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Auth. 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. Id. at 1513. The Newsletter Bringing the Legal System to Light. The Fourth Circuit agreed that the district court did not have jurisdiction over the claims and affirmed. 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. 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. Servs., 260 F.3d 909, 916 (8th Cir. 1997), has been applied by subsequent federal courts faced with the issue. 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. (Reply Supp. . Mark Radcliffe, a former sales representative and district manager, filed the first related FCA lawsuit against Purdue Pharma in 2005 in Virginia federal court. Green, 59 F.3d at 962. 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. 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. 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. Compl. (Mountcastle Decl. Supp. Ohio Dec. 29, 2006), for the proposition that publication on the Internet constitutes a public disclosure under 3730(e)(4)(A). Purdue initially contended that the Complaint failed to state a claim because Radcliffe's allegations merely showed "a scientific dispute . and as a result, generally more expensive than the OxyContin that was described in [Purdue's] marketing pitch to the same physicians." (Third Am. But that is not sufficient to meet the rigorous standard of Rule 9(b). With respect to the settlement attempts, it would seem counterintuitive to enforce a release to bar a subsequent qui tam suit, thus foreclosing the relator's ability to prosecute on behalf of the government, to punish that relator for trying to settle instead of filing suit in the first place. : 18-C-222 MSH, 18-C-233 MSH, 18-C-234 The facts on which I have determined jurisdiction are as follows. 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. In his job marketing OxyContin to physicians, the relator Radcliffe became familiar with claims made by Purdue about the medication's relative cost and potency. 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." Purdues arguments to the contrary are misleading and miss the point.. 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. On September 27, 2005, Radcliffe filed his qui tam Complaint. Regardless, the 1996 abstract was published in Clinical Pharmacology Therapeutics, a scientific journal headquartered in Alexandria, Virginia. 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. 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. 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.'" 2008). 3729 et seq., against Purdue, alleging that the company was involved in a fraudulent scheme regarding the equianalgesic ratio of OxyContin. 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." . CIV.A. 481 F. Supp. However, this applies to public policy concerns in the interpretation of a contract rather than in a determination of its validity. This case stemmed from a qui tam action under the FCA that Mark Radcliffe ("Radcliffe"), a former district sales manager for Purdue Pharma ("Purdue"), filed against Purdue, alleging that Purdue improperly labeled the drug OxyContin as having a higher pain . 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. 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. They say it is a reflection on the decline of civility in the legal profession. 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. But see United States ex rel. Mark Rad v. Purdue Pharma L.P. Filing 920100324 Download PDF . 582 F. Supp. 09-1202 (4th Cir. The government began a lengthy investigation after the execution of the release and ultimately chose to intervene. Pharmacol. Several months later, Purdue restructured its sales force and Radcliffe was offered the option of transferring positions, which he declined, or termination with an extended severance package. 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. 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. Finally, if the action was based on the public disclosure, was the relator an original source? at 965-66. 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. L E Corp. v. Days Inns of Am., Inc., 992 F.2d 55, 58 (4th Cir. 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. Co., 142 Cal. 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.'" 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." Alcohol Found., Inc. v. Kalmanovitz Charitable Found., Inc., 186 F. Supp. On August 1, 2005, he signed a severance agreement, which included a general release of all claims against Purdue. Green involved a general release between an employer and a terminated employee, who later filed a qui tam suit against that employer. They allege Purdue Pharma misrepresented the potency of OxyContin when marketing it to doctors. 2d at 1277. These disclosures suggest legitimate scientific debate and disagreement regarding the correct equianalgesic ratio, rather than any fraudulent intent on the part of Purdue. at 956-57. Id. Id. Yannacopolous v. General Dynamics, 315 F. Supp. at 916. Supp. On September 18 2014 Defendants hereinafter Purdue filed.20141009i18 The package insert is currently posted to a section of Purdue's web page devoted to package inserts. 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.'" 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 . One of their attorneys is Mark All reasonable inferences are "viewed in the light most favorable to the party opposing the motion." Id. However, the government ultimately took its investigation in a different direction, focusing on the misbranding of OxyContin as "less addictive, less subject to abuse and diversion, and less likely to cause tolerance and withdrawal than other pain medications." The court found no statutory or policy reasons to prevent enforcement of the release. See United States v. Purdue Frederick Co., 495 F. Supp. The relator would likely be willing to accept a lower overall settlement amount from the other party, knowing that he would receive the entire amount, rather than only a portion of the settlement. DeCarlo v. Kiewit/AFC Enters., Inc., 937 F. Supp. Radcliffe v. Purdue Pharma, L.P., 562 U.S. 977 (2010), his wife Angela decided to "take up . 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). 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. Purdue Pharma Br. Therapeutics 130 [Abstract PI-4] (1996); G.B. 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." at 308. United States District Court, W.D. Va. 2007) (accepting plea agreements). Contract Educ. formerly a sales representative for Purdue under Mark Radcliffe's supervision. at 232. 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. See DeCarlo, 937 F. Supp. Kennedy v. Aventis Pharms., Inc., 512 F. Supp. 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. Dismiss 35.) 2001); United States ex rel. 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." Purdue has withdraw that argument, including its related Request for Judicial Notice. 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. After the action was filed, the United States investigated the qui tam relator's allegations, but ultimately chose not to intervene. U.S. ex Rel. In deciding a jurisdictional challenge, the court must determine the facts based on the evidence submitted. (c) and (f)(2)). 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. Prior public disclosures revealed the spin off, the company's problems with the unfunded pension liability, and eventually, the company's bankruptcy. United States ex rel. Because the information contained in the disclosures was insufficient to imply fraud, it did not trigger the jurisdictional bar. Springfield Terminal Ry. Radcliff is a former sales representative and manager at Purdue, who left its employment shortly before he filed the present suit. Several months later, as part of a general restructuring of its sales force, Purdue Pharma offered Radcliffe a severance package, which he accepted. Id. He later retracted that offer after being informed by a lawyer that he could not settle a qui tam suit. 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. United States ex rel. Relators claims had no objectively reasonable chance of success, the company argues. Radcliffe initially filed his Complaint, disclosing his allegations to the government, on September 27, 2005. Radcliffe was interviewed by law enforcement agents on October 28, 2005. These responses did not address the cost implications that concerned Radcliffe. On Nov. 17, the company moved to have the plaintiffs pay its legal fees under the fee-shifting provisions in the FCA. Doyle v. Diversified Collection Services, Inc., No. 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." Id. at 1512-13. 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. 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. 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. Radcliffe was interviewed a second time in September 2006 and asked about the misleading promotion of OxyContin. 2010). See Green, 59 F.3d at 965-68; Bahrani, 183 F. Supp. Whitten v. Triad Hosps., Inc., No. 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. Id. However, he states that no details of the alleged misconduct were given and the attorney did not identify the name of his client. at 963-64. Certain sealed material has been redacted from the publicly released copy of this opinion. While the 1999 article was published in European Journal of Clinical Pharmacology, it was authored by scientists in the United States and written in the English language. The public interest in Radcliffe maintaining the ability to supplement federal enforcement of the FCA by prosecuting these allegations on behalf of the government remains. The published scientific articles and reference materials cited by Radcliffe in his Complaint the Clinical Practice Guideline, the USP, and the Textbook of Pain fall within the "news media" category of 3730(e)(4)(A) and constitute public disclosures. 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. 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. Purdue urges the court to consider pre- Green cases Virginia Impression Products Co. v. SCM Corp., 448 F.2d 262 (4th Cir. Va. 2008). Mark Radcliffe, 59, of Shady Spring, was convicted following a three-day jury trial. Reply to Resp. However, Radcliffe did file while the government was still investigating and when he could potentially still have been of use to the government. The Agreement and General Release that Radcliffe signed contained the following language: Radcliffe then filed his qui tam Complaint on September 27, 2005. Pharmacol. During this period or time, the government was conducting its own comprehensive investigation into Purdue's manufacturing, marketing, and distribution of OxyContin. 1999); Rabushka, 40 F.3d at 1514. He subsequently executed a general release ("the Release") of all claims against Purdue in order to receive an enhanced severance package. 425, 428 (1999). The Ninth Circuit also relied on Davies v. Grossmont Union High School District, 930 F.2d 1390 (9th Cir. Curtis et al., Relative Potency of Controlled-Release Oxycodone and Controlled-Release Morphine in Postoperative Pain Model, 55 Eur. at 969. App. Because MS Contin and OxyContin were designed for chronic dosing, these physicians believed the 1:1 equianalgesic ratio was the appropriate one. The FCA provides that there is no subject matter jurisdiction in a case where the claim is. Id. First, was there a public disclosure? During this period . However, neither case discusses the policy implications of enforcing a release in the context of the FCA. United States ex rel. On Nov. 17, Purdue Pharma alleged attorney Mark Hurt of Abingdon, Va., used information from a previous, unsuccessful whistleblower lawsuit against Purdue Pharma to file another through the plaintiffs wife and former coworker. Radcliffe also avers that. Modification of these search terms occurred in December, 2005. 14-2299 (4th Cir. 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. Id. 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, On December 5, 2005, AUSA Mountcastle described the government's investigation as including "whether Purdue falsely marketed OxyContin as being twice as potent . Va. 1989). Given the international nature of the scientific community, there is no indication that the publication of this article in a foreign scientific journal makes it any less accessible to the American public than if it were published in a scientific journal located in the United States. Months later, the former employee filed a qui tam complaint in federal court. Radcliffe v. Purdue Pharma L.P., 600 F.3d 319, 321-22 (4th Cir. Protected by Google ReCAPTCHA. Decided: January 29, 2016. All of the issues are now ripe for decision and will be discussed sertiam. 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. Casetext, Inc. and Casetext are not a law firm and do not provide legal advice. 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. Matsushita Elec. 1991), which builds upon the Rumery test. Va. 2014) case opinion from the Southern District of West Virginia US Federal District Court . Radcliff is a former sales representative and manager at Purdue, who left its employment shortly before he filed the present suit. Green v. Serv. 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. 1971), and Coleson v. Inspector General of the Department of Defense, 721 F. Supp. If so, was the qui tam action based on the public disclosure? Its affiliation with a traditional news outlet or periodical or its identification as an online news outlet also identifies to the public that it is a place where news or periodical information on a particular topic can be found. 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. 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. 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. Id. 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. I think it is sufficient under Hall that the government know of the substance of the allegations. Bell Tel. After all, they were suing Purdue, not for any injuries that they had personally suffered, but for Purdues fraud against the Government, a response filed Dec. 4 says. Subsequent cases have not addressed this type of argument. 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. United States ex rel. 2d at 1278. These employees were indeed asked questions pertaining to the relative potency issue during their grand jury appearances on July 20, 2005. 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). Were this the rule, a relator who initially tried to settle would have no incentive to disclose the allegations to the government in lieu of settlement. If the patient did not receive the expected pain relief, the doctor might either prescribe something else or increase the dosage. I agree. Id. 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. 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". 3730(e)(4)(A); see United States ex rel. 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. 1999). Disclosures made in other public forums do not implicate the public disclosure bar. Green, 59 F.3d at 959. 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. 1994). See United States ex rel. Radcliffe was a district sales manager for Purdue, laid off as part of a reduction in force in June 2005. 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. The case was stayed for over a year and a half until the government declined to intervene on May 8, 2007. 1348, 89 L.Ed.2d 538 (1986) (quotations and citations omitted). 56(c); Celotex Corp. v. Catrett, 477 U.S. 317, 322, 106 S.Ct. 1039, 1043-47 (S.D.N.Y. 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. (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. Gebert v. Transp. 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. The final settlement in the criminal case did not contain any reference to the relative cost and potency issue and did not purport to settle Radcliffe's suit. Id. . The amended complaint does not contain allegations that connect the dots for even a single alleged false claim Berger wrote. & Training Trust Fund. 1:07-CR-00029 (W.D. 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. He relies on United States ex rel. 1982). Id. Radcliffe signed a general release of all claims against Purdue in exchange for an enhanced severance package. 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." Matsushita, 475 U.S. at 587, 106 S.Ct. 1999). 2d 1158, 1164-65 (N.D. Ill. 2007). 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. "); Longhi, 481 F. Supp. 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. 1999). at 1513-14. 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 . The state court action resulted in a settlement and general release, which was executed more than a year after the agency had completed its investigation. The allegation is contained in a motion asking U.S. District Judge Irene Berger, of the Southern District of West Virginia, to force the plaintiffs and their attorneys to pay the companys nearly $850,000 legal bill in the second case, which Berger dismissed on Oct. 31. Id. Joining her as a relator is Steven May, a former Purdue employee who worked under Mr. Radcliffe. Radcliffe v. Purdue Pharma L.P., 582 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. The plaintiff has the burden of showing that the court has subject matter jurisdiction. at 1043-46. Id. 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. at 966. 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." Id. 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. 2d at 774. 1994); United States ex rel. 31 U.S.C.A. 9 n.4. See Fed.R.Civ.P. Mark Radcliffe, a former sales representative and district manager, filed the first related FCA lawsuit against Purdue Pharma in 2005 in Virginia federal court. United States ex rel. (c).) 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 . Wilson v. Graham County Soil Water Conservation Dist., 528 F.3d 292, 309 (4th Cir. 3d ed. 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. (Mountcastle Decl. In this case, that information was the first FCA suit filed by Mark Radcliffe. Wilson, 528 F.3d at 299. Radcliffe requests that if the Complaint is found insufficient on this ground, that he be granted leave to file an amended complaint. Longhi involved a release executed eleven days after the relator filed a qui tam complaint. 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. at 1047. . In 2010, his wife Angela and former underling May filed their own FCA lawsuit. Joining her as a relator is Steven May, a former Purdue employee who worked under Mr. Radcliffe. Purdue objects, but I find no cognizable basis for denying Radcliffe's request. In January and February of 2005 Radcliffe sent emails to several officers and directors of Purdue, using the alias "John Femaledeer." McLean v. County of Santa Clara, No. Radcliffe argues that the published results of the single-dose study are not public disclosures under 3730(e)(4)(A) because these were published in a foreign periodical. 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. Purdue argues that Radcliffe has failed to plead fraud with particularity as required by Federal Rule of Civil Procedure 9(b). . ex rel. In mid-July 2005 the government reviewed and flagged numerous documents in the possession of four Purdue employees, [Redacted]. Purdue does not claim definitively that Radcliffe actually knew of or relied on the particular scientific articles it cites. 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 . Finally, Purdue argues that the OxyContin package insert is a public disclosure, either in the news media or from an administrative investigation. It is undisputed that Radcliffe did not identify the nature of his allegations against Purdue in the course of these conversations with Ramseyer. Id. (Information 20, United States v. Purdue Frederick Co., No. Id. 2d 1272, 1275-78 (D. Colo. 2002); United States ex rel. Tex. On May 10, 2007, the government filed a criminal information against a related Purdue entity and several Purdue executives, along with executed plea agreements for all the criminal defendants. 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. 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. 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. Id. United States ex rel. 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. at 818. at 961 (applying the three-part test in United States v. Kimbell Foods, Inc., 440 U.S. 715 (1979)). 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. For the reasons stated, the Motion to Dismiss will be denied in part and granted in part, with leave to amend. Mot. Hall, 104 F.3d at 231. 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. However, that is not the situation before me. at 233. C D.) In addition to its inclusion in OxyContin packages, the package insert is available on Purdue's publically-assessable web site. 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. 1187. Howard M. Shapiro and Jennifer M. O'Connor, Wilmer Cutler Pickering Hale and Dorr LLP, Washington, D.C., and Howard C. McElroy, McElroy, Hodges, Caldwell, Abingdon, VA, for Purdue Pharma L.P. and Purdue Pharma, Inc. 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. 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. Id. 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. Id. 2006). These sources supported an equianalgesic ratio of 1:1 for chronic or around-the-clock dosing, but acknowledged that single dose studies supported the 2:1 ratio. However, the Ninth Circuit noted that: and rejected this argument because of the ex ante effects of enforcing the agreement. ( Id. 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.'" A separate order will be entered herewith. Davies requires that a determination be made as to whether a substantial public interest would be impaired by enforcement of the agreement. That provision says the court may award reasonable attorneys fees and expenses if the court finds the lawsuit was clearly frivolous or vexatious or brought primarily for purposes of harassment. . at 820. J.A. Radcliffe v. Purdue Pharma L.P., 600 F.3d 319 (4th Cir. 1993) (quotations and citations omitted). 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 . 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, 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. 5:2010cv01423 - Document 191 (S.D.W. 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). (Defs.' Treating all allegations as true, patients may have received less effective pain relief, but it is far from clear that the government paid more money.. 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. 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." Adams v. Bain, 697 F.2d 1213, 1219 (4th Cir. . 434. 2d 815, 818 (S.D. As in Bahrani, when the release was executed there was no guarantee that the government would end up prosecuting based on the relator's allegations. 2d. The Fourth Circuit follows a three-step approach in determining whether the public disclosure bar applies. 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. Defs.' the baton" and file the qui tam action against Purdue now before the court. 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. at 821. He alleged a fraudulent scheme whereby Purdue marketed In this action brought under the qui tam provisions of the False Claims Act ("FCA"), 31 U.S.C.A. However, I believe that enforcing the release under these circumstances would substantially impact important public interests associated with the FCA. The allegations claimed Purdue Pharma marketed OxyContin with a false claim that a patient could use half as much OxyContin as MS Contin to treat the same pain. United States ex rel. (Mountcastle Decl. 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Grossmont Union High School District 930! The qui tam suit Products Co. v. SCM mark radcliffe purdue pharma, 448 F.2d 262 4th!, no have the plaintiffs pay its legal fees under the fee-shifting in! Purdue now before the court has subject matter jurisdiction in a determination of its validity mid-July the. Who later filed a qui tam relator 's allegations merely showed `` a scientific dispute he a... Interests associated with the issue details of the release under these circumstances would substantially impact public. Promotion of OxyContin when marketing it to doctors ex rel, these physicians believed the 1:1 equianalgesic of. ( 4th Cir it mark radcliffe purdue pharma undisputed that Radcliffe did file while the government reviewed and flagged numerous documents the. Ripe for decision and will be discussed sertiam under Mark Radcliffe & # ;... Decision and will be discussed sertiam showed `` a scientific dispute I find no cognizable basis for Radcliffe... 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