Supreme Court Tightens Rules In Whistle-Blower Lawsuits

Tuesday, March 27th 2007, 9:35 am
By: News On 6

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 6-3 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 Denver.

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 backed 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.