Philadelphia Personal Injury Attorney Blog | Pomerantz Perlberger & Lewis LLP

In a whistleblower case filed in 1995 under the False Claims Act, two employees alleged that their employer, General Tool Company, submitted fraudulent claims to the Navy. According to the employees, General Tool Company had fitted more than 50 destroyers with substandard generators. Under the False Claims Act, the employees may be eligible to receive as much as 30% of the sum recovered by the government.

However, the Supreme Court began considering whether the two men would be eligible for recovery under the act, since General Tool Company did not submit invoices to the Navy, but to the shipyards Bath Iron Works and Ingalls Shipbuilding, where the destroyers were built. In December 2006, an appeals court ruled that the suit could go forward, since the False Claims Act allows claims made to other parties if "the claim will be paid with government money."

But Justices Stephen Breyer and Antonin Scalia, as well as Chief Justice John Roberts seem eager to limit the breadth of the law, saying that since government funding permeates most sectors of society, the law could theoretically cover anything, unless it's limited.

What these justices forget is that the law is already limited by its proportional award framework. Claims will only be filed under the law if the government is being defrauded of significant sums of money, and if that is the case, then it needs to be addressed no matter how many subcontractors may intervene between the source of the money and the source of the fraud. Allowing companies to use a subcontractor as a shield against whistleblower suits would simply encourage them to collude with subcontractors to perpetrate fraud.

If you know that your employer is submitting false claims to the government, we are prepared to help you expose their wrongdoing. Contact the experienced qui tam lawyers at Pomerants Perlberger & Lewis, LLP today for a free initial consultation.