Lake Ridge Attorney Defends Small Business In Whistleblowing Case

Lake Ridge attorney Chris Kachouroff and three other attorneys silenced a man in what one judge called a "frivolous" whistleblower case.

Legal watchdogs showed interest in the case—U.S. ex rel Ubl v. IIF Data Solutions—because some thought the lower court's decision could have deterred people from filing whistblowing charges in fear of losing and then having to pay the defendant's hefty legal fees.

In the end, Kachouroff et al still won the case, but the U.S. Court of Appeals for the 4th Circuit on April 19 reversed the lower court's decision that plantiff Thomas Ubl pay the $501,000 in attorney fees for his former employer and defendant, IIF Data Solutions, a small business in Falls Church.

The appellate court opined that the district court judge erred when he said Ubl's actions were frivolous. If Ubl's actions were frivolous, then the district court judge would have honored IIF's motions to dismiss the case, the appellate court opined.

Kachouroff said the decision to uphold the jury's verdict clears IIF Data Solutions and vice president Charles Patton Sr. of any wrongdoing, which is far more important than making Ubl pay attorney fees, which included $75,000 to Kachouroff. But, Kachouroff said the appellate court should have let the trial judge reconsider the fees decision, instead.

“Even if the appellate court upheld the fees decision, we were not expecting a dime from Mr. Ubl, who apparently didn’t have the assets to pay anyway," Kachouroff said.

The lower court judge's order that Ubl pay the defendant's $501,000 in legal fees does pose a legal question: Would anyone blow the whistle on a company for fraud if there is the chance of losing and having to pay the defendant's legal fees?

"Courts are supposed to rule on the law," Kachouroff said.  "Nothing in our Constitution warrants the added test of whether a decision has a chilling effect. Fees decisions like this case are so rare anyway that there is no chilling effect and every lawyer knows that before you advise a client you investigate your facts to see if they have merit. If an employee has actual and truthful facts of fraud, he or she should blow the whistle. In such a case, I’d be honored to represent him or her in a New York minute.”

Ubl almost walked away with $1.2 million. IIF had agreed to an $8.9 million settlement that would have given Ubl $1.2 million and the government the rest of the money. But the government refused to accept the settlement because the agreement required Ubl to be paid first and the government did not think IIF had enough money to pay the claims.

"... the settlement is designed to provide [Ubl] with $1.2 million and to provide the United States with an uncollected debt," states the published appellate opinion.