Unethical Investigative Work By Relator’s Counsel Leads to Dismissal of FCA Claims

On April 28, 2017, the District Court for the District of Massachusetts dismissed a qui tam complaint alleging off-label promotion against a pharmaceutical manufacturer.  Dismissal was a sanction for relator’s counsel having devised and implemented what the Court called “an elaborate scheme of deceptive conduct in order to obtain information from physicians about their prescribing practices, and in some instances about their patients.”

Relator filed his initial complaint in 2012, alleging that the manufacturer was promoting off-label use of two drugs and paying physicians kickbacks for prescribing those drugs.  While the case was under seal, the relator filed an amended complaint adding detail to his allegations and including a reference to a third drug.  After the United States declined to intervene and the case was unsealed in April 2014, relator filed a second amended complaint that focused only on alleged off-label promotion of the third drug.

The second amended complaint contained detailed allegations concerning the practices of eight physicians, who were identified by name and address.  This complaint also included detailed information about various patients of the eight physicians, including age, weight, height, dates of visits, diagnoses, treatment plans, and prescriptions.  The second amended complaint also referred to a “nationwide survey” of physicians in which approximately 60% of those surveyed purportedly stated that they wrote off-label prescriptions and did so because of the manufacturer’s alleged off-label promotion.

The manufacturer moved to dismiss relator’s second amended complaint in June 2014.  The Court granted the motion as to a conspiracy claim, but it denied the motion as to relator’s substantive qui tam allegations relating to off-label promotion.  Significantly, the Court focused on relator’s detailed allegations concerning the eight physicians and their patients and found the allegations sufficient to meet Rule 9(b)’s heightened pleading standard.

Through discovery, in which the manufacturer moved to compel information comprising the factual bases for relator’s allegations relating to the eight physicians and their patients, the manufacturer learned that the key allegations were based on investigative work done by a licensed physician named Mark Godec.  Relator’s counsel had retained Dr. Godec in September 2013 to investigate the manufacturer’s promotional activity and, the Court found, directed all aspects of the investigation.  The investigation entailed, among other things, (a) enlisting a third-party healthcare marketing research firm to conduct an on-line survey regarding the use of the drug, which relator’s counsel had drafted; (b) having Dr. Godec conduct follow-up interviews, scripted by relator’s counsel, with physicians who completed the survey; (c) having Dr. Godec follow-up further with physicians who provided “appropriate answers” in the interviews, which further follow-up involved solicitations of medical charts for patients to whom the physicians had prescribed the drug; and (d) payments of “honoraria” to specific physicians.

The District Court found that the survey and follow-up efforts, devised by relator’s counsel, “involved an elaborate series of falsehoods, misrepresentations, and deceptive conduct.”  Among other things, the Court found that the investigation was “designed to appear as if it were a medical research study; its only purpose, however, was to obtain otherwise-confidential information from busy medical professionals for use in litigation.”  The Court also found that Dr. Godec had “falsely represented that the information obtained from the physicians would be kept confidential.”  Further, the Court found that the misrepresentations were material, since at least two physicians involved in the “study” submitted affidavits saying they would not have participated had they known that the information they provided would be used in litigation and publicly disclosed.

After the compelled discovery disclosed the details of relator’s investigation, the manufacturer filed a second motion to dismiss, seeking dismissal as a sanction for what it argued was unethical conduct of relator’s counsel.

The District Court granted the motion.  It first found that relator’s counsel, through the acts of Dr. Godec whom it retained and directed, had violated two provisions of the Massachusetts Rules of Professional Conduct:  Rule 4.1(a), which states that “[i]n the course of representing a client, a lawyer shall not knowingly . . . make a false statement of material fact to a third person”; and Rule 8.4(c), which provides that “[i]t is professional misconduct for a lawyer to engage in conduct involving dishonesty, fraud, deceit, or misrepresentation.”  The Court found there could be “no dispute” that relator’s counsel had engaged in such conduct.

The Court then addressed relator’s argument that his counsel’s conduct fell into exceptions to these rules, which permit attorneys to engage in limited types of deception for investigative purposes.  The Court acknowledged that the case law had carved out certain exceptions, but it found that they were limited to instances in which attorneys, or those working for them, concealed their identities and purposes in order to obtain information that “would be readily available to any member of the public who was seeking the products or services in question.”  As examples of permissible, limited deception, the Court cited cases in which housing “testers” posed as prospective renters to investigate housing discrimination, and in which investigators posed as interior decorators and visited a furniture store to determine whether the store was violating trademarks of a particular manufacturer.

The Court distinguished these efforts from those of relator’s counsel in the instant case, which it concluded involved “a scheme [that] went well beyond a mere concealment of identity and purpose in order to obtain evidence.”  The Court appeared particularly persuaded by its conclusion that the scheme “involv[ed] a fake medical research study, intended to elicit information from practicing physicians about patients under their care.”  The Court cited the sensitivity of such information and protections given to it by the Principles of Medical Ethics, the Health Insurance Portability and Accountability Act (“HIPAA”), and the physician-patient privilege.  The Court also emphasized that relator’s counsel published the information in a public document, and at least with respect to those affected patients who lived in small towns, the absence of specific patient names provided “only the thinnest of veils” of protection given the other patient-specific information that was disclosed in the second amended complaint.

The Court then turned to fashioning an appropriate sanction.  It concluded that all information that relator’s counsel learned from the “study” should be stricken from the second amended complaint.  Because that information was, as the Court explained, what saved the second amended complaint from dismissal on the manufacturer’s first motion to dismiss, the second amended complaint had to be dismissed on Rule 9(b) grounds.

A copy of the district court’s opinion in United States ex rel. Leysock v. Forest Laboratories, Inc., et al., No. 12-11354-FDS (D. Mass. Apr. 28, 2017) can be found here.