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It’s Open Season on False Claims Act cases in the High Court

More petitions are being submitted to the Supreme Court for certiorari on the False Claims Act and the people writing amicus briefs do not appear to be friends of the law.

Todays “petition of the day” from the SCOTUS Blog involves a brief for petition of certiorari filed by Purdue Pharma.

Purdue Pharma, makers of the drug OxyContin, got an initial False Claims Act case thrown out. When the wife of the first Realtor and another Relator came forward, they protested the decision on numerous grounds including the pre-2010 public disclosure bar, the “first-to-file” rule, and the statute of limitations. In general terms, they do not like the idea that the Wartime Suspension of Limitations Act could apply to the False Claims Act, meaning that the statute of limitations would be extended.

Of course none of these objections goes to a discussion of the underlying allegations. The brief for the pharmaceutical company, not the plaintiff, alleges that Purdue had fraudulently “marketed its pain relief drug, OxyContin as ‘twice as potent’ and therefore ‘cheaper per dose’ than MS Contin.”

I’m not going to address those allegations here and, indeed, the issues before the Supreme Court have little to do with the underlying allegations. Nor am I going to discuss what I think the Supreme Court is potentially going to rule on issues of major concern to Plaintiff-Relators and False Claims Act practitioners.

Instead I’m going to whine a little.

The petitioners note that the “first-to-file” rule and the former version of the public disclosure bar were designed to prevent so called “parasitic suits.” I’m not sure I understand how the suit is parasitic if in fact no other suit has been pursued regarding the underlying allegations. There is a big fight within these briefs as to whether or not the original suit’s dismissal constituted a decision on the merits because of a release signed by the first Relator. Maybe that is a decision on the merits, but there does not appear to be a ruling on the allegations.

What bothers me is that the word parasitic is now in front of the Supreme Court with respect to False Claims Act relators. This is no accident. Some people would like to categorize all whistleblowers this way.

SCOTUS Blog shows the major entries for those filing briefs in the case. A motion for leave to file as amicus in the matter has been filed by the Washington Legal Foundation and from the Pharmaceutical Research and Manufacturers of America et al.   Of course, I can understand their interest in this kind of a case. I’m sure they will say that they support the False Claims Act.

The Washington Legal Foundation also boasts today of filing comments to urge the EPA to go slow on fracking regulations and limit exclusion criteria for health care entities. You can judge for yourself if their interests are to support whistleblowers.

It seems clear that if you fight a False Claims Act case as a defendant, there is going to be support for your position. That support will say things about the False Claims Act and I’m guessing it won’t be about how it’s the most important anti-fraud, pro-whistleblower law in the land.

These entities have money. They have the resources to file a petition to the Supreme Court on any issue of importance, or even issues of little importance, regarding the False Claims Act. They do so in an effort to erode or degrade the way in which the Supreme Court Justices and their clerks think about the law.

It falls to us to remind everyone that absent this law there is no way for insiders to get the information the government needs to fight fraud, nor anybody to fight that fraud if and when the government does not have the resources to pursue the matter.

Obviously, the success of the False Claims Act has drawn serious attention. But where is the big money on our side? I cannot understand why principled business leaders do not rush to the aid of the plaintiff-relators. Why would the companies that conduct their business the right way let companies that violate the rules and profit from illegal or unethical practices go on to score even more profits at their expense?

Right now the resources to fight this inside game are difficult to obtain. Therefore, it’s more important than ever to remind the Justices that whistleblowers are trying their best to fight against major corporations who do not want to pay anything when they are presented with evidence of their fraudulent activity. The public and the Department of Justice seem to understand this fact. However, today’s SCOTUS blog is a reminder that relators need all the help they can get.

Note: Since this blog was written, the Supreme Court denied certiorari on the issue presented by this particular filing. Nonetheless, the Fourth Circuit eventually found that the case should be dismissed. The first case making these allegations was dismissed, because of a release signed by the original Relator after the US declined to intervene. Then this case filed by new Relators using the first case information was dismissed under public disclosure grounds saying the allegations formed were the result of a “parasitic” suit and therefore Purdue Pharma was able to defeat this case too.

Since then, other allegations regarding OxyContin have come to light, more litigation has been pursued, to the point that Purdue Pharma is now filing for bankruptcy.

One looks back at the more than 10 year history of the allegations here in wonder.