Steve Kardell, a partner at Dallas’ Clouse Dunn, represents corporate executives in internal investigations and litigates whistleblower cases.
In the whistleblower world, there is a pecking order of “haves” and “have nots. In one camp are the paid whistleblowers. In the other are the unpaid whistleblowers. In the paid whistleblower ranks, there are four or five different categories of potential claimants (e.g., SEC whistleblowers, IRS whistleblowers, and even Texas Parks and Wildlife whistleblowers), but the 800-pound gorilla is the False Claims Act/qui tam plaintiff. This is the statute where the huge awards are paid, some exceeding $100,000,000.
Significantly, in Escobar, the Supreme Court gave its stamp of approval to the doctrine of implied false certification, a potentially game-changing FCA theory of recovery. In so doing, the court emphasized materiality as the ultimate litmus test for application of the implied certification FCA cause of action.
A number of prominent pro-business lobbying groups (e.g., the U.S. Chamber of Commerce, the Washington Legal Foundation, etc.) had urged the court to either entirely disavow the implied certification cause of action, or, at best, adopt a restricted view of the concept, predicting a litigation feeding frenzy by rapacious whistleblower plaintiffs, targeting well-meaning government contractors hamstrung by their contracts with a regulation-choking federal government.
In a dramatic illustration of the recent unpredictability of the court, the unanimous decision embracing—with certain limitations, implied certifications—was authored by none other than Clarence Thomas, normally considered a staunch pro-business ally on the court.