Tex. Months later, the former employee filed a qui tam complaint in federal court. the baton" and file the qui tam action against Purdue now before the court. Id. Because the information contained in the disclosures was insufficient to imply fraud, it did not trigger the jurisdictional bar. at 956-57. This is factually distinct from the situation in which the government is in the midst of an ongoing investigation. 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. See United States ex rel. 2005); see Springfield, 14 F.3d at 655. Id. But see United States ex rel. The three articles cited by Radcliffe were published in scientific and medical reference periodicals that distribute new or updated material on a periodic basis. Purdue Pharma, L.P. (1:05-cv-00089) District Court, W.D. Enforcement of a release to bar a subsequent qui tam suit implicates several articulated public interests. Id. Purdue Pharma L.P., No. Joining her as a relator is Steven May, a former Purdue employee who worked under Mr. Radcliffe. Hall involved an employer who had been accused of fraud on the government by an employee. . However, he states that no details of the alleged misconduct were given and the attorney did not identify the name of his client. Mark T. Hurt, Abingdon, VA, and Paul W. Roop, II, Beckley, WV, for Mark Radcliffe. Subsequent cases have not addressed this type of argument. Radcliffe was interviewed a second time in September 2006 and asked about the misleading promotion of OxyContin. On December 5, 2005, AUSA Mountcastle described the government's investigation as including "whether Purdue falsely marketed OxyContin as being twice as potent . Purdue Pharma is seeking $849,660.55 from the whistleblowers and their attorneys. 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. 2016) Annotate this Case Justia Opinion Summary Relators filed a qui tam action under the False Claims Act (FCA), 31 U.S.C. The allegations claimed Purdue Pharma marketed OxyContin with a false claim that a patient could use half as much OxyContin as MS Contin to treat the same pain. Purdue Pharma's attorneys suspected that Radcliffe was behind those threats. However, Radcliffe did file while the government was still investigating and when he could potentially still have been of use to the government. Its affiliation with a traditional news outlet or periodical or its identification as an online news outlet also identifies to the public that it is a place where news or periodical information on a particular topic can be found. It has been noted that "[c]ourts have applied Rumery to a broad spectrum of pre- and post-filing releases of qui tam claims entered into without the United States' knowledge or consent." Purdue Pharma is represented by John Hoblitzell III and Rebecca Betts of Kay Casto & Chaney in Charleston, W.Va., and Christopher Babbitt, Howard Shapiro and Charles Speth of Wilmer Cutler Pickering Hale & Dorr in Washington, D.C. On Oct. 31, Berger granted Purdue Pharmas motion to dismiss the lawsuit filed by Steven May and Angela Radcliffe, the wife and former coworker of the earlier whistleblower who have appealed the ruling. Id. Id. Id. 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. Radcliffe requests that if the Complaint is found insufficient on this ground, that he be granted leave to file an amended complaint. The Fourth Circuit follows a three-step approach in determining whether the public disclosure bar applies. 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. 1991), which builds upon the Rumery test. 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. at 1512-13. Id. Radcliffe encountered skepticism from physicians he spoke with regarding OxyContin's relative cost and potency. Id. to Mot. On August 1, 2005, Radcliffe executed a general release as part of . 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. 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.. 2d 815, 818 (S.D. Purdue next argues that other scientific publications supporting an equianalgesic ratio of 2:1, not only for single or intermittent dosing but also for longer-term use, are public disclosures because "[a]s a Purdue sales representative and supervisor, Radcliffe would have been trained on and intimately familiar with many Purdue articles endorsing a 2:1 equianalgesic potency ratio." Generally, this does not require that the disclosure be of the specific allegations brought by the relator, but instead the disclosure must put the government on notice of the likelihood of fraudulent activity. Partial knowledge or investigation on the part of the government is insufficient to remove a case from the purview of Green into the exception created by Hall. J.A. Ten years ago, Mark Radcliffe, a former district sales manager for Purdue Pharma, filed a qui tam action under the FCA against Purdue. . 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. at 821. Id. Thus, the exception created by Hall provides that a release entered into after the government has full knowledge of the allegations and an opportunity to investigate will be enforced to bar a subsequent qui tam suit. Hall, 104 F.3d at 231. After carefully considering the arguments of the parties, I hold that the Complaint does not adequately state a claim for fraud under Rule 9(b). Admin. Further, because parties engaged in the fraud would be able to settle their claims with potential relators for significantly less than they would once the government became aware of the allegations, the FCA's deterrent effect is also lessened. 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. 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. 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. Purdue Pharma L. P. et al, No. Had the substance of the relator's allegations been disclosed to an appropriate employee at the FDA with the authority to investigate these claims, that might have constituted a disclosure in an administrative investigation. Mr. Rost v. Pfizer, Inc., 507 F.3d 720, 733 (1st Cir. However, after the employee raised these concerns, the employer contacted the regulatory agency involved and apprised them of the allegations. 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. The published scientific articles and reference materials cited by Radcliffe in his Complaint the Clinical Practice Guideline, the USP, and the Textbook of Pain fall within the "news media" category of 3730(e)(4)(A) and constitute public disclosures. A doctor relying on the 2:1 ratio would initially prescribe half as much OxyContin as MS Contin, which, according to the relators, did cost less, Berger wrote. They alleged these statements were made to doctors whose patients obtained prescriptions paid for by the government, creating a claim under the False Claims Act. 2d at 774. He relies on United States ex rel. 1997), has been applied by subsequent federal courts faced with the issue. Purdue Pharma L.P., et al., Civil Action Nos. After the present qui tam suit was stayed, the government's investigation continued. 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. Green, 59 F.3d at 962. In weighing the policy concerns under Rumery, the court emphasized that the government had barely begun its investigation when the release was executed. 2006). 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. Longhi v. Lithium Power Techs., Inc., 481 F. Supp. Reply to Resp. . Virginia, Abingdon Division. On June 24, 2005, a conversation took place between Department of Justice attorney Barbara Wells and attorney Michael Scheininger, who represented several Purdue employees, about topics that would be discussed when those employees testified before the grand jury investigating Purdue. 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.'" 1990)). Radcliff is a former sales representative and manager at Purdue, who left its employment shortly before he filed the present suit. Id. The court did not inquire into the fullness of the government's investigation. Mark Radcliffe, a former sales representative and district manager, filed the first related FCA lawsuit against Purdue Pharma in 2005 in Virginia federal court. 2d at 1277. The district court determined that between 1996 and 2005 Radcliffe, on behalf of Purdue, marketed "OxyContin, The final and perhaps the most difficult issue is whether the public disclosure reveals "allegations or, Full title:UNITED STATES, et al., ex rel. While the prior public disclosures included information that was true, they did not reveal the "true" state of facts regarding the executives' knowledge or intentions. A separate order will be entered herewith. Mark Rad v. Purdue Pharma L.P. Filing 920100324. 1994). MEMORANDUM OPINION AND ORDER R. CLARKE VanDERVORT Magistrate Judge. Make your practice more effective and efficient with Casetexts legal research suite. Va. 2007) (accepting plea agreements). Bell Tel. 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. The two are represented by the same two attorneys who represented Mark Hurt and Roop. at 969. 1348, 89 L.Ed.2d 538 (1986) (quotations and citations omitted). Defs.' 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." Va. 2008). After all, they were suing Purdue, not for any injuries that they had personally suffered, but for Purdues fraud against the Government, a response filed Dec. 4 says. He subsequently executed a general release ("the Release") of all claims against Purdue in order to receive an enhanced severance package. Prior public disclosures revealed the spin off, the company's problems with the unfunded pension liability, and eventually, the company's bankruptcy. 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. See Robert F. Kaiko et al., Analgesic Onset and Potency of Oral Controlled-Release (CR) Oxycodone and CR Morphine, 59(2) Clin. 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. 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. These responses did not address the cost implications that concerned Radcliffe. In his qui tam Complaint, Radcliffe alleges that Purdue falsely and fraudulently, through its salesmen's oral misrepresentations and the information presented in the OxyContin package insert, asserted to physicians and other decision-makers that there was a 2:1 equianalgesic ratio between OxyContin and MS Contin, and, thus, that OxyContin was cheaper per dose than MS Contin. Radcliff is a former sales representative and manager at Purdue, who left its employment shortly before he filed the present suit. If anything on the record suggests fraud with respect to the relative cost and potency, it is the relator's statements regarding his experiences in being trained to market OxyContin and his questioning of his supervisors about the relative potency issue, as well as the internal training materials that explained how to address the relative cost issue with physicians. On Nov. 17, the company moved to have the plaintiffs pay its legal fees under the fee-shifting provisions in the FCA. 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."). To meet this requirement, it is sufficient that there have been either (1) disclosures of both a false state of facts and a true state of facts (not necessarily from the same source) so that fraud is implied; or (2) disclosure of an allegation of fraud, regardless of the specificity of the allegation. Mot. (Mountcastle Decl. Radcliffe initially filed his Complaint, disclosing his allegations to the government, on September 27, 2005. The "John Femaledeer" emails indicate that Radcliffe did try to settle his claims with Purdue, but later retracted this offer after being told by an attorney that qui tam claims could not be settled without the government's consent. 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