Whistleblower News: Supreme Court Decides on False Claims Act and Veterans Affairs Case, $900K Whistleblower Award
WHISTLEBLOWER NEWS QUOTE OF THE DAY:
"It is important to put your best foot forward when providing information. The Division of Enforcement has limited resources concerning what information it can pursue. If a tip, complaint or referral (TCR) contains specific, timely and credible information, it is more likely that Enforcement staff will expend the resources to investigate the matter."
— Christopher Ehrman, Director of the CFTC Whistleblower Office on advice to prospective CFTC whistleblowers
DAILY WHISTLEBLOWER HEADLINES:
Supreme Court Puts Limits On Whistleblower Suits Over Regulations
The U.S. Supreme Court made it a little harder for lawyers to press whistleblower lawsuits over minor violations of government contract terms, but the court’s unanimous decision in Universal Health Services v. Escobar might also make it harder for defendants to dismiss suits before entering the expensive evidence-gathering phase known as discovery.
The decision by Justice Clarence Thomas follows a middle path between the position of the government — that violating a single requirement, no matter how minor, opens up liability for treble damages under the Civil War era False Claims Act — and a much stricter standard favorable to defendants.The court left intact the judge-made principle of “implied certification,” under which merely presenting a bill for payment can be considered a guarantee of compliance with contract terms. But it also imposed a standard of materiality, meaning the failure to disclose non-compliance must be so important that it rises to the level of “misleading half-truths.”
“The court was cognizant of the risk of turning the FCA into a club for whistleblowers going around penalizing companies for minute regulatory violations,” said Roger Cohen, senior counsel in Proskauer’s health care practice in New York. “But it’s probably likely more cases now survive a motion to dismiss.”
The high court reversed the First Circuit Court of Appeals, which had adopted the government’s position, and sent the case back down for review.
Some of the most important verbiage in the 22-page decision is lurking in Footnote 6, where the court says says FCA plaintiffs must state their claims with “plausibility and particularity.” That evokes the court’s decisions, dubbed Twiqbal by lawyers, that have imposed a similar standard on fraud suits generally and made it harder for plaintiff lawyers to press ill-defined cases in hopes of obtaining incriminating evidence in discovery.
Plaintiffs filed the FCA suit after their daughter Yarushka Rivera died at a Universal Health facility following an adverse drug reaction.
The therapist who diagnosed Rivera’s bipolar disease had a Ph.D from an unaccredited Internet school, and Massachusetts had rejected her license application to be a psychologist. The practitioner who prescribed the medication was a nurse who could only act under the supervision of a physician.
Because Universal Health billed under National Provider Identification numbers corresponding to specific job titles without disclosing its lack of qualified and licensed staff, Thomas wrote, the bills were likely misrepresentations. read more »
State pays officer $900K in whistleblower settlement
Jeremy Romero was a law enforcement officer who dared to cross the thin blue line in 2011 by reporting to superiors at the state Department of Public Safety that he had seen one of his fellow agents in the Special Investigations Division with a prostitute in a state-issued patrol car.
Romero lost his job for his trouble, according to allegations he made in a 2013 whistleblower complaint. According to documents that only recently became public, New Mexico taxpayers lost, too. After waging a taxpayer-funded legal battle against Romero for several years, the state Department of Public Safety agreed to pay Romero $900,000 to settle the case out of court.
“They fought us tooth and nail,” Romero’s attorney, Rachel Higgins, said Thursday. “This case was fought from the standpoint that he was nothing but a liar with sour grapes in his mouth. But at the end of the day, the result demonstrates that he was telling the truth the whole time, and it’s vindicating in that respect.”
Romero, who is now working desk duty from a wheelchair as a reserve deputy for the Bernalillo County Sheriff’s Department, said there isn’t a day that goes by when he doesn’t ask himself if he would still be walking today if he had just kept his mouth shut.
After losing his state job — in retaliation, he said, for reporting that Agent Tim Carlson had prostitutes in his car while on duty — Romero said he was essentially blacklisted by the Department of Public Safety, and no other agency would hire him.
Finally, after 14 months of looking for a job, his lawsuit says, he was hired by the Corrales Police Department. It was there that he was involved in an on-duty car accident that left him paralyzed from the waist down. If he had stayed quiet, Romero said, he never would have been working in Corrales. read more »
VA Must Exclusively Preference Small Biz, High Court Rules
The U.S. Supreme Court on Thursday ruled that a law requiring the U.S. Department of Veterans Affairs to give preference to veteran-owned small businesses for procurements extends to all competitive VA acquisitions, without exception, as long those businesses can meet the "rule of two."
The Veterans Benefits, Health Care and Information Technology Act unambiguously requires that the VA use veteran-owned small businesses for all VA contracting, as long as there is a “reasonable expectation” at least two VOSBs will bid on a VA contract and can do the work at a "fair and reasonable" price — the rule of two — the high court unanimously ruled in a decision authored by Justice Clarence Thomas, siding with petitioner Kingdomware Technologies Inc.
This applies even when the agency’s mandated small-business contracting goals have already been met, and does not exempt orders made under the Federal Supply Schedule, according to the high court. The FSS is a simplified system, typically used for routine orders, allowing the VA to make purchase orders for certain services or items as needed, under an overarching indefinite-delivery contract that includes multiple vendors.
"The act does not allow the department to evade the Rule of Two on the ground that it has already met its contracting goals or on the ground that the department has placed an order through the FSS," Justice Thomas said.
While the emergency notification services contract challenged by Kingdomware, a software developer and VOSB, had already been completed, which would typically make a court challenge moot, its case falls into an exception, the high court found.
The short duration of the contract wouldn’t have allowed full judicial review before it was completed, and it is likely that without a ruling, the VA would continue to refuse to apply the rule of two to similar future procurements, according to the opinion. read more »
