Dr. Aaron Westrick has won reinstatement of his claims under the California False Claims Act. Last Thursday, May 26, 2011, the California Court of Appeal for the Second District (in Los Angeles) issued its decision in State of California ex rel. Westrick v. Itochu International, Inc., Case No. B223053. On January 26, 2010, the Superior Court of Los Angeles County dismissed Westrick's complaint, holding that his complaint did not plead the allegations of fraud with specificity. The Court of Appeal has now reversed and reinstated Westrick's claims.
Dr. Westrick began his career as a police officer in Michigan. In 1982, he was shot by a fleeing burglar with a .357 Magnum from approximately five feet away. A Second Chance bulletproof vest, made of Kevlar, saved his life. Westrick subsequently earned a Ph.D. in sociology and criminal justice. In 1996, Second Chance hired Westrick as its director of research. On July 5, 2001, Dr. Westrick received a letter from the Japanese Toyobo Company stating that, “the strength of Zylon fiber decreases under high temperature and humidity conditions.” Dr. Westrick recognized that Zylon would degrade and that police officers would die while wearing "bullet-proof" vests made of Zylon. He asked his employer to recall its Zylon vests and have them tested. In June 2003, Officer Tony Zeppetella of Oceanside, California, was killed when his $766 Zylon vest failed to stop two bullets. That same month, a police officer in Pennsylvania was seriously wounded when a bullet pierced his Zylon vest.
My colleague, Erik Snyder, presented Dr. Westrick's argument to the Court of Appeal. It was Erik's first oral argument. Based on this result, we can expect many more advances for whistleblower rights in Erik's legal career. Congratulations to Erik and Dr. Westrick.
For more information about Dr. Westrick's claims and the problems with Zylon, see this prior blog post. Some excerpts from the Court's new decision follow in the continuation of this blog entry.
From Page 10:
“The [California False Claims] Act is designed to supplement governmental efforts to identify and prosecute fraudulent claims made against state and local governmental entities by authorizing private parties (referred to as qui tams or relators) to bring suit on behalf of the government. (American Contract Services, [supra, 94 Cal.App.4th] at p. 858.)” (Hawthorne, supra, 109 Cal.App.4th at p. 1677.) The Act provides a financial incentive for private whistleblowers by entitling a successful qui tam plaintiff to share in a percentage of the recovery in the case. (§ 12652, subd. (g); Rothschild, supra,
83 Cal.App.4th at p. 495.)
The “ultimate purpose of the Act is to protect the public fisc. To that end, the Act must be construed broadly so as to give the widest possible coverage and effect to its prohibitions and remedies.” (Hawthorne, supra, 109 Cal.App.4th at p. 1677.)
The Act authorizes treble damages against one who, inter alia, “[k]nowingly presents or causes to be presented a false or fraudulent claim for payment or approval.” (§ 12651, subd. (a)(1).)
Page 15:
We conclude Westrick had pled fraud with the requisite specificity. With the above allegations in the SAC, Westrick had pled fraudulent conduct by defendants with “sufficient particularity such that [defendants are] more than able to ‘defend against the charge[s] and not just deny that [they] ha[ve] done anything wrong.’ ” (Westrick, supra, 685 F.Supp.2d at p. 137; accord Armenta ex rel. City of Burbank v. Mueller Co. (2006) 142 Cal.App.4th 636, 645 [qui tam pleading adequately “notified[d] defendants of the nature of their liability”].)
Pages 20-21:
Westrick pled sufficient facts to indicate he was an original source. Westrick alleged, inter alia, as director of research at Second Chance, he was the first employee at the company to develop a concern regarding the accelerated degradation of Zylon vests. Upon receiving the July 5, 2001 letter from Toyobo stating “the strength of Zylon fiber decreases under high temperature and humidity conditions,” Westrick determined that older vests sold by Second Chance should be pulled and independently tested in order to determine whether heat and humidity would cause them to degrade.*** The testing revealed Zylon body armor would not perform as required by the five-year warranties under which each vest was sold to police departments across the United States.
***
Westrick disclosed to the California Attorney General all the information he possessed prior to filing suit. Westrick clearly “ ‘had a hand in the public disclosure of allegations that are a part of [his] suit.’ ” (Grayson, supra, 142 Cal.App.4th at p. 755.)
We conclude Westrick sufficiently pled he qualifies as an original source within the meaning of the statute.
California Assemblyman Anthony Portantino (pictured; D-La Cañada Flintridge) has won committee approval for his bill to give employees in the Legislature the same protections afforded to other state workers when they report waste, fraud and abuse. Assembly Bill 1378 will give legislators and their employees protection from retaliation for reporting "improper governmental activity." The bill provides criminal and civil liability for violations. In a recent amendment, the bill limits the right to pursue civil remedies to employees, not legislators themselves. The Sacramento Bee reports that Assemblyman Portantino suffered retaliation himself after we was the lone Democrat to vote against a budget bill. The Speaker slashed the budget for his office staff. Thus, when Assemblyman Portantino agreed to the amendment to limit civil claims to employees only, he was giving up his own rights for the sake of his employees. The outcome: a committee vote on January 10 with 10 votes in favor and no opposition. Congratulations!
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