WALT DISNEY AND THE FEAR OF SANCTIONS
Everyone knows that Walt Disney left this earth many years ago. However, his legacy lives on in, among other things, the amusement parks in California, Florida and France. As part of the development of and continued operation of these amusement parks, the ire of local environmentalists is often raised. Now what might this have to do with sanctions against a whistleblower in the Federal Courts?
In a recent decision, a California court found a whistleblower’s lawsuit to be frivolous. The court has invited the Walt Disney Company to submit a bill for the time spent by the law firm on the defense of the matter. This case will undoubtedly be cited as the reason why whistleblowers should not come forward and report activity that they believe to be fraudulent. However, many of the facts particular to this case will not be mentioned.
The Federal False Claims Act, and similarly many state False Claims Acts, is subject to the Federal Court rule prohibiting frivolous claims. It is fairly rare for an action for a frivolous suit to be successful. The sanctions for bringing a frivolous claim require a showing that the action was “baseless” and that a reasonable inquiry would have confirmed the frivolous nature of the action. It is often the case that potential whistleblowers are afraid to move forward in making their claim or bringing their information to the attention of the government because of the fear of being sued.
The facts in the Walt Disney case were unique and even a layperson would probably agree that the action by the whistleblowers was baseless and frivolous. The whistleblower, an environmental group, sued Walt Disney for the “future” damages to the waterways surrounding Disneyland. Additionally, this was the 10th lawsuit based on essentially the same facts filed by this same group. Other courts, when considering the earlier actions by this group, had dismissed many of them with prejudice.
Although no outcome can be assured, you should contact a qualified whistleblower lawyer to discuss any fraud that you may suspect.