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whistleblowers

By ratting on his employer and clients, the UBS informant greatly advanced Washington’s project of preventing Americans from squirreling assets out of reach of the U.S. tax and legal systems. So it’s no surprise that few in the federal establishment — even among longtime critics of what they deem excessive executive compensation — begrudge him the whopping payout. Among his defenders, of course, is Iowa Republican Sen. Charles Grassley, patron of the whistleblower program: “Need we add that Mr. Grassley’s longtime aide, who actually drafted the whistleblower law, now represents Mr. Birkenfeld and stands to collect an interesting percentage of the award Mr. Grassley so obligingly applauds? If one were rich, if one had a sense of history, one might well wish to move a part of one’s nest egg out of the way of Mr. Grassley and his ilk.” [Holman Jenkins, WSJ]

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Or are you just glad to sue me? “A New Jersey appeals court … overturned a $3.6 million whistleblower award to a Wachovia worker who claimed he was fired for revealing corporate fraud rather than for passing around revealing photographs.” [Michael Booth, New Jersey Law Journal]

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“A federal judge in Indiana ordered lawyers including the prominent firm of Motley Rice to pay ITT Educational Services almost $400,000 in legal fees for pursuing a ‘frivolous’ lawsuit the judge said was ‘based on a completely false story.'” In line with the reluctance of American judges to award Rule 11 sanctions, the judge awarded only a small fraction of the defendant’s actual outlay in attorney’s fees, which ran into many millions. Motley Rice is a chief beneficiary of the ongoing income stream of the tobacco litigation fees, which return $500 million a year to an assortment of plaintiff’s firms. [Dan Fisher, Forbes]

A fired Florida TV anchorman claims whistleblowing retaliation [Fort Myers News-Press]

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November 16 roundup

by Walter Olson on November 16, 2011

  • Sure, let’s subvert sound mortgage accounting in the name of energy efficiency. What could go wrong? [Mark Calabria, Kevin Funnell]
  • California: fireworks shows are “development” and coastal commission can ban ‘em [Laer Pearce, Daily Caller]
  • Trial lawyers’ lobbyist: I got Cuomo to bash Chevron in Ecuador case [John Schwartz, NYT]
  • Politics of intimidation: “jobs bill” advocates occupy office of Sen. Minority Leader McConnell (R-Ky.) [ABC News] Union protesters invade Sotheby’s during big auction [NYObserver] “Occupy Denver protesters try to storm conference of conservative bloggers” [Denver Post] “What’s the matter with Oakland?” [Megan McArdle] Post-’08 downturn, not wealth of the few, at root of economic woes [Steve Chapman] “Bohm-Bawerk forget to include [Ms. Katchpole] in his commentaries on sundry theories of interest.” [Tyler Cowen]
  • New breakthroughs in abundant energy aren’t welcome to some [NYT "Room for Debate"] Is GOP wrong to make EPA an issue? [Michael Barone]
  • After extracting $450,000 settlement, employee admits falsifying whistleblower evidence in oil filter antitrust case; class action suits continue [Bloomberg, Abby Schachter/NYPost via PoL]
  • Least surprising Washington-DC-datelined story of year: “Medical malpractice reform efforts stalled” [Politico]

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November 11 roundup

by Walter Olson on November 11, 2011

June 2 roundup

by Walter Olson on June 2, 2011

  • “Italian Seismologists Charged With Manslaughter for Not Predicting 2009 Quake” [Fox, earlier]
  • “With context in place, it appears the WHO isn’t saying cell phones are dangerous” [BoingBoing, Atlantic Wire, Orac]
  • Wrongful convictions and how they happen — new book “Convicting the Innocent” by Brandon Garrett [Jeff Rosen, NY Times]
  • SEC to Dodd-Frank whistleblowers: no need to go through company’s internal complaint route [D&O Diary, WSJ Law Blog]
  • “British Press Laws Facing Twitter Challenge” [AW]
  • Despite legislated damages cap, jackpot awards continue in Mississippi [Jackson Clarion-Ledger] More problems with that $322 million Mississippi asbestosis verdict [PoL, earlier]
  • Golf club erects large net to comply with legal demands to prevent escape of errant balls, is promptly sued by neighbors who consider net too ugly [five years ago on Overlawyered]

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Imagine how puzzling it must be to be an employee of the city of Montreal: the city “has set up a whistleblower hotline to encourage you to expose wrongdoings by colleagues but has also created an explicit policy forbidding you to blow the whistle and is threatening severe penalties if you do.” [Montreal Gazette]

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January 12 roundup

by Walter Olson on January 12, 2011

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Children inform on their parents. [Radley Balko]

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A securities lawyer has been advertising for snitches at screenings of Oliver Stone’s new Wall-Street-bashing movie. [NYPost]

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September 20 roundup

by Walter Olson on September 20, 2010

  • “Family sues for $25 million over death of Virginia Beach homeless man” [Pilot Online]
  • New paper proposes voucherizing indigent criminal defense [Stephen Schulhofer and David Friedman, Cato Institute, more]
  • “Why the Employee Free Choice Act Has, and Should, Fail” [Richard Epstein, SSRN]
  • Free-market lawprofs file brief in class action arbitration case, Concepcion v. AT&T [PoL]
  • Enactment of Dodd-Frank law results in flood of whistleblower-suit leads for plaintiff’s bar [Corporate Counsel, ABA Journal] “Will Whistle-Blowing Be Millions Well Spent?” [Perlis/Chais, Forbes]
  • Sept. 28 in House: “Congressional Hearing on the Problems of Overcriminalization” [NACDL]
  • Abusive-litigation angle seen in NYC mosque controversy [Painter, Legal Ethics Forum]
  • Snark alert: Mr. Soros does something nice for Human Rights, and Human Rights does something nice for him [Stoll]

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Because even if the government can’t maintain a paid informer on every street corner, it can at least try to maintain one in every family. [Connecticut Law Tribune]

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August 2 roundup

by Walter Olson on August 2, 2010

  • “Why Do Employers Use FICO Scores?” Maybe one reason is that government places off limits so many of the other ways they might evaluate job applicants [McArdle, Coyote]
  • Michael Fumento on $671 million verdict against nursing home in California [Forbes]
  • Ted Frank is looking for a pro bono economics expert [CCAF]
  • Lester Brickman, “Anatomy of an Aggregate Settlement: The Triumph of Temptation Over Ethics” [Phillips Petroleum explosion; SSRN via Legal Ethics Forum]
  • Ice cream trucks return to Niskayuna, N.Y. 34 years after a panic-occasioned ban [Free-Range Kids, Mangu-Ward]
  • Galloping trend toward “whistleblower” enactments: this time lawmakers are rushing one on oil workers [Smith/ShopFloor, more, earlier]
  • Class action lawsuit filed against Trident Xtra Care gum, marketed as good for one’s teeth [Hoffman/ConcurOp; compare Russell Jackson on Wrigley's settlement of a class action over Eclipse chewing gum]
  • EEOC officials urge employers to ban foul language and swearing in workplace [seven years ago at Overlawyered]

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A new report in the WSJ quotes a retiring NHTSA official as saying higher-ups are refusing to release the results of the agency’s staff investigation into charges of Toyota sudden acceleration, because those findings are not unfavorable enough toward the automaker. I’ve got more detail in a new post at Cato at Liberty, and Ted covers the story at PoL.

Meanwhile, proponents of a sweeping expansion of federal auto safety law, one that would thrust Washington much more deeply into the operations of the automotive industry, are really in a hurry — a quick, urgent, must-do-now hurry — to pass it, even though many of its provisions have not had much airing in public debate. An editorial today in the New York Times — a newspaper that almost comically underplayed the revelations earlier this month about the NHTSA probe’s pro-Toyota results — flatly asserts that the Japanese automaker’s vehicles suffer “persistent problems of uncontrolled acceleration,” and demands that the sweeping new legislation “be passed into law without delay.” It’s almost as if they are afraid of what might happen if lawmakers pause to take a closer look.

Among the many other things the new legislation would do is greatly enhance the legal leverage of automaker or dealership employees who adopt the mantle of “whistleblowers”. But if the new revelations from a responsible career employee of NHTSA are ignored, we will have another confirmation that some types of whistleblowing are more welcome in America’s governing class than others. (& welcome Coyote, Gabriel Malor, Death by 1000 Papercuts, Mark Hemingway/D.C. Examiner (“the indispensable Overlawyered blog”), Allen McDuffee/Think Tanked readers).

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As I’ve been warning: under the new Dodd-Frank provisions, companies “should expect at least some of their employees to report to the government first rather than relying on internal disclosure mechanisms.” [NYT "DealBook", earlier here, here, etc.] More: various perspectives on FCPA whistleblower bounties [Koehler]

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I’m quoted in this report by Dunstan Prial of FoxBusiness.com and in this report by David Savage of the Los Angeles Times on the large-scale bounty incentives in the Dodd-Frank financial regulation bill, which bring us closer to an “informer model of law enforcement” that “encourages people to be disloyal to their friends and co-workers.” Earlier here and here. Other coverage of the whistleblowing provisions: Coyle/NLJ, Koehler/FCPA Professor, Baer/Prawfsblawg.

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There are lots of them tucked into the bill, and they will probably come at a significant cost for companies in the economy’s financial sector, as I explain in a new post at Cato at Liberty (earlier; more on qui tam and whistleblower matters more generally).

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