June 16, 1997 -- The Supreme Court's decision today to dismiss a whistleblower lawsuit against Hughes Aircraft Co. was based on a technical issue and in no way weakens the False Claims Act as a powerful tool for fighting fraud against the federal government, said John R. Phillips, a Washington attorney who helped write the 1986 amendments that strengthened the False Claims Act.
"Despite their success in getting the case dismissed, Hughes and the defense industry failed in their effort to weaken the False Claims Act," said Phillips, whose firm, Phillips & Cohen, specializes in False Claims Act lawsuits and represented two whistleblowers that brought a previous false claims case against Hughes. "The Supreme Court chose to let the law stand as it is and address only a minor issue involving whether the law could be applied retroactively to wrongdoing before 1986."
Hughes paid the government $4.05 million in September 1996 to settle the qui tam (whistleblower) lawsuit brought by Phillips & Cohen. The whistleblowers in that case charged that Hughes had routinely lied about conducting important quality assurance tests of certain components used in missiles, fighter planes and other military systems. Largely as a result of the whistleblowers' testimony and evidence, Hughes was convicted of criminal conspiracy on the same matter in 1992 and was fined $3.5 million.
For more information, please see the following news stories:
- "High court dismisses Hughes fraud case," Edward Felsenthal, The Wall Street Journal, 6/17/97.
- "Court to rule on financial disclosure required of various lobbying groups," Linda Greenhouse, The New York Times, 6/17/97.