Health reform to trump whistleblower ruling

The U.S. Supreme Court has ruled that potential whistleblowers are barred from filing lawsuits on behalf of the government if the suits are based on information obtained through a state, federal or local report – but the ruling’s impact will be short-lived.

A False Claims Act amendment included in the new health care reform law will allow such suits to move forward as long as they’re not based on information disclosed in a federal setting.

The Court’s decision pertained to fraud allegations made by Karen Wilson, who accused her employer, North Carolina’s Graham County Soil and Water Conservation District, of defrauding the federal government of disaster

relief funds.

The Court ruled 7-2 against Wilson, deeming her suit invalid because it hinged on state audit data. Justice John Paul Stevens, writing for the majority, made note of the newly passed health care reform law, but said that because the new law makes “no mention of retroactivity,” it does not apply to Wilson’s case or any other current cases. (Stevens recently announced his intention to retire at the end of the Court’s term.)

Justice Sonia Sotomayor, one of the two dissenting justices, said that the ruling would eliminate suits stemming from “thousands of state and local government administrative reports produced each year.”