Court Tightens Whistle-Blower Rules
By MARK SHERMAN
Associated Press Writer
WASHINGTON (AP) - The
Supreme Court made it harder Tuesday for whistle-blowers to share in the
proceeds from fraud lawsuits against government contractors.
The court ruled 6-2 that
James Stone, an 81-year-old retired engineer, may not collect a penny for his
role in exposing fraud at the now-closed Rocky Flats nuclear weapons plant
northwest of
Writing for the court,
Justice Antonin Scalia said Stone was not an original source of the information
that resulted in Rockwell International, now part of aerospace giant Boeing
Co., being ordered to pay the government nearly $4.2 million for fraud
connected with environmental cleanup at the Rocky Flats plant.
Rockwell must pay the
entire penalty anyway. The only question before the court was whether Stone
would get his cut.
The company, backed by
defense, energy and pharmaceutical interests, wanted the justices to restrict
when an individual can collect for suing on the government's behalf.
The Bush administration
sided with Stone, arguing that it was in the government's interest to encourage
whistle-blowers, even though the government keeps more money now that Stone has
lost.
The False Claims Act
allows individuals, acting on the government's behalf, to file fraud suits
against companies that do business with the government. If they prevail, they
receive a portion of what the contractor must pay the government. Lower federal
courts ruled in Stone's favor.
The case turned on
whether Stone provided information that a jury eventually used to find
fraudulent claims.
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 major exception to
this rule is if an individual is an original source of the information, which
Stone said he was.
The company said his
claim was implausible, since Stone was laid off the year before Rockwell began
submitting false claims saying it was meeting goals of treating low-level
radioactive wastes at the former atomic weapons plant.
Scalia agreed. ``Stone
did not have direct and independent knowledge of the information upon which his
allegations were based,'' he said.
Justice John Paul
Stevens, in a dissent joined by Justice Ruth Bader Ginsburg, said
whistle-blowers should have to show only that their information led the
government to the fraud, not that the claims ultimately proved to a jury must
also have come from them. Justice Stephen Breyer did not take part in the case.
The lower courts said
Stone demonstrated that he provided information on which the allegations of
fraud were based.
Rocky Flats is
designated by the Environmental Protection Agency as a Superfund cleanup site.
It is an Energy Department-owned cleanup and closure site.
In nearly four decades,
some 70,000 plutonium triggers for nuclear bombs were made at Rocky Flats.
Production was halted in 1989 because of chronic safety problems, prompting a
raid by FBI agents. The Cold War ended before production could resume. In 1993,
the Energy Department announced that the facility's mission was over.
State and federal
regulators signed an agreement in 1996 on the cleanup, including demolition of
what was termed ``the most dangerous building in
The case is Rockwell
International v.