The U.S. Supreme Court today narrowed the circumstances in which a private citizen may pursue a qui tam case under the False Claims Act.  The relator, James Stone, alleged in his original complaint that defects in a piping system resulted in insolid "pondcrete" blocks, in which Stone’s employer, Rockwell, stored radioactive sludge for the federal government.  A jury found that Rockwell used an insufficient concrete-to-sludge ratio in making the pondcrete blocks.  Rockwell Int’l Corp. v. United States, No. 05-1272 (U.S. Mar. 27, 2007). 

The Court held that the district court lacked jurisdiction to consider Stone’s qui tam claim because he didn’t qualify as an "original source" with respect to the claim alleging a bad concrete-to-sludge ratio.  He served as an original source, the Court noted, only with respect to the piping system defects, a theory that dropped out of the case after the FBI and discovery revealed that Rockwell’s shorting of concrete caused the leaking from the pondcrete blocks.  The Court also concluded that the federal government’s intervention in the case didn’t cure the jurisdictional defect as to Stone.

What does Rockwell mean for prospective qui tam relators?  Blawgletter can’t venture a prediction as to all its implications, but surely Rockwell requires a causal connection between the misdeed that the relator bases his original claim on and harm to the federal government.  Causing discovery of the true misdeed doesn’t suffice even if the injury that prompted the lawsuit remains the same.  That strikes Blawgletter as a tough test — and one that will leave relators in danger of losing, as in Rockwell, even if they win.

Barry Barnett

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