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Other Non-Sox Anti-Retaliation Laws Created Or Strengthened By Dodd Frank (Part III)

June 12, 2013

Amendment Of The False Claims Act

The False Claims Act (“FCA”) is a whistleblower law that allows a private individual with knowledge of past or present fraud committed on the federal government to sue on the government’s behalf and recover a portion of any damages award. See 31 U.S.C. §§ 3729-3733. Dodd-Frank broadens the FCA to cover conduct by persons “associated” with a whistleblower in furtherance of an FCA whistleblower action. Dodd-Frank Act §1079B(c). Dodd-Frank also now clarifies that the statute of limitations for an FCA retaliation claim is three years. 31 U.S.C. § 3730(h)(3). The statute states, “[a] civil action under [the FCA’s anti-retaliation provisions] may not be brought more than 3 years after the date when the retaliation occurred.” 31 U.S.C. § 3730(h)(3).

Note, however, that the bar against arbitration found in Dodd-Frank, and the amended SOX, does not apply to claims under the FCA. See James v. Conceptus, Inc., 851 F. Supp. 2d 1020, 1028-29 (S.D. Tex. 2012) (FCA does not prohibit arbitration and nothing in Dodd-Frank changed that); Ruhe v. Masimo Corp., No. SACV 11–00734–CJC(JCGx), 2011 WL 4442790, at *4 (C.D. Cal. Sept. 16, 2011) (explaining that Dodd–Frank’s anti-arbitration amendments extend only to the two statutes it specifically amended in this regard, SOX and the Commodity Exchange Act).

In 2009, Congress had strengthened the FCA’s anti-retaliation provision by providing for individual liability and broadening the scope of coverage to include contractors and agents. See Fraud Enforcement and Recovery Act of 2009 (FERA), Pub. L. No. 111-21, § 4(d), 123 Stat. 1617, 1624-625.

Hat tip: An outstanding article that covers the law and final regulations in comprehensive fashion is Dodd-Frank and the SEC Final Rule: From Protected Employee To Bounty Hunter, ST001 ALI-ABA 1487 (July 28-30, 2011), which was written by Littler Mendelson, P.C. lawyers John S. Adler, Edward T. Ellis, Barbara E. Hoey, Gregory C. Keating, Kevin M. Kraham, Amy E. Mendenhall, Kenneth R. O’Brian, and Carole F. Wilder. This post is partially derived from that article.