Green involved a general release between an employer and a terminated employee, who later filed a qui tam suit against that employer. 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. Adams v. Bain, 697 F.2d 1213, 1219 (4th Cir. 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. Bell Tel. 2007). However, neither case discusses the policy implications of enforcing a release in the context of the FCA. 1994). Rost v. Pfizer, Inc., 507 F.3d 720, 733 (1st Cir. 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 Pharma's attorneys suspected that Radcliffe was behind those threats. But that is not sufficient to meet the rigorous standard of Rule 9(b). J.A. Enforcement of a release to bar a subsequent qui tam suit implicates several articulated public interests. United States v. Bank of Farmington, 166 F.3d 853, 861 (7th Cir. 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 case previously reached the U.S. Court of Appeals for the Fourth Circuit, which refused to dismiss the case based on a lack of specific allegations because the whistleblowers still had the opportunity to amend their complaint. Accordingly, I find that under these circumstances, enforcement of the release would undermine important public interests associated with the FCA, as well as the countervailing interest in settling litigation. 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. I think it is sufficient under Hall that the government know of the substance of the allegations. to Mot. 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. . 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. 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. Following Radcliffe's execution of the general release on August 1, 2005, the government's investigation continued. First, was there a public disclosure? Harrison v. Westinghouse Savannah River Co., 176 F.3d 776, 784 n. 5 (4th Cir. 104 F.3d at 231. In 2010, his wife Angela and former underling May filed their own FCA lawsuit. Purdue does not claim definitively that Radcliffe actually knew of or relied on the particular scientific articles it cites. Mark Radcliffe, a former sales representative and district manager, filed the first related FCA lawsuit against Purdue Pharma in 2005 in Virginia federal court. He later retracted that offer after being informed by a lawyer that he could not settle a qui tam suit. Mark Rad v. Purdue Pharma L.P. Filing 920100324. 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. However, he states that no details of the alleged misconduct were given and the attorney did not identify the name of his client. Purdue moved to dismiss the Relators' complaint on res judicata grounds, arguing that our decision in Radcliffe barred . Purdue Pharma Br. at 1512. While these disclosures all reveal true information regarding the current state of the scientific debate, they do not reveal the "true" state of facts regarding the fraud alleged by the relator, that is, that Purdue used the 2:1 ratio despite knowing that it was inaccurate in order to mislead physicians and other decision-makers regarding the relative cost and potency of OxyContin. He further stated that "the 2:1 comparison of OxyContin to MSContin [wa]s one of the areas under investigation." 3729 et seq., against Purdue, alleging that the company was involved in a fraudulent scheme regarding the equianalgesic ratio of OxyContin. When Radcliffe raised this concern to supervisors, he was told that by approving the OxyContin package inserts, which contained the 2:1 equianalgesic ratio as a starting conversion that could later be adjusted by doctors, the U. S. Food and Drug Administration ("FDA") had approved that ratio. These employees were indeed asked questions pertaining to the relative potency issue during their grand jury appearances on July 20, 2005. Id. (c) and (f)(2)). 2005); see Springfield, 14 F.3d at 655. 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. : 18-C-222 MSH, 18-C-233 MSH, 18-C-234 Id. F. Brian Ferguson. Further, the public policy concerns raised by Purdue do not alter the relative balance of public interests under the Rumery test. 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. 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. 763 (E.D. 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." Green, 59 F.3d at 959. This is factually distinct from the situation in which the government is in the midst of an ongoing investigation. 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." Defs.' Id. The amended complaint does not contain allegations that connect the dots for even a single alleged false claim Berger wrote. Purdue argues that Radcliffe has failed to plead fraud with particularity as required by Federal Rule of Civil Procedure 9(b). 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. 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. 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. Id. In his employment with Purdue between 1996 and 2005, Radcliffe was responsible for marketing OxyContin to individual physicians and became familiar with Purdue's marketing claims about OxyContin's relative cost and potency, including the claim that there is a 2:1 equianelgesic ratio between OxyContin and MS Contin. Radcliffe v. Purdue Pharma, L.P., 562 U.S. 977 (2010), his wife Angela decided to "take up . Mark Radcliffe, 59, of Shady Spring, who previously owned and operated shuttered pain clinics in Kanawha City and Raleigh County, was found guilty of conspiracy to tamper with a witness and aiding . Gebert v. Transp. The plaintiff has the burden of showing that the court has subject matter jurisdiction. Id. Regardless, the 1996 abstract was published in Clinical Pharmacology Therapeutics, a scientific journal headquartered in Alexandria, Virginia. Finally, if the action was based on the public disclosure, was the relator an original source? Pharmacol. Several months later, as part of a general restructuring of its sales force, Purdue Pharma offered Radcliffe a severance package, which he accepted. 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. 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. 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. The general release executed by Radcliffe does not bar this action. 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. The two are represented by the same two attorneys who represented Mark Hurt and Roop. Dismiss 35.) Admin. Id. Hall involved an employer who had been accused of fraud on the government by an employee. at 963. Ten years ago, Mark Radcliffea former district sales manager for Purdue Pharma ("Purdue")filed a qui tam action under the FCA against Purdue. I agree. To the extent that Radcliffe based the allegations in his Complaint on either the published abstract or the published article, these constitute public disclosures in the news media. Because the public disclosure bar involves the jurisdiction of the court, it must be determined first, before proceeding to any other questions. Id. 09-1202 (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. 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. 434. Bahrani v. Conagra, Inc., 183 F. Supp. 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. Radcliffe requests that if the Complaint is found insufficient on this ground, that he be granted leave to file an amended complaint. Counsel also stated that on July 28, 2005, she spoke to an attorney from the Department of Justice who expressed an interest in using electronic searches to identify documents [Redacted]. at 965-66. The three articles cited by Radcliffe were published in scientific and medical reference periodicals that distribute new or updated material on a periodic basis. On September 27, 2005, Radcliffe filed his qui tam Complaint. 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. MEMORANDUM OPINION AND ORDER R. CLARKE VanDERVORT Magistrate Judge. 31 U.S.C.A. Accordingly, I do not address Purdue's second argument that the package insert is a public disclosure from an administrative investigation. Mark Rad v. Purdue Pharma L.P. Filing 920100324 Download PDF . (f)(2).) Specifically, Purdue argues that the single-dose study, other scientific articles, and its OxyContin package insert, which recommend an equianalgesic ratio of 2:1 between OxyContin and MS Contin, represent the alleged "false" state of facts, while scientific sources cited by Radcliffe in the Complaint, which recommend a ratio of 1:1, represent the "true" state of facts. ( Id. Certain sealed material has been redacted from the publicly released copy of this opinion. 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." decision in United States ex rel. 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. 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. 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. Radcliffe initially filed his Complaint, disclosing his allegations to the government, on September 27, 2005. The case was stayed for over a year and a half until the government declined to intervene on May 8, 2007. Id. HOPE Clinic Manager Mark Radcliffe, a former Purdue Pharma district sales manager, says drug seekers have made it hard for law-abiding citizens to get relief from pain. 2010), the district court dismissed . Id. Mark T. Hurt, Abingdon, VA, and Paul W. Roop, II, Beckley, WV, for Mark Radcliffe. 1187. 1348 (quoting Fed.R.Civ.P. Id. 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. 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). 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. Purdue initially contended that the Complaint failed to state a claim because Radcliffe's allegations merely showed "a scientific dispute . (Mountcastle Decl. and, accordingly, less expensive than MSContin" and the accuracy of "the 2:1 comparison of OxyContin to MSContin." According to Assistant United States Attorney Rick A. Mountcastle, "one area of investigation concern[ed] whether Purdue falsely marketed OxyContin as being twice as potent as morphine and, accordingly, less expensive than MSContin." On December 5, 2005, AUSA Mountcastle described the government's investigation as including "whether Purdue falsely marketed OxyContin as being twice as potent . 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. App. 1999); Rabushka, 40 F.3d at 1514. 434. He alleged a fraudulent scheme whereby Purdue marketed at 1277-78. From Legal Newsline: Reach editor John OBrien at jobrienwv@gmail.com. See United States ex rel. 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. 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. 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. However, I believe that enforcing the release under these circumstances would substantially impact important public interests associated with the FCA. It was dismissed for failure. and as a result, generally more expensive than the OxyContin that was described in [Purdue's] marketing pitch to the same physicians." The citations it relies on to support this argument are inapposite or misleading. 2d at 774. If a substantial public interest would be impaired, the court need not engage in the Rumery balancing test unless there is an articulated reason favoring enforcement aside from the "`interest in the settlement of litigation,'" as that "`cannot by itself outweigh a substantial public interest on the other side of the scales.'" dismissing complaint because it did "not describe even a single instance in which a physician was influenced to prescribe [the drug] based on [the defendant's] misrepresentations, and where a claim was made by the pharmacist to the government". Green, 59 F.3d at 962. In this case, that information was the first FCA suit filed by Mark Radcliffe. Several of these physicians directed Radcliffe to specific sources in the scientific literature to show that the correct equianalgesic ratio between MS Contin and OxyContin was closer to 1:1, meaning that OxyContin was less potent and more expensive than Purdue claimed. If so, was the qui tam action based on the public disclosure? 2010) case opinion from the U.S. Court of Appeals for the Fourth Circuit 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. After the present qui tam suit was stayed, the government's investigation continued. The one silver lining is that this behavior is largely limited to big city law practice, in which lawyers rarely appear regularly in the same court against the same opposing counsel, the response says. These terms included those related to the issues of relative potency and cost, as well as those that seem more related to the potential for abuse or the effects of withdrawal. United States ex rel. In September, the Department of Justice contacted Purdue's outside counsel with electronic search terms designed to capture documents [Redacted]. MARK RADCLIFFE: Defendant - Appellee: PURDUE PHARMA L.P. and PURDUE PHARMA, INCORPORATED: Amicus Curiae: Purdue cites United States ex rel. Specifically, he alleged that Purdue fraudulently marketed OxyContin using the 2:1 equianalgesic ratio, thus claiming that its relative cost was less than that of MS Contin. In his Complaint, Radcliffe alleges that Purdue "encouraged physicians to write prescriptions that were paid by Medicaid and other government programs for OxyContin that was materially less potent . One of their attorneys is Mark 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. While the results of this study were not published until 1999, an abstract including the 2:1 equianalgesic ratio was published in 1996. at 1512-13. Compl. Unsealing the Complaint or allowing the suit to proceed would make a portion of the grand jury's pending investigation public. Id. 1999). Davies requires that a determination be made as to whether a substantial public interest would be impaired by enforcement of the agreement. 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. All of the issues are now ripe for decision and will be discussed sertiam. Mot. United States ex rel. 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. Green, 59 F.3d at 962 (quoting Rumery, 480 U.S. at 392), 107 S.Ct. Joining her as a relator is Steven May, a former Purdue employee who worked under Mr. Radcliffe. 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. Radcliffe was interviewed a second time in September 2006 and asked about the misleading promotion of OxyContin. 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. When he raised the issue his supervisor assured him that the 2:1 ratio was correct. . 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. Joining her as a relator is Steven May, a former Purdue employee who worked under Mr. Radcliffe. 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). 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. 1995); State ex rel. 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. Co. v. Quinn, 14 F.3d 645, 654-55 (D.C. Cir. It is unclear from the Complaint and subsequent filings whether Radcliffe ever read this study or merely heard about it from the supervisors and physicians. Green, 59 F.3d at 962 (quoting Davies, 930 F.2d at 1396). 1348, 89 L.Ed.2d 538 (1986) (quotations and citations omitted). 2016) Annotate this Case Justia Opinion Summary Relators filed a qui tam action under the False Claims Act (FCA), 31 U.S.C. That agency investigated and concluded that it could not substantiate the allegations. at 818. 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). However, that is not the situation before me. 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. Id. 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. Purdue Pharma L.P., et al., Civil Action Nos. 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). Va.)) None of the misbranding charges pertained to the relative cost and potency issue. at 1278. For the reasons stated, the Motion to Dismiss will be denied in part and granted in part, with leave to amend. Id. On August 1, 2005, he signed a severance agreement, which included a general release of all claims against Purdue. 2010). 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.
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