A Massachusetts magistrate judge has kept alive a former sales representative’s claim that Acclarent Inc. fired her for questioning the company’s purported submission of false claims to the government. However, U.S. Magistrate Judge Donald L. Cabell dismissed claims against parent companies Ethicon Inc. and Johnson & Johnson. The judge said Melayna Lokosky sufficiently alleged that Acclarent retaliated against her for questioning the sale of its Relieva Stratus MicroFlow Spacer for an off-label use. But the court determined that Johnson & Johnson and its unit Ethicon, which acquired Acclarent in 2009, were not involved with Lokosky’s termination and therefore not liable for Acclarent’s alleged misconduct.

Lokosky claimed that Acclarent, in an effort to receive approval from the U.S. Food and Drug Administration (FDA), falsely told the agency that its spacer device would be used to deliver salt water to the sinus to aid healing. After receiving FDA clearance, Acclarent allegedly marketed the device to physicians for the delivery of the steroid Kenalog-40, and had never intended for it be used with salt water. Lokosky, who Acclarent hired as a sales representative in 2007, asked at a 2010 conference how to deal with physicians’ questions about the spacer. She was then placed on an “unrealistic performance plan” and fired the following January, the court noted.

Acclarent sought to dismiss Lokosky’s retaliation suit in April, arguing that she had complained of off-label promotion without linking that promotion to the submission of false claims to the government. But the court agreed with the Plaintiff’s contention that any sale of the product would result in the submission of a false claim because the spacer was promoted and sold only for off-label use. Her internal complaints of off-label promotion were therefore protected conduct under the False Claims Act. The court said: “The law does not require a Plaintiff to connect all of the dots between alleged off-label promotions and fraud on the government.”

Acclarent should have known of that protected conduct because Lokosky told supervisors about her concerns about selling the spacer for off-label use and asked questions in front of in-house regulatory personnel about the product at the 2010 conference, the court said. Lokosky adequately proved a link between her questioning and her termination as well, the court said. But the court dismissed Ethicon and Johnson & Johnson from the suit, saying that Lokosky can’t bring claims against the companies just because Ethicon acquired Acclarent.

The Plaintiff is represented by Royston H. Delaney, Ilyas J. Rona and Charles Kester of Delaney Kester LLP. The case is United States et al v. Acclarent Inc. et al, (case number 1:11-cv-11217-DLC) in the U.S. District Court for the District of Massachusetts.

Source: Law360.com

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