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01.29.24

Litigation Group Chair David Chizewer is quoted in "Appeals Court Rules in Favor of Wisconsin Whistleblower in Legal Battle With AT&T," a Wisconsin Law Journal article about a case in which Goldberg Kohn has successfully represented the whistleblower.

On Jan. 16, 2024, the 7th Circuit Court of Appeals issued an opinion in the Todd Heath v. Wisconsin Bell Inc. case regarding allegations that the AT&T subsidiary spent years overcharging Wisconsin school districts for their telecommunications services.

The appellate court reversed the judgment of the district court and remanded the case to the district court for further proceedings consistent with its opinion.

"In a rare move, the court returned an opinion that left AT&T in a worse position than it had been in prior to the petition."
David Chizewer

The case was originally filed in 2008 and concerns the Schools and Libraries Universal Service Support program, or E-rate program. When AT&T petitioned the 7th Circuit for a rehearing, it focused on whether funds used to reimburse schools under the federal E-Rate Program are considered government funds, and therefore subject to the False Claims Act.

David Chizewer is quoted in the article as saying: “But in a rare move, the court returned an opinion that left AT&T in a worse position than it had been in prior to the petition. AT&T’s petition for rehearing had claimed a jury decision on the government funds issue was unnecessary, and should be decided by the court in favor for AT&T. The Court agreed no jury was necessary, but then decided the issue in favor of Heath.

“The Court’s ruling in favor of a Wisconsin whistleblower will have national implications,” said David, who also noted there is a companion case currently on hold that includes the rest of the country.

According to court documents obtained by the Wisconsin Law Journal, “Heath identified enough specific evidence of discriminatory pricing to allow a reasonable jury to find that Wisconsin Bell, acting with the required scienter, charged specific schools and libraries more than it charged similarly situated customers.”

Court documents further noted that despite being aware of the E-rate program and its pricing rule, Wisconsin Bell did not train its sales representatives on the rule, nor did it put into place any mechanism to comply with it, until 2009.

In 2009 Wisconsin Bell developed a plan for complying with the rule after its parent company settled a Department of Justice and FCC investigation of its E-rate practices in Indiana. monetary payment and a compliance agreement.

According to court documents, Wisconsin Bell admitted that, beginning in 2009, it used “interim policies and processes for at least two years” and that these policies did not reach a “steady state” until 2011. Wisconsin Bell also admits that it considered the prices charged to similarly situated customers “as just one factor among many in deciding what price” to charge an E-rate customer even after 2009.

The appeals court concluded that a company violates the False Claims Act if it knowingly presents, or causes to be presented, a false or fraudulent claim for payment or approval that is material to the government’s decision on the use of federal funds.

Wisconsin attorney Doug Dehler with O’Neil Cannon Hollman DeJong & Laing, S.C. serves as co-counsel for whistleblower Todd Heath.