Bounty-hunters crestfallen: a federal judge has rejected a Washington, D.C. lawyer’s suit against Solo Cup for stamping its product with expired patent numbers. [AP/Washington Post, earlier]
Posts Tagged ‘qui tam’
A fortune in his coffee cup?
Annals of bounty-hunting: “A recent ruling on an obscure, century-old statute has opened the door for people familiar with the finer points of patent law to sue companies that stamp their products with expired patent numbers.” Washington, D.C. patent attorney Matthew Pequignot “noticed the patent marks on the lid to his daily cup of coffee, did some research and found that the lid’s maker, Solo Cup Co., was continuing to claim patent protections for disposable lids that had expired nearly 20 years ago.” So he’s sued Solo and E.D. Va. federal judge Leonie Brinkema has allowed his case to go forward, ruling that the requisite harm to the government is satisfied because the government’s laws against “false markings” were violated. (A federal judge in New York, however, ruled differently on the harm-to-government issue in a recent case with similar facts.) Pequignot has offered to settle the Solo suit for $9 million and has sued Gillette on similar theories; the bounty-hunting law allows claimants to keep half of the recovery.
Pequignot, for his part, says he does not expect an avalanche of false markings lawsuits, despite the fact that [attorney Raymond] Stauffer and some others have already followed in his footsteps. He said that, even as a patent attorney, it took him many hours of research to be able to file his lawsuit.
[AP/Fort Wayne Journal Gazette via ABA Journal; Sheri Qualters, NLJ]
Vioxx settlement: February 8 update
(Updating and bumping Feb. 4 post about to roll off bottom of page because of new comment activity)
- Judge Fallon denied the motion of Florida plaintiffs to expedite a hearing on their inclusion into a settlement when they did not even bring suit (Jan. 30). Merck and the PSC are required to respond Feb. 15, and the hearing will be Feb. 21, where one can expect the motion to be denied.
- At Point of Law, I comment on the recent grand jury investigation into Merck marketing of Vioxx.
Update, Feb. 8: separately, Merck yesterday settles for $650 million different Medicaid fraud allegations over the marketing of Vioxx and other drugs. The qui tam relator will get a jackpot award of $68 million. [WaPo; DOJ; Merck] The pricing theories at the center of these lawsuits—which hold Merck liable for purportedly charging too little—definitely deserve longer discussion another time.
Sued for not endorsing 9/11 conspiracy theory
Fifty years ago, conspiracy theorists could rant in bars, or perhaps write letters to the editor. Twenty years ago, conspiracy theorists could call talk radio. Now? Through the magic of qui tam laws, conspiracy theorists can wage their war against sanity in the courts.
While reading Bizarro-Overlawyered’s paean to 9/11 lawsuits — guess what? They’re not (just) about the money! They’re really about helping the public “know what happened”! — a commenter on the site provided a link to Morgan Reynolds’ 9/11-related lawsuit. Reynolds, a former economist at the Department of Labor, became unhinged sometime after 9/11 and began ranting on the internet about the various conspiracies that brought down the World Trade Center. (Hint: government laser beams from space, not airplanes.) In the past, that would have been the end of it. Even if Reynolds wanted to take legal action, he couldn’t — he wasn’t injured by 9/11, so he would have no standing to file a lawsuit against anybody.
Ah, but that doesn’t take into account the False Claims Act. The qui tam provisions of the False Claims Act allow private individuals to sue on behalf of the government whenever the government is defrauded, and collect a portion of the money owed to the government. So all one needs to do is find a creative legal hook to claim that the government has been cheated, and all of the sudden one has standing to sue. What was Reynolds’ claim? He argues that when the National Institute of Standards and Technology (NIST) — a government agency — prepared its report on the collapse of the World Trade Center, it paid various companies to consult with it. Since none of those consulting companies mentioned the government laser beams from space, they obviously defrauded the government.
So he sued… well, he sued everyone. To be precise, he sued:
Science Applications International Corp.; Applied Research Associates, Inc.; Boeing; Nustats; Computer Aided Engineering Associates, Inc.; Datasource, Inc.; Geostaats, Inc.; Gilsanz Murray Steficek Llp; Hughes Associates, Inc.; Ajmal Abbasi; Eduardo Kausel; David Parks; David Sharp; Daniele Venezano; Josef Van Dyck; Kaspar William; Rolf Jensen & Associates, Inc; Rosenwasser/Grossman Consulting Engineers, P.c.; Simpson Gumpertz & Heger, Inc.; S. K. Ghosh Associates, Inc.; Skidmore, Owings & Merrill, Llp; Teng & Associates, Inc.; Underwriters Laboratories, Inc.; Wiss, Janney, Elstner Associates, Inc.; American Airlines; Silverstein Properties; and United Airlines
Those are engineering firms, airlines, consulting firms, defense contractors, building contractors, and real estate firms. All of which get to deal with his lawsuit. (Will it eventually be dismissed? Yes. Will Reynolds be ordered to pay defendants’ costs? Probably. (Assuming he could afford those costs, which seems unlikely given how many defendants he sued.) But thanks to the notion that private citizens can sue without suffering any injury, it superficially states a valid claim. And, hey, it isn’t that much kookier than the actual 9/11 families who seek to blame the airlines, the World Trade Center, etc. for 9/11. Incidentally, this isn’t one of those wacky pro se lawsuits; Reynolds has an actual lawyer, albeit one who’s also a 9/11 conspiracy theorist.)
(No links in this post; no need to encourage these people. Google if you want to find it.)
Short ’em, then sue ’em II
According to a WSJ news report, Greenlight Capital, a $4 billion New York hedge fund, has filed a federal False Claims Act lawsuit against Allied Capital Corp., alleging that a subsidiary of Allied known as Business Loan Express LLC, or BLX, “submitted fraudulent loan documents to the Small Business Administration, bilking the U.S. of millions of dollars. Greenlight and James Brickman, an individual working with the fund to bring the suit, are entitled to 25% to 30% of the proceeds if their complaint results in an award.” Aside from the novelty of a hedge fund’s getting into qui tam litigation (perhaps no real surprise, given the proven money-making scope afforded by that bounty-hunter’s statute) the even more noteworthy twist is that Greenlight has also taken a short position in Allied’s stock, so that it will profit if the stock falls independently of whether the litigation results in a successful recovery. (Carol S. Remond, “Greenlight Heads to a Courtroom”, Wall Street Journal, Jan. 29)(sub-only).
We’ve reported at some length previously (here and at Point of Law) about the evidence that plaintiffs and their lawyers sometimes short target companies’ stocks before filing lawsuits, and about the fairly grave implications of that both as a matter of legal/litigation ethics and for the “market integrity” rationale of securities regulation. See, for example, May 5, 2005 and Sept. 14, 2006, as well as (relatedly) Nov. 14, 2006, and at Point of Law, Feb. 6 and Mar. 3, 2006, and this Featured Discussion.
Update: “Brockovich’s Medicare-billing lawsuits tossed”
Glamor proved no substitute for legal merit as U.S. District Judge Thomas Whelan in San Diego dismissed two lawsuits by the highly publicized Brockovich against major hospital chains, alleging that the chains should refund to Medicare sums spent on treating injuries caused by earlier hospital negligence (see Jun. 22). The suits “made no specific claims of patient injury” but instead proffered studies estimating the nationwide incidence of negligent patient injury in hospitals. The judge termed the claims “speculative allegations” intended to allow Brockovich and the lawyers for whom she was fronting to “begin a fishing expedition”. “The judge also noted that Brockovich, 46, was not eligible to receive Medicare benefits, was never treated at any of the Scripps or Sharp hospitals, and was never injured by hospital staff misconduct.” (Keith Darcé, San Diego Union-Tribune, Nov. 16). For more on Brockovich’s activities generally, follow links from Nov. 3, 2005.
Fantasy sports leagues? Shut ’em down
A class-action law firm, Gardy & Notis, is suing ESPN, Viacom, Disney, CBS, Hearst, and The Sporting News, among others, alleging that their participation in the thriving field of fantasy sports leagues violates the anti-gambling laws of New Jersey. DeadSpin notes (Jul. 31) that named plaintiff Charles Humphrey “is a resident of Colorado, not New Jersey, and he points out in the suit that he, in fact, has never played any of these fantasy games, unlike you, you heathens.” Humphrey’s press release is here and the complaint (PDF) is here (via Bill Childs and Kevin Heller). The complaint asserts a right to recovery under qui tam (bounty-hunting) laws of Illinois, Georgia and the District of Columbia which allow random outsiders to file lawsuits to recover moneys reaped by way of unlawful gambling.
“Erin Brockovich Takes Role as Plaintiff in Medicare Suits”
For those who never expected to see the words “glamourpuss” and “Medicare” in the same sentence: “The onetime legal assistant, whose environmental crusade against a utility company inspired a hit movie starring Julia Roberts, has lent her name as plaintiff in lawsuits against several California hospitals and convalescent homes.” Two law firms, including Wilkes & McHugh, have engaged Brockovich as the public face of bounty-hunting “whistleblower” suits pursuing the adventuresome theory that hospitals defraud the government by accepting Medicare reimbursement for further medical care occasioned by their own earlier errors, even when no legal process has yet determined the earlier medical decisions to have been erroneous. The “lawsuits do not involve specific allegations of wrongdoing “. Ms. Brockovich is managed by the William Morris talent agency. (Daniel Yi, Los Angeles Times, Jun. 7). For much more on her activities, follow links from Nov. 3, 2005. Update Nov. 18: federal judge in San Diego tosses two suits.
Litigious animal rightsers
San Antonio:
An animal rights group has filed a lawsuit on behalf of seven chimpanzees and two monkeys, claiming the primates are not properly cared for at a Leon Springs sanctuary.
People for the Ethical Treatment of Animals wants a state district judge in Bexar County to appoint a guardian to oversee more than $235,000 provided for the animals’ care at Primarily Primates.
(“PETA Sues Local Primate Sanctuary “, KSAT, May 8)(via Strange in San Antonio).
Meanwhile, Dan McLaughlin at Baseball Crank reports (Apr. 19) on a Ninth Circuit decision (PDF) which “permitted an animal rights activist’s qui tam suit to go forward under the False Claims Act against a cancer researcher, principally on the theory that the researcher misrepresented the efficacy of his research.” McLaughlin does not pass judgment on whether the research project in question was a good use of public funds:
But I do know that allowing animal rights zealots an opening to use private litigation to harass medical researchers is a horrifying development. You will note, if you review the allegations on pages 6-7 of the slip opinion, that there are no allegations of the kind of things the False Claims Act is intended to protect against, i.e., personal enrichment, bill padding, and/or cost overruns by government contractors. Instead, there are a series of charges mainly relating to the medical merits of the research – a subject that will often be difficult for a judge without medical expertise to resolve on a motion to dismiss (where you assume the truth of the plaintiff’s allegations) or even on summary judgment (where the defendant only wins if it can show that there are no material factual disputes). Result: protracted and expensive litigation whenever anti-animal-research fanatics can gin up a factual dispute and hire an expert to bicker over anything said in a research application, with the attendant chilling effect on life-saving research. Indeed, from the docket numbers on the caption it appears that this particular case has already dragged on for five years just on the dispute over the legal merits.
Of course, harassment via legal process may compare favorably with some of the ways animal rights zealots have been known to harass researchers.
Also at Point of Law
Along with a great deal of other discussion of the John Roberts nomination (for which see the site’s special Supreme Court nominations page), Point of Law has kicked off a featured discussion of the confirmation saga by two distinguished contributors, U. of Chicago lawprof Richard Epstein and Northwestern lawprof Stephen Presser (more).
Some other recent highlights at the site: Jim Copland and Jonathan Wilson on the Texas Merck trial, Wilson on Georgia’s new rule regarding “offers of judgment”, and posts from me on an expansion of ADA coverage, school finance suits, the retention by Oklahoma’s attorney general of private tort lawyers to sue chicken farmers in nearby Arkansas, an appeals court approves RICO suits against employers of illegal aliens, health care qui tam actions, the “cab-rank” principle in legal ethics (observed more in Britain than here), and Astroturf in the liability wars.