As climate change threatens the United States’ coastlines, the federal government has responded with a wave of spending to support what is being called the “blue economy.” 

Across nearly 100,000 shoreline miles, from New England to Florida, around the Great Lakes, and across the Gulf and West Coasts, revenue and jobs are generated by a variety of “blue” industries, among them marine transportation, offshore renewable energy, seafood, fishing, and coastal travel and tourism.

In 2018, according to government figures, the U.S. blue economy supported 2.3 million jobs and contributed $373 billion to the Gross Domestic Product. In 2019, the blue economy added $397 billion to the GDP and grew faster than the nation’s economy as a whole.

Some states, such as Rhode Island, appropriately nicknamed the Ocean State, are even more reliant on blue economy jobs – and threatened by climate change. It’s the country’s smallest state, yet second-most densely populated, making coastline space a premium. A 2020 University of Rhode Island report estimated the state’s share of the U.S. blue economy at $5 billion and 36,500 jobs.

With warming temperatures, rising sea levels, and pollution caused by climate change threatening communities around the United States, the $1.2 trillion Infrastructure Investment and Jobs Act (also known as the Bipartisan Infrastructure Law), allocated nearly $3 billion of funding over five years to the National Oceanic and Atmospheric Administration to fight global warming, in part, through investment in blue economy businesses.

But with any government spending program, no matter how well intentioned, comes the potential for fraud. This can happen not only if a person or business makes a false claim to the government to receive money or grants from the infrastructure law, but if they don’t pay prevailing wages for the work.

Here is an overview of the infrastructure law related to climate change and the blue economy, and what to do if you suspect fraud in these programs.

NOAA is focusing on three initiatives with the $2.96 billion it received from the law.

• Climate Ready Coasts is the biggest, $1.467 billion over five years for natural infrastructure projects that build coastal resilience, create jobs, store carbon, remove marine debris, and restore habitat. About $217 million in grants were awarded in 2022 for these projects.
• $904 million will be spent on Climate Data and Services to get critical information in the hands of decision-makers through flood mapping, ocean and coastal observation systems, research supercomputing, and wildfire infrastructure.
• And $592 million will support Fisheries and Protected Resources, including a Pacific Coastal Salmon Recovery Fund.

So what happens if this money isn’t being used as intended? The False Claims Act includes a way for someone with knowledge of a fraud on the government to report it and to secure recovery of the money to the government. By statute the whistleblower is entitled to between 15-30% of any successful recovery. 

If you are working one of the federal government’s infrastructure contracts and you believe you are not being properly compensated for your work, or your employer is not reporting wages to the government properly, you may have a claim against your employer. Additionally, if you know your employer is using funds awarded through these programs in ways that were not what the government intended reporting false wage information to the federal government, like reporting that it is paying workers prevailing wages when it isn’t, you may have grounds for a whistleblower action.

Consulting with an employment whistleblower attorney is important to ensure your rights are protected and to determine whether you have a basis for a lawsuit. If you are considering reporting any wrongdoing to the government, it’s critical to consult with a knowledgeable attorney to better understand your rights and the potential outcomes of becoming a whistleblower. 

In either situation, the attorneys of Keller Grover are here to help. With more than 30 years combined experience in both fraud and employment law, Keller Grover is uniquely positioned to help clients with both types of claims. The firm has helped its clients recover billions of dollars.  

Keller Grover is committed to helping whistleblowers report wrongdoing and helping workers get the pay they are owed. If you want to report wrongdoing or discuss a potential prevailing wage claim, contact us today for a free, confidential consultation. 

How much detail do whistleblowers need about false claims made by their employers in order for a case to proceed? That level of particularity is the central issue in three False Claims Act cases the Supreme Court declined to hear in October.

The court’s denial of certiorari means one of the cases, against Illinois-based Molina Healthcare, can proceed after the U.S. Court of Appeals for the Seventh Circuit ruled 2-1 in favor of the whistleblower.

The other two cases, also alleging fraud by healthcare providers, were dismissed following appeals to the Sixth and Eleventh Circuits.

The plaintiff’s lawyers in the Eleventh Circuit case, Johnson et al. v. Bethany Hospice and Palliative Care, No. 21-462, argued to the Supreme Court that the appeals courts are divided over Federal Rule of Civil Procedure 9(b).

That rule says circumstances constituting fraud must be stated with particularity. Johnson’s lawyers argued “Most circuits allow plaintiffs to proceed if the submission of false claims can reasonably be inferred from other well-pleaded facts. But a minority, including the Eleventh Circuit, hold that the submission of claims cannot be inferred from circumstances, and that unless the plaintiff pleads specific details of the claims themselves, the complaint must be dismissed.”

Johnson, according to Reuters, provided detailed allegations about illegal kickbacks paid to physicians for patient referrals, but regarding billing, she said only that “100% or nearly 100% of Bethany’s patients were on Medicare or Medicaid. The Eleventh Circuit said “the dates on or the frequency with which the defendants submitted false claims, the amounts of those claims, or the patients whose treatment served as the basis for the claim” were needed for the case to proceed.

In the Sixth Circuit case that was also dismissed, U.S. ex rel. Owsley v. Fazzi Associates Inc., a nurse alleged inflated billing to Medicare for home health services, Law360 reported.

The Sixth Circuit wrote that the nurse, Cathy Owsley, had “alleged in considerable detail that she observed, firsthand, documents showing that her employer had used fraudulent data … (but) provided few details that would allow the defendants to identify any specific claims … that she thinks were fraudulent,” falling short of fulfilling Rule 9(b).

In Molina, a district court originally dismissed the case because it ruled the whistleblower had not provided specific details of false claims made for Medicaid reimbursements, Reuters reported. But the Seventh Circuit ruled 2-1 in favor of Thomas Prose, saying the circumstances he alleged, that the company billed Medicaid for more than it was able to provide its patents, were enough for the case to proceed.

“Rule 9(b) requires specificity, but it does not insist that a plaintiff literally prove his case in the complaint,” the Seventh Circuit panel wrote. “Prose provided numerous details indicating when, where, how and to whom allegedly false representations were made … (and) hardly can be blamed for not having information that exists only in Molina’s files.”

The question of whether the government could unearth detailed evidence of a fraud alleged by a whistleblower was also cited by U.S. Solicitor General Elizabeth Prelogar. In an amicus brief requested by the Supreme Court, she argued against granting the three petitions for certiorari. 

She wrote that “even if every court of appeals articulated precisely the same standard for applying Rule 9(b) in FCA cases, the application of such a general standard to each case’s individual facts would necessarily produce some variations and differing glosses. This Court’s review therefore could not reasonably be expected to produce a bright-line rule or otherwise eliminate all disuniformity among the courts of appeals.”

The Solicitor General also wrote that the “question presented arises only in the subset of FCA cases where the plaintiff can describe in detail the defendant’s fraudulent scheme, but is unable to plead details concerning the false claims for payment that the defendant submitted to the government.”

“FCA claims litigated by the United States should rarely if ever present that circumstance, because the United States will typically have access to any claims for payment that the defendant submitted.”

Do you have evidence of Medicare or Medicaid fraud by your employer and have questions about becoming a whistleblower? If so, contact Keller Grover for a confidential, free consultation. Our attorneys follow the latest developments in False Claims Act law and understand the implications of recent decisions in whistleblower cases against healthcare providers.

We can advise potential whistleblowers about the best path forward from the very beginning, helping minimize the impact of reporting, protect rights and achieve the best possible outcome for the situation.