Pipe manufacturer JM Eagle is lashing out against whistleblower John Hendrix, claiming that he spoke to a prospective witness and offered that witness a kick-back. JM Eagle has made the claim in an interview with industry magazine PlasticsNews. Meanwhile, Hendrix’s attorneys at the Washington, DC, law firm of Phillips & Cohen are denying the allegation, calling it a distraction. Hendrix was an engineer with JM Eagle, and he claims that the company knowingly supplied pipe that lacked the required tensile strength. JM Eagle denies that allegation. Still, anyone who likes to have water arrive cleanly to their home, and not flooding their streets, will appreciate the value of good tensile strength.
My hunch is that this issue will be decided not by the personal attacks on the whistleblower, but rather by expert testing of the pipes themselves. JM Eagle also complains about how they knew nothing about this lawsuit, and were caught by surprise when it was unsealed. This is exactly the effect intended by the False Claims Act (FCA) which requires that cases be kept sealed until the government finishes its investigation. Finally, JM Eagle is crowing about how many governments, including the federal government, declined to join the lawsuit. To me, this shows the genius of Sen. Grassley’s amendment to the FCA. The Grassley Amendment allows state and local governments to adopt their own versions of the False Claims Act. If they do, claims under those state and local laws can be joined with federal qui tam whistleblower cases. If just a few states, or even just one, joins a case, then the public record will benefit from having that government hold corporate officials accountable when they try to cheat the taxpayers. In a case involving water pipes, it makes sense that state and local governments would be more directly affected than the federal government.
