Wisconsin company leads whistle-blower claim vs. AT&T

Not every claim under the U.S. False Claims Act (FCA) involves an employee accusing his or her employer of illegal practices that defraud the government. Sometimes a contractor can also act in the capacity of a whistle-blower.

A recent case involving a Wisconsin-based consultant provides an example of how this can work. The consultant works with school districts to assist them with claims that they are being overcharged for telecommunications services. Initially he filed a claim in state against Wisconsin Bell, but later on added an additional lawsuit against its parent company AT&T under the federal FCA. Both whistle-blower lawsuits have overcome legal challenges, including a claim by AT&T that it should not be subject to a lawsuit when its subsidiary is also being sued.

Some interesting aspects of these cases include:

  • It may be possible to file concurrent whistle-blower lawsuits against a parent and a subsidiary, provided that the defendants are different enough. In the cases at hand, the District of Columbia Circuit Court of Appeals has held that if the lawsuit against the subsidiary alleges fraudulent actions against a few employees, and the one against the parent company alleges a more systematic fraudulent practice, that is enough of a difference to permit separate lawsuits.
  • The participation of the U.S. Department of Justice in a whistle-blower lawsuit under the FCA is optional. If it declines to join, then the amount of possible recovery by the whistle-blower plaintiff is greater; but this potential reward must be considered against the loss of the government’s investigatory resources if it does not participate.

Anyone who believes that they have knowledge of financial fraud committed against the state or federal government should consult with an attorney who is familiar with the FCA to help determine whether a cause of action exists, and for assistance with pursuing such a claim if it does.

Source: Pacific Standard, “Is AT&T Overcharging Schools for Internet Service?”, Jeff Gerth, July 30, 2015

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