When 3M agreed in July to pay the U.S. Department of Justice $9.1 million to resolve allegations of providing faulty equipment to our military, it signaled a victory for men and women in uniform as well as for all Americans. That’s because the DOJ’s case against 3M hinged on information from a whistleblower acting on laws designed to protect people who expose corruption and fraud.
DOJ’s settlement with 3M began with the allegation that the company knowingly sold defective earplugs to the U.S. military, resulting in permanent hearing loss or tinnitus for many who used them. Still more legal actions against 3M are in the works. Law firms across the country are investigating claims and filing lawsuits on behalf of military personnel claiming injury — including my firm in Durham, N.C., which is not far from Fort Bragg and Camp Lejeune.
This far-reaching pursuit of justice began with a single whistleblower bringing what’s known as a “qui tam” action under the federal False Claims Act (FCA). This allows individuals with evidence of fraud involving federal programs or contracts to sue the party in the wrong on behalf of the United States government.
The whistleblower in the action against 3M was not a member of the military, but rather the private sector. Still, FCA qui tam actions are open to military whistleblowers — and that’s a fact well worth remembering. Indeed, the FCA’s association with the U.S. military goes back to its inception. It was born during the Civil War to fight fraud perpetrated by companies that sold faulty supplies to the military, including cardboard boots and sawdust disguised as gunpowder.
Today, FCA whistleblower lawsuits protect the government from all kinds of fraud. As vast as our country’s law enforcement system is, it can’t ferret out all the cheating against the U.S. government and, by extension, taxpayers. Fraud on the government has stemmed from virtually every industry, including housing and mortgage lending, education and student loan obligations, and finance. Nearly all the $2.8 billion in whistleblower recovery in 2018 came from the health care industry alone — 89.3%, or $2.5 billion.
During the defense spending boom of the 1980s, some contractors charged hundreds of dollars for a toilet seat or for a hammer you could buy at a hardware store for $10. Whistleblowers, working through the FCA, helped slam the hammer down on such corruption.
As to how military personnel can figure into qui tam actions, the 11th Circuit in the landmark 1991 case, U.S. ex rel. Williams v. NEC Corp., 931 F.2d 1493 (11th Cir. 1991) found, “[N]othing in the False Claims Act prohibits a government employee from filing a qui tam action based upon information acquired while working for the government.”
The case involved an Air Force attorney who alleged fraud against a third party in a qui tam complaint. A move to throw out the claim because the whistleblower was a government employee failed, and the case proceeded. It’s important to note here that while members of the military may bring qui tam cases against third parties (like, say, a hardware contractor), they are expressly prohibited from bringing a qui tam suit against an individual member of the armed forces (31 USC 3730(e)(1)).
People choose to blow the whistle for many reasons. Some come forward because of their principles; they cannot abide cheating. Some worry that various kinds of fraud put innocent people in danger, e.g. hospital patients who undergo unnecessary procedures or members of the military left to deal with defective supplies.
Some are motivated by the financial incentives. According to the Taxpayers Against Fraud (TAF), the DOJ recovered more than $2.8 billion in 2018. Individuals who file whistleblower claims on behalf of the U.S. government may receive compensation anywhere from 15% to 30% of the total recovery in some cases. In the 3M case, the whistleblower will reportedly receive $1,911,000.
In other words, while whistleblowers do require courage, they don’t have to be martyrs. A whistleblower is anyone who witnesses rule-breaking and decides to be the person who makes a difference by setting in motion a legal action that includes built-in protections for him or her.
But while whistleblower cases can be milestones, they aren’t a cure-all. For example, military personnel who wish to receive compensation for injury as a result of using 3M’s allegedly defective earplugs must now file their own legal actions. Still, because of a whistleblower and the laws that protect them, the wheels of justice are turning.
Gary Jackson is an attorney at the Law Offices of James Scott Farrin, headquartered in Durham, N.C. He has participated in whistleblower (qui tam) cases around the country.