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District Court Sides With Relator for a Higher Reward

July 27, 2015 — Individuals who file a false claims act case (“relators”) are statutorily entitled to a percentage of the reward. The statute provides a range between 15% and 30% depending on the depth of contribution by the relator. And, generally, the sole entity authorized to make the determination of whether the reward will be closer to 15% or 30% is the government.  Relators are permitted to challenge the decision of the government, and that is just what Peggy Ryan, Max Weathersby and Gursheel S. Dhillon did.

Background

The relators came forward and filed a qui tam case under seal to report Endo Pharmaceuticals for violations of the False Claims Act in the promotion of the drug Lidoderm.  The government engaged in a lengthy investigation initiated by the filing of the case. After concluding its investigation, the government settled the matter for $171.9 million. In determining the amount owed to the relators for bringing forth the case, the government offered the relators a 19% relator’s share. The relators requested a 24% share. After the government refused to increase the 19% offer, the relators filed a motion with the Pennsylvania District Court to obtain a higher percentage than that offered by the government.

The Result

Based on the significant contribution the relators brought, the Court agreed with the relators and granted them a 24% share. The government argued that the size of the settlement warrants a smaller relator’s share. The Court disagreed with the government citing to the language of the False Claims Act, which emphasizes the relator’s contribution to the prosecution as a measure of the reward. The District Court noted in its decision, “[a]n examination of the record exhibits that Ryan provided not only the spark for the investigation, but that she nurtured the flame at the darkest times when the possibility of a favorable outcome seemed most remote.” The Court noted that the relator provided the government access to defendant’s corporate walls, and enabled the government’s investigatory team to uncover evidence, which would have otherwise been unobtainable. She wore a wire for over three years, and successfully procured direct evidence of an organizational strategy to market Lidoderm for off-label uses in violation of the False Claims Act. The Court emphasized that the relator spent hundreds of hours supporting the government in its investigation, and that she was indispensable to the investigation in its decision to grant relator’s request of 24% of the share. This reward amounts to $33.6 million to the relator.

Contact Waters & Kraus to Report Misconduct by a Government Contractor

While Waters & Kraus is not handling this particular False Claims Act case, we are representing whistleblowers in similar lawsuits. If you have comparable claims against a different government contractor, contact us by email, or call our qui tam attorneys at 800.226.9880 to learn more about our practice and how we can work together to notify the government about fraudulent abuses by government contractors. This article was contributed by Louisa Kirakosian one of the qui tam attorneys in the firm’s Los Angeles office.

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