First Circuit Sides With Greene LLP Over $34 Million Whistleblower Award

May 10th, 2019

Reversing a District Court decision that had found a different False Claims Act relator first to file, the First Circuit Court of Appeals on Monday issued a decision agreeing with Greene LLP client Mark McGuire that he was the first relator to file the essential facts of two drug testing laboratory schemes that resulted in a $227 million settlement with Millennium Laboratories. The 2015 settlement reached by the United States and several states with Millennium had required McGuire and relators in six other False Claims Act cases to dismiss their claims, but it did not resolve which of the relators was entitled to a 15% relator share from the settlement.

The 2015 settlement resolved claims that Millennium had caused physicians to order confirmation urine drug testing from Millennium without individualized assessments of need, and that Millennium had provided free point-of-care testing cups to providers as kickbacks in violation of the Anti-Kickback Statute. McGuire had argued that his case was the first of the seven False Claims Act cases to have alleged the essential facts of the fraudulent scheme, even though one of the cases had been filed in 2009, more than two years before McGuire filed suit in January 2012. Ultimately, the First Circuit agreed with McGuire’s position.

“The First Circuit’s ruling is consistent with the goals of the False Claims Act, which is carefully balanced to provide the United States with the maximum number of actionable cases,” said Greene. The False Claims Act encourages those with knowledge of fraud on the government to bring it to the government’s attention, authorizing private persons to file suit on the government’s behalf and providing for an award of 15% to 30% of any resulting recovery. “The first to file bar gives teeth to the statute’s award provisions, protecting the interest of the relator who is first to plead the essential facts of a fraudulent scheme,” said Greene. “Without that protection, relators may be less willing to file suit, or less willing to vigorously investigate and prosecute False Claims Act cases.”

The First Circuit agreed, ruling that the incentive to dig out facts and launch a False Claims Act action is weakened by allowing follow-on filers to siphon off the first-filed suit’s proceeds. The litigation shows that the statute’s first to file bar and the “essential facts” test used by the First Circuit to apply the bar serves as a yardstick for comparing False Claims Act suits brought by different relators. It can be used to determine that an earlier-filed case, like the 2009 suit against Millennium filed by Robert Cunningham, is not responsible for a later recovery. It can also be used to protect the interests of a whistleblower like McGuire, whose allegations about Millennium were echoed in later-filed cases by other whistleblowers, at least to a degree.

At the time he filed his case in January 2012, McGuire was the director of a large laboratory that conducted 1.1 million tests a year for a network of hospitals in Massachusetts. Millennium attempted to solicit the lab’s business from McGuire in October 2011, meeting with him regularly and detailing how it could help increase the lab’s testing and revenue with so-called “custom profiles.” McGuire alleged that Millennium encouraged or required health care providers to execute these “custom profiles” with a battery of a minimum number of confirmation tests that Millennium would run on any urine samples sent to it by providers—with no assessment of which tests, if any, were appropriate confirmation tests for particular patients. McGuire also alleged that Millennium provided point-of-care testing cups to providers in order to solicit confirmation tests, in violation of the Anti-Kickback Statute.

McGuire’s complaint and later-filed complaints, including the United States’ complaint in intervention, alleged that after a change in CMS regulations that was effective January 2011, Millennium sought to make up for lost revenue with these two schemes: custom profiles with a required minimum of tests, and kickbacks in the form of point-of-care testing cups. They alleged that the schemes were enacted around August 2011 at the company’s highest levels.

The First Circuit’s decision in U.S. ex rel. McGuire, et al. v. Millennium Laboratories, Inc. was the culmination of a three-and-a-half year effort for McGuire, who had sought a declaration that he was the first to file relator on the United States claims and the claims on behalf of all but one state. Ultimately, the First Circuit determined that McGuire’s suit was not blocked by the earlier-filed Cunningham suit, that the Cunningham suit did not include the essential elements of the fraud alleged by McGuire, and that “the fraud the government pursued was that alleged by McGuire.”

Greene LLP Whistleblower Secures $6.5 Million False Claims Act Settlement With Carolinas Healthcare System Over Upcoding Allegations

July 5th, 2017

Greene LLP attorneys announce the resolution of False Claims Act claims by Mark McGuire, a former laboratory director with the Charlotte-Mecklenburg Hospital Authority, Inc., a chain of North Carolina hospitals doing business as Carolinas Healthcare System (CHS). While with CHS, McGuire oversaw all of the operations of its laboratory, and protested against billing practices that resulted in false claims for payment to the government. Under the federal False Claims Act, McGuire filed a law suit on behalf of the federal and North Carolina governments, alleging that upcoding at CHS resulted in thousands of falsely inflated claims to Medicare and Medicaid. The $6.5 million settlement reached by the United States with CHS resolves McGuire’s allegations that CHS upcoded when submitting claims for urine drug testing services.

Federal health insurance programs reimburse for laboratory testing based in part on the complexity of testing. Effective January 1, 2011, the Centers for Medicare and Medicaid Services introduced a reimbursement code for carefully defined urine drug tests of moderate complexity, to be used when utilizing “a moderately complex reader device.” McGuire found that CHS routinely billed Medicare and Medicaid under a high complexity reimbursement code for tests performed with its Beckman Coulter UniCel DxC 800 Synchron Systems, classified by its manufacturer as a moderate complexity reader device. Tests done on this machine should never be billed under a high complexity code, alleged McGuire, but by doing so, CHS increased its reimbursements by approximately $80 per test.

Before filing the False Claims Act suit, McGuire made efforts to stop the CHS billing practices internally, employing a compliance “HelpLine” and speaking directly with CHS officials. “This case is a great example of how the False Claims Act can get things done when other methods do not,” said Thomas M. Greene, who along with Michael Tabb and Tucker Greene represented McGuire in the law suit. “McGuire knew he was right—Carolinas Healthcare did not own the lab equipment needed to justify the high complexity reimbursement codes. He feels vindicated by this settlement.” W. Thompson Comerford of Comerford & Britt, LLP also represented McGuire in the suit, which was resolved through the instrumental efforts of Assistant United States Attorney Jonathan Ferry and others at the U.S. Attorney’s Office for the Western District of North Carolina.

The False Claims Act provides that when a whistleblower successfully files suit and the government intervenes, that whistleblower is entitled to between 15% and 25% of any resulting recovery. Pursuant to the terms of settlement, McGuire will receive $1,365,000 of the government’s settlement. “We are pleased with a 21% relator share in this case, which rewards McGuire for the professional nature of his conduct in this straightforward upcoding case,” said Greene. McGuire also received $30,000 directly from CHS in satisfaction of his allegations that the company retaliated against him because of his efforts to stop improper billing practices. Pursuant to the statute, CHS will also pay McGuire’s attorneys’ fees for the prosecution of the False Claims Act case. The case, United States ex rel. Mark McGuire v. The Charlotte-Mecklenburg Hospital Authority, et al., was filed in federal court in the Western District of North Carolina, Case No. 3:15-cv-147.

Greene LLP is a Boston complex civil litigation firm that specializes in False Claims Act litigation, employing a low-volume, high-attention approach. Each of the firm’s partners have over twenty years of experience in whistleblower litigation, pioneering innovative theories of recovery. Greene LLP cases have resulted in over $1.2 billion in government recoveries, including nearly $500 million for claims for which the government declined to intervene.

Far-Reaching False Claims Act Decision Won in U.S. Supreme Court by Greene LLP

June 16th, 2016

GREENE LLP MASTER LOGO [65 percent of SMALL]With a unanimous 8-0 decision delivered today, the Supreme Court of the United States ruled in favor of Greene LLP and its clients on a landmark False Claims Act issue with far-reaching consequences on the so-called “implied certification” theory of liability. The Supreme Court held that contrary to the assertions of defendant Universal Health Services, Inc., a regulation need not specify that it constitutes a “condition of payment” in order for a failure to comply with that regulation to form the basis of liability.

Key to the Supreme Court’s decision was that in providing mental health services through unlicensed and unsupervised personnel, Universal submitted claims for payment to MassHealth, the state Medicaid program in Massachusetts which uses both state and federal funds. The Court ruled that a defendant may be held liable under the False Claims Act for misleading the government when it represents to an agency that services were provided without disclosing that the services did not comply with material regulations.

Greene LLP clients Julio Escobar and Carmen Correa filed the False Claims Act case on behalf of the government after learning that most of the counseling and medical services received by their daughter, Yarushka Rivera, had been provided by unlicensed personnel. MassHealth regulations permit services by unlicensed personnel at satellite facilities like the Universal facility in Lawrence, MA where Rivera received care, but only when the unlicensed personnel is supervised by licensed personnel. The lawsuit alleged that four of five persons who treated Rivera at Universal were unlicensed and unsupervised, including a nurse held out as a psychiatrist. Rivera later died due to complications with a medication first prescribed by that nurse.

The implications of the Supreme Court’s decision on False Claims Act litigation are vast. Prior to today’s decision, only two Circuit Courts of Appeal had recognized some form of “implied certification,” with other courts holding that if a regulation did not by its own terms refer to itself as a “condition of payment,” a failure to meet such requirements did not render claims for payment false. The Supreme Court’s ruling means that the government need not specify in each and every regulation it considers important that it will not pay for services that do not meet those requirements – the only test is one of materiality, articulated in the False Claims Act itself.

“Today’s decision vindicates more than six years of efforts by Julio Escobar and Carmen Correa to hold Universal accountable,” said Thomas M. Greene, who represents the relators. “Requiring unlicensed mental health providers to be closely supervised is common sense. The Supreme Court spoke loudly today: if you’re trying to get the government to pay for services, you’d better actually provide them. That means providing them in compliance with regulations that most people would consider important, like licensing and supervision requirements.” In addition to Greene, the relators were represented in the Supreme Court by Michael Tabb and Elizabeth Cho, both also of Greene LLP, and David Frederick and Derek Ho of Kellogg, Huber, Hansen, Todd, Evans & Figel, PLLC.

Greene LLP is complex civil litigation firm specializing in qui tam suits filed under the False Claims Act, which permits private citizens to share in a recovery if they have information of fraud against the government. The Universal Health Services, Inc. v. United States ex rel. Escobar decision today is the latest in a long line of trailblazing whistleblower rulings pursued by Greene LLP attorneys, including United States ex rel. Franklin v. Parke-Davis, the first case in which a court ruled that a pharmaceutical company could be held liable under the False Claims Act for off-label promotion of drugs.

$2.8M False Claims Act Settlement for Retention of Overpayments from Tennessee Valley Authority

May 5th, 2016

Greene LLP announces the $2,800,000 settlement with Bartlett Holdings, Inc. of False Claims Act allegations that it wrongfully retained overpayments from the Tennessee Valley Authority for work expanding a nuclear power plant on the Chickamauga Reservoir in Tennessee. As part of the settlement, Greene LLP’s qui tam whistleblower client will receive $616,000, representing a 22% relator share.

Bartlett was a subcontractor performing professional engineering and other services for the Tennessee Valley Authority’s addition of a second reactor at the Watts Bar Nuclear Plant, paid pursuant to a “cost plus” government procurement contract. The False Claims Act suit alleged that Bartlett was pre-paid for payroll taxes and other estimated costs, but that it failed to return overpayments representing the difference between those estimated costs and the actual payroll taxes and insurance costs paid.

An accountant, the relator was employed by a firm that performed an audit of the Watts Bar project financials. As part of the audit, the relator examined detailed payroll files, and his firm shared the results of his audit in 2012. As alleged in the complaint, the audit concluded that $1,645,574.99 in pre-paid payroll taxes for the year 2010 had not been returned to the TVA as required. By the time the False Claims Act case was filed in May 2014, the relator came to believe that Bartlett had not been required to return the overpayments he had identified.

Because the TVA is a wholly owned government corporation and instrumentality of the United States, wrongful retention of overpayments from it can be actionable under the False Claims Act. As a so-called “reverse false claims” case brought under 31 U.S.C. § 3729(a)(1)(G), the allegations of a violation relied on Bartlett’s affirmative duty as part of its contract to perform regular reconciliations to return anticipated overpayments to the TVA.

“The United States is not a business partner to be trifled with,” said Thomas M. Greene, who represents the relator. “Fraud against any government agency, even one as independent as the Tennessee Valley Authority, can carry stiff penalties—and there’s always someone that knows it’s happened.” The relator was also represented by Michael Tabb, Tucker Greene and Ryan P. Morrison, also of Greene LLP. The work of the TVA Office of Inspector General and the U.S. Attorney’s Office for the Eastern District of Tennessee were instrumental in completing the investigation and effecting settlement, particularly that of Assistant United States Attorney Robert McConkey, and Charles A. Kandt, Counselor to the Office of Inspector General.

Greene LLP is a complex civil litigation firm in Boston of seven attorneys, specializing in representing qui tam whistleblowers in False Claims Act litigation with a low-volume, high-attention approach. Each of the firm’s partners have over twenty years of experience in whistleblower litigation, pioneering innovative theories of recovery and litigating to $1.2 billion in government recoveries, including nearly $500 million for claims for which the government declined to intervene.

Greene LLP False Claims Act Suit Resolved with Millennium Health, LLC Settlement of $227 Million

October 19th, 2015

On October 19, 2015, Greene LLP announced the resolution of False Claims Act claims against Millennium Health, LLC in a settlement reached with the United States. The settlement, likely to exceed $231 million once interest is calculated, brought to an end the whistleblower suit initiated by Greene LLP and client Mark McGuire in January 2012 under the qui tam provisions of the False Claims Act.

The settlement resolved allegations that Millennium encouraged physicians to order drug testing performed by the company without an individualized assessment of patient need. The Greene LLP suit and the United States’s complaint in intervention alleged that Millennium caused physicians to order such tests by promoting the use of standing orders termed “custom profiles,” which included a default panel of tests for Millennium to run on each specimen physicians sent to its San Diego, California facility for testing. Also resolved by the settlement were the complaints’ claims that Millennium billed the federal and state governments for testing it was referred in exchange for providing physicians with free point-of-care testing supplies, cups containing test strips that also served as specimen containers.

The complaints alleged that after a change in CMS regulations effective January 2011, Millennium sought to make up for lost revenue by requiring all of the testing referrers with which it did business to execute Custom Profiles, and to keep a minimum number of tests selected on those standing orders. The complaints alleged that as part of its marketing strategy to encourage physicians to refer testing, Millennium provided free point-of-care test cups. Testing performed as a result when physicians sent specimens to Millennium with Custom Profiles executed was not selected for patients on the basis of whether they were medically necessary, a condition of payment by Medicare and Medicaid programs.

False Claims Act allegations filed against Millennium alleged that it initiated its business plan to make up for a 2011 downturn in revenue at the company’s highest levels at the end of August, 2011. Mark McGuire was the director of a large laboratory that conducted 1.1 million tests a year for a network of hospitals in Massachusetts. Millennium attempted to solicit the lab’s business from McGuire in October 2011, meeting with him regularly and detailing how it could help increase the lab’s testing and revenue with custom profiles.

“This settlement is a great example of what the False Claims Act is designed to encourage,” said Thomas M. Greene, who filed McGuire’s January 2012 suit. “When a person has enough information about a significant fraud against the government for the government to take action, the law provides a strong incentive to come forward.” As part of the settlement, the United States agreed to pay a relator’s share of 15% of its recovery. The settlement also provided for payments to state governments, a portion of which will also be awarded as relator shares under several state False Claims Acts.

On behalf of the United States, the case was handled by Doug Rosenthal of the Department of Justice in Washington, DC and Assistant U.S. Attorneys George Henderson III and Abraham George of the U.S. Attorney’s Office in Massachusetts. Also especially instrumental in the investigation was Kathleen VonHoene of the Florida Attorney General’s Office. “We were pleased to participate in what became an enormous investigation with talented attorneys, all working for the government to recover money for testing that should never have been performed,” said Greene.

Greene LLP is a complex civil litigation firm in Boston of seven attorneys, specializing in representing qui tam whistleblowers in False Claims Act litigation and employing a low-volume, high-attention approach to litigation. Each of the firm’s partners have over twenty years of experience in False Claims Act litigation, pioneering innovative theories of recovery, including the theory that off-label promotion of drugs can cause damages actionable under the False Claims Act.

$500,000 Settlement of Customs Duty False Claims Act Case

January 26th, 2015

Greene LLP announces an agreement with Green Bag, Co. to settle allegations that it underpaid customs duties on designer bags it imported from China. The suit was filed in 2012 after nine months of investigation by the qui tam relator and Greene LLP attorneys Thomas M. Greene, Michael Tabb and Ryan P. Morrison. It alleged that Green Bag underreported cost of goods in order to pay correspondingly low customs duties. The False Claims Act settlement provides for $500,000 to the United States, and the whistleblower will receive a 20% relator’s share of that recovery. In addition, the defendant agreed to pay statutory fees and a significant breach of contract settlement to the relator.

Greene LLP filed the case in the Northern District of California with the help of local counsel. Once the case was filed, Assistant United States Attorney Sara Winslow spearheaded a multi-agency investigation into the alleged fraud.

“We believe fraud on the government through avoidance of customs duties is a lot more pervasive than people realize,” said Thomas M. Greene. “Our investigation suggests that many companies use a variety of techniques to either improperly reduce the customs duties they pay, or to avoid paying them altogether.” In the case against Green Bag, the False Claims Act whistleblower alleged that the defendant essentially kept two sets of books. One set tracked the company’s true cost of goods overseas so that its manufacturers could be paid, and in order to claim the proper business deductions. The second was fabricated solely for the purpose of underreporting cost of goods to United States Customs and Border Protection personnel.

Although relatively few customs cases have been successfully pursued under the False Claims Act, several types of fraud in avoiding tariffs have been the subject of whistleblower cases. “Falsely stating the country of origin to avoid paying duties can be actionable,” said Ryan P. Morrison. “Misclassifying goods to get a lower duty rate can also lead to False Claims Act recoveries for the government and qui tam whistleblowers.”

In some ways, underreporting cost of goods may be the easiest way for a company importing goods to avoid paying the correct customs duties. As the Green Bag case revealed, there are export entities in China that stand willing to provide United States companies with two sets of invoices. With seemingly complete documentation, Customs and Border Protection has no way to determine directly that the importer actually paid more for the goods abroad. Whistleblowers, therefore, will play a key role in curbing customs fraud.

“With the proliferation of government spending, there is really no limit to the number of ways that the government can be defrauded,” said Greene. “With new kinds of fraud comes new kinds of False Claims Act cases, and we think customs fraud will become an important way to recover money owed to the government.”

Greene LLP is a complex civil litigation firm that specializes in representing qui tam whistleblowers in False Claims Act litigation. Its partners each have over twenty years of experience in False Claims Act litigation, with a track record of successes in defense and health care industry cases.

Greene LLP Announces $325 Million Class Action Settlement with Pfizer Inc. on Claims of Fraudulent Marketing of Neurontin

December 1st, 2014

Greene LLP is pleased to announce the resolution of a class action settlement with Pfizer Inc. and Warner-Lambert Company for $325 to resolve allegations of fraudulent marketing of the drug Neurontin. On November 10, 2014, Judge Saris of the Federal District Court of the District of Massachusetts granted final approval of the settlement, which was reached on behalf of third-party payors who paid for Neurontin prescriptions they alleged were worthless.

“I am gratified by this achievement,” said Thomas M. Greene, Chairman of the Plaintiffs Steering Committee. “After more than eighteen years of litigation, all of the briefing and investigative lawyering, I think this represents an excellent result for those harmed financially by the marketing of a worthless drug.”

The cases that came together as a putative class action were mostly filed in 2004. Greene’s 1996 False Claims Act suit on behalf of a whistleblower had made national news as the first to successfully allege that it was a False Claims Act violation for a pharmaceutical company to cause others to submit claims for off-label prescriptions. The False Claims Act suit was settled between Pfizer and the United States and several states in 2004 for $430 million in civil fines and criminal penalties.

Although the government had recovered for Neurontin prescriptions that were off label, private insurers had also been led to pay for the drug. The suits filed in 2004 alleged that Pfizer and its subsidiaries had distorted or omitted information about the drug’s effectiveness for bipolar disorder, migraine, neuropathic pain and other uses for which it was not approved by the FDA. Filed under the Racketeer Influenced and Corrupt Organizations Act (RICO), the case required the plaintiffs to prove that the promotion had been fraudulent.

“What sets this case apart is not simply that it was the first of its kind,” said Greene. “What truly sets it apart was the investigative lawyering of my firm and others involved in the litigation, including the work done to dig into Pfizer’s internal research reports for its own clinical trials. What we found is that the company was practicing marketing-based medicine, not evidence-based medicine.”

Partway through the litigation, one payor was selected by Judge Saris for a bellwether trial to test for factual findings. Once the trial was complete, the judge, sitting as fact finder, determined that there was no evidence that Neurontin was more effective than a placebo for off-label uses. Nonetheless, the rest of the putative class faced an uphill battle, losing several motions for class certification before an appeal to the First Circuit Court of Appeals made it clear that they could in fact bring aggregate evidence as proof of causation and damages.

Greene LLP took the lead on the investigative lawyering in the first stages of the case and the briefing at the district court and appellate levels in the last few years of litigation, but there were several other key figures in the litigation from the Plaintiffs Steering Committee who also were invaluable in advancing the case. Thomas M. Sobol of Hagens Berman Sobol Shapiro, Elizabeth Cabraser of Lieff Cabraser Heimann & Bernstein, and Don Barrett of Barrett Law Group played particularly prominent roles.

Also on November 10th, Judge Saris awarded a 28% attorneys’ fee for the class lawyers. “We are very pleased by the resolution of these claims,” said Greene. “Pursuing Pfizer and its predecessors for its marketing of Neurontin has dominated my time and energy for nearly twenty years, and I am satisfied that in the end, justice was served.”

Greene LLP is a complex civil litigation firm that specializes in representing qui tam whistleblowers in False Claims Act litigation and in large-scale health care industry cases.

British Medical Journal Recognizes Tom Greene as a “Pioneer of Transparency”

November 26th, 2014

Greene LLP attorney Thomas M. Greene filed a False Claims Act case against pharmaceutical company Parke-Davis over improper marketing of the drug Neurontin, a first-of-its-kind case that established that when a pharmaceutical company markets a drug for off-label uses, it can be a False Claims Act violation when such marketing causes financial harm to Medicare and other government payors.

But Greene’s work did not end there. After Pfizer settled the Neurontin False Claims Act case in 2004 for $430 million in civil fines and criminal penalties, private health insurers stepped forward with lawsuits saying that they too had been financially harmed by marketing of Neurontin. And although the False Claims Act case had taken more than seven years of litigation to be resolved, Greene once again found himself with a daunting task.

Once a multi-district litigation for Neurontin claims was established and assigned to Chief Judge Patti Saris of the Federal District Court for the District of Massachusetts, Greene was appointed to the Plaintiffs Steering Committee and elected its chairman. Ten years of active litigation later, the firm announced a $325 million class action settlement on behalf of private health insurers with Pfizer, Inc.

At the root of the class settlement were fraud allegations, that Pfizer and its predecessors had marketed Neurontin for off-level uses despite evidence that it did not actually work for those indications. It was the investigative lawyering necessary to properly examine that evidence that made the difference, although a seminal appellate decision from the First Circuit was also exceedingly important.

On January 2, that investigative work was recognized in “The Pioneers of Transparency,” an article in the British Medical Journal. Tom Greene and professor Kay Dickersin were singled out for their work in revealing selective outcome reporting in the clinical trials for Neurontin that Pfizer and its predecessors used to pitch Neurontin for off-label uses with doctors around the country. Dickersin and Greene LLP attorneys delved into the actual clinical trial reports, zeroing in on discrepancies between the studies’ raw information and how it was later repurposed for Pfizer’s marketing messages.

In addition to fighting for transparency in the Neurontin case, Greene has also taken his message across the country in a number of speaking engagements. He also testified before the United States House of Representatives in 2013, speaking out on a better way of tracking clinical trials before their outcomes are reported, to cut down on selective outcome reporting.

Greene LLP Recovers $18.6 Million in False Claims Act Fee Recovery Case

July 31st, 2014

Greene LLP recently reached an $18.6 million settlement on behalf of Cross & Bennett L.L.C., a Colorado firm that like Greene LLP represents False Claims Act whistleblowers. The fee recovery settlement concludes nearly two years of active litigation, and also awards Cross & Bennett the rights to substantial statutory fees from the underlying case which were later recovered from GlaxoSmithKline pursuant to a confidential settlement.

Attorneys Keith Cross and Joseph Bennett filed a qui tam case on behalf of clients Gregory Thorpe and Blair Hamrick in January 2003. The case against pharmaceutical giant GlaxoSmithKline alleged illicit off-label promotion of several drugs, including the asthma drug Advair, which in turn caused Medicare and Medicaid to pay for millions of prescriptions not legally reimbursable under the Social Security Act. After thousands of hours of investigation and working closely with government attorneys, Cross was informed in late 2009 by government attorneys that GSK was interested in a “handshake deal” within a few months. When he passed the news along to clients Thorpe and Hamrick, they immediately attempted to renegotiate the contingency fee due to Cross & Bennett.

When Cross refused to drop Cross & Bennett’s contingency fee percentage from 40% to 24%, his firm was terminated. “This is the nightmare scenario for all contingency lawyers,” said Thomas M. Greene. “It’s clear from the litigation records that Cross and Bennett were responsible, responsive, highly effective, and even inventive in ways that grew the case and protected their clients’ interests. After more than seven years of hard work, being threatened like that at the eleventh hour of litigation means your very livelihood is at risk.”

Making the litigation more difficult was that at the time Cross filed on behalf of his clients, only a single False Claims Act case was public that had asserted an off-label promotion theory of liability. That case, Franklin v. Parke-Davis, was originally filed by Greene in 1996, later settling for $430 million in civil penalties and criminal fines in 2004. At the time Cross was investigating the GSK case on behalf of Thorpe and Hamrick, however, the off-label theory of liability was still in its infancy.

The GSK case was ultimately settled for $3 billion, becoming not only the largest off-label case ever resolved, but the largest False Claims Act case recovery in the 150-year history of the statute. Under the False Claims Act, whistleblowers – known as relators – are entitled to between 15% and 30% of any recovery. For their role, Thorpe and Hamrick were awarded $75 million for blowing the whistle on GSK.

Cross & Bennett filed an attorneys’ lien and a complaint for unjust enrichment, alleging that they had been terminated in bad faith. They engaged Greene LLP to represent them in their fee recovery claims, with attorneys Greene, Michael Tabb, Sarah E. Godfrey and Margaret N. Rosenberg all playing key roles in the ensuing litigation.

“I am proud of the work done by this firm to safeguard the bar of attorneys who represent False Claims Act relators and the interests of those who represent plaintiffs on a contingency basis,” said Greene. “Contingency fees are an important way to provide access to justice for many people who have been harmed or who are trying to do the right thing, especially in False Claims Act cases, which can stretch on for several years.”

Greene LLP is a complex civil litigation firm that specializes in representing qui tam whistleblowers in False Claims Act litigation. Its attorneys have over twenty years of experience representing whistleblowers, with a track record of successes in a variety of industries, including health care. Located in the heart of Boston, the firm has unparalleled experience in successfully pursuing whistleblower cases regardless of whether the government elects to intervene.

Greene LLP Files Class Action Complaint Against General Motors Regarding Defective Ignition Switches

May 2nd, 2014

On May 1, Greene LLP attorneys filed a class action complaint against General Motors and affiliated companies for violations of the Racketeer Influenced and Corrupt Organizations Act (RICO). An ignition switch system installed in certain GM car makes and models is defective, allowing the cars’ engines, air bags, power-assisted steering and anti-lock brakes to shut down unexpectedly while the cars are in motion, and allowing the key to come out of the ignition while the cars continue to run.

The manufacturer of the ignition switches, Delphi Automotive, is also a named defendant in the complaint. GM instructed Delphi to continue manufacturing the defective part even though it did not meet GM’s own specifications – and directed Delphi to conceal a change in the design of the part by not assigning a new part number. The complaint alleges that GM and Delphi deceived Greene LLP client Colin Elliott and others into purchasing dangerous and defective vehicles. Even after the defect in the ignition switches were known, GM sold and leased more vehicles with the defect and Delphi sold more defective switches.

Although GM has only acknowledged 13 deaths caused by the defective ignition switches, independent safety regulators have recorded more than 303. The defective ignition switch was installed in several GM makes and models: Ion and Sky, manufactured by Saturn; Cobalt and HHR, manufactured by Chevrolet; and Solstice and G5, manufactured by Pontiac. Each of these six models was equipped with the defective switch for several years, spanning 2003 to 2011. An estimated 2.6 million vehicles were sold in the United States equipped with the defective ignition switches.

Prior to the sale of these vehicles, the complaint alleges, GM knew of the switch defect through field testing, in-warranty repair data, accident data, and early customer complaints made to GM and the National Highway Transportation Safety Administration. As early as 2005, GM engineers had proposed a redesign of the defective ignition switch (from a “slotted” to “hole” configuration) to prevent inadvertent shifting of the key in the ignition. Despite approving the new design, GM declined to act on it.

Because the cars sold with the defective ignition switch are and were grossly unsafe, all persons who purchased or leased them suffered economic damages by overpaying for the vehicles and/or having the resale value of their cars diminish. The following make and model years were equipped with the defective ignition switch:

Saturn Ion 2003-2007
Chevrolet Cobalt 2005-2010
Chevrolet HHR 2006-2011
Saturn Sky 2007-2010
Pontiac G5 2007-2010
Pontiac Solstice 2006-2010

In addition to RICO claims, Greene LLP’s complaint asserts claims of fraudulent concealment, breach of implied warranties under Massachusetts law, and violations of the Michigan Consumer Protection Act.