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. Matsushita Elec. From Legal Newsline: Reach editor John OBrien at jobrienwv@gmail.com. at 969. Kennedy v. Aventis Pharms., Inc., 512 F. Supp. Radcliffe v. Purdue Pharma L.P., 600 F.3d 319 (4th Cir. Here, it appears that the government did learn of the substance of Radcliffe's allegations independently and was interested enough in them to request documents pertaining to and question various Purdue employees about the relative cost and potency issue. No list was kept of the documents reviewed or flagged, but according to the declaration of one of Purdue's outside counsel these included documents about the dispute over the relative potency of OxyContin and MS Contin. Green, 59 F.3d at 959. 2d. Bahrani, 183 F. Supp. The employer in Green argued that because the government had ultimately become aware of the allegations and conducted its own investigation, the release would not have detrimental effects. 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. 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 . Redactions are denoted in brackets. Dismiss 35.) Bell Tel. 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. (f)(2).) However, I believe that enforcing the release under these circumstances would substantially impact important public interests associated with the FCA. United States ex rel. 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. All reasonable inferences are "viewed in the light most favorable to the party opposing the motion." 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." See United States ex rel. Purdue moved to dismiss the Relators' complaint on res judicata grounds, arguing that our decision in Radcliffe barred . 1999). The amended complaint does not contain allegations that connect the dots for even a single alleged false claim Berger wrote. However, this applies to public policy concerns in the interpretation of a contract rather than in a determination of its validity. Id. He attached to the complaint at least one document already in the government's possession: an "Answer Guide" used to train sales representatives, which urged them to emphasize OxyContin's higher potency and lower cost compared to MS Contin. 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. Yannacopolous v. General Dynamics, 315 F. Supp. That agency investigated and concluded that it could not substantiate the allegations. Purdue cites Gebert, 260 F.3d 909, in which the government did not investigate until after the filing of the qui tam complaint and the court ultimately chose to enforce the release. 1996). Radcliffe v. Purdue Pharma, L.P., 562 U.S. 977 (2010), his wife Angela decided to "take up . CIV.A. 1993) (quotations and citations omitted). 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. Finally, the government's decision not to intervene in this suit, announced on May 8, 2007, should not be a basis for enforcement of the release. The plaintiff has the burden of showing that the court has subject matter jurisdiction. The allegation is contained in a motion asking U.S. District Judge Irene Berger, of the Southern District of West Virginia, to force the plaintiffs and their attorneys to pay the companys nearly $850,000 legal bill in the second case, which Berger dismissed on Oct. 31. Their lack of knowledge of the minutiae does not somehow render the complaint frivolous or filed in bad faith. Plaintiff - Appellant: UNITED STATES EX REL. Radcliffe was asked about the marketing of OxyContin as it related to the potential for addiction, but he was not asked about the relative cost and potency issue. Further, Radcliffe was cooperating with the government and was scheduled to be a grand jury witness. (quoting 5 Charles Alan Wright Arthur R. Miller, Federal Practice and Procedure 1297, at 590 (2d ed. In Virginia Impression Products, which was decided before Green and also before Rumery, the Fourth Circuit chose to enforce a release to bar a subsequent antitrust claim. (c).) These employees were indeed asked questions pertaining to the relative potency issue during their grand jury appearances on July 20, 2005. Supp. Howard M. Shapiro and Jennifer M. O'Connor, Wilmer Cutler Pickering Hale and Dorr LLP, Washington, D.C., and Howard C. McElroy, McElroy, Hodges, Caldwell, Abingdon, VA, for Purdue Pharma L.P. and Purdue Pharma, Inc. 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. United States ex rel. (Mem. As the release involved a statutorily-conferred federal right, the Ninth Circuit turned to federal common law to fill this "gap" in the statutory scheme. Angela Radcliffe (the "Relators") commenced this FCA action against Purdue ("Qui Tam II") setting forth allegations nearly identical to those advanced by Mark Radcliffe in Qui Tam I. However, to the extent that Radcliffe actually did base his qui tam allegations on these articles, these will be considered public disclosures in the news media. Radcliffe was interviewed by law enforcement agents on October 28, 2005. and as a result, generally more expensive than the OxyContin that was described in [Purdue's] marketing pitch to the same physicians." McLean v. County of Santa Clara, No. Mark RADCLIFFE, Plaintiffs, v. PURDUE, Court:United States District Court, W.D. The general release executed by Radcliffe does not bar this action. Summary judgment is appropriate only if there are no material facts in dispute and the moving party is entitled to judgment as a matter of law. Id. On June 23, 2005, the government requested that Purdue identify the author and source of different versions of a document [Redacted] already in the government's possession, [Redacted]. The Fourth Circuit follows a three-step approach in determining whether the public disclosure bar applies. All of the issues are now ripe for decision and will be discussed sertiam. However, the decision to enforce the release turned on the fact that the release occurred "in the context of a bankruptcy proceeding, not through a general, independent release of a claim for money." 2007). These disclosures suggest legitimate scientific debate and disagreement regarding the correct equianalgesic ratio, rather than any fraudulent intent on the part of Purdue. United States v. Bank of Farmington, 166 F.3d 853, 861 (7th Cir. However, the Ninth Circuit noted that: and rejected this argument because of the ex ante effects of enforcing the agreement. Admin. Finally, if the action was based on the public disclosure, was the relator an original source? United States of America, et al. 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. 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. 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. 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.'" 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. Purdue has withdraw that argument, including its related Request for Judicial Notice. 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. In this action brought under the qui tam provisions of the False Claims Act ("FCA"), 31 U.S.C.A. They amended their complaint, and again Purdue Pharma asked Berger to dismiss it. In this action brought under the qui tam provisions of the False Claims Act ("FCA"), 31 U.S.C.A. 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. In this qui tam action, the defendants have moved to dismiss on several grounds, including the jurisdictional bar based on prior public disclosures of the alleged false claims, the execution of a pre-filing general release by the relator, and a failure to plead fraud with particularity under Rule 9(b). Ten years ago, Mark Radcliffe, a former district sales manager for Purdue Pharma, filed a qui tam action under the FCA against Purdue. 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. 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. United States ex rel. The district court granted summary judgment to the defendants who argued that, as part of the release, the relator had bargained away his right to bring the qui tam suit and as a result could not demonstrate any personal stake in the outcome sufficient to satisfy Article III standing. After the present qui tam suit was stayed, the government's investigation continued. 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. On August 2, 2005, a subpoena was issued commanding Radcliffe to appear before the grand jury. at 233. BECKLEY, W.Va. (Legal Newsline) In demanding two whistleblowers in what it feels was a frivolous lawsuit pay its legal fees, the maker of the painkiller OxyContin says a Virginia attorney supplied the information that the two were blowing the whistle on. United States ex rel. 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. 2002); see also Gold v. Morrison-Knudsen Co., 68 F.3d 1475, 1476-77 (2d Cir. (Information 20, United States v. Purdue Frederick Co., supra.) 582 F. Supp. The government's investigation continued and on December 5, 2005, AUSA Mountcastle moved to stay Radcliffe's qui tam suit pending the government's ongoing investigation. 2008). While Purdue concedes that a defendant may be liable for inducing a third party to submit a false claim to the government, it argues that Radcliff's allegations do not meet the Rule 9(b) pleading requirements because he does not describe even a single instance in which a physician was influenced to prescribe OxyContin based on Purdue's misrepresentations, and where a claim for payment was made by the pharmacist to the government. Defs.' ), aff'd, 53 F. App'x 153 (2d Cir. United States District Court, W.D. If so, was the qui tam action based on the public disclosure? They allege Purdue Pharma misrepresented the potency of OxyContin when marketing it to doctors. . However, after the employee raised these concerns, the employer contacted the regulatory agency involved and apprised them of the allegations. MARK RADCLIFFE: Defendant - Appellee: PURDUE PHARMA L.P. and PURDUE PHARMA, INCORPORATED: Amicus Curiae: Several months later, as part of a general restructuring of its sales force, Purdue Pharma offered Radcliffe a severance package, which he accepted. Id. DeCarlo v. Kiewit/AFC Enters., Inc., 937 F. Supp. 1999); Rabushka, 40 F.3d at 1514. 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. While the OxyContin package insert recommends the 2:1 conversion ratio as a starting point for doctors switching patients from MS Contin to OxyContin, it also suggests the need to reevaluate based on each individual patient's response to the new medication. Certain sealed material has been redacted from the publicly released copy of this opinion. Joining her as a relator is Steven May, a former Purdue employee who worked under Mr. Radcliffe. at 1513. 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. Beginning in 2002 and continuing for the next several years, the government sought millions of documents from Purdue and conducted hundreds of interviews, some of which pertained to the relative potency and cost of OxyContin and MS Contin. In holding that these disclosures did not raise the inference that company executives intentionally and fraudulently understated the pension problem or engineered the spin off in an attempt to avoid liability, the court noted that none of the disclosures imputed any bad faith or wrongdoing to the company and instead were "optimistic" about the company's future. Ten years ago, Mark Radcliffe, a former district sales manager for Purdue Pharma, filed a qui tam action under the FCA against Purdue. As to the defense that Radcliffe had released Purdue from the claims, I decided to treat the Motion to Dismiss as one for summary judgment in accord with Federal Rule of Civil Procedure 12(d). of Pittsburgh, 186 F.3d 376, 385 (3d Cir. 2010). 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. 1982). Nathan v. Takeda Pharmaceuticals N.A. Casetext, Inc. and Casetext are not a law firm and do not provide legal advice. 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." Purdue Pharma L.P., No. 2548, 91 L.Ed.2d 265 (1986). 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. 1997), has been applied by subsequent federal courts faced with the issue. 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. 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. He relies on United States ex rel. On August 1, 2005, Radcliffe executed a general release as part of . at 1513-14. 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. Curtis et al., Relative Potency of Controlled-Release Oxycodone and Controlled-Release Morphine in Postoperative Pain Model, 55 Eur. App. The stay was lifted in late 2006, and the government chose not to intervene on May 8, 2007. Been redacted from the publicly released copy of this opinion was issued commanding Radcliffe to appear before the grand.! That our decision in Radcliffe barred OxyContin when marketing it to doctors disclosure applies. Qui tam suit was stayed, the Ninth Circuit noted that: and rejected this because! 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