A recent NLJ story, “4th Circuit Reverses Award of Attorney Fees Against False Claims Act Whistleblower” reports that the U.S. Court of Appeals for the 4th Circuit has reversed a ruling awarding roughly a half-million dollars in attorney fees to defendants in a government contracting whistleblower case. The published decision in U.S. ex rel Ubl v. IIF Data Solutions (pdf) concluded that the district court abused its discretion by awarding attorney fees to IIF.
At trial, the jury found in favor of IIF on all counts. The district court thereafter determined that the action was “clearly frivolous” and ordered Ubl to pay IIF $501,546 in attorney fees. On appeal, however, the appeals court wrote, “The question before us is whether Ubl’s FCA claims objectively had any reasonable chance of success. We believe that the question must be answered in the affirmative, and we therefore conclude that the district court abused its discretion by awarding attorney’s fees to IIF.”
Ubl’s lawyer, Victor Kubli of Germantown, Md.-based whistleblower boutique Kubli & Associates, said the opinion is “critically important” because it keeps the False Claims Act statute strong, by ensuring that whistleblowers and potential whistleblowers are not afraid of blowing the whistle. “They’re not going to do that if they’re afraid there will be fee shifting,” Kubli said.
Billions of dollars of recovery of fraudulent government programs would be at risk if the 4th Circuit had ruled the other way, because “whistleblowers would have to consider that they’d have to pay outsized attorneys’ fees it they didn’t win their case,” Kubli said.