at 1043-46. Looking at the specific web page cited by Purdue, it appears that on July 18, 2001, the OxyContin package insert was posted to a section of Purdue's web page entitled "News What's New." Regardless, the 1996 abstract was published in Clinical Pharmacology Therapeutics, a scientific journal headquartered in Alexandria, Virginia. at 963. As noted, Angela Radcliffe is Mark Radcliffe's wife; Steven May was formerly a sales representative for Purdue under Mark Radcliffe's supervision. Purdue initially contended that the Complaint failed to state a claim because Radcliffe's allegations merely showed "a scientific dispute . Id. 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. Mark T. Hurt, Abingdon, VA, and Paul W. Roop, II, Beckley, WV, for Mark Radcliffe. Purdue Pharma's attorneys suspected that Radcliffe was behind those threats. Id. These disclosures suggest legitimate scientific debate and disagreement regarding the correct equianalgesic ratio, rather than any fraudulent intent on the part of Purdue. at 1512. 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. 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). 763 (E.D. 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. Id. 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. Supp. 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. (Information 20, United States v. Purdue Frederick Co., No. 1999). In this action brought under the qui tam provisions of the False Claims Act ("FCA"), 31 U.S.C.A. 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."). 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. Ten years ago, Mark Radcliffea former district sales manager for Purdue Pharma ("Purdue")filed a qui tam action under the FCA against Purdue. Purdue argues that Radcliffe has failed to plead fraud with particularity as required by Federal Rule of Civil Procedure 9(b). 2005); see Springfield, 14 F.3d at 655. For instance, this web page could be affiliated with a news publication and, as such, would be updated regularly and would disseminate information to the public in a periodic manner. Ohio Dec. 29, 2006), for the proposition that publication on the Internet constitutes a public disclosure under 3730(e)(4)(A). 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. regarding the relative potency of oxycodone." MEMORANDUM OPINION AND ORDER R. CLARKE VanDERVORT Magistrate Judge. Thus, I find that these constitute public disclosures in the news media. Accordingly, I do not address Purdue's second argument that the package insert is a public disclosure from an administrative investigation. Following Radcliffe's execution of the general release on August 1, 2005, the government's investigation continued. 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 . of Pittsburgh, 186 F.3d 376, 385 (3d Cir. 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. Purdue Pharma L.P., et al., Civil Action Nos. Contract Educ. Mark Rad v. Purdue Pharma L.P. Filing 920100324. Mark Rad v. Purdue Pharma L.P., No. ( Id. decision in United States ex rel. Pharmacol. Gebert v. Transp. 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. U.S. ex Rel. Radcliffe was interviewed by law enforcement agents on October 28, 2005. Kennedy v. Aventis Pharms., Inc., 512 F. Supp. 2001); United States ex rel. It is undisputed that Radcliffe did not identify the nature of his allegations against Purdue in the course of these conversations with Ramseyer. 2d at 1278. Id. In this case, that information was the first FCA suit filed by Mark Radcliffe. Wilson v. Graham County Soil Water Conservation Dist., 528 F.3d 292, 309 (4th Cir. 30.) and, accordingly, less expensive than MSContin" and the accuracy of "the 2:1 comparison of OxyContin to MSContin." 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. 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. at 1047. at 231-32. DeCarlo v. Kiewit/AFC Enters., Inc., 937 F. Supp. 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. 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. 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. 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. (Reply Supp. One of their attorneys is Mark 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). Id. They allege Purdue Pharma misrepresented the potency of OxyContin when marketing it to doctors. 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. 2007). 3729 et seq., against Purdue, alleging that the company was involved in a fraudulent scheme regarding the equianalgesic ratio of OxyContin. Will be used in accordance with our terms of service & privacy policy. Va.)) None of the misbranding charges pertained to the relative cost and potency issue. 2006). 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." 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. United States ex rel. Id. The opinion makes no mention of what type of web page this is or whether it bears any resemblance to a traditional periodical. After the action was filed, the United States investigated the qui tam relator's allegations, but ultimately chose not to intervene. Green involved a general release between an employer and a terminated employee, who later filed a qui tam suit against that employer. 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. Radcliffe requests that if the Complaint is found insufficient on this ground, that he be granted leave to file an amended complaint. Id. 2010), the district court dismissed . Id. 1348, 89 L.Ed.2d 538 (1986) (quotations and citations omitted). In 2010, his wife Angela and former underling May filed their own FCA lawsuit. 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. Dismiss 35.) Bell Tel. Id. 2010). the baton" and file the qui tam action against Purdue now before the court. 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. 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 . However, I believe that enforcing the release under these circumstances would substantially impact important public interests associated with the FCA. 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. Further, Radcliffe was cooperating with the government and was scheduled to be a grand jury witness. Id. 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. If so, was the qui tam action based on the public disclosure? 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. Bahrani v. Conagra, Inc., 183 F. Supp. Generally, this does not require that the disclosure be of the specific allegations brought by the relator, but instead the disclosure must put the government on notice of the likelihood of fraudulent activity. The amended complaint does not contain allegations that connect the dots for even a single alleged false claim Berger wrote. Id. See id. 56(e)). That agency investigated and concluded that it could not substantiate the allegations. 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 August 2, 2005, a subpoena was issued commanding Radcliffe to appear before the grand jury. 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. 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. 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. 2d 1272, 1275-78 (D. Colo. 2002); United States ex rel. While this would seem to be the case in Hall since the federal government had not only completed its investigation, but concluded that the allegations could not be substantiated, this does not mean that there are not other cases that the government may have investigated fully but determined that it would not prosecute on its own for a variety of reasons, such as the low amount of money involved compared to the cost of prosecution, the low likelihood of success, or the lack of government resources to pursue it. The term "news media" includes scholarly, scientific, and technical periodicals, including trade journals, because, like newspapers, these sources disseminate information to the public in a periodic manner. Once it decided to fashion a uniform rule on the enforceability of pre-filing releases, the Ninth Circuit turned to Rumery, 480 U.S. at 392, to structure its discussion of competing policy concerns. Nathan v. Takeda Pharmaceuticals N.A. Specifically, in his sales representative training, he alleges that he was taught that there was a 2:1 equianalgesic ratio between OxyContin and MS Contin, a rival pain medication containing morphine, making OxyContin twice as potent and, as a result, cheaper per dose than MS Contin. Doyle v. Diversified Collection Services, Inc., No. 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. In mid-July 2005 the government reviewed and flagged numerous documents in the possession of four Purdue employees, [Redacted]. DeCarlo, 937 F. Supp. Mark Radcliffe, 59, of Shady Spring, was convicted following a three-day jury trial. 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. Given the vast array and varying credibility of web pages on the Internet, I am not ready to conclude that anything posted online would automatically constitute a public disclosure within the meaning of 3730(e)(4)(A). 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." Therapeutics 130 [Abstract PI-4] (1996); G.B. Hurts co-counsel in the case is Beckley, W.Va., attorney Paul Roop. The package insert recommends a starting conversion rate between OxyContin and MS Contin of 2:1, which can be reassessed based on a patient's reaction to the dosage. : 18-C-222 MSH, 18-C-233 MSH, 18-C-234 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). Further, the public policy concerns raised by Purdue do not alter the relative balance of public interests under the Rumery test. at 820. 3730(e)(4)(A); see United States ex rel. 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). 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, In January and February of 2005 Radcliffe sent emails to several officers and directors of Purdue, using the alias "John Femaledeer." 425, 428 (1999). 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. Mot. 1991), which builds upon the Rumery test. See DeCarlo, 937 F. Supp. Pharmacol. 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. 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. Purdue argues that Radcliffe was a bad actor who waited to file his qui tam complaint and, prior to doing so, attempted to settle with Purdue in exchange for an investment in a company he was starting. Id. at 960. Alcohol Found., Inc. v. Kalmanovitz Charitable Found., Inc., 186 F. Supp. This is factually distinct from the situation in which the government is in the midst of an ongoing investigation. Hall involved an employer who had been accused of fraud on the government by an employee. . A doctor relying on the 2:1 ratio would initially prescribe half as much OxyContin as MS Contin, which, according to the relators, did cost less, Berger wrote. United States ex rel. Radcliffe also avers that. After the present qui tam suit was stayed, the government's investigation continued. The FCA provides that there is no subject matter jurisdiction in a case where the claim is. I agree. 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.'" Finally, Purdue argues that the OxyContin package insert is a public disclosure, either in the news media or from an administrative investigation. Co. v. Zenith Radio Corp., 475 U.S. 574, 587, 106 S.Ct. The government began a lengthy investigation after the execution of the release and ultimately chose to intervene. 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. 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). The two are represented by the same two attorneys who represented Mark Hurt and Roop. 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. 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. formerly a sales representative for Purdue under Mark Radcliffe's supervision. 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. Purdues arguments to the contrary are misleading and miss the point.. 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. School escapes liability for sex abuse by teacher, Walmart launches Constitutional attack on Lina Khan's FTC, Firefighters fired over penises drawn on Black colleague's family pictures lose lawsuit, Lawsuit targets Panera's Sip Club, complains refills have restrictions, Judge stops 3M's plan to handle massive earplug litigation. Purdue Pharma, L.P. (1:05-cv-00089) District Court, W.D. 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. 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." Radcliffe was interviewed a second time in September 2006 and asked about the misleading promotion of OxyContin. Id. (Defs.' Unsealing the Complaint or allowing the suit to proceed would make a portion of the grand jury's pending investigation public. 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." Gilligan v. Medtronic, Inc., 403 F.3d 386, 389 (6th Cir. 1995), and United States ex rel Hall v. Teledyne Wah Chang Albany, 104 F.3d 230 (9th Cir. Gilligan, 403 F.3d at 389; see also Springfield, 14 F.3d at 655; United States ex rel. Va. 2007) (accepting plea agreements). 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. See Green, 59 F.3d at 965-68; Bahrani, 183 F. Supp. When he raised the issue his supervisor assured him that the 2:1 ratio was correct. Id. The Agreement and General Release that Radcliffe signed contained the following language: Radcliffe then filed his qui tam Complaint on September 27, 2005. In deciding a jurisdictional challenge, the court must determine the facts based on the evidence submitted. 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. Auth. 2548, 91 L.Ed.2d 265 (1986). CIV.A. The "John Femaledeer" emails indicate that Radcliffe did try to settle his claims with Purdue, but later retracted this offer after being told by an attorney that qui tam claims could not be settled without the government's consent. at 821. Notwithstanding the government's lack of knowledge of or consent to the release, because the federal government was already aware of the allegations of fraud, the public interest in having information disclosed to the government was not implicated. Id. 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. 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. at 818. 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. 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. Purdue Pharma L. P. et al, No. For these reasons, I find that this court his subject matter jurisdiction over the Complaint. Id. 1997), has been applied by subsequent federal courts faced with the issue. 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. He later retracted that offer after being informed by a lawyer that he could not settle a qui tam suit. The government's investigation continued and on December 5, 2005, AUSA Mountcastle moved to stay Radcliffe's qui tam suit pending the government's ongoing investigation. 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. Ten years ago, Mark Radcliffe, a former district sales manager for Purdue Pharma, filed a qui tam action under the FCA against Purdue. 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. . Modification of these search terms occurred in December, 2005. See United States ex rel. 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. 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. at 733-34 (remanding to allow leave to amend). 1996). 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. Both were published in scientific periodicals. 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. The Fourth Circuit does not have any analogous case law interpreting Rumery. These include the public interest in having relators disclose inside information of alleged fraud to the government, in having relators supplement federal enforcement of the FCA by assisting the government in its investigation and prosecution or prosecuting the claim itself, and in deterring future fraud against the government. 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. 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. 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. Virginia, Abingdon Division, declining to conclude that anything posted online would automaticallyconstitute a public disclosure. He further stated that "the 2:1 comparison of OxyContin to MSContin [wa]s one of the areas under investigation." On Nov. 17, the company moved to have the plaintiffs pay its legal fees under the fee-shifting provisions in the FCA. In these somewhat rambling and incoherent emails, he warned Purdue that he was considering a qui tam suit, detailed his allegations, and offered to settle in exchange for an investment by Purdue in a project he was contemplating. 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. Defs.' A separate order will be entered herewith. C2 (Feb. 1992) ("Clinical Practice Guideline"); United States Pharmacopeia-Dispensing Information 2238 tbl. 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. The case previously reached the U.S. Court of Appeals for the Fourth Circuit, which refused to dismiss the case based on a lack of specific allegations because the whistleblowers still had the opportunity to amend their complaint. 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." Harrison v. Westinghouse Savannah River Co., 176 F.3d 776, 784 n. 5 (4th Cir. (f)(2).) Whitten v. Triad Hosps., Inc., No. Purdue objects, but I find no cognizable basis for denying Radcliffe's request. 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. 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. Redactions are denoted in brackets. For convenience, references herein to the "Complaint" shall include the most recent version. J.A. 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. 434. Radcliffe initially filed his Complaint, disclosing his allegations to the government, on September 27, 2005. Purdue does not claim definitively that Radcliffe actually knew of or relied on the particular scientific articles it cites. However, Radcliffe did file while the government was still investigating and when he could potentially still have been of use to the government. 09-1202 (4th Cir. Id. at 1277-78. Id. 5:2010cv01423 - Document 191 (S.D.W. Relators claims had no objectively reasonable chance of success, the company argues. (Mountcastle Decl. L E Corp. v. Days Inns of Am., Inc., 992 F.2d 55, 58 (4th Cir. The court found no statutory or policy reasons to prevent enforcement of the release. (f)(2).) 2d 766, 774 (W.D. United States of America, et al. 1993) (quotations and citations omitted). 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). 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. 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." and as a result, generally more expensive than the OxyContin that was described in [Purdue's] marketing pitch to the same physicians." Partial knowledge or investigation on the part of the government is insufficient to remove a case from the purview of Green into the exception created by Hall. Va. 1989). 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. 2 (16th ed 1996) ("USP"); Robert G. Twycross, Opioids, in Textbook of Pain 943, 953 tbl. 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. at 956-57. Wilson, 528 F.3d at 299. 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.'" Supp. Compl. In addition to this source requirement, the disclosure must have been of the "allegations or transactions" on which the qui tam action is based, not merely of information used by the qui tam relator. 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. 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. 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. 2d at 774. United States v. Bank of Farmington, 166 F.3d 853, 861 (7th Cir. 2016) Annotate this Case Justia Opinion Summary Relators filed a qui tam action under the False Claims Act (FCA), 31 U.S.C. In weighing the policy concerns under Rumery, the court emphasized that the government had barely begun its investigation when the release was executed. Yannacopolous v. General Dynamics, 315 F. Supp. Several months later, as part of a general restructuring of its sales force, Purdue Pharma offered Radcliffe a severance package, which he accepted. App. 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. 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. For the reasons stated, the Motion to Dismiss will be denied in part and granted in part, with leave to amend. 2d 1158, 1164-65 (N.D. Ill. 2007). . On June 23, 2005, the government requested that Purdue identify the author and source of different versions of a document [Redacted] already in the government's possession, [Redacted]. Also on July 28, the government issued a subpoena for Michael Cullen, [Redacted]; he was later asked during his grand jury testimony about the relative potency issue. Defs.' 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. . 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. . 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. 1994). at 963-64. 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 . 1999). of Health Human Servs., Clinical Practice Guideline: Acute Pain Management: Operative or Medical Procedures and Trauma, app. See United States v. Purdue Frederick Co., 495 F. Supp. In his Complaint, Radcliffe references, but does not cite, a single-dose potency study that his supervisors told him supported an equianalgesic ratio of 2:1. at 233. Radcliffe encountered skepticism from physicians he spoke with regarding OxyContin's relative cost and potency. 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. Rabushka v. Crane Co., 40 F.3d 1509, 1512-14 (8th Cir. (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. Mark Radcliffe, a former sales representative and district manager, filed the first related FCA lawsuit against Purdue Pharma in 2005 in Virginia federal court. The package insert is currently posted to a section of Purdue's web page devoted to package inserts. 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. . 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. Specifically, they argue that, as here, where the government learned of the allegations independently and had already begun its investigation into the substance of the allegations prior to the date of the release, where the relator delayed in filing the qui tam complaint and attempted to settle with the defendants prior to doing so, and where the government ultimately chose not to intervene, enforcement of the release is appropriate. at 1512-13. 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. MARK RADCLIFFE: Defendant - Appellee: PURDUE PHARMA L.P. and PURDUE PHARMA, INCORPORATED: Amicus Curiae: 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. (Third Am. The citations it relies on to support this argument are inapposite or misleading. Dismiss 11.) 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. Rost v. Pfizer, Inc., 507 F.3d 720, 733 (1st Cir. Adams v. Bain, 697 F.2d 1213, 1219 (4th Cir. 9 n.4. 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, All reasonable inferences are "viewed in the light most favorable to the party opposing the motion." 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. 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. 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 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. 1039, 1043-47 (S.D.N.Y. 1971), and Coleson v. Inspector General of the Department of Defense, 721 F. Supp. Longhi involved a release executed eleven days after the relator filed a qui tam complaint. J. Clin. Springfield Terminal Ry. 1348 (quoting Fed.R.Civ.P. 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. 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. 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." (Mem. at 916. Green, 59 F.3d at 956. 2d 569, 576 (W.D. 1994) ("Textbook of Pain"). Id. at 308. 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. He subsequently executed a general release ("the Release") of all claims against Purdue in order to receive an enhanced severance package. at 969. 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.. Radcliffe v. Purdue Pharma L.P., 600 F.3d 319 (4th Cir. Co., 142 Cal. 1999). 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 United States ex rel. 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. Reply to Resp. Radcliffe v. Purdue Pharma, L.P., 562 U.S. 977 (2010), his wife Angela decided to "take up . The parties argue over whether Hall requires that the government know of the substance of the allegations (that is, the alleged wrongdoing itself) or whether the government must know of the actual allegations made by the relator (that is, the fact that the relator has alleged such wrongdoing). (c).) 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. 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. As early as 1996, Radcliffe found that some of the physicians he spoke to were skeptical of this 2:1 ratio. One of their attorneys is Mark Admin. 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." (Mem. 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. 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. He alleges that this was done to induce physicians to prescribe OxyContin and other decision-makers to purchase or authorize the purchase of OxyContin. at 963. Enforcement of a release to bar a subsequent qui tam suit implicates several articulated public interests. Defs.' On September 18 2014 Defendants hereinafter Purdue filed.20141009i18 at 232. Id. 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. BECKLEY, W.Va. - A Raleigh County man was sentenced today to five years in federal prison and ordered to pay a $25,000 fine for a witness tampering crime, announced United States Attorney Carol Casto. Id. See id. 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. Curtis et al., Relative Potency of Controlled-Release Oxycodone and Controlled-Release Morphine in Postoperative Pain Model, 55 Eur. Dismiss 20.) United States ex rel. Protected by Google ReCAPTCHA. 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. Joining her as a relator is Steven May, a former Purdue employee who worked under Mr. Radcliffe. 1:07-CR-00029 (W.D. (Mountcastle Decl. Mark Rad v. Purdue Pharma L.P. Filing 920100324 Download PDF . Counsel also stated that on July 28, 2005, she spoke to an attorney from the Department of Justice who expressed an interest in using electronic searches to identify documents [Redacted]. 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. The case was stayed for over a year and a half until the government declined to intervene on May 8, 2007. The plaintiff has the burden of showing that the court has subject matter jurisdiction. Id. 481 F. Supp. 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. at 965-66. 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. Wilson, 528 F.3d at 300-01 (alternations and internal quotations omitted); see Eberhardt v. Integrated Design Constr., Inc., 167 F.3d 861, 870 (4th Cir. 49.7 (Patrick D. Wall Ronald Mezack eds. 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. 434. Green, 59 F.3d at 962 (quoting Davies, 930 F.2d at 1396). He relies on United States ex rel. 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. Id. 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." But that is not sufficient to meet the rigorous standard of Rule 9(b). 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. 104 F.3d at 231. Disclosures made in other public forums do not implicate the public disclosure bar. All of the issues are now ripe for decision and will be discussed sertiam. Radcliffe v. Purdue Pharma L.P., 600 F.3d 319, 321-22 (4th Cir. 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. Make your practice more effective and efficient with Casetexts legal research suite. to Mot. Mot. 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. 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.'" 2d 815, 818 (S.D. at 961 (applying the three-part test in United States v. Kimbell Foods, Inc., 440 U.S. 715 (1979)). The facts on which I have determined jurisdiction are as follows. Bahrani, 183 F. Supp. Bahrani, 183 F. Supp. 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. Radcliffe v. Purdue Pharma, L.P., 562 U.S. 977 (2010), his wife Angela decided to "take up . Id. 1187. 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 1277. Id. Id. Dismiss, Exs. 2010) case opinion from the U.S. Court of Appeals for the Fourth Circuit 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. at 817. 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.. (Information 20, United States v. Purdue Frederick Co., supra.) 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. the baton" and file the qui tam action against Purdue now before the court. Id. Purdue urges the court to consider pre- Green cases Virginia Impression Products Co. v. SCM Corp., 448 F.2d 262 (4th Cir.

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