Part of the Dodd–Frank Wall Street Reform and Consumer Protection Act of 2010 provided a fund for the Securities and Exchange Commission to reward whistleblowers. The SEC is able to anonymously reward whistleblowers for information that leads to a penalty greater than $1 million. The results for the second year of the program announced that its biggest success happened this past October when it awarded $14 million.
The total anonymity of the program makes it impossible to uncover who the whistleblower is or the violations they reported.
In total, the program paid $14.8 million to whistleblowers this year and received 3,238 tips. The fund has $439 million in reserve for future whistleblowers. The three biggest states for domestic tips were California, New York and Florida. The biggest category of whistleblower tips is financial disclosures and reporting.
In another type of whistleblower action, Doyle Raizner LLP is currently in discovery on a qui tam case, United States of America ex rel. Eric Uhlig v. Fluor Corp; Fluor Gover. The case involves allegations that a military contractor improperly billed the federal government for electrical work in Afghanistan. Fluor’s contract required it to employ experienced, professional electricians. Evidence suggested that the company employed non-experienced, non-qualified workers to carry out electrical repairs and construction, billing the government for “qualified” workers. Not only did this lead to payments by the taxpayers for unqualified work, it also potentially endangered American and Coalition troops and civilian workers in the base facilities.
If you or someone you know is aware of fraudulent activity being conducted, please contact the attorneys at Doyle Raizner.
The scope of whistleblower protection and the question of whether legal protections extend to employees of auditors, law firms and other advisers to publicly traded companies were reviewed this week by the Supreme Court. The court is attempting to sort out the 2002 law in relation to two mutual-fund industry workers who lost their jobs after reporting fraud.
The 2002 law, named Sarbanes-Oxley Act or SOX after the sponsoring members of Congress, was enacted to prevent another Enron-type catastrophe. The dispute centers on a provision that bars publicly traded companies, their contractors and subcontractors from discriminating against an “employee” who reports fraud or a violation of securities regulations. The central question lies in the application of the law to employees of publicly traded companies only, or whether the law also extends to contractors of these publicly traded entities. In this case, the publicly traded mutual funds were managed by a privately held management firm which employed the plaintiffs.
The justices are expected to deliver their decision on the broad or narrow scope of the law by July 2014.
A similar type of whistleblower law applies qui tam cases. Qui tam refers to laws that allow a private individual with knowledge of fraud against the federal government to blow the whistle and assist the government in the prosecution of the corporation committing the fraud. A qui tam plaintiff acts as a “private attorney general” in investigating and pursuing litigation against a corporation that commits fraud on the government. A successful whistleblower may receive a portion of damages recovered on behalf of the federal government.
Doyle Raizner LLP is currently taking depositions in a qui tam case, United States of America ex rel. Eric Uhlig v. Fluor Corp; Fluor Gover. The case involves allegations that a military contractor improperly billed the federal government for electrical work in Afghanistan. Fluor’s contract required it to employ experienced, professional electricians. Evidence suggested that the company
The United States Fifth Circuit Court of Appeals has dismissed KBR’s interlocutory appeal in McManaway, et al, v KBR, Inc.,et al as premature until a determination of controlling law has been made. In the appeal, KBR contended the case should be dismissed as barred under the political question doctrine and preempted by the combatant-activities exception to the Federal Tort Claims Act (FTCA). The appeal was dismissed without prejudice. Click here to read the decision.
McManaway, et al, v KBR, Inc.,et al involves dozens of Indiana, West Virginia, South Carolina, and British veterans. The plaintiffs have sued the Houston-based military contractor over health problems they blame on exposure to hexavalent chromium dust, a carcinogenic orange-yellow powder used to fight corrosion in water pipes. The troops were guarding KBR workers as they tried to restore water treatment facilities at the Qarmat Ali water treatment site.
United States District Judge Vanessa Gilmore is presiding over the case in the Southern District of Texas. Judge Gilmore denied the immunity defense last year. After denying KBR’s immunity motions, the court permitted the immunity defense decision to go on interlocutory appeal to the Fifth Circuit in September 2012. In November 2012, a decision was made by a jury in Oregon in Bixby, et al, v KBR, Inc., et al, a case involving the same circumstances as McManaway, et al, v KBR, Inc.,et al, determining KBR was negligent and awarded the veterans $85 million. The court later affirmed the jury decision in the amount of $81 million.
At this time, Judge Gilmore will decide on when and how to proceed to trial for the Texas cases. It is anticipated that KBR will ask for reconsideration by the Court of Appeals.
Doyle Raizner has filed a RICO (Racketeer Influenced and Corrupt Organizations Act) lawsuit in the Federal District Court for the District of Arizona against York Risk Services Group on behalf of firefighters employed by the City of Phoenix whose workers’ comp claims were wrongfully denied. York is a third-party administrator of workers compensation and other types of insurance claims management. The United States Court of Appeals for the Sixth Circuit ruled in Brown et al. v. Cassens Transport Company that a company may be held accountable under the federal RICO statute for scheming to withhold and/or wrongfully deny workers compensation benefits.
The suit was brought by eight City of Phoenix firefighters injured on the job. The proper paperwork and procedures were followed by the firefighters after each of their on the job injuries. York denied each firefighter’s claim by letter sent through United States Mail, and in each circumstance York refused these first responders medical treatment for on the job injuries sustained helping the residents of Phoenix. Each firefighter appealed York’s denial to the Industrial Commission of Arizona (ICA), the agency that administers state laws relating to workers’ compensation. In each individual appeal, the ICA determined that York wrongfully denied care to the firefighter.
The extent of the injuries each firefighter sustained varies; however, each was harmed financially, medically and emotionally. York’s fraudulent denial and lack of timely payments for the medical care of one firefighter resulted in her untimely death from work related cancer due to chemical exposure. Prior to her death, the financial loss due to York’s lack of payment resulted in her family losing their home. Another firefighter also lost her home due to financial hardship due to York’s denial of supportive care for the on the job injury. York ignored the Industrial Commission of Arizona’s ruling that rejected their denial for coverage, and continued to refuse payment in defiance of the law and administrative orders.
Federal Times has reported on the mounting tensions between contractor KBR Inc. and the US Army over an ultimatum to provide a firm, fixed price on remaining work to close out the $38 billion Logistics Civil Augmentation Program (LOGCAP) III.
LOGCAP III is the 12-year-old logistics contract that has supported US military logistics operations in Iraq. The Army awarded the contract in 2001 and issued 160 tasks for everything from dining services to delivery of housing for civilian and military personnel. The original contract was considered a “cost plus” contract, which means KBR was paid its costs plus a guaranteed profit; the Army seeks to revise the pricing terms on the final work to be done on the contract to be firm, fixed pricing. KBR filed a lawsuit in response seeking to keep the “cost plus” nature of the contract.
The dispute started in July 2012, at that time the Army decided contract closeout activities must be performed on a fixed-price basis meaning KBR would need to provide a fixed dollar figure for the remaining work and absorb any excess costs. KBR responded they were unwilling to accept that due to the lack of scope or duration of work that needs to be completed.
KBR filed a case with the Government Accountability Office that was thrown out on jurisdictional grounds. The case was refiled in the US Court of Federal Claims and accused the Army of using the wrong type of contract, acting in bad faith and violating procurement regulations.
In emails submitted as part of the lawsuit, Army contracting officer Robert Egan told KBR he would not “enter further communication exchanges with” KBR’s contract team until he saw the FFP deliverable. KBR responded they were unwilling to accept such a proposal. KBR responded to Federal Times with a statement noting the company enjoys “frank, open and continuous communications with the Army.”
KBR has been paid enormous amounts for well
NPR released two articles this past week examining the dangers of the Texas construction industry and the too-common practices that often lead to wage theft, poor work conditions and injuries.
Commercial construction and homebuilding are staples of the state’s economy. Years of illegal immigration have driven down wages of construction workers. The economic crash of 2008 brought its own issues besides the decrease in construction. Many workers make far less than minimum wage and often take home $4 or $5 an hour. The workers cheated out of their wages or paid very low wages continue working because of the promise of pay from one week to another. These workers are often classified as independent contractors rather than employees. The classification of independent workers makes them responsible for their state and federal taxes.
The issue of pay is coupled with the dangerous nature of the job. According to the Worker’s Defense Project, there were 10.7 deaths per 100,000 Texas construction workers in 2010. In comparison, California had a rate of 5.2 deaths per 100,000 construction workers. The study also revealed one in every five Texas construction workers will require hospitalization due to injuries sustained on the job.
Doyle Raizner has represented many clients over the years whose injuries were a result of poor work conditions and an employer’s failure to honor their obligation to safety. The construction industry in a dangerous field in Texas and regulation is the ultimate route to safety.
Doyle Raizner Files Negligence Suit on Behalf of Worker Injured on Grounded Vessel off Coast of Chile
Doyle Raizner has filed a negligence lawsuit against T&T Marine Salvage and Titan Maritime on behalf of a worker who was thrown 30 feet in the air and dropped on the beach landing on his back.
The plaintiff was an employee of T&T Salvage in Texas and the company sent him to Chile to work on the salvage of a grounded vessel offshore Puerto San Antonio. While on the shore operating a winch to unload cargo from the ship, the line on the winch broke. A cable from the vessel en-wrapped the plaintiff’s leg and body and launched him into the air.
After landing on the beach, he was rushed to the hospital where a pain shot was administered and the plaintiff was released. He was taken to a motel for three days without pain medication while waiting for a flight back to Texas. The plaintiff was taken directly from the airport to an urgent care clinic chosen by T&T Salvage where a pulled muscle was diagnosed, light duty and painkillers were prescribed. The plaintiff sought an independent physician who diagnosed two protruding discs in his back after review of a MRI.
T&T Salvage negligently failed to provide safe, properly maintained equipment and work facilities for the plaintiff’s use to carry out his job duties. The company also failed to provide proper training and supervision. Managers of T&T Salvage and Titan Maritime had obligations to safety they failed to uphold by proceeding with conscious indifference to the rights, safety and welfare of the plaintiff despite having awareness of the risk involved.
Doyle Raizner stands behind this client in their fight for justice and accountability for his injury and inability to work.
Doyle Raizner has filed a workers’ comp bad faith case against Gallagher Bassett and Ace American Insurance on behalf of an injured worker whose claim for benefits was wrongfully denied and unreasonably delayed. Ace American Insurance issued the workers’ comp insurance coverage under the Arizona Workers’ Compensation Act. Gallagher Bassett adjusts insurance claims on behalf of Ace American under the same act.
The plaintiff was injured in the scope and course of his employment in 2011, when another vehicle hit at a high rate of speed the truck he was driving. The collision resulted in traumatic brain injury, post-traumatic headaches, post-concussion syndrome, chest injuries, cervical spine injuries, among other injuries.
The plaintiff’s claim for benefits was initially accepted by Ace American and Gallagher Bassett. However, Ace American and Gallagher Bassett began to ignore their obligation to timely and appropriately approve reasonable and necessary medical treatment recommended by the plaintiff’s treating physician. Due to the denial of timely benefit payments to which the plaintiff was entitled, an attorney was hired to help secure the workers’ compensation benefits. A final and binding order was issued by the Industrial Commission of Arizona and required Ace American and Gallagher Bassett to provide the treatments. The commission noted the carrier had no evidence to controvert the plaintiff’s right to treatment and had not even bothered to appear to attempt to justify its wrongful conduct.
Ace American, as the plaintiff’s workers’ compensation insurer, breached their duty of good faith and fair dealing by refusing to properly investigate and effectively denying necessary medical care and other benefits, without any reasonable basis to do so. Gallagher Bassett acts and omissions were performed by it in its individual capacity and as an agent for Ace American. Gallagher Bassett knew the claim was not fairly debatable and substantially assisted or encouraged Ace American in delaying or denying the claim without a reasonable basis.
Ace American and Gallagher Bassett placed unnecessary
A former Veterans Affairs researcher testified before the House Committee on Veterans Affairs this week about the organization’s efforts to minimize research that supports claims of Gulf War Illness and illness from burn pit exposure.
Steven Coughlin was an epidemiologist in the VA’s public health department until he resigned over a request to retract his claims concerning the concealed information and admit he had made a mistake. Coughlin also said “if the studies produce results that do not support the office of public health’s unwritten policy, they do not release them. “ He also testified about a panel of outside experts hired to study neurological connections to Gulf War illness for the Institute of Medicine. Coughlin maintains the panel was stacked in favor of those who believe Gulf War illness is psychological rather than neurological. Coughlin added “anything that supports the position that Gulf War illness is a neurological condition is unlikely to ever be published.”
Coughlin’s allegations were countered by Victoria Davey, chief officer of VA’s office of public health and environmental hazards. Davey never directly addressed the accusations levied against the VA but talked about the “cutting-edge” research the VA has conducted.
Coughlin was backed by Lea Steele, a researcher at the Veterans Health Research Program at Baylor University who said the VA has not managed an effective program. Steele echoed Coughlin when she said “studies consistently show Gulf War illness is not due to war trauma.”
Steele referenced the panel Coughlin viewed as stacked in favor of Gulf War illness as a psychological illness. The panel studied veterans from the past 20 years rather than a segment of Gulf War veterans. The symptoms of this broad group were lumped together so that neither cause nor treatment for “chronic multisymptom illness” could be found. Steele likened this to “medical malpractice”.
A Gulf War veteran and appointed member of the Congressionally Directed Gulf War Illness Research Medical Program,
KBR reported a net income of $30 million for the fourth-quarter of 2012. Chief Executive Officer Bill Utt called it “a disappointing year” but later stated 2013 would bring “a robust series of new opportunities across each of our business units.”
For the same period a year earlier, KBR reported profits of $90 million. Utt accredited the sharp decline in profits to difficulties in the company’s minerals and US construction businesses. The sector of the company that did perform well was the hydrocarbons arm. Its profits increased 76 percent from the same period a year earlier resulting in a $174 million net income.
Interestingly, the released statement made no mention of the current litigation against KBR. In November, a jury awarded $85 million to twelve Oregon Army National Guard soldiers for negligence due to the contamination of a water treatment plant in Iraq. KBR, in turn, sued the US government to honor a secret indemnity agreement signed by the secretary of the Army in 2001. The agreement purports to shield KBR from financial costs associated with unusually hazardous risks including “sudden or non-sudden release of hydrocarbons or other toxic or hazardous substances or contaminants into the environment.”
They also did not mention the lawsuit filed by the United States in November. In that civil complaint, the government accuses KBR of inflating claims for the delivery and installation of trailers to house troops in Iraq.
The jury verdict for the twelve plaintiffs in Oregon is significant for the role it will play in the future trials for the more than 150 soldiers awaiting their day in court. The financial impact for KBR potentially could be more than $1.1 billion if the current individual case value trend of $7 million continues. The case is currently being reviewed by the Department of Justice and the Department of Defense. We will continue to blog updates as they develop.