Here's an update on another case I previously covered—a $90 billion qui tam claim by Kasowitz Benson Torres, one where the firm wasn't representing the whistleblower, but was the whistleblower.

Had it succeeded, the firm could (in theory) have pocketed $27 billion in bounty as the relator. But as my colleague Ross Todd reports, this doesn't look likely.

To refresh your memory—the firm went after four of the country's largest chemical companies for allegedly failing to inform the U.S. Environmental Protection Agency of serious health injuries caused by a common chemical, isocyanate.

The claim arose from the firm's prior work representing 1,500 coal miners in a product liability suit in Alabama. During the course of discovery in that case, Bice v. Micon, Kasowitz lawyers found a series of reports suggesting the companies knew isocyanate was incredibly toxic but kept the information under wraps. Even better, the documents weren't subject to discovery use restrictions.

The Kasowitz team tried out a novel False Claims Act theory—a reverse claim, alleging that the companies failed to pay an obligation, in this case, an unassessed civil penalty for violating reporting and disclosure obligations under the Toxic Substances Control Act.

Kasowitz lost the first round before Senior Judge Rosemary Collyer of the U.S. District Court for the District of Columbia. On appeal before the D.C. Circuit, Todd reported that the panel on Monday pushed back hard against Kasowitz partner Andrew A. Davenport.

Judge Cornelia Pillard “sounded skeptical of the firm's theory, pointing out that the Toxic Substances Control Act, which Kasowitz accused the companies of violating, doesn't allow individual plaintiffs to sue for damages. She also suggested that the firm's lawsuit would fail altogether, if the court didn't buy its argument that information takes on a property interest,” Todd wrote.

Read the whole story here.