The U.S. Supreme Court will use a 17-year-old case involving Colorado’s Rocky Flats to clarify the ability of whistle-blowers to sue and collect from private contractors for the misuse of federal funds.
The high court agreed Tuesday to hear an appeal of a $4.2 million award in a lawsuit brought in 1989 by James Stone, a former engineer for Rockwell International Corp. During the 1970s and ’80s, Rockwell was a contractor at Rocky Flats, a nuclear weapons plant north of Golden that has since been demolished.
Stone’s suit claimed Rockwell lied to the government about its performance during its tenure at Rocky Flats in order to qualify for more than $22 million in performance awards. The U.S. Energy Department later joined the suit.
The suit was filed under the federal False Claims Act, which allows a whistle-blower to sue over alleged fraud against the government and collect a percentage of any money awarded.
A federal jury in 1999 awarded Stone and the government $1.4 million, which under federal law was tripled to $4.2 million. The False Claims Act entitled Stone to claim roughly a third of the money.
The 10th U.S. Circuit Court of Appeals upheld the award in 2001.
The Boeing Co. – which now owns Rockwell – is seeking to overturn the $4.2 million award. It contends Stone does not qualify as a whistle-blower under federal law because he was not the “original source” of information about Rockwell’s alleged misdeeds and therefore should not share in the award.
Stone’s attorneys argue that the 10th Circuit concluded that he had direct and independent knowledge about a number of problems at Rocky Flats.
The Bush administration joined Stone in urging the Supreme Court not to hear the appeal.
In agreeing to review the case, the Supreme Court declined to address the larger issue raised by some business groups as to whether the False Claims Act is unconstitutional.
The court is expected to rule by July.
