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. during the depositions of Mark and Angela Radcliffe and Steven May respecting commu nications between Relators and Mark Radcliffe and Relators and their attorneys with Mark . These include the public interest in having relators disclose inside information of alleged fraud to the government, in having relators supplement federal enforcement of the FCA by assisting the government in its investigation and prosecution or prosecuting the claim itself, and in deterring future fraud against the government. 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.. of Health Human Servs., Clinical Practice Guideline: Acute Pain Management: Operative or Medical Procedures and Trauma, app. For the reasons stated, the Motion to Dismiss will be denied in part and granted in part, with leave to amend. Radcliffe encountered skepticism from physicians he spoke with regarding OxyContin's relative cost and potency. With respect to allegations of fraud, "the `circumstances' required to be pled with particularity under Rule 9(b) are `the time, place, and contents of the false representations, as well as the identity of the person making the misrepresentation and what he obtained thereby.'" He relies on United States ex rel. Virginia, Abingdon Division, declining to conclude that anything posted online would automaticallyconstitute a public disclosure. Ramseyer recalls receiving a telephone call from a West Virginia attorney regarding a possible qui tam suit against Purdue at some point prior to September 27, 2005. Id. 1994) ("Textbook of Pain"). 5:2010cv01423 - Document 191 (S.D.W. Hall, 104 F.3d at 231. Purdue Pharma is seeking $849,660.55 from the whistleblowers and their attorneys. Radcliffe v. Purdue Pharma L.P., 600 F.3d 319, 321-22 (4th Cir. 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. Id. at 1043-46. Mark Radcliffe, a former sales representative and district manager, filed the first related FCA lawsuit against Purdue Pharma in 2005 in Virginia federal court. When he raised the issue his supervisor assured him that the 2:1 ratio was correct. I agree. Id. The qui tam provisions are designed to supplement government enforcement of the FCA by using financial incentives to encourage insiders privy to fraud on the government to disclose this inside knowledge and potentially prosecute violations. 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. During this period or time, the government was conducting its own comprehensive investigation into Purdue's manufacturing, marketing, and distribution of OxyContin. Id. Id. 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. 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. 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.'" 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. This is factually distinct from the situation in which the government is in the midst of an ongoing investigation. Id. 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. In summary, Purdue argues that the public disclosures in these scientific articles and in the OxyContin package insert amount to a disclosure of the fraudulent transactions alleged in Radcliffe's qui tam suit and put the government on notice of the potential fraud. Disclosures made in other public forums do not implicate the public disclosure bar. Although the 2001 posting of the OxyContin package insert could be considered either a corporate report or a press release, because it was posted on a web page entitled "News What's New" and because other items on the page resemble press releases, I will consider the OxyContin package insert a public disclosure in the news media. 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. 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. 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. 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. Regardless, the 1996 abstract was published in Clinical Pharmacology Therapeutics, a scientific journal headquartered in Alexandria, Virginia. Radcliffe also avers that. 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. 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. 1996). Id. Make your practice more effective and efficient with Casetexts legal research suite. On September 27, 2005, Radcliffe filed his qui tam Complaint. United States of America, et al. Id. The court did not inquire into the fullness of the government's investigation. By this time, the government had also begun drafting Grand Jury Subpoena 513, which included requests for all documents discussing relative analgesic potency or safety of OxyContin and MS Contin. 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. 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. 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. 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. at 817. 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. 763 (E.D. It further reasoned that "[t]he public's interest in [the relator] maintaining the ability to bring a qui tam action to supplement federal enforcement of the FCA also remained as there was no guarantee when [the relator] executed the Release that the federal government was ever going to investigate, let alone prosecute," the alleged fraud. J.A. 56(c); Celotex Corp. v. Catrett, 477 U.S. 317, 322, 106 S.Ct. . 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. Because MS Contin and OxyContin were designed for chronic dosing, these physicians believed the 1:1 equianalgesic ratio was the appropriate one. As early as 1996, Radcliffe found that some of the physicians he spoke to were skeptical of this 2:1 ratio. 1348, 89 L.Ed.2d 538 (1986) (quotations and citations omitted). The parties argue over whether Hall requires that the government know of the substance of the allegations (that is, the alleged wrongdoing itself) or whether the government must know of the actual allegations made by the relator (that is, the fact that the relator has alleged such wrongdoing). To determine whether the circumstances of a case fall within the general rule articulated in Green or the exception in Hall, the critical issue is the completeness of the government's knowledge or the fullness of its investigation. In his Complaint, Radcliffe references, but does not cite, a single-dose potency study that his supervisors told him supported an equianalgesic ratio of 2:1. Id. 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." Indus. (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. The package insert is currently posted to a section of Purdue's web page devoted to package inserts. The court stated that the defendant "informed the [NRC] of Hall's concerns," but it does not necessarily follow that in doing so Hall was identified to the NRC. Dismiss 35.) Purdue has withdraw that argument, including its related Request for Judicial Notice. 1187, 94 L.Ed.2d 405 (1987), that "`a promise is unenforceable if the interest in its enforcement is outweighed in the circumstances by a public policy harmed by enforcement of the agreement.'" 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. Compl. Later, in Hall, the Ninth Circuit carved out an exception to the general rule against enforcing pre-filing releases to bar subsequent qui tam suits: where the government has full knowledge of the allegations and an opportunity to investigate these prior to the release, the release will be enforceable and will bar a later qui tam suit. 2010), the district court dismissed . 104 F.3d at 231. Based on the evidence in the present case, it is clear that the government was aware of the substance of Radcliffe's allegations and had begun, but not completed, its investigation of these allegations as of the date of the release. He further stated that "the 2:1 comparison of OxyContin to MSContin [wa]s one of the areas under investigation." 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 . 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. at 1277-78. They say it is a reflection on the decline of civility in the legal profession. 458 (S.D.N.Y. App. The parties have been provided with the sealed copy. 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. Id. More than a year later, after he had executed the release, the relator was contacted by USDA investigators and at this time he provided detailed information regarding his allegations. Will be used in accordance with our terms of service & privacy policy. While allegations of fraud were known to the Department of Justice, they had not been publically disclosed within the meaning of 3730(e)(4)(A). 30.) Mr. 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, Radcliffe v. Purdue Pharma L.P., 600 F.3d 319 (4th Cir. 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, 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. Rabushka v. Crane Co., 40 F.3d 1509, 1512-14 (8th Cir. 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 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 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. It has been held that disclosures made directly to relevant government officials, rather than to the public, can constitute public disclosures in administrative investigations when the disclosure is made "to a competent public official" "who has managerial responsibility for the very claims being made." On August 1, 2005, Radcliffe executed a general release as part of . (Third Am. at 1047. Green, 59 F.3d at 962. 2007). Radcliff is a former sales representative and manager at Purdue, who left its employment shortly before he filed the present suit. The general release executed by Radcliffe does not bar this action. the baton" and file the qui tam action against Purdue now before the court. at 963. 2d. Radcliffe's allegations pertain to the issue of the relative cost and potency of OxyContin and MS Contin. Both were published in scientific periodicals. 2548, 91 L.Ed.2d 265 (1986). Defs.' In doing so, the court relied on the test set forth in Town of Newton v. Rumery, 480 U.S. 386, 107 S.Ct. Wilson v. Graham County Soil Water Conservation Dist., 528 F.3d 292, 309 (4th Cir. 425, 428 (1999). 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. 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. at 818. 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. 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. Mark Rad v. Purdue Pharma L.P., No. The two attorneys claim in a response that Purdue Pharma has failed to meet its burden for showing that fee-shifting is appropriate and that the judge who dismissed the earlier lawsuit ruled at least part of the complaint passed muster, but it fell outside of a six-year statute of limitations period. 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. Radcliffe signed a general release of all claims against Purdue in exchange for an enhanced severance package. Whitten v. Triad Hosps., Inc., No. 1990)). J. Clin. The two are represented by the same two attorneys who represented Mark Hurt and Roop. Servs., 260 F.3d 909, 916 (8th Cir. United States ex Noah Nathan v. Takeda Pharmaceuticals North America, Inc. Id. C2 (Feb. 1992) ("Clinical Practice Guideline"); United States Pharmacopeia-Dispensing Information 2238 tbl. The citations it relies on to support this argument are inapposite or misleading. 1187. Ten years ago, Mark Radcliffe, a former district sales manager for Purdue Pharma, filed a qui tam action under the FCA against Purdue. However, it is also clear from the evidence that the government continued to seek such information after the release had been executed on August 1, 2005. 2d at 1277. 2d 1272, 1275-78 (D. Colo. 2002); United States ex rel. 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. Mark Radcliffe v. Purdue Pharma L.P.; Purdue Pharma, Inc. 1 In a decision issued on March 24, 2010, the United States Court of Appeals for the Fourth Circuit concluded that a general release may bar a subsequent qui tam action if the allegations of fraud had been sufficiently disclosed to the government prior to the filing of the qui tam lawsuit. 40 F.3d at 1510. Id. On August 1, 2005, he signed a severance agreement, which included a general release of all claims against Purdue. In Hall, the Nuclear Regulatory Commission ("NRC") completed and closed an investigation after the defendant made it aware of the relator's allegations, before the filing of the qui tam complaint. 2d 1158, 1164-65 (N.D. Ill. 2007). 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.'" This line of reasoning has been adopted by the Eighth Circuit, Gebert, 260 F.3d at 916, and the Southern District of New York, DeCarlo, 937 F. Supp. 2002); see also Gold v. Morrison-Knudsen Co., 68 F.3d 1475, 1476-77 (2d Cir. In September, the Department of Justice contacted Purdue's outside counsel with electronic search terms designed to capture documents [Redacted].
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