High Court Tightens Whistle-Blower Rules
(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 wanted a different decision, reports CBS News
correspondent Barry Bagnato, arguing that new restrictions on
whistleblowers will discourage them from coming forward.
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.