WASHINGTON -- The Supreme Court left an 81-year-old retired engineer without a penny to show for his role in exposing fraud at a former nuclear weapons plant -- a ruling that makes it harder for whistle-blowers to claim cash rewards.
James Stone stood to collect as much as $1 million from a lawsuit he filed in 1989 against
A court eventually ordered Rockwell to pay the government nearly $4.2 million for false claims the company submitted. Stone could have received up to a quarter of Rockwell's payment, under the False Claims Act.
But Justice Antonin Scalia, writing in the 6-to-2 ruling yesterday, said Stone was not entitled to recover any money because he lacked "direct and independent knowledge of the information upon which his allegations were based." Scalia said Stone had little connection to the jury's ultimate verdict against Rockwell.
The company must pay the entire penalty anyway. The only question before the court was whether Stone would get a cut.
The outcome was sought by business interests looking for the court to limit whistle-blowers in false claims lawsuits. Since Congress reinvigorated the Civil War-era law in 1986, those suits have returned $11 billion to the government. Recent high- profile cases include settlements with leading pharmaceutical manufacturers.
The Bush administration sided with Stone, saying it was in the government's interest to encourage whistle-blowers, even though the government keeps more money now that Stone has lost.