Financial Incentivesfor Whistleblowing Lawyers?The False Claims Act& Dodd-FrankKathleen ClarkWashington University in St L...
IntersectionofLegal Ethics&Law of Whistleblowing
Part I:False Claims Act
False Claims Actstatutorysilence
5 cases
US ex rel Doe v X CorpED VA 1994Vermont Agency Natl Res v US ex rel StevensSCt 2000Bury v Community Hospital of Central Ca...
LawyerSuesFormerClient
InternalWhistleblowing
Retaliation
US ex rel Doe v X CorpED VA 1994Vermont Agency Natl Res v US ex rel StevensSCt 2000Bury v Community HospitalCa5thApp 2002U...
US ex rel Doe v X CorpED VA 1994Vermont Agency Natl Res v US ex rel StevensSCt 2000Bury v Community HospitalCa5thApp 2002U...
US ex rel Doe v X CorpED VA 1994Vermont Agency Natl Res v US ex rel StevensSCt 2000Bury v Community HospitalCa5thApp 2002U...
Confidentiality
$ confidentialityincentives > based oncontract
$ ? confidentialityincentives > based onprofessional rules
$ confidentialityincentives < based onprofessional rules
US ex rel Doe v X CorpED VA 1994Vermont Agency Natl Res v US ex rel StevensSCt 2000Bury v Community HospitalCa5thApp 2002U...
US ex rel Doe v X CorpED VA 1994Vermont Agency Natl Res v US ex rel StevensSCt 2000Bury v Community HospitalCa5thApp 2002U...
US ex rel Doe v X CorpED VA 1994Vermont Agency Natl Res v US ex rel StevensSCt 2000Bury v Community HospitalCa5thApp 2002U...
US ex rel Doe v X CorpED VA 1994Vermont Agency Natl Res v US ex rel StevensSCt 2000Bury v Community HospitalCa5thApp 2002U...
US ex rel Doe v X CorpED VA 1994Vermont Agency Natl Res v US ex rel StevensSCt 2000Bury v Community HospitalCa5thApp 2002U...
US ex rel Doe v X CorpED VA 1994Vermont Agency Natl Res v US ex rel StevensAttorneys“should be encouraged”to use qui tam l...
US ex rel Doe v X CorpED VA 1994Vermont Agency Natl Res v US ex rel StevensSCt 2000Bury v Community HospitalCa5thApp 2002U...
US ex rel Doe v X CorpED VA 1994Vermont Agency Natl Res v US ex rel StevensSCt 2000Bury v Community HospitalCa5thApp 2002U...
US ex rel Doe v X CorpED VA 1994Vermont Agency Natl Res v US ex rel StevensSCt 2000Bury v Community HospitalCa5thApp 2002U...
Part II:Dodd-Frank
- voluntarily provides- original information- successful enforcement action- monetary sanctions > $1 millionDodd-Frank Whi...
Dodd-FrankW petitions S.E.C.False Claims ActW = plaintiff
Dodd-Frankstatutoryexclusions:DoJlaw enforcement
Dodd-Frankstatutorysilencere:lawyers
Dodd-FrankSECregulationsre:lawyers
Dodd-Frank SEC regsCan’t use information-subject to A-C privilege or-gained thru legal representation. . . unless . . .
Dodd-Frank SEC regs. . . unless permitted by:- applicable state professional rules- SEC SOX regulation- “otherwise”
Dodd-Frankvariation state-to-stateconfidentiality exceptionsfor client fraud
Dodd-FrankSECannounced1st awardAugust, 2012
Dodd-Frank3,000+whistleblower tipsin1st year
Op-ed:Kathleen ClarkWhistleblowing Incentives for Lawyers?NATIONAL LAW JOURNAL(Sept. 3, 2012)
Financial Incentivesfor Whistleblowing Lawyers?The False Claims Act& Dodd-FrankKathleen ClarkWashington University in St L...
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Financial Incentives for Whistleblowing Lawyers? The False Claims Act & Dodd-Frank

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Whistleblowers have been awarded more than $3 billion in False Claims Act cases against health care companies and government contractors that have defrauded the government, and this powerful financial incentive has enabled the federal government to recover more than $20 billion.
Should lawyers -- like other corporate insiders -- be able to take advantage of these financial incentives for blowing the whistle on corporate fraud? I have identified five cases in which lawyers sued their former clients under federal or state False Claims Acts.
This presentation explains how courts resolved the legal and ethical issues that arose in those cases. It also describes how the Securities and Exchange Commission addressed similar issues in its Whistleblower Program regulations under the Dodd-Frank Wall Street Reform and Consumer Protection Act.

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Financial Incentives for Whistleblowing Lawyers? The False Claims Act & Dodd-Frank

  1. 1. Financial Incentivesfor Whistleblowing Lawyers?The False Claims Act& Dodd-FrankKathleen ClarkWashington University in St Louis39th ABA National Conference on Professional ResponsibilitySan Antonio30 May 2013
  2. 2. IntersectionofLegal Ethics&Law of Whistleblowing
  3. 3. Part I:False Claims Act
  4. 4. False Claims Actstatutorysilence
  5. 5. 5 cases
  6. 6. US ex rel Doe v X CorpED VA 1994Vermont Agency Natl Res v US ex rel StevensSCt 2000Bury v Community Hospital of Central CalifCa5thApp 2002US ex rel Repko v Guthrie ClinicMD PA 2008, 2011US ex rel Fair Laboratory Practice Assoc v QuestSDNY 2011
  7. 7. LawyerSuesFormerClient
  8. 8. InternalWhistleblowing
  9. 9. Retaliation
  10. 10. US ex rel Doe v X CorpED VA 1994Vermont Agency Natl Res v US ex rel StevensSCt 2000Bury v Community HospitalCa5thApp 2002US ex rel Repko v Guthrie ClinicMD PA 2008, 2011US ex rel Fair Laboratory Practice Assoc v QuestSDNY 2011
  11. 11. US ex rel Doe v X CorpED VA 1994Vermont Agency Natl Res v US ex rel StevensSCt 2000Bury v Community HospitalCa5thApp 2002US ex rel Repko v Guthrie ClinicMD PA 2008, 2011US ex rel Fair Laboratory Practice Assoc v QuestSDNY 2011
  12. 12. US ex rel Doe v X CorpED VA 1994Vermont Agency Natl Res v US ex rel StevensSCt 2000Bury v Community HospitalCa5thApp 2002US ex rel Repko v Guthrie ClinicMD PA 2008, 2011US ex rel Fair Laboratory Practice Assoc v QuestSDNY 2011
  13. 13. Confidentiality
  14. 14. $ confidentialityincentives > based oncontract
  15. 15. $ ? confidentialityincentives > based onprofessional rules
  16. 16. $ confidentialityincentives < based onprofessional rules
  17. 17. US ex rel Doe v X CorpED VA 1994Vermont Agency Natl Res v US ex rel StevensSCt 2000Bury v Community HospitalCa5thApp 2002US ex rel Repko v Guthrie ClinicMD PA 2008, 2011US ex rel Fair Laboratory Practice Assoc v QuestSDNY 2011
  18. 18. US ex rel Doe v X CorpED VA 1994Vermont Agency Natl Res v US ex rel StevensSCt 2000Bury v Community HospitalCa5thApp 2002US ex rel Repko v Guthrie ClinicMD PA 2008, 2011US ex rel Fair Laboratory Practice Assoc v QuestSDNY 2011
  19. 19. US ex rel Doe v X CorpED VA 1994Vermont Agency Natl Res v US ex rel StevensSCt 2000Bury v Community HospitalCa5thApp 2002US ex rel Repko v Guthrie ClinicMD PA 2008, 2011US ex rel Fair Laboratory Practice Assoc v QuestSDNY 2011
  20. 20. US ex rel Doe v X CorpED VA 1994Vermont Agency Natl Res v US ex rel StevensSCt 2000Bury v Community HospitalCa5thApp 2002US ex rel Repko v Guthrie ClinicMD PA 2008, 2011US ex rel Fair Laboratory Practice Assoc v QuestSDNY 2011
  21. 21. US ex rel Doe v X CorpED VA 1994Vermont Agency Natl Res v US ex rel StevensSCt 2000Bury v Community HospitalCa5thApp 2002US ex rel Repko v Guthrie ClinicMD PA 2008, 2011US ex rel Fair Laboratory Practice Assoc v QuestSDNY 2011
  22. 22. US ex rel Doe v X CorpED VA 1994Vermont Agency Natl Res v US ex rel StevensAttorneys“should be encouraged”to use qui tam law suitsto expose fraudMD PA 2008, 2011US ex rel Fair Laboratory Practice Assoc vQuestSDNY 2011
  23. 23. US ex rel Doe v X CorpED VA 1994Vermont Agency Natl Res v US ex rel StevensSCt 2000Bury v Community HospitalCa5thApp 2002US ex rel Repko v Guthrie ClinicMD PA 2008, 2011US ex rel Fair Laboratory Practice Assoc v QuestSDNY 2011
  24. 24. US ex rel Doe v X CorpED VA 1994Vermont Agency Natl Res v US ex rel StevensSCt 2000Bury v Community HospitalCa5thApp 2002US ex rel Repko v Guthrie ClinicMD PA 2008, 2011US ex rel Fair Laboratory Practice Assoc v QuestSDNY 2011
  25. 25. US ex rel Doe v X CorpED VA 1994Vermont Agency Natl Res v US ex rel StevensSCt 2000Bury v Community HospitalCa5thApp 2002US ex rel Repko v Guthrie ClinicMD PA 2008, 2011US ex rel Fair Laboratory Practice Assoc v QuestSDNY 2011
  26. 26. Part II:Dodd-Frank
  27. 27. - voluntarily provides- original information- successful enforcement action- monetary sanctions > $1 millionDodd-Frank Whistleblowers
  28. 28. Dodd-FrankW petitions S.E.C.False Claims ActW = plaintiff
  29. 29. Dodd-Frankstatutoryexclusions:DoJlaw enforcement
  30. 30. Dodd-Frankstatutorysilencere:lawyers
  31. 31. Dodd-FrankSECregulationsre:lawyers
  32. 32. Dodd-Frank SEC regsCan’t use information-subject to A-C privilege or-gained thru legal representation. . . unless . . .
  33. 33. Dodd-Frank SEC regs. . . unless permitted by:- applicable state professional rules- SEC SOX regulation- “otherwise”
  34. 34. Dodd-Frankvariation state-to-stateconfidentiality exceptionsfor client fraud
  35. 35. Dodd-FrankSECannounced1st awardAugust, 2012
  36. 36. Dodd-Frank3,000+whistleblower tipsin1st year
  37. 37. Op-ed:Kathleen ClarkWhistleblowing Incentives for Lawyers?NATIONAL LAW JOURNAL(Sept. 3, 2012)
  38. 38. Financial Incentivesfor Whistleblowing Lawyers?The False Claims Act& Dodd-FrankKathleen ClarkWashington University in St LouisKathleenClarkEsq@gmail.com314-827-4081
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