These terms included those related to the issues of relative potency and cost, as well as those that seem more related to the potential for abuse or the effects of withdrawal. 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. . 2d at 1278. 1982). 14-2299 (4th Cir. See United States v. Purdue Frederick Co., 495 F. Supp. Mistick PBT v. Hous. The Ninth Circuit also relied on Davies v. Grossmont Union High School District, 930 F.2d 1390 (9th Cir. The court found no statutory or policy reasons to prevent enforcement of the release. at 969. . I agree. 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). 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). When he raised the issue his supervisor assured him that the 2:1 ratio was correct. 2d at 1277. Radcliffe requests that if the Complaint is found insufficient on this ground, that he be granted leave to file an amended complaint. 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. See Fed.R.Civ.P. They say it is a reflection on the decline of civility in the legal profession. 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 . 40 F.3d at 1510. See DeCarlo, 937 F. Supp. Supp. Pharmacol. See Agency for Health Care Policy Research, Public Health Serv., U.S. Dept. See id. 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. 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. (Mountcastle Decl. 1995); State ex rel. Supp. ( Id. The amended complaint does not contain allegations that connect the dots for even a single alleged false claim Berger wrote. 2d 766, 774 (W.D. 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. Co., 142 Cal. Grayson v. Pac. 2002); see also Gold v. Morrison-Knudsen Co., 68 F.3d 1475, 1476-77 (2d Cir. On Nov. 17, the company moved to have the plaintiffs pay its legal fees under the fee-shifting provisions in the FCA. United States ex rel. 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." 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 . 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." Radcliffe was a district sales manager for Purdue, laid off as part of a reduction in force in June 2005. 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.. Enforcement of a release to bar a subsequent qui tam suit implicates several articulated public interests. However, after the employee raised these concerns, the employer contacted the regulatory agency involved and apprised them of the allegations. 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. Id. Va. 1989). 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." United States ex rel. He alleged a fraudulent scheme whereby Purdue marketed The one silver lining is that this behavior is largely limited to big city law practice, in which lawyers rarely appear regularly in the same court against the same opposing counsel, the response says. 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. 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. 2d at 1272. Indus. Purdue cites United States ex rel. Unsealing the Complaint or allowing the suit to proceed would make a portion of the grand jury's pending investigation public. Id. 2d 569, 576 (W.D. Purdue argues that in the present case, the following constitute public disclosures: (1) published scientific articles and reference materials cited in the Complaint, which support an equianalgesic ratio of 1:1 between MS Contin and OxyContin for repeated dosing, but note the existence of single-dose studies that support a ratio of 2:1; (2) a single-dose study that supports an equianalgesic ratio of 2:1 and a published article and an abstract reporting the results of this study; (3) other materials published in scientific journals, which support the 2:1 equianalgesic ratio for longer-term use, that Purdue argues Radcliffe would have been familiar with in his employment; and (4) the OxyContin package insert, which was approved by the FDA and was, at one time, available on Purdue's web site. Mark Radcliffe, 60, of Shady Spring, was convicted in October 2016 of conspiracy to tamper with a witness following a three-day jury trial. 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. Defs.' 104 F.3d at 231. 2008). 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. Joining her as a relator is Steven May, a former Purdue employee who worked under Mr. Radcliffe. 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. 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. Disclosures made in other public forums do not implicate the public disclosure bar. The Newsletter Bringing the Legal System to Light. Va. 2014) case opinion from the Southern District of West Virginia US Federal District Court . Mot. These disclosures suggest legitimate scientific debate and disagreement regarding the correct equianalgesic ratio, rather than any fraudulent intent on the part of Purdue. (Mem. Radcliffe v. Purdue Pharma L.P., 600 F.3d 319, 321-22 (4th Cir. Certain sealed material has been redacted from the publicly released copy of this opinion. at 308. The Fourth Circuit does not have any analogous case law interpreting Rumery. The Fourth Circuit follows a three-step approach in determining whether the public disclosure bar applies. The facts on which I have determined jurisdiction are as follows. Davies requires that a determination be made as to whether a substantial public interest would be impaired by enforcement of the agreement. Modification of these search terms occurred in December, 2005. It is undisputed that Radcliffe did not identify the nature of his allegations against Purdue in the course of these conversations with Ramseyer. 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. 425, 428 (1999). 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. 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. 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. Id. . . 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." Therapeutics 130 [Abstract PI-4] (1996); G.B. 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." Dismiss 35.) 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. Because the information contained in the disclosures was insufficient to imply fraud, it did not trigger the jurisdictional bar. 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. 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. at 1512-13. 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 . Hall, 104 F.3d at 231. 4th 741, 754-55 (Cal.Ct.App. and as a result, generally more expensive than the OxyContin that was described in [Purdue's] marketing pitch to the same physicians." However, this applies to public policy concerns in the interpretation of a contract rather than in a determination of its validity. (f)(2).) They alleged these statements were made to doctors whose patients obtained prescriptions paid for by the government, creating a claim under the False Claims Act. Casetext, Inc. and Casetext are not a law firm and do not provide legal advice. 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). 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 On December 5, 2005, AUSA Mountcastle described the government's investigation as including "whether Purdue falsely marketed OxyContin as being twice as potent . 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. 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). at 1043-46. 2010), the district court dismissed . 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. 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. . : 18-C-222 MSH, 18-C-233 MSH, 18-C-234 Because the public disclosure bar involves the jurisdiction of the court, it must be determined first, before proceeding to any other questions. However, it is also clear from the evidence that the government continued to seek such information after the release had been executed on August 1, 2005. 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." 2010). Finally, Purdue submits that Radcliffe should have known of, and did not deny knowledge of, other studies supporting the 2:1 ratio for longer-term use. Id. 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. Dismiss 20.) 09-1202 (4th Cir. 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. Relators, or private individuals who bring suits on behalf of the government, are entitled to a portion of the recovery from a qui tam suit, the amount of which depends on whether the government chooses to intervene after learning the allegations and prosecute the case itself and the overall importance of the relator's participation in the action. Wilson v. Graham County Soil Water Conservation Dist., 528 F.3d 292, 309 (4th Cir. 1995), and United States ex rel Hall v. Teledyne Wah Chang Albany, 104 F.3d 230 (9th Cir. 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. Because of the potential in this area for state law to impair federal rights, the possibility of forum-shopping, and the unlikeness that uniform federal rule would disrupt commercial relationships predicated on state law, the Ninth Circuit chose to craft a uniform federal rule, rather than apply state law. Defs.' But see United States ex rel. Gebert v. Transp. Radcliffe encountered skepticism from physicians he spoke with regarding OxyContin's relative cost and potency. The Fourth Circuit agreed that the district court did not have jurisdiction over the claims and affirmed. Hurts co-counsel in the case is Beckley, W.Va., attorney Paul Roop. Radcliffe v. Purdue Pharma L.P., 600 F.3d 319 (4th Cir. After the present qui tam suit was stayed, the government's investigation continued. (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.
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