Court to look at standards in whistleblower case
WASHINGTON — The Supreme Court has agreed to consider restricting certain whistleblower lawsuits claiming that local governments misused federal money.
The court said Monday it would grapple with a technical, though important, aspect of the federal False Claims Act as it relates to local governments.
One section of the law prohibits whistleblower lawsuits when public disclosure of the alleged fraud occurs through a court hearing, a news report or congressional or administrative audit.
The question for the court — one that has divided federal appeals courts — is whether the language on administrative audits refers to a report prepared by any government or only a federal government document.
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 issue arose in a lawsuit alleging fraud on the part of the Graham County Soil and Water Conservation District in western North Carolina in the use of federal disaster assistance following a damaging storm in 1995.
The False Claims Act allows a whistleblower to collect up to 30 percent of a judgment against a party found liable.
Since Congress reinvigorated the Civil War-era law in 1986, those suits have returned $16 billion to the government.
The case will be argued in the court term that begins in October.
The case is Graham County Soil and Water Conservation District v. U.S., 08-304.
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