David Chizewer, Principal in the firm's Litigation group, is quoted in "Two Rulings Force Whistle-Blowers to Wait, Maybe Too Long," published in the Aug. 15, 2017, edition of Bloomberg's Federal Contracts Report.
The article concerns two appellate rulings in July 2017 that raised hurdles in the False Claims Act’s ‘‘first-to-file’’ bar. The bar blocks a second-filed case if a first-filed case is still pending when a whistleblower brings the second case. That bar applies even if the first-filed case is ultimately dismissed, the D.C. Circuit and Fourth Circuit ruled within a week of each other.
Equitable tolling may hold hope for them, however, said Mr. Chizewer, who represents whistleblowers.
A court may rely on that principle to pause the running of a statute of limitations if fairness requires doing so. The D.C. Circuit’s opinion in United States ex rel. Shea v. Cellco P’ship noted this potential problem but withheld issuing a judgment on it. It wouldn’t be fair for a court to force a meritorious whistle-blower to wait out a first-filed case’s dismissal and then dismiss that whistle-blower’s case for lack of timeliness, Mr. Chizewer said.
‘‘If a later-filed whistle-blower finds herself in the position where all prior filed cases have been dismissed, why should her ability to proceed with her case depend upon whether she can simply continue with the existing case, or go through the technical process of refiling it?’’ he said. ‘‘If her case was timely when she filed it, where is the equity in forcing her to refile and now be subject to the statute of limitations?’’
Whistleblowers and counsel may also establish sharing agreements to work around a harshly enforced first-to-file bar. This is common in cases where many potential whistleblowers accuse big companies of fraud on a large scale, Mr. Chizewer said. The U.S. District Court for the District of New Jersey in 2015 upheld an agreement between some whistleblowers who sued laboratory companies in California, and others who filed suit in New York.
‘‘I think these rulings will increase, on the margins, the number of circumstances where a sharing agreement becomes the attractive strategy,’’ Chizewer said.