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).
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]
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.
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).
During the long series of scandals that brought down former tort potentate Richard (“Dickie”) Scruggs, of tobacco-asbestos-Katrina-mass tort fame, no blogger achieved the status of “must” reading more consistently than David Rossmiller of Insurance Coverage Blog. Now Alan Lange of Mississippi site YallPolitics (and co-author of Kings of Tort, a book on the scandal) has posted a massive document dump of emails between the Scruggs camp and its public relations agency, as made public in later litigation (see also). It shows the principals:
* boasting of their success in manipulating major media outlets to inflict bad publicity on the targets of Scruggs’s suits;
* plotting ways of striking back against critics — in particular, Rossmiller — with tactics including going after him with legal process, as well as creating fake commenters and whole blogs to sow doubt about his reporting;
* wondering who they might pay to secure “Whistleblower of the Year” awards, or something similar, for their clients;
* apparently oblivious, just days before the fact, as to how the ceiling was going to cave in on them because of Judge Henry Lackey’s willingness to go to law enforcement to report a bribe attempt from the Scruggs camp.
The whole set of documents, along with Rossmiller’s summary and reaction, really must be seen to be believed. It will easily provide hours of eye-opening reading, both for those who followed the Scruggs affair in particular, and for everyone interested in how ambitious lawyers manipulate press coverage to their advantage — and how they can seek to use the law against their blogger critics. (& welcome readers from Forbes.com and Victoria Pynchon’s “On the Docket” column there).
It seems the Senate-passed financial reform bill includes whistleblower bounties and other legal goodies. [Whistleblower Law Blog] On tax informants, see our post of Wednesday.
Bonus: Amy Kolz at American Lawyer (“Serial whistle-blower Joseph Piacentile makes millions helping the government uncover fraud. That’s how the False Claims Act is supposed to work. Or is it?”). And David Walk at Drug and Device Law assails as “dumb,” credulous, and based upon a biased sample a New England Journal of Medicine feature on whistleblowing in the pharmaceutical industry:
The New England Journal of Medicine bills itself as “the world’s most influential medical journal,” and it unquestionably publishes groundbreaking articles about medicine. But all too often in recent years the NEJM has strayed from what it knows — medicine – into what it doesn’t – law and public policy, particularly tort policy. No longer content with editorials encouraging litigation against anyone but doctors, the NEJM now publishes public policy advocacy pieces dressed up as scientific studies, with the implicit suggestion that those studies should get the benefit of the NEJM’s good name in public policy debates.
It’s attractive enough to have lured private equity money:
Three years ago, the I.R.S. began offering bigger rewards — 15 percent to 30 percent of whatever money the government recovered — in a move that has turbocharged the agency’s whistle-blower program. …
Among the lawyers, hedge funds and investors who may provide the financing for class-action lawsuits and whistle-blower cases against government contractors, the reinvigorated I.R.S. program has attracted attention.
Two Winkler County nurses filed accusations of problematic practices against Doctor Rolando G. Arafiles Jr. before the Texas Medical Board in April; a prosecutor who was friends with the doctor has now charged the two with a felony, “misuse of official information.” Local and national nursing associations have protested and established a legal defense fund. (Kevin Sack, “Nurse to Stand Trial for Reporting Doctor”, New York Times, Feb. 6; KFDA (undated)). It’s possible that the nurses made false accusations maliciously, but that seems something that could be handled through civil suits and then only after the Texas Medical Board adjudicated the complaints. Such overreaching by doctors could backfire, as it would give credence to the proposition that medical malpractice lawsuits are a necessary check to incompetent doctors.
If you’re not reading my other legal site, Point of Law, here’s some of what you’re missing:
As if all the other problems with the law were not bad enough, Common Room notes that its provisions conferring new legal protections on disgruntled employees take us another step closer to being “a nation of informants”. Whistleblower provisions are frequently used as a weapon in hardball employment litigation, where “find something to blow the whistle about and they won’t lay a hand on you” is, unfortunately, often sound legal advice for an employee who’s at odds with the boss for other reasons. Maybe the stakes are so high in, say, an area like defense contracting, or where safety violations endanger actual lives, that it’s worth the high cost of some such rules. But for paperwork violations at makers of cardboard puzzles and baby hats?
(GRAPHIC: Zesmeralda at Flickr, some rights reserved, Creative Commons).
Assume a false identity and file a bogus misconduct complaint that gets your boss fired. Claim whistleblower protection and transfer to a nice job in another department. When the imposture is discovered, the state won’t be able to do more than slap your wrist. That’s been the happy experience of a lawyer with Connecticut’s state ethics bureau (!) in a case provoking considerable, though apparently futile, outrage in the Nutmeg State. (Point of Law, Nov. 25; Dan Schwartz, Nov. 17).
Andrew M. Grossman and James L. Gattuso analyze the CPSC Reform Act, S. 2663 (the update to S. 2045). We discussed Feb. 20 and Feb. 25, as well as briefly Jan. 1. Update: After the jump, Senator DeMint’s office provides the “Top Ten Reasons to Oppose the CPSC “Reform” Act (S. 2663)”
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