Chamber Lauds Supreme Court Whistleblower Decision

WASHINGTON, D.C. - The Supreme Court today ruled 6-2 that an individual alleging wrongdoing against a government contractor must have first-hand knowledge of the behavior in order to file a lawsuit and claim damages on behalf of the government.

"Today's decision is an important victory for every government contractor in the country because it prevents plaintiffs who are not true whistleblowers from digging into a company's coffers," said NCLC Senior Vice President Robin Conrad. "The high court has made it clear that alleging wrongdoing against a company without independent knowledge does not satisfy the original source requirement of the False Claims Act."

In Rockwell International Corp. v. United States ex rel. Stone, a former employee claimed Rockwell misrepresented its ability to make Pondcrete blocks — a solid way of storing toxic waste — from toxic sludge. A district court upheld the employee's ability to sue despite finding he was incorrect about his claim and that he relied on "incidents that were widely covered in the news media." The federal False Claims Act (FCA) allows such lawsuits only when the individual bringing the suit is the "original source" of the information on which the allegations are based.

"The high court correctly determined that the plaintiff did not have independent and direct knowledge of the information in which he based his claim," Conrad said. "This decision should put to rest any uncertainty courts have had in applying the FCA, and supports the legitimate business activities of federal government contractors."

NCLC, the public policy law firm of the U.S. Chamber of Commerce, is a membership organization that advocates fair treatment of business in the courts and before regulatory agencies. The U.S. Chamber is the world's largest business federation representing more than 3 million businesses and organizations of every size, sector, and region.

National Chamber Litigation Center

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