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Whistleblowers have been awarded more than $3 billion in False Claims Act cases against health care companies and government contractors that have defrauded the government, and this powerful financial incentive has enabled the federal government to recover more than $20 billion. Should lawyers -- like other corporate insiders -- be able to take advantage of these financial incentives for blowing the whistle on corporate fraud? I have identified five cases in which lawyers sued their former clients under federal or state False Claims Acts. This presentation explains how courts resolved the legal and ethical issues that arose in those cases. It also describes how the Securities and Exchange Commission addressed similar issues in its Whistleblower Program regulations under the Dodd-Frank Wall Street Reform and Consumer Protection Act.
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Financial Incentivesfor Whistleblowing Lawyers?
The False Claims Act
& Dodd-Frank
Kathleen ClarkWashington University in St Louis
39th ABA National Conference on Professional Responsibility San Antonio30 May 2013
Intersectionof
Legal Ethics&
Law of Whistleblowing
Part I:
False Claims Act
False Claims Act
statutorysilence
5 cases
US ex rel Doe v X CorpED VA 1994
Vermont Agency Natl Res v US ex rel Stevens SCt 2000
Bury v Community Hospital of Central CalifCa5thApp 2002
US ex rel Repko v Guthrie ClinicMD PA 2008, 2011
US ex rel Fair Laboratory Practice Assoc v Quest SDNY 2011
LawyerSues
FormerClient
InternalWhistleblowing
Retaliation
US ex rel Doe v X Corp ED VA 1994
Vermont Agency Natl Res v US ex rel Stevens SCt 2000
Bury v Community Hospital Ca5thApp 2002
US ex rel Repko v Guthrie Clinic MD PA 2008, 2011
US ex rel Fair Laboratory Practice Assoc v Quest SDNY 2011
US ex rel Doe v X Corp ED VA 1994
Vermont Agency Natl Res v US ex rel Stevens SCt 2000
Bury v Community Hospital Ca5thApp 2002
US ex rel Repko v Guthrie Clinic MD PA 2008, 2011
US ex rel Fair Laboratory Practice Assoc v Quest SDNY 2011
US ex rel Doe v X Corp ED VA 1994
Vermont Agency Natl Res v US ex rel Stevens SCt 2000
Bury v Community Hospital Ca5thApp 2002
US ex rel Repko v Guthrie Clinic MD PA 2008, 2011
US ex rel Fair Laboratory Practice Assoc v Quest SDNY 2011
Confidentiality
$ confidentiality incentives > based on
contract
$ ? confidentiality incentives > based on
professional rules
$ confidentiality incentives < based on
professional rules
US ex rel Doe v X Corp ED VA 1994
Vermont Agency Natl Res v US ex rel Stevens SCt 2000
Bury v Community Hospital Ca5thApp 2002
US ex rel Repko v Guthrie Clinic MD PA 2008, 2011
US ex rel Fair Laboratory Practice Assoc v Quest SDNY 2011
US ex rel Doe v X Corp ED VA 1994
Vermont Agency Natl Res v US ex rel Stevens SCt 2000
Bury v Community Hospital Ca5thApp 2002
US ex rel Repko v Guthrie Clinic MD PA 2008, 2011
US ex rel Fair Laboratory Practice Assoc v Quest SDNY 2011
US ex rel Doe v X Corp ED VA 1994
Vermont Agency Natl Res v US ex rel Stevens SCt 2000
Bury v Community Hospital Ca5thApp 2002
US ex rel Repko v Guthrie Clinic MD PA 2008, 2011
US ex rel Fair Laboratory Practice Assoc v Quest SDNY 2011
US ex rel Doe v X Corp ED VA 1994
Vermont Agency Natl Res v US ex rel Stevens SCt 2000
Bury v Community Hospital Ca5thApp 2002
US ex rel Repko v Guthrie Clinic MD PA 2008, 2011
US ex rel Fair Laboratory Practice Assoc v Quest SDNY 2011
US ex rel Doe v X Corp ED VA 1994
Vermont Agency Natl Res v US ex rel Stevens SCt 2000
Bury v Community Hospital Ca5thApp 2002
US ex rel Repko v Guthrie Clinic MD PA 2008, 2011
US ex rel Fair Laboratory Practice Assoc v Quest SDNY 2011
US ex rel Doe v X Corp ED VA 1994
Vermont Agency Natl Res v US ex rel Stevens Attorneys
“should be encouraged” to use qui tam law suits
to expose fraudMD PA 2008, 2011
US ex rel Fair Laboratory Practice Assoc v Quest
SDNY 2011
US ex rel Doe v X Corp ED VA 1994
Vermont Agency Natl Res v US ex rel Stevens SCt 2000
Bury v Community Hospital Ca5thApp 2002
US ex rel Repko v Guthrie Clinic MD PA 2008, 2011
US ex rel Fair Laboratory Practice Assoc v Quest SDNY 2011
US ex rel Doe v X Corp ED VA 1994
Vermont Agency Natl Res v US ex rel Stevens SCt 2000
Bury v Community Hospital Ca5thApp 2002
US ex rel Repko v Guthrie Clinic MD PA 2008, 2011
US ex rel Fair Laboratory Practice Assoc v Quest SDNY 2011
US ex rel Doe v X Corp ED VA 1994
Vermont Agency Natl Res v US ex rel Stevens SCt 2000
Bury v Community Hospital Ca5thApp 2002
US ex rel Repko v Guthrie Clinic MD PA 2008, 2011
US ex rel Fair Laboratory Practice Assoc v Quest SDNY 2011
Part II:
Dodd-Frank
- voluntarily provides- original information- successful enforcement action- monetary sanctions > $1 million
Dodd-Frank Whistleblowers
Dodd-Frank
W petitions S.E.C.
False Claims ActW = plaintiff
Dodd-Frank
statutoryexclusions:
DoJlaw enforcement
Dodd-Frank
statutorysilence
re: lawyers
Dodd-Frank
SECregulations
re: lawyers
Dodd-Frank SEC regs
Can’t use information-subject to A-C privilege or-gained thru legal representation . . . unless . . .
Dodd-Frank SEC regs
. . . unless permitted by: - applicable state professional rules - SEC SOX regulation - “otherwise”
Dodd-Frank
variation state-to-state
confidentiality exceptionsfor client fraud
Dodd-Frank
SECannounced1st award
August, 2012
Op-ed:
Kathleen ClarkWhistleblowing Incentives for Lawyers?
NATIONAL LAW JOURNAL (Sept. 3, 2012)
Financial Incentivesfor Whistleblowing Lawyers?
The False Claims Act
& Dodd-Frank
Kathleen ClarkWashington University in St Louis
