Motion to dismiss a complaint alleging retaliation against a whistleblower for engaging in protected activity is denied, where the plaintiff was not required to show that false claims were submitted, but only that he investigated company conduct based on his reasonable belief that false claims could be submitted. The plaintiff investigated and raised concerns about activities that appeared to violate the Anti-Kickback Act, which would have rendered any related claims for payment to Medicare impliedly false. The court found the allegations plausible, that the plaintiff had adequately shown that false claims could have been submitted, and that the plaintiff demonstrated his employer knew he was engaged in protected activity.
Sunovion Pharmaceuticals Inc. moved for a partial dismissal of Todd Wittenbrock’s complaint that Sunovion took adverse employment action against him based on activity protected by the False Claims Act.
Wittenbrock alleged Sunovion fired him for investigating and reporting what he suspected were compliance violations. Specifically, the relator alleged that he was fired for investigating and reporting Sunovion’s practice of paying physicians to speak to their own medical groups to promote drugs developed by Sunovion, including the epilepsy drug Aptiom. Wittenbrock believed that this constituted an illegal kickback scheme violating anti-kickback statutes, the FCA, the CFCA, and a variety of other pharmaceutical-company compliance guidelines.
Sunovion argued that Wittenbrock failed to allege the existence of any false claims submitted by Sunovion, and thus failed to show that he engaged in any protected activity. However, the court disagreed, explaining that a company does not need to be subject to an actual False Claims Act action in order to violate the act’s protection of potential whistleblowers. A plaintiff asserting an FCA retaliation claim need not allege that an actual false claim was submitted; rather, the plaintiff need only allege a reasonable belief that an employer was possibly committing fraud against the government, and that they investigated this possible fraud.
The court held that the plaintiff’s complaint alleged that he was investigating his reasonable belief that Sunovion was causing false claims to be submitted to the government based on its knowing violations of anti-kickback statutes. Compliance with the Anti-Kickback Act—which AKA criminalizes providing a financial benefit to another with the specific intent to cause that person to induce a government health program to make purchases or reimbursements—is a requirement for receiving payments under Medicare.
Specifically, Wittenbrock observed that a Sunovion sales representative arranged an excessive number of speaker luncheons that were attended only by doctors from the same practice as the speaker. Wittenbrock claimed that after investigated these activities and reported them to his company’s compliance department, he was issued a written warning. The sales representative resigned shortly thereafter.
Wittenbrock also alleged another physician was paid honorariums in excess of the amount allowed by law to ensure his support in getting Aptiom approved by Medi-Cal and thereafter prescribing, and helping encourage other doctors to prescribe Aptiom. Wittenbrock investigated and reported this concerns to Sunovion management.
Finally, Wittenbrock alleged Sunovion engaged another physician to give a speech about Aptiom that was attended only by members of his own medical group. The complaint suggested the physicians would be induced to prescribe Aptiom over competing drugs because of the intimate setting and position of influence held by the paid speaker. Wittenbrock also reported these concerns.
The court held that Wittenbrock plausibly alleged that Sunovion’s speaker program provided the mechanism for Anti-Kickback Act violations. Because violations of the AKA may serve as a predicate for private causes of action under the FCA, the court concluded Wittenbrock was investigating conduct which reasonably could lead to the submission of false claims, satisfying the pleading standard.
Further, while Sunovion argued the plaintiff failed to allege that he suspected any false claims were made to the government, the court found the complaint alleged the plaintiff believed his employer attempted to defraud the government under an implied false certification theory.
The complaint alleged that Sunovion submitted certifications that it complied with Medicare laws, regulations, and program instructions as a prerequisite to seeking reimbursement from government health care programs, and that these certifications were rendered false based on Sunovion’s knowing violations of the AKA. It also alleged that Sunovion violated the FCA by knowingly submitting claims for reimbursement for prescriptions of Sunovion’s drugs, including Aptiom, which it knew were overprescribed or overpriced, thereby defrauding the government. Thus, the court held Wittenbrock adequately alleged that he suspected false claims were being made by Sunovion.
Sunovion also argued the plaintiff failed to demonstrate scienter, but the court found the complaint alleged the company knowingly violated anti-kickback statues by allowing employees and agents to spend large sums of money for speaking engagements to influence the physician-speakers to write prescriptions, and encourage other doctors to write prescriptions, for Aptiom. It also argued that Sunovion’s knowledge is demonstrated by Wittenbrock’s interactions with several members of Sunovion’s management to whom he reported suspected violations of the AKA. The complaint also alleged that Sunovion management expressed concern about the plaintiff’s activity and the effect it would have on the launch of its new drug. According to the court, in the context of Sunovion’s enthusiasm surrounding the Medi-Cal Launch of Aptiom and the prospect of a $30 million sales campaign, the plaintiff’s allegations were sufficient to infer that Sunovion had knowledge of the information Wittenbrock was attempting to convey.
Accordingly, the court found that Wittenbrock had alleged that he was engaged in protected activity for purposes of his FCA and CFCA retaliation claims.
Next, Sunovion argued that the plaintiff failed to show the company had knowledge of his protected activities, because his complaints fell within his job duties. The court disagreed, finding the complaint alleged the protected activity was not part of the plaintiff’s job requirements. While Wittenbrock’s duties as Regional Business Manager included preventing violations of regulations which govern interactions between Sunovion and healthcare practitioners, the court found his activity exceeded the scope of his duty to report violations to the Compliance Department when he reported the violations to management personnel outside the Compliance Department.
Moreover, Wittenbrock went even further outside the scope of his job duties when he notified a third-party event coordinator that he believed a physician’s speech was illegal in an attempt to get the speech cancelled. Further, the plaintiff alleged management discussed these activities with Wittenbrock and expressed surprise that he had taken certain actions.
Finally, the court found no dispute that Wittenbrock alleged that Sunovion retaliated against him for his engagement in protected activity. The complaint detailed several negative interactions with management and sales representatives regarding the protected activity, in which they expressed dissatisfaction with his actions and attempted to dissuade him from continuing them. The complaint also alleged the company placed the plaintiff on a 60-day performance improvement plan on February 1, 2018, and fired him on February 9, 2018. Wittenbrock also alleged that he was not provided any written document or detailed explanation setting forth the grounds for his termination. Based on those allegations, the court found it plausible to infer that Wittenbrock was fired for investigating and reporting suspected legal violations occurring within Sunovion’s speaker program.
