Beasley Allen attorney Lance Gould said an Illinois federal judge was right to reject the U.S. government’s motion to dismiss his client’s whistleblower lawsuit accusing Omnicare Inc., CVS Health Corp., and RX Crossroads of engaging in an illegal kickback scheme that violated the False Claims Act.
“We believe the court was correct in denying the government’s motion to dismiss,” Lance told Bloomberg Law. He is one of four Beasley Allen attorneys representing whistleblower CIMZNHCA LLC in the case.
The motion to dismiss the case is one of 11 cases brought by CIMZNHCA parent company National Health Care Analysis (NHCA) that the U.S. Department of Justice (DOJ) seeks to have vacated. CIMZNHCA is a limited liability holding company for of the NHCA group.
CIMZNHCA alleges that the defendant companies engaged in illegal kickback schemes in which they offered free nursing and support services to doctors in exchange for drug recommendations.
CIMZNHCA’s lawyers argued that the DOJ’s motion to dismiss was focused on attacking the whistleblower instead of providing legitimate reasons for a dismissal.
In a May 13 ruling, U.S. District Judge Staci Yandle sided with CIMZNHCA, saying the government’s motion was arbitrary because one could reasonably conclude that its “true motivation” was “animus” toward the whistleblower.
CIMZNHCA’s lawyers also argued that the DOJ failed to conduct an adequate investigation of the whistleblower’s complaint before moving to dismiss the case. The DOJ is supposed to investigate claims of fraud or other wrongdoing brought by a private whistleblower under the False Claims Act on the government’s behalf.
According to Bloomberg Law, the DOJ refuted that claim, arguing it spent considerable time over a 10-week period discussing NHCA whistleblower cases with both the plaintiff’s and defendants’ counsel. The government also argued it has “an unfettered right to dismiss an action,” which renders its motion to end the whistleblower case as essentially “unreviewable,” and that the case failed to justify why the U.S. should spend its resources monitoring the litigation of the case and responding to discovery requests.
Lance told Bloomberg Law that “based on the court’s comments during the hearing, it appears the court is confident in the ruling.”