Supreme Court Preserves Role For Whistleblowers

Under the Civil False Claims Act (FCA),

persons who commit fraud against the federal government may be liable for

treble damages and civil penalties of $10,000 for each false claim submitted.†

Whistleblowers (or relators) who bring the fraud to light may receive a bounty

of between 15 and 30 percent of whatever amount the government recovers.†

The Justice Department reports that relators have helped the government

recover more than $3.5 billion, of which $550 million has gone to relators.

Recently, defendants in suits brought by

relators have argued that relators lack standing to bring FCA cases, in that

they have not personally sustained any injury.† On May 22, the Supreme

Court addressed this high-profile issue and found that the relators do in fact

have standing.† Vermont Agency of Natural Resources v. United States ex

rel. Stevens.††† The Court reasoned that, under the FCA, the

federal government partially assigns its claim to the relator.† Since

courts routinely uphold assignments of claims, Justice Scalia wrote†

ìthat adequate basis for the relator's suit for his bounty is to be found

in the doctrine that the assignee of a claim has standing to assert the injury

in fact suffered by the assignor. Using this assignment of

claim analogy, the court held that relators may bring FCA cases on behalf of

the...