U.S. Supreme Court will review standards in False Claims Act suit

The United States Supreme Court has accepted review of a case concerning whether, when it is alleged that a local government misused federal money, a whistleblower may file suit under the federal False Claims Act if an administrative audit also reveals the fraudulent conduct. Under the False Claims Act, whistleblower lawsuits may not be brought if public disclosure of the wrongful conduct is made in a news report, a court hearing, or an administrative or congressional audit. Were it not for this rule, a person might read about fraudulent conduct in the newspaper and then simply file a “whistleblower” case based on that publicly disclosed information.

The case accepted by the Court involves alleged fraud by North Carolina’s Graham County Soil and Water Conservation District in the use of federal assistance after a disastrous 1995 storm.

The case, Graham County Soil and Water Conservation District v. U.S., will be argued in the Court’s October 2009 term.

For the full story, go to the Boston Globe.