Supreme Court Restricts Right To Appeal Under The False Claims Act

Today the U.S. Supreme Court
issued a decision which "chipped away" at the rights of whistleblowers
to use the most important anti-fraud law in the United States, the
False Claims Act. The False Claims Act permits whistleblowers to file
claims on behalf of the United States, and force corrupt government
contractors to pay back to the government monies improperly obtained
from taxpayers.

The ruling was written by Justice Clarence Thomas in the case of U.S. ex rel. Eisenstein v. City of New York.
The Court applied a 30 day
limitations for an appeal of a False Claims Act ruling when the
Government declined to intervene in the case. Generally a 60 day
limitations period applies to cases in which the United
States is a party, but Justice Thomas decided that if the Government
does not formally intervene in the case it should be treated
essentially like any other private party claim.

The Eisenstein
appeal was filed within 54 days of the lower court ruling and the harsh
result of Justice Thomas' holding is to dismiss the anti-fraud claim as
being untimely.

The following statement was issued by Stephen Kohn, the President of the
National Whistleblowers Center:

"The Supreme Court in Eisenstein
has once again chipped away at the ability of whistleblowers to
challenge corrupt contracting
practices under the False Claims Act. The ruling demonstrates a
fundamental misconception of the purposes behind the False Claims Act,
the most important anti-fraud law in the United States. The Court
ruled that FCA cases pursued by whistleblowers are similar to private
lawsuits. This is wrong. Whistleblowers under the FCA have a powerful
right to file cases on behalf of the United States, and the vast
majority of any recovery in these cases is paid to the U.S. Treasury --
not the whistleblower. Taxpayers are the main beneficiaries of these
cases -- the rules concerning filing deadlines should reflect the
intent of the law, and should also reflect the fact that the United
States, recovers no less then 70% of all monies obtained in an FCA
case. In
today's environment, the Supreme Court should be strengthening
anti-fraud laws, not continuously chipping away at the ability of
whistleblowers to present their cases."