False Claims Act Cases Limited

The False Claims Act prohibits government contractors from making false claims for payment to the United States government. The Act allows civil actions to be brought by the Attorney General or a private person in the name of the United States. Private citizens may be awarded 15 30% of the damages the government recovers. To avoid a frenzy of lawsuits being filed following every news report, the Act bars a private citizen s lawsuit if the basis for the lawsuit is already publicly known, unless the person was an original source. An original source is a person who (1) has direct and independent knowledge of the facts underlying the cause of action and (2) voluntarily provided the information to the government before filing the lawsuit.

James Stone worked for Rockwell as an engineer from 1980 to March 1986. He worked at the Rocky Flats nuclear weapons plant near Golden, Colorado, under a government contract. In the early 1980s, Rockwell investigated the possibility of disposing of toxic pond sludge by mixing it with cement to form concrete blocks ( pondcrete ). In 1982, Stone reviewed the proposed process and told Rockwell he believed it would not work. His opinion was the pondcrete would be unstable, deteriorate, and release toxic waste. Stone s prediction was based on what he perceived to be a flaw in the equipment used to create the pondcrete.

The pondcrete process worked well for several years. As Stone predicted, eventually it failed, though not for the reason Stone anticipated. The pondcrete failed when a foreman changed the toxic sludge to cement ratio of the mixture. This change took place long after Stone was employed, and Stone had no personal knowledge of the change.