Oral argument in the whistleblower case of Allison Engine Company v. United States took a strange twist today when Supreme Court justices, at least temporarily, seemed convinced that crucial facts of the case were not quite what they had appeared. After seemingly new information emerged, an exasperated Justice Antonin Scalia said to one of the lawyers, "I wish you had said that in your brief, because we could have saved ourselves a lot of reading."
The case is a test of the False Claims Act, which rewards whistleblowers who report when the U.S. government is being defrauded by those who do business with it. At issue is whether the law only covers those cases in which a fraudulent bill is presented directly to the government -- or, alternatively, it could also cover subcontractor situations in which government funds may be misspent, but the actual fraudulent bill is presented not to the government directly but to a company or other institution, like a hospital, that receives federal funds.
Clearly, then, a key question is whether the fraudulent bill in the case before the Court ever went directly to the government -- in this case the U.S. Navy, which used Allison's engines in a fleet of destroyers. The case was taken up by the Court on the presumption that the bill was not presented directly to the government. But Cincinnati lawyer James Helmer Jr., representing the whistleblower, dropped a bombshell when he told the Court that the next best thing had happened -- a "certificate of conformance" had gone directly from subcontractor Allison Engine to the Navy. His evidence for this fact was not in his brief but in the appendix to the appeals court ruling, he said.
"Well, then there's less to this case than we had thought," Scalia exclaimed, suggesting that Allison Engine could in fact be covered by the law. Chief Justice John Roberts Jr. picked up on the revelation: "If in fact, as you suggest, Allison submitted the certificate to the Navy person... then the question presented in this case is not in fact presented here?" The likelihood of the case being dismissed suddenly loomed large.
In rebuttal, Allison Engine's lawyer Theodore Olson of Gibson, Dunn & Crutcher scrambled to save the case. He said in fact the certificates had not been presented to the Navy, and in spite of what Helmer said, the district court had found that they had not been presented. He calmly shrugged off Helmer's argument as "backing and filling."
Whether or not the case is in jeopardy is uncertain. But Jack Boese of the Fried Frank law firm, who watched the argument, said "Ted got the case right back on track" and thinks the justices' concerns about Helmer's assertions will be alleviated when they re-read the record of the case. Boese wrote a brief for the Washington Legal Foundation in support of Allison Engine.