The U.S. Supreme Court will hear a case that could decide how much money whistleblowers can recover when they uncover government or corporate abuse or waste, reports Bloomberg.com.
The dispute rests over whether a whistleblower can sue a North Carolina water district under the U.S. False Claims Act for fraudulently seeking federal funds for storm cleanup. As Bloomberg.com reports, the issue is whether the whistleblower has a right to sue underneath the law because the incident was already publicized in state documents.
The False Claims Act lets whistleblowers press fraud claims on behalf of the federal government and then share in any recovery. The law bars suits when allegations have been publicized by the federal government. The measure isn’t clear about the effect of disclosures by state governments.
The 4th U.S. Circuit Court of Appeals said the so-called public disclosure bar applies only to federal documents and hearings. Lower courts disagree on the question.
Industry groups have taken a keen interest in the upcoming ruling.
The Pharmaceutical Research and Manufacturers of America and the Biotechnology Industry Organization filed an amicus curiae brief with the Supreme Court asking it to strike down the 4th Circuit Court's decision, arguing it will lead to opportunists going through state documents and filing lawsuits for profit.
The two industry groups fear that if the 4th Circuit's decision is upheld, lawsuits underneath the False Claims Act will soar. In their brief, the industry groups say lawsuits filed under the law in 2007 cost the healthcare industry $1.1 billion.
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