A Pennsylvania federal judge has dismissed a whistleblower company’s False Claims Act (FCA) case against Teva Pharmaceuticals at the request of the U.S. Department of Justice (DOJ). This dismissal further solidifies the federal government’s campaign to derail FCA suits. U.S. District Judge Jan E. DuBois granted the DOJ’s motion to dismiss a case filed by the National Healthcare Analysis (NHCA) Group. The suit alleged that Teva Pharmaceuticals USA Inc. encouraged doctors to write prescriptions for multiple sclerosis drug Copaxone in exchange for kickbacks in the form of free nursing services and assistance obtaining prescription reimbursement.
Judge DuBois said the federal government’s interest in “preserving scarce resources” by cutting litigation costs and protecting policy goals for health care programs justifies dismissal of the suit. The judge said that the government would need to monitor the case and respond to discovery requests if the suit survived. Judge DuBois wrote:
The government’s interest in avoiding potentially burdensome or unnecessary litigation costs is legitimate even when a relator’s claims appear meritorious.
This decision is the latest in a number of rulings allowing the government to derail whistleblower FCA cases. Nearly a dozen suits brought by the NHCA Group against various drugmakers have been dismissed. Those wins emanated from the 2018 release of the so-called Granston memo, which directed government lawyers to more aggressively weed out FCA suits viewed as conflicting with government prerogatives.
Federal courts have historically applied one of two standards when the DOJ tries to end a whistleblower’s FCA suit, recognizing either “unfettered discretion” to dismiss or broad authority to dismiss as long as doing so serves a valid government purpose. Judge DuBois said the DOJ met its burden under the valid government purpose standard. The government moved to dismiss the NHCA Group’s suit in December after claiming it had extensively investigated the allegations – not only in the Teva case but in similar cases brought by NHCA Group affiliates in other courts – and found that the suits lacked merit.
The NHCA Group opposed dismissal in January, saying the government didn’t meet its burden for dismissal and that the “valid government purpose” arguments didn’t hold water because proceeding with the case would yield a significant recovery for the government. Judges have only rejected two of approximately 36 motions to dismiss that the DOJ has filed in accordance with the Granston memo. The government is appealing the two rejections – one of which came in an NHCA case – at the Seventh and Ninth Circuits.
Recent DOJ wins also include a trio of Nov. 5 rulings from federal judges in California, Pennsylvania and Washington state that granted government motions to dismiss fraud allegations targeting AstraZeneca PLC, Gilead Sciences Inc. and a UnitedHealth Group Inc. unit despite opposition from FCA whistleblowers. The NHCA Group is represented by Gregory S. Spizer of Anapol Weiss and Joseph Trautwein of Joseph Trautwein & Associates LLC.
The government is represented by lawyers from the DOJ’s Civil Division and by the U.S. Attorney’s Office for the Eastern District of Pennsylvania. Teva is represented by Michael A. Schwartz and Erin Colleran of Pepper Hamilton LLP. The case is U.S. ex rel. NHCA-TEV LLC v. Teva Pharmaceutical Products Ltd. et al., (case number 2:17-cv-02040) in the U.S. District Court for the Eastern District of Pennsylvania.
Fraud against the federal government continues to be a huge problem. Many industries in this country are involved. Our firm is heavily involved in the whistleblower litigation. Beasley Allen lawyers Lance Gould, Larry Golston, Paul Evans, Leslie Pescia, Leon Hampton, Tyner Helms and Lauren Miles are working in this area of law known as “qui tam” cases. They make up the Whistleblower Litigation Team.
As we have consistently stated, whistleblowers are the key to exposing corporate wrongdoing and government fraud. A person who has first-hand knowledge of fraud or other wrongdoing may have a whistleblower case. Before you report suspected fraud or other wrongdoing – before you “blow the whistle” – it is important to make sure you have a valid claim and that you are prepared for what lies ahead. Beasley Allen has an experienced group of lawyers dedicated to handling whistleblower cases.
If you are aware of fraud being committed against the federal or state governments, you could be rewarded for reporting the fraud. If you have any questions about whether you qualify as a whistleblower, contact a lawyer at Beasley Allen for a free and confidential evaluation of your claim.
A lawyer on our Whistleblower Litigation Team will be glad to discuss any potential whistleblower claim with you.
This story appears in the January 2020 issue of The Jere Beasley Report. For more like this, visit the Report online and subscribe.