Colorado Whistle Blower Loses SCOTUS Case

In a 6-2 opinion written by Justice Scalia and released today, the U.S. Supreme Court has made it harder for whistle blowers to receive compensation when they play a part in revealing fraud by government contractors. 

This case, Rockwell International Corp. v. United States, involved a whistle blower at Colorado’s Rocky Flats clean up site who helped expose a coverup of shoddy reclaimation work by Rockwell’s subsidiary.  Colorado Confidential has covered the case as it has progressed.
The case turned on a narrow issue of statutory interpretation with big consequences, involving a law that allows whistle blowers to receive a share of the benefit the government receives when it recovers money in a fraud investigation intiated by the whistle blower.

Mr. Stone, the individual who tipped off the government in this case, argued with government support that he is entitled to recover so long as his information leads to an investigation that produces a recovery, even if it is new information discovered in the investigation is the ground for the government’s ultimate court win.

The Supreme Court, in contrast, at the behest of the contractor found that the whistle blower must actually supply information that is part of the government’s winning case at trial to recover.  The Supreme Court also found that this limitation was one of “subject matter jurisdiction”.  This means that the fraudulent contractor is allowed to object to compensation for the whistleblower, even though the contractor in this case, Rockwell, had conceded in the trial court that the whistle blower was entitled to compensation.

Justices Stevens and Ginsberg, dissenting, argued that jurisdictional requirements of the law should not be dependent upon the course the litigation at trial, long after the case is commenced.  Under the new rule, the Court can lose jurisdiction over the claim after years of litigation if the government changes its trial theory in the case at the last minute.

Since the case involved a statute and not the U.S. Constitution, the law can be amended by Congress if it wants to reach a different result than the one rearched by the U.S. Supreme Court in this case.  Given the fact that the government supported the whistle blowers case, and that Democrats who control Congress are often favorable to whistle blowers, an amendment to the statute to overrule this case is within the realm of the possible.

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Andrew Oh-Willeke

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