False Claims / Whistleblower

Qui Tam cases allow individuals, sometimes referred to as “whistleblowers,” to bring lawsuits against businesses that are defrauding taxpayers. This type of action was created by Congress during the Civil War, after military suppliers provided defective equipment to Union soldiers. 31 U.S.C. § 3729. As a result, Congress empowered anyone who was aware of such conduct to bring an action qui tam pro domino rege quam pro sic ipso in hoc parte sequitier — “who for the king as well as for himself sues in this matter” — on behalf of the government against the wrongdoer.

Qui Tam lawsuits are brought on behalf of the state or federal government, and are usually brought under the state or federal False Claims Act. The whistleblower typically receives 15-33% of the recovery based on their role in unveiling the fraud.  CPM has successfully represented numerous Qui Tam plaintiffs against companies that have defrauded the government, resulting in large recoveries of taxpayer money by the government, and substantial awards for whistleblowers. In most cases, CPM works with government attorneys to litigate Qui Tam lawsuits.

RECENT CASES OF NOTE

CPM has several qui tam cases that cannot be disclosed because they are currently under seal and being investigated by the state or federal governments.  Examples of cases that are no longer under seal include:

Quest Diagnostics Litigation
State of California ex rel. Hunter Laboratories v. Quest Diagnostics, Inc., et al.
Sacramento County Superior Court
CPM represented a whistleblower, Chris Riedel, who owns a lab company, Hunter Laboratories of Campbell, California.  The California Attorney General’s office joined the case in late 2008.  The lawsuit alleged that, despite state law requiring that California’s Medi-Cal program receive the lowest price for lab services, Quest Diagnostics, the largest lab in California, and LabCorp, the second largest, routinely billed California prices far above what it was charging others.  The case settled in 2011, recovering $301 million in taxpayer money from the lab defendants, including $241 million from Quest Diagnostics, Inc.  The $241 million settlement is the largest false claims act recovery in California history, and the largest single-state False Claims Act settlement ever in United States history.

State of Michigan ex rel. Hunter Laboratories v. Quest Diagnostics, Inc., et al.
30th Circuit Court - Michigan
This action is very similar to the California action.  CPM recently defeated a Motion to Dismiss.  The case is being prepared for trial.

California v. Tri-City Hospital
Sacramento Superior Court
This action intersects with FBI raids of Southern California hospitals.  The core allegation is that Plaintiffs are providing unneeded back surgeries with counterfeit medical devices. 

United States, et al. v. Kan-Di-Ki, LLC
USDC Central District of California
CPM represents two former employees of Diagnostic Laboratories, the largest provider of x-ray and laboratory services to skilled nursing facilities in Southern California, in a case under the federal and California False Claims Acts alleging that Diagnostic Laboratories systematically overbilled Medicare and Medi-Cal, and provided illegal kickbacks to induce the referral of Medicare and Medi-Cal business. The California Attorney General’s Office has intervened in the case. This case settled in March 2013 after arguing pre-trial motions.

California ex rel. Richardson v. IREF
San Francisco Superior Court, Case No. 964656
CPM filed a Qui Tam California False Claims Act case against research foundation for failure to pay direct and overhead costs in clinical drug studies to its host university.  Defendants agreed to pay $25 million to settle the lawsuit that alleged dollars were being misused.  A UC-trained physiologist Dr. Charles Richardson, brought the lawsuit.

United States v. Tenet Healthcare Corporation
USDC Central District of California
CPM filed a Qui tam False Claims Act litigation against healthcare provider for overcharging the government.  The case involved a hospital in South Carolina and was successfully resolved.

Key Contacts

News