The California Supreme Court ruled unanimously that public agencies, such as cities and school districts, can’t sue as whistle-blowers under the California state False Claims Act, nor can they be sued under the same law for allegedly defrauding the state. The law applies to suits by or against individuals, organizations and corporations, categories that do not include government agencies, the court said.
The suit had been brought against PriceWaterhouseCoopers, the accounting firm that audited Old Republic Title Company. Old Republic paid San Francisco $7.5 million as its whistle-blower share when it settled charges that it failed to forward funds in unclaimed customer accounts to the state. That settlement is final and will not be affected by the ruling.
The suit against PriceWaterhouseCoopers contended that the accountant should have told the state that the title company was wrongfully withholding the unclaimed customer funds. An Unfair Competion Law suit, based on the same allegations, can proceed.
The San Francisco Chronicle ran a story on the suit on September 2, 2006.