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. 434. at 969. Id. United States ex rel. 1:07-CR-00029 (W.D. Green, 59 F.3d at 962. at 818. Id. In mid-July 2005 the government reviewed and flagged numerous documents in the possession of four Purdue employees, [Redacted]. See id. During this period or time, the government was conducting its own comprehensive investigation into Purdue's manufacturing, marketing, and distribution of OxyContin. Bahrani, 183 F. Supp. 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). Id. 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. 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. 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. 3729 et seq., against Purdue, alleging that the company was involved in a fraudulent scheme regarding the equianalgesic ratio of OxyContin. It has been noted that "[c]ourts have applied Rumery to a broad spectrum of pre- and post-filing releases of qui tam claims entered into without the United States' knowledge or consent." 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. CIV.A. 2002); see also Gold v. Morrison-Knudsen Co., 68 F.3d 1475, 1476-77 (2d Cir. Because the public disclosure bar involves the jurisdiction of the court, it must be determined first, before proceeding to any other questions. (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. 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 . From Legal Newsline: Reach editor John OBrien at jobrienwv@gmail.com. 2548, 91 L.Ed.2d 265 (1986). at 916. 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. Ga. Oct. 27, 2005) (citing DeCarlo for the opposite conclusion). Id. Id. Purdue next argues that other scientific publications supporting an equianalgesic ratio of 2:1, not only for single or intermittent dosing but also for longer-term use, are public disclosures because "[a]s a Purdue sales representative and supervisor, Radcliffe would have been trained on and intimately familiar with many Purdue articles endorsing a 2:1 equianalgesic potency ratio." Thus, I find that these constitute public disclosures in the news media. One of their attorneys is Mark 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. 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. 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. 2016) Annotate this Case Justia Opinion Summary Relators filed a qui tam action under the False Claims Act (FCA), 31 U.S.C. 2001); United States ex rel. 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. 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. 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. 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. at 1512-13. 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. See United States ex rel. DeCarlo v. Kiewit/AFC Enters., Inc., 937 F. Supp. Radcliffe v. Purdue Pharma L.P., 582 F. Supp. Pharmacol. While the results of this study were not published until 1999, an abstract including the 2:1 equianalgesic ratio was published in 1996. at 961 (applying the three-part test in United States v. Kimbell Foods, Inc., 440 U.S. 715 (1979)). Bell Tel. U.S. ex Rel. Dismiss, Exs. 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). Alcohol Found., Inc. v. Kalmanovitz Charitable Found., Inc., 186 F. Supp. 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. Mark Radcliffe, 59, of Shady Spring, was convicted following a three-day jury trial. 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. For convenience, references herein to the "Complaint" shall include the most recent version. [2] 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. The Fourth Circuit follows a three-step approach in determining whether the public disclosure bar applies. Gilligan, 403 F.3d at 389; see also Springfield, 14 F.3d at 655; United States ex rel. These employees were indeed asked questions pertaining to the relative potency issue during their grand jury appearances on July 20, 2005. 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. This is factually distinct from the situation in which the government is in the midst of an ongoing investigation. 425, 428 (1999). 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.. Further, the public policy concerns raised by Purdue do not alter the relative balance of public interests under the Rumery test. Id. Mot. 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. 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. Radcliffe v. Purdue Pharma L.P., 600 F.3d 319, 321-22 (4th Cir. Purdue Pharma L.P., No. 1991), which builds upon the Rumery test. 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. 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. Wilson v. Graham County Soil Water Conservation Dist., 528 F.3d 292, 309 (4th Cir. Indus. 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. Therapeutics 130 [Abstract PI-4] (1996); G.B. Id. 2005); see Springfield, 14 F.3d at 655. 1999); Rabushka, 40 F.3d at 1514. On August 1, 2005, Radcliffe executed a general release as part of . 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. Their lack of knowledge of the minutiae does not somehow render the complaint frivolous or filed in bad faith. & Training Trust Fund. 2010). 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). However, the Ninth Circuit noted that: and rejected this argument because of the ex ante effects of enforcing the agreement. 2010), the district court dismissed . 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. 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. 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. Mark Rad v. Purdue Pharma L.P., No. 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. The plaintiff has the burden of showing that the court has subject matter jurisdiction. at 1043-46. 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. at 1047. 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. 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. 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. Id. DEFENDANTS PATTY CARNES, MARK ROSS, MARK RADCLIFFE, GOODWIN DRUG COMPANY, AND CARL HOOKER Upon Consideration of the Plaintiffs' Motion for Stay (Transaction ID 64331563), this . to Mot. Purdue Pharma is seeking $849,660.55 from the whistleblowers and their attorneys. at 1512. Doyle v. Diversified Collection Services, Inc., No. Protected by Google ReCAPTCHA. 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. 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. 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. It is undisputed that Radcliffe did not disclose the nature of his qui tam allegations to the government prior to the filing of his Complaint. at 233. 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. 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. 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. 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. Supp. 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. I think it is sufficient under Hall that the government know of the substance of the allegations. 1187. 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. Will be used in accordance with our terms of service & privacy policy. 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." . Ten years ago, Mark Radcliffe, a former district sales manager for Purdue Pharma, filed a qui tam action under the FCA against Purdue. The parties have been provided with the sealed copy. Plaintiff - Appellant: UNITED STATES EX REL. at 1047. Id. Purdue cites United States ex rel. Purdue's response was ambiguous, first stating that Radcliffe did not have legitimate claim, but if he thought he did he should make it, then expressing an interest in investing in Radcliffe's company. F. Brian Ferguson. Redactions are denoted in brackets. Id. 1039, 1043-47 (S.D.N.Y. In deciding a jurisdictional challenge, the court must determine the facts based on the evidence submitted. Reply to Resp. Id. Further, Radcliffe was cooperating with the government and was scheduled to be a grand jury witness. Dismiss 35.) 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 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). It has held that public policy is implicated only where "it is explicit, well defined and dominant, and ascertainable by reference to the laws and legal precedents and not from general considerations of supposed public interests." After the present qui tam suit was stayed, the government's investigation continued. Id. Enforcement of a release to bar a subsequent qui tam suit implicates several articulated public interests. (f)(2).) at 821. 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. 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. For the reasons stated, the Motion to Dismiss will be denied in part and granted in part, with leave to amend. Instead of the 2:1 ratio Purdue Pharma claimed, the actual ratio was more like 1.5:1, the whistleblowers said. Bahrani, 183 F. Supp. 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. The FCA provides that there is no subject matter jurisdiction in a case where the claim is. 2d 939, 949 (N.D. Ill. 2004), which held that newspaper articles published in Greek in the Greek press did not constitute disclosures to the American public. Because the information contained in the disclosures was insufficient to imply fraud, it did not trigger the jurisdictional bar. Taken together, these disclosures reveal disagreement in the scientific community, but do not raise an inference of fraud. It was dismissed for failure. The facts surrounding this defense have been developed in the summary judgment record. 14-2299 (4th Cir. Mot. 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. Virginia Search this Docket Tags Get Alerts View on PACER Last Updated: Dec. 28, 2020, 6:49 a.m. EST Assigned To: James Parker Jones Referred To: Pamela M. Sargent Date Filed: Sept. 27, 2005 Date Terminated: Jan. 25, 2009 Date of Last Known Filing: June 1, 2010 . Radcliffe v. Purdue Pharma L.P., 600 F.3d 319 (4th Cir. 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. Id. Id. During this period . 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. Green, 59 F.3d at 956. 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. 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. 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. The Ninth Circuit reversed, holding that a pre-filing release entered into without the government's knowledge or consent is not enforceable to bar a subsequent qui tam action because that would impair a substantial public policy. L E Corp. v. Days Inns of Am., Inc., 992 F.2d 55, 58 (4th Cir. 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. 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. at 962-63 (quoting Davies, 930 F.2d at 1399). Id. Mistick PBT v. Hous. 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. Supp. (Mountcastle Decl. Purdue has withdraw that argument, including its related Request for Judicial Notice. While the prior public disclosures included information that was true, they did not reveal the "true" state of facts regarding the executives' knowledge or intentions. Mark Radcliffe, 60, of Shady Spring, was convicted in October 2016 of conspiracy to tamper with a witness following a three-day jury trial. See Fed.R.Civ.P. Servs., 260 F.3d 909, 916 (8th Cir. Accordingly, I do not address Purdue's second argument that the package insert is a public disclosure from an administrative investigation. I agree. Id. 1994); United States ex rel. 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. 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. 56(c); Celotex Corp. v. Catrett, 477 U.S. 317, 322, 106 S.Ct. (Mem. Auth. Contract Educ. 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). Id. The package insert is currently posted to a section of Purdue's web page devoted to package inserts. 1996). at 817. United States ex rel. United States ex rel. Mot. at 820. 09-1202 (4th Cir. As in Green, the Ninth Circuit in Hall relied on the Rumery test, but concluded that the concerns that weighed against enforcement in Green were not present. It is implausible to believe that doctors consistently used the 2:1 ratio as a starting point, prescribed significantly greater amounts as they titrated the dosage to the patients, and continued to believe OxyContin to be cost-effective based on the 2:1 ratio. 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." Purdues arguments to the contrary are misleading and miss the point.. On August 1, 2005, he signed a severance agreement, which included a general release of all claims against Purdue. A separate order will be entered herewith. Co. v. Quinn, 14 F.3d 645, 654-55 (D.C. Cir. Radcliffe v. Purdue Pharma, L.P., 562 U.S. 977 (2010), his wife Angela decided to "take up . 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. 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. Va. 1989).
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