This new program marks a significant development at the intersection of whistleblower law and antitrust enforcement.
Accomplished whistleblower attorney Julie Keeton Bracker of Bracker & Marcus and Dan Mogin, a veteran antitrust attorney and founder of Mogin Law LLP, joined long-time legal writer and Editor-in-Chief of the Mogin Law Blog, Tom Hagy, to discuss the origins, mechanics, and implications of this initiative.
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See webinar here.
The Roots and Evolution of Whistleblower Laws
Julie Keaton Bracker, a nationally recognized authority on whistleblower law, began by tracing the history of whistleblower statutes to the Civil War era. The False Claims Act (FCA), often called “Lincoln’s Law,” was enacted to combat fraud against the government—such as the infamous supply of lame mules and weevil-infested flour to Union troops. The FCA’s unique “qui tam” provisions empower insiders, known as relators, to file lawsuits on behalf of the government, incentivizing the exposure of fraud even when the whistleblower may have been involved in the wrongdoing. Bracker explained that the definition of “insider” has broadened over time. Today, whistleblowers may be employees who unknowingly participate in fraudulent billing or other schemes, only to discover and report the misconduct. The FCA has recovered more than $700 billion for the government since its revitalization in the late 1980s, inspiring similar programs at agencies like the SEC and IRS.
The Whistleblower’s Journey: Risks and Protections
Whistleblowers often face retaliation before or after reporting fraud. Bracker emphasized the importance of anti-retaliation provisions in the FCA, which allow employees to seek remedies if they are fired or mistreated for exposing wrongdoing. However, the process is complex: FCA cases are initially filed under seal, giving the government time to investigate covertly before notifying defendants. Criminal investigations can further slow proceedings, as they take precedence over civil actions. State-level whistleblower programs also play a role, with most states enacting their own False Claims Acts—some limited to Medicaid fraud, others covering broader government spending.
Antitrust Law: Protecting Competition and Free Enterprise
Dan Mogin, with more than four decades of antitrust litigation experience, provided an overview of the core principles underpinning U.S. antitrust law. The Sherman Act, described as the “Magna Carta of free enterprise,” prohibits concerted actions that restrain trade (Section 1) and monopolization (Section 2). The Federal Trade Commission Act and the Clayton Act further empower both public and private enforcement. Building an antitrust case is a resource-intensive process. Mogin outlined the analytical framework: understanding industry context and structure, identifying anti-competitive conduct, proving antitrust injury and standing, and calculating damages. Market definition is a critical—and often contentious—element, especially in complex cases.
The DOJ’s Antitrust Whistleblower Initiative
The DOJ’s new program extends whistleblower protections and incentives to individuals reporting antitrust violations, particularly those involving mail fraud. Monetary awards can reach up to 30% of criminal fines recovered. Mogin noted that this initiative builds on the success of the DOJ’s leniency program, which has helped break up international cartels in industries ranging from vitamins to fine art auctions and marine construction. Recent cases illustrate the financial and societal impact of whistleblower actions. For example, a whistleblower in a medical device overcharging case received $700,000 from a $4.4 million settlement.
Strategic and Ethical Considerations
Bracker discussed the complexities of choosing where to file whistleblower claims, especially with the proliferation of new programs. Coordination among agencies is essential to avoid overlapping investigations. Ethical and privilege issues also arise, particularly in cyber fraud cases, where insiders may inadvertently share privileged information.
Constitutional Challenges and Future Directions
The constitutionality of qui tam provisions has been questioned, notably in the Middle District of Florida. Bracker argued that such challenges are unlikely to overturn the FCA’s core mechanisms, given its bipartisan support and historical success. She suggested that, if necessary, Congress could create a mechanism to formally commission relators, preserving the statute’s effectiveness.
Antitrust Enforcement: Bipartisan Efforts and Reform
Mogin highlighted the bipartisan nature of antitrust enforcement, noting that both recent Republican and Democratic administrations have pursued aggressive policies. The DOJ and FTC are reviewing hundreds of federal laws and regulations that may distort markets or stifle competition, balancing antitrust goals with other priorities like environmental protection.
Key Takeaways
1) Whistleblowers play a critical role in uncovering fraud and anti-competitive conduct, often at personal risk.
2) The DOJ’s new antitrust whistleblower program expands opportunities for reporting and accountability, with substantial financial incentives.
3) Understanding the nuances of whistleblower and antitrust laws is essential for effective litigation.
4) Constitutional challenges to qui tam provisions are unlikely to derail the FCA, but ongoing legal debates may shape future reforms.
5) Antitrust enforcement remains a bipartisan priority, with ongoing efforts to identify and address market-distorting regulations.
