May 21, 2013 11:52 AM
| Posted by Jonathan Cohn and Benjamin Mundel
| Topic(s): Retaliation
On Monday, the United States Supreme Court granted certiorari in Lawson v. FMR LLC, No. 12-3 (certiorari granted May 20, 2013). The issue presented is whether an employee of a privately held contractor or subcontractor of a public company is protected from retaliation by Section 806 of the Sarbanes-Oxley Act, 18 U.S.C. § 1514A. The statute prohibits retaliation by a public company—or an officer, employee, contractor, subcontractor, or agent of a public company—against “an employee” who reports fraud or a violation of securities regulations. This is an important case that may interpret the scope of Sarbanes-Oxley’s whistleblower protection provisions.
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On March 28, 2013, in a reverse False Claims Act case, the United States District Court for the Eastern District of Wisconsin denied Lakeshore Medical Clinic’s motion to dismiss and allowed the relator’s claim to go forward. U.S. ex rel. Keltner v. Lakeshore Med. Clinic, Ltd., No. 11-CV-00892 (E.D. Wis. Mar. 28, 2013). This case shows the increased risk the Fraud Enforcement Recovery Act of 2009 (“FERA”) presents for government contractors, particularly Medicare and Medicaid providers.
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A recent Fourth Circuit decision clarifies what constitutes “protected activity” under the anti-retaliation provision of the FCA (31 U.S.C. § 3730(h)(1)). In Glynn v. Edo Corp., 710 F.3d 209 (4th Cir. 2013), the Fourth Circuit affirmed the District Court’s grant of summary judgment dismissing an employee’s retaliation claim. The court held that because plaintiff’s evidence failed to “raise a distinct possibility of a viable FCA action” or prove that any false certification was material, he failed to establish he engaged in “protected activity,” the first of three elements in a FCA retaliation claim.
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May 6, 2013 4:52 PM
| Posted by Ellyce Cooper and Brent Wilner
| Topic(s): Attorney’s Fees
A recent opinion by the United States District Court for the District of New Jersey underscores the significant incentives for attorneys to represent whistleblowers in False Claims Act litigation. In resolving a fee dispute between a relator and his counsel following a settlement of FCA claims, the court found that the fee shifting provisions of the FCA, 31 U.S.C. § 3730(d)(1)-(2), do not preclude the relator’s attorney from receiving contingency fees in addition to the statutorily mandated attorney’s fees. United States ex rel. DePace v. Cooper Health System, __ F. Supp. 2d __, 2013 WL 1707952 (D.N.J. Apr. 22, 2013).
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On April 16, 2013, the Department of Justice announced that Amgen Inc. (“Amgen”) had entered into a settlement with federal and state agencies to resolve allegations in a qui tam action involving its biologic product Aranesp, an anemia medication. The civil settlement requires Amgen to pay $24.9 million for conduct from September 1, 2003 through December 31, 2012.
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On April 12, 2013, the First Circuit in United States ex rel. Estate of Cunningham v. Millennium Labs., No. 12-1258 held that the FCA’s public disclosure bar applies even to disclosures made by the defendant in a prior lawsuit. The Court rejected relator’s contention that applying the bar under these circumstances would permit a defendant to manufacture a public disclosure defense by selectively placing a sanitized version of its story on a public docket.
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The United States District Court for Middle District of Tennessee recently dismissed a qui tam action with prejudice after finding that the relator’s “opportunistic” claims were barred by the public disclosure provision of the FCA. In Osheroff v. HealthSpring, Inc., No. 3:10-1015 (M.D. Tenn. April 5, 2013), the Court granted the defendant’s motion to dismiss after finding that the allegations were “substantially the same as the allegations or transactions exposed by the Miami Herald and found on the [company’s] website.” Slip Op. at 14.
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On April 17, 2013, the Department of Health and Human Services’ Office of Inspector General (“OIG”) released an Updated Provider Self-Disclosure Protocol (“SDP”). The SDP provides a process for all healthcare providers and suppliers, including manufacturers, subject to OIG’s Civil Monetary Penalties (“CMP”) authority to voluntarily identify, disclose, and resolve liability for potential misconduct, including under the False Claims Act. The SDP provides specific guidance on SDP requirements. Of note, the SDP articulates OIG’s new policies that the damages calculation will start at 1.5 times single damages and that those who self-disclose will presumptively not be subject to the imposition of a corporate integrity agreement. Sidley’s client update regarding the SDP is available here.
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A federal district court opinion issued last week could help defendants oppose attempts by relators in non-intervened qui tam cases to seek early discovery of documents produced to the Government during its investigations. In Laughlin v. Orthofix International, N.V., No. 05-10557-EFH (D. Mass. Apr. 10, 2013), the Court denied the relator’s motion for leave to issue a subpoena to the Government—before the parties had commenced discovery—to obtain documents that the defendant had produced to the Government during its investigation of similar allegations.
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