In Vermont Agency of Natural Resources v. United States ex rel. Stevens, 120 S. Ct. 1858 (2000), the Supreme Court recently held that states and state agencies are not “persons” that can be sued under the Federal Civil False Claims Act (FCA) by qui tam relators—“whistleblowers” — suing on behalf of the United States. State schools have been occasional targets of whistleblowers who allege that the school has submitted a false claim or is otherwise liable to the United States under the FCA, and who seek a percentage of the amount recovered through the litigation. Stevens is of great importance to state universities and other state agencies because it significantly limits, and possibly eliminates, their exposure from whistleblower suits under the FCA. Stevens thus reduces the legal exposure that state schools incur when they accept federal grant money or submit claims under federal government contracts.
