The district court granted the defendant’s motion to dismiss a complaint alleging unlawful employment retaliation under the FCA. The relator alleged that he was fired after he expressed concerns about speaking fees the defendants paid to physicians in violation of the Anti-Kickback Statute. According to the relator, another business director tacitly acknowledged that the speaker fees were intended to induce physicians to prescribe the company’s medications. However, the court found the relator had not shown he engaged in protected activity, first finding that he made only vague comments about his concerns to his direct manager and never expressly asserted that either the AKS or FCA were being violated. The court also found that when the relator was asked to increase the speaker program budget, he failed to launch an investigation into the program and instead directed other employees to make a business case for an increase in spending.
Defendant Avanir Pharmaceuticals Inc. moved to dismiss a qui tam complaint alleging the company violated the Anti-Kickback Statute and False Claims Act by paying speaking fees to physicians in exchange for their promise to prescribe certain medications. Relator Kevin Manieri also alleged Avenir terminated his employment after he raised objections to this activity.
In his complaint, Manieri alleged that the reason given for his termination was pretextual. Manieri alleged that his direct supervisor reprimanded him for comments he made to another regional business manager and criticized his management skills, which he had never done before. The supervisor gave Manieri the opportunity to resign, but did not cite any reasons for the termination, other than Manieri’s suggestion that underperforming employees be terminated. After that conversation, the relator’s employment was terminated.
In his complaint, the relator argued that the criticism of his management practices was only a pretext for his termination and that he was fired in retaliation for complaining about Avenir’s alleged kickback scheme.
Avenir moved to dismiss, arguing that Manieri had not demonstrated that his termination was retaliatory, because he had not shown that he engaged in protected activity intended to stop FCA violations.
Manieri alleged that he had attempted to stop FCA violations by refusing to allocate more money to provide a kickback to one named physician and when he reported and objected to the alleged kickback scheme.
However, the court found the complaint instead showed that, despite his belief that the speaking fees were illegal, Manieri either failed to intervene or explicitly directed that they continue. For example, the complaint alleged that a regional business director asked for more funding for the speaker program and tacitly admitted that the speaking fees were intended to induce physicians to continue prescribing Avenir’s medications. However, rather than launch an investigation into this alleged impropriety, Manieri told the director to proceed with available funds and to make a business case for an increase. The court found it peculiar that Manieri did not launch an investigation at that time, despite his concerns that the program was illegal.
Further, the court found no allegation that Manieri reported any concerns to Avanir’s compliance program or legal department, initiated any disciplinary or corrective actions against the regional business director, or took any other actions to stop the ongoing speaker payments. The court explained that Manieri’s alleged provisional refusal to increase the budget for speaker fees, without more, did not rise to the level of an allegation of a “protected activity.”
The court also was not convinced by the relator’s allegation that he reported Avenir’s illegal kickback scheme to his vice president. According to the complaint, Manieri raised his concerns without urgency, during a regularly scheduled status call that occurred 10 days after his conversation with the regional business director. The court also found Manieri raised his concerns only after his supervisor asked about the speaker program budget. Further, Manieri did not claim to have told McFadden that he believed Avanir was engaging in illegal activity by way of the speaker payment program; Manieri merely stated that he was “concerned” about both the speaker funds and about Avanir’s relationship with a specific physician, and that he felt Avanir was “crossing the line.”
The court explained that to constitute protected activity, an internal report must specifically allege fraud on the government, and not just general misconduct. The court could not assume that Manieri’s conduct was directed at preventing possibly tainted claims from being submitted to the federal government when nothing in the pleadings showed he understood, was motivated by, or even aware of that possibility.
Because Manieri could not demonstrate that he engaged in protected activity, he also failed to show that his employer was aware of this activity when he was terminated. Notably, Manieri did not allege that he affirmatively reported alleged fraud on the government in the form of illegal speaker fees, asking his superiors to halt the activity. Manieri alleged only that his vice president knew or should have known that his concerns were related to a purported kickback scheme. The court found this insufficient to meet the notice standard.
Because Manieri failed to demonstrate the first two prongs of the retaliation test, he also could not demonstrate that his termination was a direct result of his protected activity. Accordingly, the court granted the defendant’s motion to dismiss.
