Eric Young on the New Auto Safety Whistleblower Bounty Law

It used to be that if you were a whistleblower bounty hunter, your practice was limited to the False Claims Act.

Now, there’s a buffet of whistleblower options.


In addition to the False Claims Act, you have the whistleblower program at the Securities and Exchange Commission (SEC), the whistleblower program at the Internal Revenue Service and now, the program at the Department of Transportation.

Eric Young is a partner at McEldrew Young in Philadelphia.

Young has settled a number of False Claims Act cases against pharmaceutical companies.

And he was the first to recover under the IRS whistleblower program.

He also has cases in the SEC program.

But Young says there is now potential for whistleblowers in the automobile industry to blow the whistle on illegal practices that may lead to death and injury.

It’s the whistleblower provision of the Fixing America’s Surface Transportation Act (FAST Act).

“It’s a pretty basic whistleblower provision. It is limited to insiders,” Young told Corporate Crime Reporter in an interview last week. “To be eligible, a whistleblower would have to be an employee of an auto company or a contractor, a vehicle manufacturer, parts supplier, dealership — somebody in the chain of manufacturing and sale of motor vehicles. You couldn’t bring a whistleblower claim if you are a third party who interacted with a manufacturer. It’s not a perfect system, but it does provide an opportunity for people who are on the inside of one of these companies to come forward if they see some kind of a coverup or a failure to report a problem.”

Does it have a qui tam provision?

“It does not. It’s a claim much like an SEC claim. You can’t litigate on your own if the government decides not to take action.”

Is there an office of the whistleblower at the Department of Transportation?

“Unfortunately, the regulations have not been issued yet. Some of that is being decided. This is what happened with the IRS whistleblower program in the early days. There was much confusion in the beginning.”

“The auto whistleblower provision is limited to information about a motor vehicle defect, noncompliance that will likely cause unreasonable risk of death or serious physical injury. It’s limited in that way.”

“What that means is subject to interpretation. I don’t know that the False Claims Act would cover such situations. That’s not something you or I are going to figure out on this phone call. If there is the basis to file a False Claims Act case against an auto company in a situation where this is a cover up that might cause harm to our citizens, then that case is going to get filed. This law isn’t going to affect that one way or another.”

“Much like in some cases where you might have a False Claims Act case against a bank for some violation in the mortgage lending area and at the same time could be the basis for an SEC whistleblower case. One doesn’t bar the other. I don’t see this any differently. You may have facts or circumstances that give rise to a False Claims Act case, but also a separate claim could be filed under this law.”

“As a practitioner, I prefer the False Claims Act because I have more control over that case in the event that the government does not decide to invest resources into a certain case or intervene in that action. Under the False Claims Act, my client would have the right to proceed with that case on their own.”

How many whistleblower cases are you juggling at any one time?

“We have approximately 30 active cases right now.”

What is your screening process like?

“We get inundated with calls and emails from people who believe they have some information that might form the basis of a whistleblower case. In most cases, it doesn’t meet the threshold for what we have set in terms of a viable case.We actually open a file on maybe five percent of the cases we look at.

How does it divide up — False Claims, SEC, IRS?

“Our active cases are a fairly even mix. Half are False Claims Act cases and the other half are a mix of SEC and IRS cases.”

Word on the street has been, if you are going to file a False Claims Act case against the pharmaceutical industry, go with the U.S. Attorney in Philadelphia or Boston. Is that changing?

“I think it is. For example, we have had a number of pharmaceutical industry cases up the Southern District of New York. They are very active now. The District of New Jersey has been vocal in letting practitioners know that they are prepared to invest resources in pharmaceutical cases. There are others in different parts of the country. I don’t agree that in 2017 that you are not doing your client justice if you don’t file in Philadelphia or Boston. They are still two offices at the upper echelon when it comes to pharmaceutical cases. But they are no longer the only ones.”

[For the complete Interview with Eric Young, see 31 Corporate Crime Reporter 3(13), January 16, 2017, print edition only.]

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