Whistleblower Qui Tam Law Blog

The Washington Post recently reported on a lawsuit filed by six whistleblowers, who are former Food and Drug Administration scientists and doctors, accusing FDA of secretly reading their personal email accounts after they warned Congress that the agency was coercing them to approve medical devices that pose an unacceptable risk of harm to patients. The Complaint, which was filed in the United States District Court for the District of Columbia, alleges that FDA violated their constitutional rights, which ultimately led to harassment or dismissal of the six whistleblowers.

The challenged medical devices - most of which have been approved by supervisors despite their objections - include three devices that could miss signs of breast cancer, a devise that exposes patients testing for colon cancer to unnecessarily high levels of radiation (which can cause cancer in otherwise healthy patients), a device that risks falsely diagnosing patients with osteoporosis, and an ultrasound device used with pregnant women that could malfunction and harm the fetus.

FDA surveillance took place over a period of two years as the employees communicated with congressional staffers and their attorneys using personal Gmail accounts on government computers. FDA intercepted emails and draft whistleblower complaints containing information protected by the attorney-client privilege, and took snapshots of their computers.

Internal documents show that FDA reported the whistleblowers' conduct to the Office of the Inspector General in May 2010, stating that the whistleblowers had improperly disclosed confidential information about the devices and requesting that an investigation be opened. OIG declined to do so.

Among the communications intercepted by FDA were emails sent to the Office of Special Counsel, which was established by Congress to provide a secure and confidential avenue for whistleblowers to disclose government fraud, waste, and abuse, including health and safety issues. Recently, OSC broadened the scope of its investigation into the matter to determine whether FDA's surveillance and attempts to initiate criminal investigations against the whistleblowers violated the Whistleblower Protection Act. Under the Whistleblower Protection Act, federal employees are authorized by law to provide any information to OSC, including confidential information, to report government misconduct.

In a statement released by OSC, Special Counsel Carolyn Lerner said that "[m]onitoring employee emails with OSC of Congress could dissuade employees from making important disclosures" and is "unacceptable." She encouraged other agencies to "review their policies to ensure that they are not monitoring or otherwise impeding employee disclosures to OSC or Congress."

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Congress and Abraham Lincoln enacted the False Claims Act in 1863 in response to widespread corruption and fraud by defense contractors in selling supplies and provisions to the Union Army during and after the Civil War. After being weakened by Congress during World War II, the FCA was revived in 1986 after congressional hearings and GAO reports exposed rampant fraud in the defense industry. Senator Charles Grassley and Congressman Howard Berman pushed the amendments through Congress, and Ronald Reagan signed them into law, thus enhancing the Government's ability to combat fraud and recover losses.

For the past 25 years, the False Claims Act has been the single most effective tool for combating fraud against the government. The law owes much of its success to the courage of whistleblowers, who not only alert the government to fraud, but also provide invaluable assistance by uncovering evidence and explaining highly complex fraudulent schemes. The False Claims Act's qui tam provisions allow whistleblowers with evidence of fraud against the government to sue on behalf of the government, and receive 15 to 30 percent of the amount recovered.

In Fiscal Year 2010, the government recovered over $3 billion under the False Claims Act, 80 percent of which was recovered as a direct result of whistleblower lawsuits. Since the 1986 amendments to the False Claims Act, the government has recovered over $30 billion in judgments and settlements.

Taxpayers Against Fraud, a nonprofit, public interest organization dedicated to combating fraud against government, chronicles the False Claims Act's remarkable success over the last 25 years and highlights the pivotal role of whistleblowers in The 1986 False Claims Act Amendments, A Look At Twenty-Five Years of Effective Fraud Fighting in America.

In addition to providing financial incentives to report fraud, waste, and abuse in government programs, the False Claims Act protects employee whistleblowers from retaliation by their employers. In all FCA cases, the identity of the whistleblower remains confidential so long as the case is under seal with the court. In some instances, however, employers are able figure out which employee blew the whistle based on, for example, the substance of the government's inquiry, the knowledge base of their employees, and who in the company is most likely possess certain information. Under the FCA, employee whistleblowers who are discharged, demoted, suspended, "or in any other manner discriminated against in the terms and conditions of employment by his or her employer" in retaliation for engaging in activity that could reasonably lead to a viable FCA claim are entitled to, among other things, reinstatement, double the amount of back pay plus interest, and other special damages.

For the first time, the Dodd-Frank Act, effective July 21, 2010, provides for an express statute of limitations for FCA retaliation claims. Now, such claims must be brought within three years after the date when the retaliation occurred. The statute of limitations for retaliation claims made prior to the enactment of Dodd-Frank, however, is still subject to debate.

In deciding whether the new statute of limitations in the Dodd-Frank Act applies retroactively, federal courts have generally decided either not to apply the statute retroactively or have declined to address the issue directly. Most recently, in Saunders v. District of Columbia, No. 02-01803 (D.D.C. June 6, 2011), the U.S. District Court for the District of Columbia was confronted with whether to apply the statute of limitations contained in Dodd-Frank or "borrow" the statute of limitations applicable to the closest analog under District of Columbia law to a retaliation claim brought prior to the enactment of the Dodd-Frank Act.

Continue reading "The U.S. District Court for the District of Columbia Examines the Statute of Limitations for Filing Retaliation Claims under the FCA" »