Over the objections of a whistleblower, the U.S. Justice Department settled a suit in Washington for $1.2 million, far from the amount the plaintiff believed her fraud claims were worth.
The whistleblower, Susan Schweizer, took her dispute to the U.S. Court of Appeals for the D.C. Circuit. Today, the appeals court unsealed its unanimous decision, which orders a lower judge to review the settlement DOJ reached with the company, Océ N.V.
Schweizer was a federal contracts manager at Océ, which sells copying and printing products. At issue in the litigation were contracts the company had with the General Services Administration. Schweizer, who supervised contract compliance, sued in April 2006, claiming the company wasn’t giving the government the best price on equipment.
The suit in Washington’s federal trial court presented the question of whether the Justice Department has unlimited authority to dismiss a False Claims Act suit over the objections of a whistleblower. Océ and the government agreed on a deal. Schweizer did not.
The False Claims Act, the appeals court said, does not allow the Justice Department to decide when and whether a federal trial judge will hold a hearing about a proposed settlement in a whistleblower action.
“The meaning is clear,” Senior Judge A. Raymond Randolph said in the three-judge ruling. “The government may not settle a case when the relator objects unless the court approves the settlement.”
Océ, represented by Reed Smith counsel Tillman Breckenridge, sided with DOJ in the dispute. Breckenridge was not immediately reached for comment this morning.
The Justice Department’s Douglas Letter argued the hearing requirement in the False Claims Act gives a whistleblower a chance to convince the government not to dismiss a suit after a settlement has been reached. In Schweizer’s suit, a co-whistleblower did not object to the $1.2 million deal between the government and Océ.
Breckenridge, at a hearing in the D.C. Circuit in January, described Schweizer’s suit as frivolous. He asked the appeals court to uphold the dismissal of the case. “The claim was asserted as being worth $165 million and more,” he said. “We're talking about less than one percent of the asserted claim.”
The appeals court panel, which also included Chief Judge David Sentelle and Judge Thomas Griffith, also revived Schweizer’s retaliation claim against Océ.
Schweizer, the D.C. Circuit said, has presented sufficient evidence of retaliation, and that the company has offered a non-discriminatory reason for terminating her.
“Thus, all that remains is the ultimate question” of whether a jury can infer retaliation from the evidence, Randolph said in the court's ruling.
Schweizer’s lawyer, Jason Ehrenberg of Washington’s Bailey & Ehrenberg, said the whistleblower suit "clarifies the limitations on the government’s ability to dismiss qui tam claims over the objection of whistleblowers and will afford whistleblowers additional procedural protections."