Whistleblower Law Blog

August Whistleblower Rewards Include $2.2 Million in Medical Fraud Case

September 21, 2015

The U.S. Department of Justice announced settlements in six large qui tam cases during August – including a medical fraud case where the whistleblower earned over a two million dollar reward.

The False Claims Act (FCA) penalizes fraud against the U.S. government.  Its qui tam provision allows whistleblowers to sue on behalf of the government, and to get up to 30% of recovered funds as a reward.

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Recent Actions Highlight OSHA’s Role in Enforcing Whistleblower Anti-Retaliation Laws

September 21, 2015

The Department of Labor’s Occupational Safety and Health Administration is known for its role in implementing and enforcing safety standards in workplaces across the United States. But another main role played by OSHA is its enforcement of the whistleblower anti-retaliation provisions of a number of statutes, including but not limited to: The Occupational Safety and Health Act, the Sarbanes-Oxley Act, the Clean Air Act, the Surface Transportation Safety Act, and the Federal Railroad Safety Act. Several recent actions by OSHA demonstrate the seriousness with which OSHA enforces these statutes.

On August 4, 2015, OSHA announced that it filed suit against Continental Alloys and Services, Inc., a Houston-based company which provides steel for oil and gas companies, for violations of the Occupational Safety and Health Act’s whistleblower provision. In this case, a former employee filed a complaint for wrongful termination after Continental fired her, allegedly because she complained that the company failed to log workplace injuries in violation of OSHA regulations.  The whistleblower reported several instances when the company failed to log injuries, and even recorded a meeting with the company official who failed to record the injuries in order to gather evidence for an internal investigation. Continental fired her as a result of her actions. In its suit, OSHA seeks an injunction barring further retaliation, and reinstatement, back pay, and any other damages suffered by the whistleblower.
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D.C. Circuit Holds Trial Court Cannot “Divine” Reasons for Summary Judgment Not Offered by Movant

September 16, 2015

In a recent case before the D.C. Circuit Court of Appeals, Coleman v. District of Columbia, et al., 794 F.3d 49 (D.C. 2015), the Court overturned the District Court’s grant of summary judgment in favor of the District of Columbia in a case involving a former Captain of the D.C. Fire Department who claimed her termination was retaliation for whistleblowing. The Court’s opinion, which contains important holdings regarding the standard of proof under the D.C. Whistleblower Protection Act, also emphasizes the moving party’s burden at summary judgment to show “no genuine dispute of material fact.”

In reversing, the Coleman Court noted two legal errors by the lower court: (1) it relied in part on reasons not given by the Fire Department, but instead “divined” by the court and deemed to have been “impliedly offered;” and (2) inappropriately shifted the burden of persuasion back to the plaintiff after the Department articulated a legitimate, non-retaliatory reason for its adverse actions.
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Doctor Who Gave Chemotherapy to Healthy Patients Gets 45 Years in Prison

August 30, 2015

As previously reported, prosecutors charged a Michigan oncologist, Farid Fata, with numerous criminal counts with the underlying allegation that Dr. Fata intentionally gave chemotherapy to healthy patients in order to maximize Medicare payments. Dr. Fata pled guilty to a majority of these charges.

U.S. District Judge Paul Borman sentenced Fata to 45 years in prison as Fata wept in court. Fata apologized for misusing his talents because of “power and greed.” While the sentence was considerably less than the 175 years sought by U.S Attorney Barbara McQuade’s prosecutors, McQuade said that the 45 year sentence was close to a life sentence for Fata. McQuade also expressed surprise that the case had uncovered such egregious conduct.

Government seeks $3.35 billion from Novartis for violations of AKS and FCA

August 30, 2015

In late June 2015, the U.S. government filed papers in United States v. Novartis Pharmaceuticals Corp. notifying the court that it seeks $3.35 billion from Novartis in damages and civil fines. This amount roughly consists of $1.52 billion in treble damages and $1.83 billion in fines for the over 160,000 alleged false claims that Novartis submitted to the government.

Though news of the large potential damages is recent, the government has been investigating and litigating this case in the Southern District of New York for several years. In April 2013, the government filed its complaint and intervention against Novartis, alleging that Novartis violated both the False Claims Act and the Anti-Kickback Statute. The government contends that Novartis gave kickbacks, in the form of rebates and discounts, to twenty or more pharmacies in exchange for their switching kidney transplant patients from competitor drugs to Novartis’s drug. The government noted that Novartis is a repeat offender, referencing the government’s multi-million dollar settlement with the company less than three years ago for kickbacks.

Because this is a qui tam case, the whistleblower stands to receive a large award –between 15 to 25 percent of the ultimate settlement.

Grassley Urges Stronger Policing of Medicare Advantage

August 25, 2015

On May 21, 2015, Senator Chuck Grassley urged tighter policing of the Medicare Advantage program by the Department of Justice. Grassley relied on an investigative report by the Center for Public Integrity, which found that between 2008 and 2013, the Center for Medicare and Medicaid Services has paid more than $70 billion in improper payments to Medicare Advantage plans. Medicare Advantage plans are offered by private insurance companies that contract with Medicare to provide Part A and Part B benefits to beneficiaries.

According to a recent GAO report, the government “could save billions of dollars” by reducing abuse of Medicare Advantage’s payment system. Whistleblower lawsuits are one of the least costly and most effective tools for the government in fighting fraud. Through qui tam actions, whistleblowers are able to bring suit under seal and on behalf of the government to help the government recover funds it paid out as a result of false statements submitted for payment. Whistleblowers in qui tam actions are entitled to 15-25% of the government’s recovery.

New Jersey Supreme Court Extends Whistleblower Protections to “Watchdog” Employees

August 14, 2015

On July 15, 2015, in Lippman v. Ethicon, Inc., the New Jersey Supreme Court held that whistleblower protections under New Jersey’s Conscientious Employee Protection Act (CEPA) extend to actions taken by employees as part of their normal job duties.

Dr. Joel S. Lippman was employed by Ortho-McNeil Pharmaceuticals, Inc. (OMP) and Ethicon, Inc. as the World-Wide Vice President of Medical Affairs and Chief Medical Officer. Lippman, in his role as Medical Officer, was asked to provide his opinion about the safety of OMP and Ethicon’s products.

Lippman, after he was terminated from his high-level position, filed a retaliation claim under New Jersey’s Conscientious Employee Protection Act. The New Jersey trial court granted OMP and Ethicon’s motion for summary judgment, determining that disclosures Lippman made as part of his normal job duties were not CEPA-protected conduct.
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Third Circuit District Courts Split on Kick-Out Actions Brought After Final Agency Decisions

August 14, 2015

The U.S. District Court for the Western District of Pennsylvania ruled that plaintiffs claiming retaliation under Federal Railroad Safety Act (FRSA) lose their right to sue in federal court when the Department of Labor (DOL) reaches a final decision in their action, even if that decision is reached more than 210 days after the DOL administrative complaint was filed.

This ruling creates a split among the Third Circuit’s district courts. Just last year, the U.S. District Court for the Eastern District of Pennsylvania found that the right to file a so-called “kick-out” action in federal court is triggered when a final administrative decision isn’t reached within 210 days, and that FRSA contains nothing that extinguishes that right if the DOL subsequently issues a final decision.

In Mullen v. Norfolk Southern, Harry Mullen alleged that the railroad wrongfully terminated his employment because he protested to his supervisors about violations of safety regulations. Mullen’s termination occurred on February 14, 2011. Mullen filed a whistleblower claim with the DOL’s Occupational Safety and Health Administration (OSHA) on April 28, 2011 under the FRSA, 49 U.S.C. § 20109.
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Favorable Jury Verdict for DuPont Tossed Because DuPont Withheld Evidence

July 30, 2015

The Louisiana-based federal judge in Simoneaux et al. v. E.I. du Pont De Nemours & Co., an environmental qui tam action concerning safety problems at a chemical plant, set aside a jury verdict in favor of DuPont, holding that DuPont withheld crucial evidence that could have changed the outcome of the case. While DuPont failed to produce the evidence at issue in Simoneaux, it had produced the same evidence in an unrelated qui tam action. The court rejected DuPont’s argument that the evidence was available to the relator in Simoneaux because DuPont had produced in the other case. The court held that DuPont had engaged in “misconduct” because the relator in Simoneaux requested the evidence in discovery and DuPont failed to produce it.

The court’s June 25, 2015 ruling states, “[T]he Court finds that Relator has established by clear and convincing evidence that the newly discovered leak calculations and the November 2014 OSHA Citation were called for in discovery. DuPont’s failure to produce them is misconduct for the purposes of Rule 60(b)(3).” The court held that DuPont’s failure to produce the evidence affected the integrity of the trial process and prevented the relator from fully presenting his case. The court emphasized that its decision to set aside the judgement in favor of DuPont does not imply that the outcome of the trial would have been different had DuPont not withheld the evidence.

Based on the unavailability of the evidence, the court granted the relator’s post-verdict motion for relief from judgment, but denied the relator’s motion for a new trial.

Fourth Circuit Holds that Single Discriminatory Incident Can Give Rise to a Hostile Work Environment

July 24, 2015

In overturning the U.S. District Court for the District of Maryland, the Fourth Circuit Court of Appeals affirmed that a hostile work environment – which typically results from a series of separate incidents – can also exist when an employee is subjected to a single sufficiently severe hostile action.

The Fourth Circuit found that Reya Boyer-Liberto, a former cocktail waitress at the Clarion Resort Fountainbleu in Ocean City, Maryland, was subjected to a severe hostile action when her supervisor called her a “porch monkey” twice in one night. The Court also found that Boyer-Liberto’s engaged in protected activity when she reported the incident.

The Fourth Circuit’s decision overturned the District Court ruling, which was based on the presumption that a claim of hostile work environment must allege a series of discrete events in order to be actionable. The Fourth Circuit found that the actions of Boyer-Liberto’s supervisor were sufficiently severe to give rise to a hostile work environment claim, even though the discriminatory behavior happened in the course of just one night.

The ruling by the Fourth Circuit Court of Appeals that a single instance of discrimination can constitute a hostile work environment enhances workers’ rights. When a single incident is sufficiently severe, employers cannot avoid liability for a hostile work environment claim simply because the alleged underlying discriminatory behavior did not occur in a series of separate incidents.