In weighing the policy concerns under Rumery, the court emphasized that the government had barely begun its investigation when the release was executed. 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. 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. Id. Yannacopolous v. General Dynamics, 315 F. Supp. 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. 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.'" In doing so, the court relied on the test set forth in Town of Newton v. Rumery, 480 U.S. 386, 107 S.Ct. 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. at 308. United States ex rel. of Pittsburgh, 186 F.3d 376, 385 (3d Cir. Purdue argues that Radcliffe has failed to plead fraud with particularity as required by Federal Rule of Civil Procedure 9(b). 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. Purdue Pharma L.P., et al., Civil Action Nos. (c) and (f)(2)). 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. Further, the public policy concerns raised by Purdue do not alter the relative balance of public interests under the Rumery test. MEMORANDUM OPINION AND ORDER R. CLARKE VanDERVORT Magistrate Judge. at 969. Months later, the former employee filed a qui tam complaint in federal court. On August 1, 2005, Radcliffe executed a general release as part of . (Reply Supp. 425, 428 (1999). While the OxyContin package insert recommends the 2:1 conversion ratio as a starting point for doctors switching patients from MS Contin to OxyContin, it also suggests the need to reevaluate based on each individual patient's response to the new medication. Finally, Purdue argues that the OxyContin package insert is a public disclosure, either in the news media or from an administrative investigation. C05-01962 HRL, 2006 WL 2067061 (July 25, 2006) at *7 ("[T]he key question is whether the government knew about [the relator's] allegations of fraud and had an opportunity to investigate them before the release was executed. at 818. Together, Purdue argues, these create an implication of fraud sufficient to put the government on notice. Defs.' 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". Purdue urges the court to consider pre- Green cases Virginia Impression Products Co. v. SCM Corp., 448 F.2d 262 (4th Cir. 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. 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. In deciding a jurisdictional challenge, the court must determine the facts based on the evidence submitted. Green, 59 F.3d at 962. Radcliffe has amended his Complaint three times since it was originally filed, so that Purdue's Motion to Dismiss actually relates to the Third Amended Complaint filed June 5, 2007. 14-2299 (4th Cir. Hall involved an employer who had been accused of fraud on the government by an employee. 481 F. Supp. Enforcement of a release to bar a subsequent qui tam suit implicates several articulated public interests. Mountcastle argued that the suit could hinder the investigation because while Purdue was aware of the investigation "no mention ha[d] been made that the 2:1 comparison of OxyContin and MSContin [was] one of the areas under investigation." A separate order will be entered herewith. On Nov. 17, the company moved to have the plaintiffs pay its legal fees under the fee-shifting provisions in the FCA. 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. Purdue Pharma L.P., No. 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. 1039, 1043-47 (S.D.N.Y. 1994) ("Textbook of Pain"). 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 820. Radcliff is a former sales representative and manager at Purdue, who left its employment shortly before he filed the present suit. The plaintiff has the burden of showing that the court has subject matter jurisdiction. I agree. 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. 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. Id. at 963-64. Instead both the 2001 posting and the current posting of the OxyContin package insert seem more akin to a corporate report or a press release. The Fourth Circuit does not have any analogous case law interpreting Rumery. Id. On September 18 2014 Defendants hereinafter Purdue filed.20141009i18 Redactions are denoted in brackets. Mot. 458 (S.D.N.Y. J. Clin. Id. 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." Hurts co-counsel in the case is Beckley, W.Va., attorney Paul Roop. All of the issues are now ripe for decision and will be discussed sertiam. at 1513. Radcliff is a former sales representative and manager at Purdue, who left its employment shortly before he filed the present suit. Co. v. Zenith Radio Corp., 475 U.S. 574, 587, 106 S.Ct. 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. It was dismissed for failure. 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. 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. 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." 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. Springfield Terminal Ry. Summary judgment is appropriate only if there are no material facts in dispute and the moving party is entitled to judgment as a matter of law. As a result, such a rule would reward potential defendants who encourage settlement and would impair the public interest in having relators disclose information to the government. Radcliffe v. Purdue Pharma L.P., 600 F.3d 319, 321-22 (4th Cir. Relators claims had no objectively reasonable chance of success, the company argues. C2 (Feb. 1992) ("Clinical Practice Guideline"); United States Pharmacopeia-Dispensing Information 2238 tbl. 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. On June 24, 2005, a conversation took place between Department of Justice attorney Barbara Wells and attorney Michael Scheininger, who represented several Purdue employees, about topics that would be discussed when those employees testified before the grand jury investigating Purdue. 2007). . "); Longhi, 481 F. Supp. On August 2, 2005, a subpoena was issued commanding Radcliffe to appear before the grand jury. Green, 59 F.3d at 959. at 233. 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. 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. Mark Radcliffe v. Purdue Pharma L.P.; Purdue Pharma, Inc. 1 In a decision issued on March 24, 2010, the United States Court of Appeals for the Fourth Circuit concluded that a general release may bar a subsequent qui tam action if the allegations of fraud had been sufficiently disclosed to the government prior to the filing of the qui tam lawsuit. Id. Specifically, Purdue argues that the single-dose study, other scientific articles, and its OxyContin package insert, which recommend an equianalgesic ratio of 2:1 between OxyContin and MS Contin, represent the alleged "false" state of facts, while scientific sources cited by Radcliffe in the Complaint, which recommend a ratio of 1:1, represent the "true" state of facts. These employees were indeed asked questions pertaining to the relative potency issue during their grand jury appearances on July 20, 2005. 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. The stay was lifted in late 2006, and the government chose not to intervene on May 8, 2007. Virginia, Abingdon Division, declining to conclude that anything posted online would automaticallyconstitute a public disclosure. That agency investigated and concluded that it could not substantiate the allegations. Alcohol Found., Inc. v. Kalmanovitz Charitable Found., Inc., 186 F. Supp. 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. 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. 434. 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. Mark T. Hurt, Abingdon, VA, and Paul W. Roop, II, Beckley, WV, for Mark Radcliffe. 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. United States ex rel. 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. 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. 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. I think it is sufficient under Hall that the government know of the substance of the allegations. Ten years ago, Mark Radcliffe, a former district sales manager for Purdue Pharma, filed a qui tam action under the FCA against Purdue. Id. Some studies recommended an equianalgesic ratio of 1:1, particularly for chronic, around-the-clock dosing; they acknowledged studies that recommended a ratio of 2:1 for single or intermittent doses. If the patient did not receive the expected pain relief, the doctor might either prescribe something else or increase the dosage. 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. Va. 1989). 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. at 965-66. However, Radcliffe did file while the government was still investigating and when he could potentially still have been of use to the government. On December 5, 2005, AUSA Mountcastle described the government's investigation as including "whether Purdue falsely marketed OxyContin as being twice as potent . As the release involved a statutorily-conferred federal right, the Ninth Circuit turned to federal common law to fill this "gap" in the statutory scheme. By the end of July, the government had also begun drafting Grand Jury Subpoena 513 which included requests for all documents discussing the relative analgesic potency or safety of OxyContin and MS Contin. 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. 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. Evidence presented in Bahrani demonstrated that, prior to executing a general release, the relator had two brief conversations with an FBI agent prior in which he made charges against his employer but offered no specifics regarding the alleged fraud. Joining her as a relator is Steven May, a former Purdue employee who worked under Mr. Radcliffe. 56(e)). 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. 3d ed. 1995), and United States ex rel Hall v. Teledyne Wah Chang Albany, 104 F.3d 230 (9th Cir. Supp. If so, was the qui tam action based on the public disclosure? 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. 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. To reach this decision, the Ninth Circuit first evaluated the statutory scheme of the FCA and determined that while Congress had addressed the ability of parties to settle post-filing, it left open the enforceability of pre-filing releases. Mark Rad v. Purdue Pharma L.P. Filing 920100324. See id. (Information 20, United States v. Purdue Frederick Co., No. In the conclusion of the response, the attorneys say Purdues allegations of bad faith and its personal attack on them are a lamentable tactic used to get an advantage in litigation. at 231-32. All reasonable inferences are "viewed in the light most favorable to the party opposing the motion." 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