Fifth Circuit Rules for Plaintiff in False Claims Act Retaliation Suit Previously Dismissed on Statute of Limitations Grounds

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On January 5, 2012, the U.S. Court of Appeals for the Fifth Circuit held that a two-year statute of limitations was the appropriate period for assessing the timeliness of an action brought by a private employee alleging retaliation by a former employer in violation of the False Claims Act (FCA).

The plaintiff, Michael Riddle, allegefs that after he complained to his supervisors at Dyncorp International, Inc. that the company had not fulfilled its obligations to finish a contracting project with the U.S. government, he was “marginalized” and “eventually terminated” on September 21, 2009.  Riddle then filed suit against Dyncorp on March 18, 2010 in the U.S. District Court for the Northern District of Texas, alleging that his employer had violated the FCA when he purportedly sought to prevent the company from making a fraudulent claim for payment to the government.

When Riddle filed suit, the FCA contained no relevant limitations period. In the absence of an express statute of limitations, courts have generally used analogous state statutes of limitations to determine the timeliness of a FCA action.  The district court dismissed Riddle’s suit, holding that the most analogous statute to the FCA is the Texas Whistleblower Act (TWA) which has a 90-day statute of limitations.

The Fifth Circuit reversed the lower court’s dismissal, disagreeing with the district court and finding that the analogy between the FCA and the TWA was “lacking”.  The appeals court noted that the TWA only provides a cause of action to public employees and Mr. Riddle alleged retaliation by a private employer.  In addition to restricting its retaliation protection only to public employees, the court noted that the TWA was also not analogous to the FCA because the TWA requires public employees first “to pursue an administrative remedy before suing”.  This results in TWA limitations periods often exceeding 90 days because the running of the limitations period is suspended while the required administrative proceedings are pending.

In its decision, the Fifth Circuit held that the most analogous Texas state statute for determining the FCA statute of limitations is the two-year period applied to personal injury cases.  The court favored this analogy “because of its association with…a cause of action for wrongful discharge where a person is terminated for refusing to commit an illegal act”. In reversing the district court’s ruling, the court remanded the case for further proceedings.

The appeals court also declined to apply the new three-year statute of limitations for FCA retaliation cases created by the Dodd–Frank Wall Street Reform and Consumer Protection Act because newly-created statute of limitations under Dodd-Frank was not yet in effect when the plaintiff filed his complaint.

The Employment Law Group® law firm has an extensive nationwide whistleblower practice  representing employees who have been victims of retaliation.

Jury Orders TD Bank to Pay $67 Million to Victims of Ponzi Scheme

On January 18, 2012, a jury for the U.S. District Court for the Southern District of Florida found TD Bank liable for engaging in fraudulent activity and ordered the company to pay $67 million in damages to the victims of the Ponzi scheme. Texas firm Coquina Investments filed a lawsuit against TD Bank in May 2010, accusing the bank of aiding Scott Rothstein in his $1.2 billion Ponzi scheme.

The suit alleges that TD Bank was aware of Rothstein’s illegal business transactions but still allowed him to conduct his affairs with the bank.  Questionable activity, such as sizable funds passing through Rothstein’s account, occurred without any objections from the bank. In a deposition, Rothstein testified that he wouldn’t have been able to conduct his scheme without the help of TD bank management, such as former bank vice president Frank Spinosa, who Rothstein claims to have paid $50,000 to falsify account balances.

TD Bank denies any wrongdoing and maintains, that it was Scott Rothstein “who defrauded investors.”

The Employment Law Group® law firm has an extensive nationwide whistleblower practice  representing employees who have been victims of retaliation.

Feature Article Interviewing The Employment Law Group® Principal Attorney Dave Scher Receives Wide Coverage in Military Publications

On January 11, 2011 the Air Forces Times featured The Employment Law Group® law firm principal attorney Dave Scher in a story regarding recent whistle-blowing by U.S. Department of Veterans Affairs (VA) physicians.

The story has since been featured in other Gannet Government Media publications including the Army Times, Navy Times, Marine Corps Times, and Military Times.  In addition, the article was mentioned on the Government Accountability Project’s (GAP) Daily Whistleblower News blog.

Cover of January 16, 2011 print edition of Air Force Times

The Air Force Times and the other Gannet publications are weekly newspapers that serve active, reserve, and retired members of the U.S. military and their families by providing news and analysis that is relevant to members of the military community.  The newspapers are among the most widely purchased publications on U.S. military bases and other military installations and, together, have an average weekly circulation of over 240,000.

The article highlighted a current case that arose following allegations that a whistleblower was fired from a VA facility in Northport, New York after complaining about unsafe patient practices and hazardous working conditions. The Employment Law Group® law firm attorney Dave Scher noted that the U.S. Office of Special Counsel substantiated the allegations and that “the special counsel herself went out of her way to praise [the whistleblower’s] courage in a press release.”

The article also profiled other cases in which The Employment Law Group® law firm has advocated for whistleblowers’ rights by assisting VA doctors who claim that “they were fired or harassed for speaking out about problems affecting patient care”.  In these cases, said Scher, the “former healthcare professionals attempted to point out the dangers patients were facing at VA medical facilities.”

“How such rampant disregard for regulations and respect for patients took place is a travesty.  The whistleblowers are stepping forward to protect these patients’ rights as well as their own.”

The original article, entitled “Whistle-blowers Sue VA, Claim Reprisal”, appeared in the January 16, 2012 print edition of the Air Force Times.

The Employment Law Group® law firm has an extensive nationwide whistleblower practice  representing employees who have been victims of retaliation.

OSHA Orders AirTran Airways to Reinstate and Pay $1 Million in Damages to Whistleblower Pilot

The U.S. Department of Labor’s Occupational Safety and Health Administration (OSHA) last week ordered AirTran Airways, a subsidiary of Dallas- based Southwest Airlines Co., to reinstate a former pilot who was fired in 2007 after he filed numerous reports of mechanical malfunctions. OSHA found that AirTran violated the whistleblower provision of the Wendell H. Ford Aviation Investment and Reform Act for the 21st Century (AIR21), which prohibits retaliation against airline employees who blow the whistle on safety concerns.

On August 23, 2007, AirTran removed the pilot from flight status until the airline could hold an internal hearing regarding the sudden spike in the number of mechanical malfunction reports (PIREPS) that he filed. A week after the hearing, the airline fired the pilot for failing to provide a satisfactory explanation for the number of PIREPS he had filed.

In addition to reinstating the former pilot, AirTran must pay the pilot more than $1 million in back wages plus interest and compensatory damages.

Dr. David Michaels, Assistant Secretary of Labor for Occupational Safety and Health, stated:

Retaliating against a pilot for reporting mechanical malfunctions is not consistent with a company that values the safety of its workers and customers… Whistleblower laws are designed to protect workers’ rights to speak out when they have safety concerns, and the Labor Department will vigilantly protect and defend those fundamental rights.

The Employment Law Group® law firm has an extensive nationwide whistleblower practice  representing employees who have been victims of retaliation.

Johnson & Johnson Subsidiary to Pay $158 Million to Settle Allegations it Misrepresented Drug Safety and Paid Physicians Kickbacks to Prescribe Risperdal

On January 19, 2012 Janssen Pharmaceuticals Inc., a subsidiary of Johnson & Johnson, announced that it had agreed to pay $158 million to settle a Medicaid fraud lawsuit in Texas which alleged that the company improperly marketed its antipsychotic drug Risperdal causing the state to overpay for the drug.

The lawsuit alleges that the company committed fraud by making false or misleading statements about the cost, effectiveness, and safety of the drug and exerted improper influence over physicians and state officials to recommend the drug, including allegations of providing kickbacks. Additionally, the lawsuit claimed that the company told physicians that the drug was safe to prescribe to children even though the Food and Drug Administration (FDA) had not approved such use.

Janssen announced that it agreed to pay the $158 million settlement in order to resolve all claims against it in Texas. The company noted, however, that it does not admit any liability or wrongdoing by entering into the settlement agreement. The settlement will put an end to the trial that began on January 10, 2012.

Some analysts have contended that the $158 million settlement is a victory for Johnson & Johnson because the company has made billions from the sales of Risperdal and the settlement will allow the company to avoid repaying the $579 million that the Texas Medicaid program spent on the drug in addition to the $500 million in penalties initially sought by Texas Attorney General Greg Abbot.

The suit was originally filed in 2004 when whistleblower Allen Jones, a former employee of the Office of Inspector General of Pennsylvania, claimed that he had uncovered the drug manufacturer’s alleged violations while he investigated claims in Pennsylvania. Texas joined the lawsuit two years later in 2006.

Mr. Jones will receive a portion of the settlement amount for his role as a whistleblower. The details of the settlement, including the amount of the award to be received by the whistleblower, have not yet been released.

The Employment Law Group© law firm focuses in the areas of employment law and whistleblower protection law, has helped many clients file suit against employers that fraudulently billed the U.S. government, and has established favorable precedents under the retaliation provision of the False Claims Act.