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Ruling makes whistle-blower lawsuits more difficult
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11-29-99 Houston. A recent ruling by appellate court judges in New Orleans striking down a 130-year-old law will make it more difficult for workers in health care and other industries to bring "whistle-blower" suits against employers. The judges declared unconstitutional a provision of the 1863 False Claims Act called qui tam that allows uninjured employees to file suit on behalf of the federal government if they believe their employer is guilty of fraud. Qui tam also allows such plaintiffs to collect up to 25 percent of any damages awarded, whether or not the government joins the legal action. The decision stems from a lawsuit filed by a former nurse at St. Luke's Episcopal Hospital in Houston. The nurse alleged that the hospital bilked Medicare by admitting patients unnecessarily and prematurely placing some patients in intensive care. Both the Texas State Board of Medical Examiners and the Texas State Board of Nurse Examiners found the claims to be without merit. In making the ruling, the judges said qui tam infringes on the government's "prosecutorial discretion" by allowing suits to go forward even if the attorney general determines that the action might injure the government's interests. "It's important to note that the decision is limited only to those cases in which the government decides not to intervene," said Boyd Smith, a Houston attorney who represented the hospital and two other defendants. "If this ruling stands, the False Claims Act will still be a viable tool with which to fight fraud." The 5th U.S. Circuit Court of Appeals is scheduled to review the decision in January.
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