Mistick PBT v. Hous. Id. 2016) Annotate this Case Justia Opinion Summary Relators filed a qui tam action under the False Claims Act (FCA), 31 U.S.C. Radcliffe initially filed his Complaint, disclosing his allegations to the government, on September 27, 2005. However, neither case discusses the policy implications of enforcing a release in the context of the FCA. 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. 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 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. 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. at 1513. Bahrani, 183 F. Supp. The court did not inquire into the fullness of the government's investigation. 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. Id. 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 mid-July 2005 the government reviewed and flagged numerous documents in the possession of four Purdue employees, [Redacted]. Therapeutics 130 [Abstract PI-4] (1996); G.B. But that is not sufficient to meet the rigorous standard of Rule 9(b). 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. 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." at 1047. 582 F. Supp. 1999). 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. The three articles cited by Radcliffe were published in scientific and medical reference periodicals that distribute new or updated material on a periodic basis. Id. Pharmacol. 1348, 89 L.Ed.2d 538 (1986) (quotations and citations omitted). 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. He was not asked about the relative cost or potency of OxyContin and MS Contin, nor was he asked about the equianalgesic ratio of these two drugs. 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. All reasonable inferences are "viewed in the light most favorable to the party opposing the motion." DeCarlo, 937 F. Supp. Radcliffe's allegations pertain to the issue of the relative cost and potency of OxyContin and MS Contin. First, was there a public disclosure? 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 . United States of America, et al. Radcliffe also avers that. (Mountcastle Decl. Va. 1989). 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. See id. Joining her as a relator is Steven May, a former Purdue employee who worked under Mr. Radcliffe. Make your practice more effective and efficient with Casetexts legal research suite. 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. The Fourth Circuit agreed that the district court did not have jurisdiction over the claims and affirmed. He relies on United States ex rel. 14-2299 (4th Cir. Radcliffe requests that if the Complaint is found insufficient on this ground, that he be granted leave to file an amended complaint. Subsequent cases have not addressed this type of argument. Id. The facts on which I have determined jurisdiction are as follows. Hurts co-counsel in the case is Beckley, W.Va., attorney Paul Roop. Green, 59 F.3d at 962 (quoting Davies, 930 F.2d at 1396). Further limited discovery and briefing was allowed as to that issue. Plaintiff - Appellant: UNITED STATES EX REL. at 956-57. 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). See Robert F. Kaiko et al., Analgesic Onset and Potency of Oral Controlled-Release (CR) Oxycodone and CR Morphine, 59(2) Clin. 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. 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). Casetext, Inc. and Casetext are not a law firm and do not provide legal advice. 763 (E.D. Nathan v. Takeda Pharmaceuticals N.A. 2d at 774. In his qui tam Complaint, Radcliffe alleges that Purdue falsely and fraudulently, through its salesmen's oral misrepresentations and the information presented in the OxyContin package insert, asserted to physicians and other decision-makers that there was a 2:1 equianalgesic ratio between OxyContin and MS Contin, and, thus, that OxyContin was cheaper per dose than MS Contin. Green, 59 F.3d at 962. (Mem. J.A. 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. Prior public disclosures revealed the spin off, the company's problems with the unfunded pension liability, and eventually, the company's bankruptcy. Harrison v. Westinghouse Savannah River Co., 176 F.3d 776, 784 n. 5 (4th Cir. (Information 20, United States v. Purdue Frederick Co., No. In this action brought under the qui tam provisions of the False Claims Act ("FCA"), 31 U.S.C.A. 2d 766, 774 (W.D. 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. Will be used in accordance with our terms of service & privacy policy. 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.. 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. at 1047. 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 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. 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. 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. (Information 20, United States v. Purdue Frederick Co., supra.) 2010). . Springfield Terminal Ry. 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. On August 1, 2005, Radcliffe executed a general release as part of . 3730(e)(4)(A); see United States ex rel. 2d at 820 ("If there is a dividing line to be found between Hall and Green, it is the fullness of the government's investigation, not the timing of the release."). . (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. The circumstances here fall within the general rule articulated in Green that pre-filing releases are unenforceable to bar subsequent qui tam actions, rather than the Hall exception, because the government had not fully investigated the substance of Radcliffe's allegations. formerly a sales representative for Purdue under Mark Radcliffe's supervision. 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. Va. 2014) case opinion from the Southern District of West Virginia US Federal District Court . Mark Radcliffe, a former sales representative and district manager, filed the first related FCA lawsuit against Purdue Pharma in 2005 in Virginia federal court. Dismiss 11.) MARK RADCLIFFE: Defendant - Appellee: PURDUE PHARMA L.P. and PURDUE PHARMA, INCORPORATED: Amicus Curiae: 1990)). 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 Fourth Circuit follows a three-step approach in determining whether the public disclosure bar applies. However, this applies to public policy concerns in the interpretation of a contract rather than in a determination of its validity. Id. 1999). Further, such a rule would mean that the enforceability of the release would be uncertain until such time as the government chose whether to intervene, which would undermine the countervailing interest in settlement of litigation. at 232. In finding the release unenforceable, the court reasoned that the limited knowledge of the allegations held by the government did not negate the public interest in providing incentives for the relator to fully disclose inside information concerning the allegations to the government. United States ex rel. Davies requires that a determination be made as to whether a substantial public interest would be impaired by enforcement of the agreement. 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. : 18-C-222 MSH, 18-C-233 MSH, 18-C-234 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, MEMORANDUM OPINION AND ORDER R. CLARKE VanDERVORT Magistrate Judge. Id. 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. 1994); United States ex rel. Radcliffe v. Purdue Pharma L.P., 600 F.3d 319 (4th Cir. 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." Several months later, as part of a general restructuring of its sales force, Purdue Pharma offered Radcliffe a severance package, which he accepted. 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. 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 . Radcliffe requests that if the Complaint is found insufficient on this ground that... Southern District of West Virginia US Federal District court did not have jurisdiction over the claims and affirmed viewed the... Part of Purdue employee who worked under Mr. radcliffe co-counsel in the context of the agreement a sales representative Purdue... 130 [ Abstract PI-4 ] ( 1996 ) ; G.B # x27 ; s supervision leave to an. ( quoting Davies, 930 F.2d at 1396 ) and Purdue PHARMA L.P. and PHARMA! 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