False Claims Act Public Disclosure Bar: Does it Shield Against Future Liability in Whistleblower Claims?
The Canary™: Qui Tam Whistleblower Blog
When you hear the term “whistleblower” what comes to mind? The Enron scandal? Lengthy and costly litigation? Disingenuous executives and accounting practices? Most likely, all of the aforementioned concepts come to mind, and your organization has already implemented policies to prevent any comparable occurrences, but are those safeguards sufficient to provide the protection you seek? What many executives may fail to realize, however, is that past whistleblower lawsuits may not necessarily shield against future whistleblower claims, and thus it important for you to understand your disclosure obligations, and the potentially long-lasting ramifications of insufficient disclosure.
Frank Solis v. Millennium Pharmaceuticals Inc. et al, and Frank Solis v. Schering-Plough Corp. et al, are two examples of cases in which the sufficiency of previous disclosures in whistleblower cases, was called into question. In both cases, the pharmaceutical companies were accused of illegally promoting their drugs by providing kickbacks to physicians who prescribed them. Years later, the same plaintiff from the previous lawsuits, attempted to revive those lawsuits, citing additional information and different claims.
Lessons From Merck & Co.: Is Previous Disclosure Enough?
While the case against Millennium Pharmaceuticals Inc. was dismissed because the claims had already been publicly addressed in several previous cases, currently, Merck & Co. (formerly known as Schering-Plough Corp.) is attempting to persuade the Ninth Circuit to deny an attempted revival of a whistle blower suit, as it believes the current claims are barred by the public disclosure provision of the False Claims Act (31 U.S. Code §3729), and the plaintiff does not qualify for any exceptions to the public bar disclosure. The plaintiff, however, alleges that a significant amount of new information has been included in his claim, in addition to a new cause of action.
There are many lessons to be learned from this case, and while the court’s decision will ultimately shape the lessons we learn, of the utmost importance is understanding that previous disclosure may not necessarily shield against future liability. Consequently, your company must remain vigilant in preventing disingenuous practices, and in publicly disclosing any, and all relevant information.
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