We’ve embarked on an interesting new course here: a series of classes led by experts in a variety of aspects of whistleblowing. Our first class featured Jordan Thomas, currently at Labaton Sucharow in New York, and formerly the Assistant Director of the SEC’s Division of Enforcement. Jordan led the students through a terrific exercise in identifying competing policy considerations behind the Dodd-Frank whistleblowing program and the SEC’s implementing rules. [For a recent story on the SEC’s whistleblower program, see this write-up by John Kiernan for CardHub.]
Yesterday’s class was led by Virginia Gibson, currently with Hogan Lovells in Philadelphia, and former director of the civil division of the U.S. Attorney’s office in Philadelphia. She brought her extensive enforcement experience to introduce students to the qui tam provisions of the False Claims Act, which permit citizens to initiate litigation asserting claims of fraud against the federal government.
Having just released a working paper that sharply criticizes the “first-filed” rule in corporate shareholder representative litigation, I was struck by the fairly strict “first to file rule” in Section 3730(b)(5) of the False Claims Act. That rule apparently has its supporters, but it’s hard to see how it doesn’t inappropriately encourage whistleblowers to file claims before developing and maturely evaluating the facts. Ginny Gibson explained that situations with multiple relators (whistleblowers) are becoming increasingly common, but priority (and sharing in a potential recovery) often gets negotiated during the “quiet period” after the complaints are filed but before the Government decides whether to intervene and the complaints become unsealed. Still, I worry that the first to file rule gives the first filer an inappropriate advantage. Hat tip to my student Kerrin Cahill (Widener ’13) whose paper pointed out that the qui tam first to file rule could use a little nuance. (And hat tip to the Ruby R. Vale Foundation for its support of this series of classes).
We’re looking forward to the other speakers in this series, including former Delaware Supreme Court Chief Justice E. Norman Veasey, DuPont General Counsel Thomas Sager, and Prof. Kathleen Clark of Washington University Law School in St. Louis, who also teaches an entire course devoted to whistleblowing.