Justice to share information obtained from a civil investigative demand; and
• amending the retaliation provision of the FCA by broadening the scope of protected conduct to include efforts to prevent a violation of the FCA and including contractors and agents in the class of individuals protected from retaliation.

For more information about the False Claims Act and The Employment Law Group® law firm’s False Claims Act Practice, click here.