Disclosures made in other public forums do not implicate the public disclosure bar. He later retracted that offer after being informed by a lawyer that he could not settle a qui tam suit. Virginia, Abingdon Division, declining to conclude that anything posted online would automaticallyconstitute a public disclosure. Id. 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. at 956-57. of Pittsburgh, 186 F.3d 376, 385 (3d Cir. 1348, 89 L.Ed.2d 538 (1986) (quotations and citations omitted). 2548, 91 L.Ed.2d 265 (1986). Green, 59 F.3d at 962 (quoting Davies, 930 F.2d at 1396). Enforcement of a release to bar a subsequent qui tam suit implicates several articulated public interests. 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. However, I believe that enforcing the release under these circumstances would substantially impact important public interests associated with the FCA. See Fed.R.Civ.P. 2006). Bahrani, 183 F. Supp. Co. v. Zenith Radio Corp., 475 U.S. 574, 587, 106 S.Ct. 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. Dismiss 11.) 2010), the district court dismissed . Davies requires that a determination be made as to whether a substantial public interest would be impaired by enforcement of the agreement. A separate order will be entered herewith. In mid-July 2005 the government reviewed and flagged numerous documents in the possession of four Purdue employees, [Redacted]. 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. 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." 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. He relies on United States ex rel. 2d 1158, 1164-65 (N.D. Ill. 2007). Because I find that these scientific articles and the OxyContin package insert, taken together, do not disclose or imply fraud, and, thus, do not constitute a public disclosure of the allegations or transactions within the meaning of 3730(e)(4)(A), I need not address the extent to which Radcliffe based his allegations on these materials, nor whether he was an original source. Id. The package insert recommends a starting conversion rate between OxyContin and MS Contin of 2:1, which can be reassessed based on a patient's reaction to the dosage. (Information 20, United States v. Purdue Frederick Co., No. 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). 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. 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. While the results of this study were not published until 1999, an abstract including the 2:1 equianalgesic ratio was published in 1996. It was dismissed for failure to plead fraud with sufficient particularity. 1993) (quotations and citations omitted). All of the issues are now ripe for decision and will be discussed sertiam. at 1513-14. Id. See United States ex rel. He submits that each OxyContin prescription submitted to the government for reimbursement constitutes a false claim under the FCA and the analogous state statutes, because the product distributed had only half the potency that physicians and decision-makers had been led to believe it possessed. One of their attorneys is Mark Radcliffe was interviewed a second time in September 2006 and asked about the misleading promotion of OxyContin. Wilson, 528 F.3d at 299. 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, at 1278. United States of America, et al. Purdue urges the court to consider pre- Green cases Virginia Impression Products Co. v. SCM Corp., 448 F.2d 262 (4th Cir. 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). 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. 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. Under 3730(e)(4), an action is properly dismissed for lack of subject matter jurisdiction only if there was a public disclosure on which the relator's allegations were based and that relator is not an original source. This furthers the public interests in encouraging a potential relator to disclose his allegations to the government as quickly as possible, before the government has an opportunity to discover the alleged wrongdoing through other means. Defs.' United States v. Bank of Farmington, 166 F.3d 853, 861 (7th Cir. 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." Contract Educ. Purdue also argues that in Hall itself the government had not completed its investigation prior to the execution of the release. 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. Green, 59 F.3d at 962 (quoting Rumery, 480 U.S. at 392), 107 S.Ct. at 963-64. 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. It is undisputed that Radcliffe did not identify the nature of his allegations against Purdue in the course of these conversations with Ramseyer. 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 . Hall, 104 F.3d at 231. of Health Human Servs., Clinical Practice Guideline: Acute Pain Management: Operative or Medical Procedures and Trauma, app. 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. 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. Instead both the 2001 posting and the current posting of the OxyContin package insert seem more akin to a corporate report or a press release. 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. As noted, Angela Radcliffe is Mark Radcliffe's wife; Steven May was formerly a sales representative for Purdue under Mark Radcliffe's supervision. 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. In 2010, his wife Angela and former underling May filed their own FCA lawsuit. Id. (Third Am. Mark Radcliffe, 59, of Shady Spring, was convicted following a three-day jury trial. 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. When he raised the issue his supervisor assured him that the 2:1 ratio was correct. 2007). 2d 766, 774 (W.D. This is factually distinct from the situation in which the government is in the midst of an ongoing investigation. Radcliffe v. Purdue Pharma L.P., 600 F.3d 319 (4th Cir. 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. On August 2, 2005, a subpoena was issued commanding Radcliffe to appear before the grand jury. On August 1, 2005, Radcliffe executed a general release as part of . 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. Taken together, these disclosures reveal disagreement in the scientific community, but do not raise an inference of fraud. In January and February of 2005 Radcliffe sent emails to several officers and directors of Purdue, using the alias "John Femaledeer." Reply to Resp. See United States ex rel. Pharmacol. 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 . Ten years ago, Mark Radcliffea former district sales manager for Purdue Pharma ("Purdue")filed a qui tam action under the FCA against Purdue. Radcliffe's allegations pertain to the issue of the relative cost and potency of OxyContin and MS Contin. at 818. 1994). 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. Mark Rad v. Purdue Pharma L.P., No. Certain sealed material has been redacted from the publicly released copy of this opinion. Id. Purdue Pharma L. P. et al, No. Unsealing the Complaint or allowing the suit to proceed would make a portion of the grand jury's pending investigation public. 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. 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. C D.) In addition to its inclusion in OxyContin packages, the package insert is available on Purdue's publically-assessable web site. 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. Radcliffe was interviewed by law enforcement agents on October 28, 2005. It reasoned that "[t]here is no public disclosure to the American public when information is divulged in a foreign publication, especially if published in a foreign language." 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. App. The stay was lifted in late 2006, and the government chose not to intervene on May 8, 2007. Defs.' See United States v. Purdue Frederick Co., 495 F. Supp. I think it is sufficient under Hall that the government know of the substance of the allegations. The facts on which I have determined jurisdiction are as follows. 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. If so, was the qui tam action based on the public disclosure? Nathan v. Takeda Pharmaceuticals N.A. . 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. Mark Rad v. Purdue Pharma L.P. Filing 920100324 Download PDF . 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. 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. at 232. Yannacopolous v. General Dynamics, 315 F. Supp. 3729 et seq., against Purdue, alleging that the company was involved in a fraudulent scheme regarding the equianalgesic ratio of OxyContin. 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 deciding a jurisdictional challenge, the court must determine the facts based on the evidence submitted. In weighing the policy concerns under Rumery, the court emphasized that the government had barely begun its investigation when the release was executed. Protected by Google ReCAPTCHA. I agree. 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. 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. Ten years ago, Mark Radcliffe, a former district sales manager for Purdue Pharma, filed a qui tam action under the FCA against Purdue. 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 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." 458 (S.D.N.Y. 1991), which builds upon the Rumery test. It further states that OxyContin is "indicated for the management of moderate to severe pain when a continuous, around-the-clock analgesic is needed for an extended period of time." . In this case, that information was the first FCA suit filed by Mark Radcliffe. 582 F. Supp. 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. Alcohol Found., Inc. v. Kalmanovitz Charitable Found., Inc., 186 F. Supp. Id. (Information 20, United States v. Purdue Frederick Co., supra.) at 963. The three articles cited by Radcliffe were published in scientific and medical reference periodicals that distribute new or updated material on a periodic basis. Gebert v. Transp. He alleges that this was done to induce physicians to prescribe OxyContin and other decision-makers to purchase or authorize the purchase of OxyContin. Adams v. Bain, 697 F.2d 1213, 1219 (4th Cir. 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. 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. 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. Doyle v. Diversified Collection Services, Inc., No. 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. 1994); United States ex rel. (f)(2).) 1996). 1995), and United States ex rel Hall v. Teledyne Wah Chang Albany, 104 F.3d 230 (9th Cir. Green, 59 F.3d at 962. Following Radcliffe's execution of the general release on August 1, 2005, the government's investigation continued. Decided: January 29, 2016. For these reasons, I find that this court his subject matter jurisdiction over the Complaint. Mot. But see 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. [2] Id. Likewise, the prior public disclosures reveal that there was contradicting scientific evidence as to the relative potency of OxyContin to MS Contin, but they do not imply fraud. 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 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. United States ex rel. Co. v. Quinn, 14 F.3d 645, 654-55 (D.C. Cir. 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]. Further, Radcliffe was cooperating with the government and was scheduled to be a grand jury witness. 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. Id. 49.7 (Patrick D. Wall Ronald Mezack eds. 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. Auth. at 1047. Purdue Pharma is seeking $849,660.55 from the whistleblowers and their attorneys. 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. 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. Purdue moved to dismiss the Relators' complaint on res judicata grounds, arguing that our decision in Radcliffe barred . Accordingly, I do not address Purdue's second argument that the package insert is a public disclosure from an administrative investigation. at 969. United States ex rel. Id. Supp. The Fourth Circuit follows a three-step approach in determining whether the public disclosure bar applies. Although antitrust cases are similar to qui tam suits in that the government relies on the enforcement efforts of private parties, the policy implications and economic incentives differ. 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. Casetext, Inc. and Casetext are not a law firm and do not provide legal advice. Mark RADCLIFFE, Plaintiffs, v. PURDUE, Court:United States District Court, W.D. 5:2010cv01423 - Document 191 (S.D.W. Curtis et al., Relative Potency of Controlled-Release Oxycodone and Controlled-Release Morphine in Postoperative Pain Model, 55 Eur. 2d. Lack of compliance with the pleading requirements of Rule 9(b) is treated as a failure to state a claim under Rule 12(b)(6). at 231-32. Purdue Pharma L.P., et al., Civil Action Nos. 2 (16th ed 1996) ("USP"); Robert G. Twycross, Opioids, in Textbook of Pain 943, 953 tbl. Subsequent cases have not addressed this type of argument. Will be used in accordance with our terms of service & privacy policy. "); Longhi, 481 F. Supp. United States ex rel. 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. 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. 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. Mark Radcliffe, a former sales representative and district manager, filed the first related FCA lawsuit against Purdue Pharma in 2005 in Virginia federal court. 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). The Ninth Circuit also relied on Davies v. Grossmont Union High School District, 930 F.2d 1390 (9th Cir. United States ex rel. 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 . For the reasons stated, the Motion to Dismiss will be denied in part and granted in part, with leave to amend. Bell Tel. 1971), and Coleson v. Inspector General of the Department of Defense, 721 F. Supp. 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. Radcliffe requests that if the Complaint is found insufficient on this ground, that he be granted leave to file an amended complaint. Radcliffe v. Purdue Pharma, L.P., 562 U.S. 977 (2010), his wife Angela decided to "take up . (c) and (f)(2)). Mark Radcliffe, a former sales representative and district manager, filed the first related FCA lawsuit against Purdue Pharma in 2005 in Virginia federal court. 1:07-CR-00029 (W.D. 14-2299 (4th Cir. 434. Bahrani, 183 F. Supp. 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.. Supp. United States ex Noah Nathan v. Takeda Pharmaceuticals North America, Inc. Id. 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. 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. Purdue cites United States ex rel. (Mem. Joining her as a relator is Steven May, a former Purdue employee who worked under Mr. Radcliffe. 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. 4th 741, 754-55 (Cal.Ct.App. 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). Compl. It was dismissed for failure. 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." Kennedy v. Aventis Pharms., Inc., 512 F. Supp. It is important to note that the government's decision not to intervene "does not necessarily signal governmental disinterest in an action, as it is entitled to most of the proceeds even if it opts not to intervene." Purdue contends that Radcliffe released the claim made in his Complaint in the course of a settlement agreement with Purdue when he left its employment. Purdue argues that, under Rumery, the circumstances present here do not implicate the public interests articulated in Green, do not outweigh the general interest in settling litigation, and, thus, support enforcement of the release to bar this qui tam suit. at 965-66. Id. 2d at 774. 31 U.S.C.A. On December 5, 2005, AUSA Mountcastle described the government's investigation as including "whether Purdue falsely marketed OxyContin as being twice as potent . Gilligan, 403 F.3d at 389; see also Springfield, 14 F.3d at 655; 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. That agency investigated and concluded that it could not substantiate the allegations. 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.
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