& Training Trust Fund. 1995), and United States ex rel Hall v. Teledyne Wah Chang Albany, 104 F.3d 230 (9th Cir. The two are represented by the same two attorneys who represented Mark Hurt and Roop. These responses did not address the cost implications that concerned Radcliffe. (Mem. See Green, 59 F.3d at 965-68; Bahrani, 183 F. Supp. Purdue then filed the present Motion to Dismiss, seeking a dismissal on the grounds that Radcliffe's claims are based on publicly disclosed information rather than information he discovered; that Radcliffe has released Purdue from the claims; and that the Complaint fails to adequately allege fraud as required by Federal Rule of Civil Procedure 9(b). On May 10, 2007, the government filed a criminal information against a related Purdue entity and several Purdue executives, along with executed plea agreements for all the criminal defendants. 481 F. Supp. Mr. formerly a sales representative for Purdue under Mark Radcliffe's supervision. Whitten v. Triad Hosps., Inc., No. This case briefly mentions several sources "two previously filed lawsuits against defendant, as well as an Internet web page and a Pittsburgh Post-Gazette article" and summarily concludes that "these constitute public disclosures." Purdue argues that Radcliffe was a bad actor who waited to file his qui tam complaint and, prior to doing so, attempted to settle with Purdue in exchange for an investment in a company he was starting. This rule would also make the enforcability of such a release dependant on the government's intervention decision and may discourage some potential relators from initiating qui tam suits in the first place, leaving some allegations undisclosed. Further, the public policy concerns raised by Purdue do not alter the relative balance of public interests under the Rumery test. Further, such a rule would mean that the enforceability of the release would be uncertain until such time as the government chose whether to intervene, which would undermine the countervailing interest in settlement of litigation. Defs.' Id. (Mountcastle Decl. Purdue objects, but I find no cognizable basis for denying Radcliffe's request. Document production requests made by the government and conversations between lawyers representing the government and Purdue or its employees in June and July of 2005 suggest that the government was trying to learn more about the relative cost and potency issue. Congress deemed this necessary because of reluctance on the part of insiders to come forward with relevant knowledge of fraud as well as federal enforcement agencies' relative lack of resources to investigate and prosecute allegations of fraud, leaving some potentially significant cases unaddressed. Id. at 733-34 (remanding to allow leave to amend). Id. Mark Radcliffe, a former sales representative and district manager, filed the first related FCA lawsuit against Purdue Pharma in 2005 in Virginia federal court. The motion says the whistleblowers attorney, Hurt, knewthe two would take up the baton after the first FCA suit was dismissed and that the two did not have personal knowledge of the allegations of fraud they would make against Purdue, claiming they even contradicted the claims made in the complaint during their testimony. According to Scheininger, Wells mentioned several times that she wished to ask these witnesses about the dispute over the relative potency of OxyContin and MS Contin, among other topics, explaining that this related to the marketing and cost implications of the relative potencies. The term "news media" includes scholarly, scientific, and technical periodicals, including trade journals, because, like newspapers, these sources disseminate information to the public in a periodic manner. . Angela said her knowledge of the alleged fraud came from conversations with her husband, while May alleged some of his knowledge came from conversations with Mark and some came from observations during his own employment. However, Radcliffe did file while the government was still investigating and when he could potentially still have been of use to the government. Specifically, in his sales representative training, he alleges that he was taught that there was a 2:1 equianalgesic ratio between OxyContin and MS Contin, a rival pain medication containing morphine, making OxyContin twice as potent and, as a result, cheaper per dose than MS Contin. Although the criminal charges did relate to the misbranding of OxyContin, these charges focused on Purdue's marketing of OxyContin as "less addictive, less subject to abuse and diversion, and less likely to cause tolerance and withdrawal than other pain medications." Purdue contends that, under Hall, enforcement of a release to bar a subsequent qui tam action is appropriate even if the government has not completed its investigation. The relator would likely be willing to accept a lower overall settlement amount from the other party, knowing that he would receive the entire amount, rather than only a portion of the settlement. Decided: January 29, 2016. In deciding a jurisdictional challenge, the court must determine the facts based on the evidence submitted. On August 1, 2005, Radcliffe executed a general release as part of . It is unclear from Hall whether the NRC was made aware of the identity of the specific person making the allegations when it first investigated the matter. 14-2299 (4th Cir. Dismiss, Exs. Grayson v. Pac. As early as 1996, Radcliffe found that some of the physicians he spoke to were skeptical of this 2:1 ratio. 1995); State ex rel. See United States v. Purdue Frederick Co., 495 F. Supp. 1039, 1043-47 (S.D.N.Y. In these somewhat rambling and incoherent emails, he warned Purdue that he was considering a qui tam suit, detailed his allegations, and offered to settle in exchange for an investment by Purdue in a project he was contemplating. Wilson, 528 F.3d at 300-01 (alternations and internal quotations omitted); see Eberhardt v. Integrated Design Constr., Inc., 167 F.3d 861, 870 (4th Cir. 2:04 CV 053, 2006 WL 3834407, at *3 (S.D. While the 1999 article was published in European Journal of Clinical Pharmacology, it was authored by scientists in the United States and written in the English language. With respect to Radcliffe's delay in filing his qui tam suit, I agree that this does weigh in favor of enforcement as a means to encourage relators to file quickly and disclose their allegations to the government as soon as possible. Several months later, Purdue restructured its sales force and Radcliffe was offered the option of transferring positions, which he declined, or termination with an extended severance package. Enforcing a release in this situation would deprive the public of a potential relator to enforce the FCA and recover monies for the government treasury. In September and December of 2005, the Department of Justice contacted Purdue with electronic search terms, some of which pertained to the relative cost and potency issue. Ten years ago, Mark Radcliffe, a former district sales manager for Purdue Pharma, filed a qui tam action under the FCA against Purdue. Further, Radcliffe was cooperating with the government and was scheduled to be a grand jury witness. C05-01962 HRL, 2006 WL 2067061 (July 25, 2006) at *7 ("[T]he key question is whether the government knew about [the relator's] allegations of fraud and had an opportunity to investigate them before the release was executed. While corporate reports have been held insufficient to implicate the jurisdictional bar of 3730(e)(4)(A), Rabushka, 40 F.3d at 1514 n. 2, press releases have been deemed public disclosures within the meaning of the statute, United States ex rel. 1348, 89 L.Ed.2d 538 (1986) (quotations and citations omitted). Radcliffe v. Purdue Pharma, L.P., 562 U.S. 977 (2010), his wife Angela decided to "take up . In responding to Purdue Pharmas allegations, the attorneys say the whistleblowers have always been upfront that their knowledge of the alleged scheme was second-hand. Purdue argues that Radcliffe has failed to plead fraud with particularity as required by Federal Rule of Civil Procedure 9(b). Alcohol Found., Inc. v. Kalmanovitz Charitable Found., Inc., 186 F. Supp. These employees were indeed asked questions pertaining to the relative potency issue during their grand jury appearances on July 20, 2005. Id. On September 27, 2005, Radcliffe filed his qui tam Complaint. Purdue also argues that in Hall itself the government had not completed its investigation prior to the execution of the release. Purdue Pharma L.P., No. He was also told that Purdue's decision to rely on the 2:1 ratio, despite published articles indicating that the 1:1 ratio was more appropriate for OxyContin's approved use, was based on safety concerns, that is, it was better for doctors to start with a lower dose and adjust upward if necessary. The court held the release unenforceable both because it was executed within the statutory sixty-day investigatory period and interfered with the government's ability to evaluate whether to intervene in the suit and because it was contrary to public policy under the Green/Hall framework. Pharmacol. Enforcement of a release to bar a subsequent qui tam suit implicates several articulated public interests. at 820. Because of my disposition of the case, I do not reach Purdue's arguments that some of the claims may be barred by the applicable statute of limitations or that some of state causes of action are procedurally barred. However, neither case discusses the policy implications of enforcing a release in the context of the FCA. . Matsushita, 475 U.S. at 587, 106 S.Ct. Section 3730(e)(4)(A) provides an exclusive list of sources that may give rise to a public disclosure that will strip a court of subject matter jurisdiction: "disclosures in (1) criminal, civil, or administrative hearings; (2) congressional, administrative, or Government [Accountability] Office reports, hearings, audits, or investigations; and (3) the news media." The package insert is currently posted to a section of Purdue's web page devoted to package inserts. Id. The parties have been provided with the sealed copy. He also refers to, but does not cite, a single-dose study supporting the 2:1 ratio that he was told about by his supervisors at Purdue. Michael Scheininger, counsel to several Purdue employees, stated that Department of Justice lawyer Barbara Wells informed him on June 24, 2005, of her intent to ask several of his clients about the dispute over the relative potency of OxyContin and MS Contin, explaining that it related to the marketing and cost implications. Coleson, which was decided prior to Green but after Rumery, involved a claim brought under the anti-retaliation provisions of the FCA, rather than a qui tam claim brought on behalf of the government. at 821. Compl. The stay was lifted in late 2006, and the government chose not to intervene on May 8, 2007. He alleged a fraudulent scheme whereby Purdue marketed Auth. Radcliffe argues that the published results of the single-dose study are not public disclosures under 3730(e)(4)(A) because these were published in a foreign periodical. . Purdue Pharma's attorneys suspected that Radcliffe was behind those threats. (T)here is no question that counsels pre-filing knowledge and investigations are imputed to his clients on the issue of whether there is a good-faith, non-frivolous basis for the allegations in a complaint. (Mountcastle Decl. Servs., 260 F.3d 909, 916 (8th Cir. Of course, it is plausible that a physician would be so induced by false representations concerning OxyContin's relative potency to write a prescription, ultimately paid for by the government. of Health Human Servs., Clinical Practice Guideline: Acute Pain Management: Operative or Medical Procedures and Trauma, app. Radcliffe v. Purdue Pharma L.P., 600 F.3d 319 (4th Cir. School escapes liability for sex abuse by teacher, Walmart launches Constitutional attack on Lina Khan's FTC, Firefighters fired over penises drawn on Black colleague's family pictures lose lawsuit, Lawsuit targets Panera's Sip Club, complains refills have restrictions, Judge stops 3M's plan to handle massive earplug litigation. The Newsletter Bringing the Legal System to Light. In this action brought under the qui tam provisions of the False Claims Act ("FCA"), 31 U.S.C.A. The Fourth Circuit does not have any analogous case law interpreting Rumery. I am troubled by the fact that Radcliffe's behavior, in waiting until the Department of Justice had already begun a criminal investigation into other allegations of marketing fraud committed by Purdue, before filing his qui tam action, suggests that he is an opportunistic relator. Supp. Were this the rule, a relator who initially tried to settle would have no incentive to disclose the allegations to the government in lieu of settlement. The public interest in Radcliffe maintaining the ability to supplement federal enforcement of the FCA by prosecuting these allegations on behalf of the government remains. It is not entirely obvious why the Ninth Circuit concluded that a full investigation negates the public interest in having a qui tam supplement federal enforcement, which includes not only disclosing information to the government, but also potentially investigating and prosecuting the case on behalf of the government. 458 (S.D.N.Y. at 961 (applying the three-part test in United States v. Kimbell Foods, Inc., 440 U.S. 715 (1979)). United States ex rel. Apparently Radcliffe later experienced more doubts because in 2004 he sought legal advice and in January 2005 he anonymously contacted Randy Ramseyer, an Assistant United States Attorney for the Western District of Virginia, to gauge the government's interest in a claim against Purdue. Hurt thus acted in bad faith by bringing an action when he knew that Relators had no personal knowledge of the allegations he drafted in their name.. Radcliffe was interviewed by law enforcement agents on October 28, 2005. For the reasons set forth below, I deny the former two grounds of dismissal, but I will grant the motion under Rule 9(b), with leave to amend. The opinion makes no mention of what type of web page this is or whether it bears any resemblance to a traditional periodical. That provision says the court may award reasonable attorneys fees and expenses if the court finds the lawsuit was clearly frivolous or vexatious or brought primarily for purposes of harassment. Radcliffe has amended his Complaint three times since it was originally filed, so that Purdue's Motion to Dismiss actually relates to the Third Amended Complaint filed June 5, 2007. The Ninth Circuit determined that enforcement of the release would impair the public interest by diluting incentives to file qui tam suits, thus making the government less likely to learn of the alleged fraud, and by diluting the FCA's deterrent affect. Id. On August 1, 2005, he signed a severance agreement, which included a general release of all claims against Purdue. Purdue Pharma Br. Bell Tel. In mid-July 2005 the government reviewed and flagged numerous documents in the possession of four Purdue employees, [Redacted]. Ultimately, the Ninth Circuit found that the significant public interests at issue when a potential relator and potential defendant execute a release, without the government's knowledge or consent, prior to the filing of a qui tam complaint outweighed the general interest in settling litigation and determined that, as a rule, such pre-filing releases were not enforceable to bar the subsequent qui tam actions. McLean v. County of Santa Clara, No. Plaintiff - Appellant: UNITED STATES EX REL. . ), aff'd, 53 F. App'x 153 (2d Cir. The government stated that without the relator's assistance following the release date it could not have issued a warrant to obtain documents or made sense of those documents when received and that given that these documents were not received until several weeks after the release date, the government had not had the opportunity to fully investigate prior to the execution of the release. For the purposes of addressing the public disclosure issue, the Complaint and the Third Amended Complaint contain the same claims and neither party has indicated that any relevant public disclosures were made between the date the Complaint was file and the date that the Third Amended Complaint was filed. He was not asked about the relative cost or potency of OxyContin and MS Contin, nor was he asked about the equianalgesic ratio of these two drugs. Accordingly, I do not address Purdue's second argument that the package insert is a public disclosure from an administrative investigation. Purdue argues that in the present case, the following constitute public disclosures: (1) published scientific articles and reference materials cited in the Complaint, which support an equianalgesic ratio of 1:1 between MS Contin and OxyContin for repeated dosing, but note the existence of single-dose studies that support a ratio of 2:1; (2) a single-dose study that supports an equianalgesic ratio of 2:1 and a published article and an abstract reporting the results of this study; (3) other materials published in scientific journals, which support the 2:1 equianalgesic ratio for longer-term use, that Purdue argues Radcliffe would have been familiar with in his employment; and (4) the OxyContin package insert, which was approved by the FDA and was, at one time, available on Purdue's web site. at 962-63 (quoting Davies, 930 F.2d at 1399). 434. The government began a lengthy investigation after the execution of the release and ultimately chose to intervene. Id. Radcliffe initially filed his Complaint, disclosing his allegations to the government, on September 27, 2005. But see United States ex rel. Id. 40 F.3d at 1510. Looking at the specific web page cited by Purdue, it appears that on July 18, 2001, the OxyContin package insert was posted to a section of Purdue's web page entitled "News What's New." Relators, or private individuals who bring suits on behalf of the government, are entitled to a portion of the recovery from a qui tam suit, the amount of which depends on whether the government chooses to intervene after learning the allegations and prosecute the case itself and the overall importance of the relator's participation in the action. The plaintiff-relator, Mark Radcliffe ("Radcliffe"), filed a qui tam suit in the United States District Court for the West-ern District of Virginia alleging that his former employer, Purdue Pharma, L.P. ("Purdue"), defrauded the government . Indus. 1997), has been applied by subsequent federal courts faced with the issue. If not, then the court balances "all the factors that bear on whether `the public interest in enforcement of the agreement outweigh the policies furthered by non-enforcement.'" Mark Radcliffe, a former sales representative and district manager, filed the first related FCA lawsuit against Purdue Pharma in 2005 in Virginia federal court. . 2 (16th ed 1996) ("USP"); Robert G. Twycross, Opioids, in Textbook of Pain 943, 953 tbl. While the results of this study were not published until 1999, an abstract including the 2:1 equianalgesic ratio was published in 1996. Mistick PBT v. Hous. That agency investigated and concluded that it could not substantiate the allegations. 1996). and, accordingly, less expensive than MSContin" and the accuracy of "the 2:1 comparison of OxyContin to MSContin." Further, this shareholder-relator was the first to allege that company executives knew of the extent of the underfunding at the time of the spin off and that the liability was large enough to place the company in jeopardy of failing. While this would seem to be the case in Hall since the federal government had not only completed its investigation, but concluded that the allegations could not be substantiated, this does not mean that there are not other cases that the government may have investigated fully but determined that it would not prosecute on its own for a variety of reasons, such as the low amount of money involved compared to the cost of prosecution, the low likelihood of success, or the lack of government resources to pursue it. Some studies recommended an equianalgesic ratio of 1:1, particularly for chronic, around-the-clock dosing; they acknowledged studies that recommended a ratio of 2:1 for single or intermittent doses. Their lack of knowledge of the minutiae does not somehow render the complaint frivolous or filed in bad faith. It was dismissed for failure to plead fraud with sufficient particularity. See United States ex rel. Thus, allowing enforcement of such a release to bar a subsequent qui tam suit undermines the financial incentives thought necessary by Congress to ensure that those with inside knowledge file qui tam suits alerting the government of the alleged fraud and potentially assisting the government with its investigatory and prosecutory burden. In the conclusion of the response, the attorneys say Purdues allegations of bad faith and its personal attack on them are a lamentable tactic used to get an advantage in litigation. Green, 59 F.3d at 959. Mountcastle argued that the suit could hinder the investigation because while Purdue was aware of the investigation "no mention ha[d] been made that the 2:1 comparison of OxyContin and MSContin [was] one of the areas under investigation." In his Complaint, Radcliffe cites the three publications shown to him by the physicians the Clinical Practice Guideline, the USP, and the Textbook of Pain to support the correctness of the 1:1 ratio. While these public disclosures do demonstrate some disagreement or debate over the appropriate equianalgesic ratio, I am not convinced that they sufficiently raise the specter of fraud. On August 2, 2005, a subpoena was issued commanding Radcliffe to appear before the grand jury. If the patient did not receive the expected pain relief, the doctor might either prescribe something else or increase the dosage. Id. Radcliffe requests that if the Complaint is found insufficient on this ground, that he be granted leave to file an amended complaint. To the extent that Radcliffe derived the allegations in his Complaint from either of these sources, these will be considered public disclosures in the news media. Despite the labeling of the 2001 page, I find that this is not analogous to a traditional news outlet or periodical or even a trade journal because it involves information disseminated by one company about its own products, rather than a news organization or industry group disseminating information of general or specialized interest. [2] The final settlement in the criminal case did not contain any reference to the relative cost and potency issue and did not purport to settle Radcliffe's suit. The generalized interest in settling litigation is outweighed in the present circumstances by public interests that would be impaired by enforcement of this release, and so analysis under the Rumery test does not favor enforcing Radcliffe's release. Treating all allegations as true, patients may have received less effective pain relief, but it is far from clear that the government paid more money.. In addition to ruling the whistleblowers failed to sufficiently plead their allegations, Berger also found that their suit was barred by a rule that says whistleblowers cant bring suit over information that has already been made public. Joining her as a relator is Steven May, a former Purdue employee who worked under Mr. Radcliffe. 2d at 820 ("If there is a dividing line to be found between Hall and Green, it is the fullness of the government's investigation, not the timing of the release."). L E Corp. v. Days Inns of Am., Inc., 992 F.2d 55, 58 (4th Cir. Id. First, was there a public disclosure? Because a relator is only entitled to a portion of the proceeds from a successful qui tam suit, both the relator and the party accused of fraud could benefit financially by settling before the government learns of the allegations. Mot. Given the international nature of the scientific community, there is no indication that the publication of this article in a foreign scientific journal makes it any less accessible to the American public than if it were published in a scientific journal located in the United States. 49.7 (Patrick D. Wall Ronald Mezack eds. (Mountcastle Decl. The Agreement and General Release that Radcliffe signed contained the following language: Radcliffe then filed his qui tam Complaint on September 27, 2005. Therapeutics 130 [Abstract PI-4] (1996); G.B. 1999). Supp. Defs.' Disclosures made in other public forums do not implicate the public disclosure bar. Once the moving party has met its burden, "the nonmoving party must come forward with `specific facts showing that there is a genuine issue for trial.'" at 969. Together, Purdue argues, these create an implication of fraud sufficient to put the government on notice. Doyle v. Diversified Collection Services, Inc., No. However, that is not the situation before me. at 1513-14. While the issue of whether a general release is enforceable to bar a subsequent qui tam action has not been addressed by the Fourth Circuit, the framework established by the Ninth Circuit in United States ex rel Green v. Northrop Corp., 59 F.3d 953 (9th Cir. Curtis et al., Relative Potency of Controlled-Release Oxycodone and Controlled-Release Morphine in Postoperative Pain Model, 55 Eur. This subsection includes disclosures made in "criminal hearings," as well as those made in "administrative investigations," but I cannot see that, nor have the parties asserted that, either of these classifications applies to the current situation. 2d at 774. at 1047. This implies that the government was by that point aware of the substance of allegations, but more importantly that those facets of their investigations were still ongoing, beyond the date of the release. On September 18 2014 Defendants hereinafter Purdue filed.20141009i18 2d at 1272. Also on July 28, the government issued a subpoena for Michael Cullen, [Redacted]; he was later asked during his grand jury testimony about the relative potency issue. 2001); United States ex rel. For instance, this web page could be affiliated with a news publication and, as such, would be updated regularly and would disseminate information to the public in a periodic manner. With respect to the settlement attempts, it would seem counterintuitive to enforce a release to bar a subsequent qui tam suit, thus foreclosing the relator's ability to prosecute on behalf of the government, to punish that relator for trying to settle instead of filing suit in the first place. Because of the potential in this area for state law to impair federal rights, the possibility of forum-shopping, and the unlikeness that uniform federal rule would disrupt commercial relationships predicated on state law, the Ninth Circuit chose to craft a uniform federal rule, rather than apply state law. Evidence presented in Bahrani demonstrated that, prior to executing a general release, the relator had two brief conversations with an FBI agent prior in which he made charges against his employer but offered no specifics regarding the alleged fraud. Training materials included this claim and Purdue encouraged sales representatives to emphasize this cost difference when speaking with physicians. the plaintiff-relator, mark radcliffe ("radcliffe"), filed a qui tam suit in the united states district court for the western district of virginia alleging that his former employer, purdue pharma, l.p. ("purdue"), defrauded the government by marketing its pain-relief drug, oxycontin, as a cheaper alternative to the drug it replaced, ms contin, Following Radcliffe's execution of the general release on August 1, 2005, the government's investigation continued. In Rabushka, a shareholder filed suit alleging that his conversations with company executives demonstrate that they fraudulently understated unfunded pension liability and spun off one of the company's components in order to shift responsibility for the pensions to another entity. This action was stayed for some time at the request of the federal government, which eventually declined to intervene, along with all of the thirteen state governments named in the Complaint. In finding the release unenforceable, the court reasoned that the limited knowledge of the allegations held by the government did not negate the public interest in providing incentives for the relator to fully disclose inside information concerning the allegations to the government. Indeed, Mr. Hurt drafted the core allegations not on the basis of information and facts relayed to him by Relators, but rather by using information and documents provided to him by Mark Radcliffe (the plaintiff in the first, unsuccessful case), the motion says. In such cases, I can hardly think that the mere fact of a government investigation would negate the public interest in having a private citizen shoulder the burden of prosecution that would allow the government to recover monies lost through fraud. 3729-3733 (West 2003 & Supp.2008), and analogous state statutes, the relator Mark Radcliffe alleges that the defendants, Purdue Pharma, L.P. and Purdue Pharma, Inc. (collectively, "Purdue"), misrepresented to physicians the relative potency of . Mark Rad v. Purdue Pharma L.P. Filing 920100324 Download PDF . the baton" and file the qui tam action against Purdue now before the court. During the course of the agency's investigation, the employee was terminated and initiated a state court action, which did not include a qui tam claim. I agree. While the court reasoned that the enforceability of the release should be governed by federal law because it arose under federal law, the court did not address any of the public policy concerns associated with qui tam suits or the FCA. By the end of July, the government had also begun drafting Grand Jury Subpoena 513 which included requests for all documents discussing the relative analgesic potency or safety of OxyContin and MS Contin. The circumstances here fall within the general rule articulated in Green that pre-filing releases are unenforceable to bar subsequent qui tam actions, rather than the Hall exception, because the government had not fully investigated the substance of Radcliffe's allegations.
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