Supreme Court Restricts Whistleblower Lawsuits

WASHINGTON — The Supreme Court on Tuesday placed new limits on whistleblower lawsuits claiming that local governments misused federal money.

The court voted 7-2 to hold that a technical, though important aspect of the federal False Claims Act applies to local governments. One section of the law prohibits whistleblower lawsuits when public disclosure of the alleged fraud occurs through a court hearing, a news report or congressional or administrative audit.

In an opinion by Justice John Paul Stevens, the court ruled that the language on administrative audits refers to a report prepared by any government, not just a federal government document. The question had divided federal appeals courts.

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