District of South Carolina Settles Long Term Care Pharmacy Whistle Blower Case Completing Final Leg of Anemia Drug Litigation

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Columbia, South Carolina —— A $2.5 million settlement with Pharmerica, a long term care pharmacy servicing hundreds of nursing homes across the nation, completes the final leg of litigation involving the illegal promotion of Aranesp, an anemia drug manufactured by Amgen, Inc.

In 2013, the US Attorney’s Office for the District of South Carolina, The Department of Justice Civil Frauds and a number of states executed a $24.9 million settlement with Amgen in this case. In 2014, Omnicare followed with a $4.19 million settlement. The recent settlement brings the government’s recovery in United States ex rel. Kurnik v. Amgen et al. to just over $31.5 million.

The Kurnik litigation was brought under federal and state false claims act statutes that allow private citizens to bring suit on behalf of the government to recover money expended as a result of fraud or other wrongful conduct. The government intervened in the Amgen and Omnicare portions of the case and the Relator pursued the case against Pharmerica on behalf of the government.

“Public health insurance programs shouldn’t foot the bill for drug company schemes that manipulate doctors and patients to maximize profits,” said South Carolina US Attorney Bill Nettles. “This case is an excellent example of how the government can work together with private whistleblowers to recover money for taxpayers.”

The United States was represented by Assistant US Attorneys Fran Trapp and James Leventis from the District of South Carolina Office.

Kurnik was represented by Dick Harpootlian and Chris Kenney of Richard A. Harpootlian, P.A. in Columbia, South Carolina and Reuben Guttman, Traci Buschner, Justin Brooks and Caroline M. Poplin, J.D., M.D. of Guttman, Buschner & Brooks PLLC in Washington, D.C.

Whistleblower program will be one of the most significant national gatherings of 2016

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Feb. 18 and 19, the Center for Advocacy and Dispute Resolution and the Emory Corporate Governance and Accountability Review will partner to present “Fraud Against the Government & SEC Whistleblower Actions Training.” This event will feature more than 20 authorities on fraud, including U.S. attorneys, experts from the U.S. Securities and Exchange Commission and judges.

The training will be held from 8:30 a.m. to 4 p.m. each day in Tull Auditorium, Gambrell Hall at Emory Law.

Reuben Guttman, partner with Guttman Buschner & Brooks, PLLC and senior fellow with the Center for Advocacy and Dispute Resolution, said, “We think that for would-be whistleblowers and their counsel, the Emory program will be one of the most significant national gatherings in 2016. The program will offer them an opportunity to hear directly from regulators about how they can work to maximize their contributions to federal whistleblower programs.”

Attendees can earn up to 12 CLE credits along with the Certificate of Completion of Emory University School of Law’s Advocacy and Dispute Resolution Training in Case Investigation. Registration is now open.

Featured panelists and instructors include:

  • John A. Horn, U.S. Attorney for the Northern District of Georgia
  • William M. Nettles, U.S. Attorney for the District of South Carolina
  • David Rivera, U.S. Attorney, Middle District of Tennessee
  • Sean McKessey, Director, Office of Whistleblower, U.S. Securities and Exchange Commission
  • Benjamin Singer, Chief, Securities & Financial Fraud Unit, Fraud Section, Criminal Division, U.S. Department of Justice
  • Walter Jospin, Regional Director, Atlanta Regional Office, U.S. Securities and Exchange Commission
  • William P. Hicks, Associate Regional Director, Atlanta Regional Office, U.S. Securities and Exchange Commission
  • Stephen E. Donahue, Assistant Regional Director, Atlanta Regional Office, U.S. Securities and Exchange Commission
  • Randy Chartash, Chief, Economic Crime Section at United States Attorney’s Office
  • Reuben Guttman, Partner, Guttman Buschner & Brooks, PLLC and Senior Fellow, Center for Advocacy and Dispute Resolution, Emory University School of Law
  • John Floyd, Partner, Bondurant Mixson & Elmore LLP
  • Michael A. Sullivan, Partner, Finch McCranie LLP
  • Sam Sheldon, Partner, Quinn, Emmanuel Urquhart & Sullivan, LLP
  • Bob Magnanini, Partner, Stone and Magnanini, LLP
  • David Bocian, Partner, Kessler, Topaz, Meltzer, Check, LLP
  • Traci Buschner, Partner, Guttman, Buschner & Brooks, PLLC
  • Christopher Haney, CPA, CFE, CHC, Forensus Group, LLC
  • Richard Harpootlian, Harpootlian Law
  • Jerry Martinj, Partner, Barrett Johnston Martin & Garrison, LLC
  • Amy Berne, Chief, Civil Division, United States Attorney’s Office, Northern District of Georgia
  • Sally Molloy, Assistant U.S. Attorney at U.S. Attorney’s Office, Northern District of Georgia
  • Paul Zwier, Professor; Director Center for Advocacy and Dispute Resolution, Emory University School of Law
  • Hon. Matt McCoyd, Magistrate Court Judge, DeKalb County; Associate Director Center for Advocacy and Dispute Resolution, Emory University School of Law

The Importance of Whistleblowers

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Whistleblowers are of vital importance to regulators, helping them put the pieces of the jigsaw together, says Reuben Guttman.

Back in 2013, HSBC whistleblower, Herve Falciani, told the German publication Der Spiegel: “Banks such as HSBC have created a system for making themselves rich at the expense of society, by assisting in tax evasion and money laundering.” Conclosury statements like this are levied all the time by public interest groups, legislators, opinion writers and pundits.  When they are made, they are often a matter of speculation or at most, an argument of inferences from loose facts. Of course, Herve Falciani is different. When he left HSBC in 2008, he reportedly took data from 130,000 customers. He took the facts to allow authorities to make solid claims of tax evasion; claims that can only be effectively levied with inside information.

In a global economy with complex transactions, communications occurring in multiple languages and transactions and communications made with the jargon of the industry, it is extraordinarily complicated for outside regulators to investigate and gather the facts to prove complex fraud cases.  To some degree, it is analogous to a large ship attempting to navigate a harbor without a local captain available to explain where the rocks are or where the water is shallow. Or, perhaps it is like a blind person walking into a room for the first time without having any sense of where the furniture is located.

Of course regulators have the ability to access documents through a subpoena or civil and investigative demands, and they might even have the ability to ask questions under oath.  But which documents do the regulators ask for?  And when the questions are asked, how should the questions be worded so that regulators target the facts with the precision of a laser guided missile?   Imagine an investigator questioning an HSBC official: Question:“Have you aided and abetted foreign citizens in ways that allow them to avoid paying taxes?”  Answer: “No, that is not our mission … we are a bank.”

The problem is that most sophisticated lawbreakers understand the concept of a smoking gun.  Never create a document that summarizes the wrongdoing for regulators.  Never create a document that lays out the facts leading regulators to pinpoint the wrongdoing. And of course, in a large corporation, never create documents, rules, policies or plans that will cause the average employee to question the propriety of a corporation’s efforts. We live in an age where complex wrongdoing is orchestrated through communications and programmes which, if analysed independently, would seem harmless.

Yet, it is the whistleblower – the person inside the box – who can explain how patterns of innocent conduct, when linked together, amount to wrongful schemes involving fraud, money laundering, racketeering and tax evasion.  Whistleblowers like Falciani are so critically important to regulators and without their help, regulators face a daunting task of fully understanding the schemes and pinpointing and gathering the evidence to convince a trier effect that wrongful conduct has occurred.  Hence, “the importance of the whistleblower.”

The Art of Advocacy

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Judges are now insisting that plaintiffs make their case with facts instead of merely putting their clients on notice of a claim.

When the United States Supreme Court issued its decisions in Bell Atlantic Corp v Twombly, 550 U.S. 544 (2007) and Aschroft v Iqbal , 556 U.S. 662 (2009), there was sea change in the standard by which judges evaluated lawsuits to determine their sufficiency to withstand a motion to dismiss.  Rather than merely placing a defendant on notice of a claim, the Court established a new standard.  Plaintiffs must allege facts allowing a court to find that a claim is plausible.  In reviewing the allegations of the complaint, courts are challenged to weed out conclusory statements and base their analysis on only the factual pleadings of the Complaint.

Naturally, Iqbal and Twombly have raised serious access to justice issues for plaintiffs who must muster the facts without an opportunity to gather evidence through discovery.  The “plausibility” standard is of course entirely subjective; what is plausible to one judge based on his or her life’s journeys may not be plausible to another.  And with the challenge to plead facts, plaintiffs are undoubtedly encouraged to put the “kitchen sink” into their complaints and plead complaints that are exponentially larger than those of yesteryear.

With all of the problems caused by Iqbal and Twombly, there is a nugget of gold that can be snatched as a teaching lesson.  The notion that litigants are instructed to make their cases based on facts and not conclusions or hyperbole, is a solid concept.

The question of what is a fact and what is a conclusion is of course a lesson that lawyers must understand.  In one of my classes at Emory Law School, I asked the students to outline the good facts and bad facts for a case involving assault and robbery. A student raised his hand noting that a good fact for the Defendant is “he has an alibi.”  I turned to the student and said, “Are you telling me a fact or are you giving me a conclusion?”  The student looked at me.  I said, “unpack what you just told me in terms of the evidence, or facts, that support the alibi.” The student then began to tell me about a witness who saw the defendant at a theater performance at the time of the alleged incident; theater tickets found in the defendant’s wallet; and a receipt from a theater vendor which had the time and date stamp on it.  Of course these are three very powerful facts – often hard to dispute – which are more compelling than merely stating the conclusion that an alibi exists.

In two weeks, I will again be teaching second year students trial advocacy at Emory Law School.  It is hard to explain the difference between facts and conclusions but I give them this example which, in past years, they seem to remember.

Several years ago, a seven year old girl who is the daughter of a trial lawyer, said to her father: “I hate my little brother, no one likes him, he is extremely difficult and we need to trade him in for a new brother.”  The father said, “Sweetie, haven’t I told you to make your arguments with facts and not conclusions or hyperbole?”  The daughter said, “Yes, I remember Daddy; I will start over. Here is a photo of your BMW and the can of spray paint used to redecorate it.  Here is a photo of our dog Spot tied up in your Versace Neck Ties and I have here a photo of your 80 inch Samsung TV set and the baseball that went through the screen; I also have here an essay the little fellow wrote for school which discusses his contemporary art projects. Finally, Daddy, here is a study by a prominent Harvard Psychologist who says that parents do well to act early and trade in ill-behaved children.” The father responded: “I understand.  Say no more.  The little fellow is history.”

Advocacy is a two way street

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Young lawyers learning about advocacy need to understand how judges think if they are to master the skill, says Reuben Guttman.

Young advocates or trial lawyers often labour under the conception that communication is a one size fits all effort.  Be smooth, don’t be nervous, be flamboyant, and engage in fanfare.  Really?  For my trial advocacy students at Emory Law School, this is sometimes their vision of a trial lawyer.  Yet advocacy is a two way street.  Before an advocate formulates the content and form of his or her message, the most important question to ask is “Who is receiving the message?” Advocates, or trial lawyers, are teachers.  Judges and juries are their students.  How does the trial lawyer, as a teacher, deliver a message that resonates with each particular student?

Insight

Last year at Emory Law School,  I convened a panel of four judges with the hope of giving students an insight into their lives.  It was enlightening for the students to learn that these judges had dockets ranging from a couple hundred to several thousand cases.  The students learned that these judges were tasked with deciding matters that they had never studied in law school.  Their support ranged from one to several law clerks and the law clerks themselves were all recent law school graduates.  This group of judges ranged from civil cases to criminal matters with divorces, large scale securities class actions, business disputes, discrimination cases, and maritime matters in the mix.

Breaking the monotony

There is a saying that justice is blind.  And of course there is a perception that judges are powerful – which they of course are – and that they know everything.  While sitting in federal court a couple of weeks ago, I was watching a judge hear a dozen motions before it was my turn to argue. He was jovial.  He was witty. He engaged the litigants with humour.  I liked him. I had seen this behavior before with jurists.  I realised of course that some judges usually do this to break the monotony of the job.  They are human beings.  As I sat and watched this particular judge, I thought about him sitting high on his bench in a courtroom with 35 foot ceilings and the walls adorned with paintings of judges who had preceded him. I thought about why the US government spends so much on these ornate courtrooms.  I realised that without these accoutrements, judges would seem like mere mortals.  And of course, the proceeding itself would not be cloaked in the same solemnity.

Lifetime experiences

For the advocate, it is important to understand that at the end of the day, their messages will be evaluated by humans; whether they are judges or jurists.  They will have lifetime experiences, families that they go home to, perhaps pets that they feed, and like other humans, they will have had their successes and failures.  They will have fears and concerns.

If there is a takeaway from all of this, it is that advocacy is a two way street.  What you may think is the right message, or form of message to deliver to the decision maker, may not necessarily be the one that resonates.  What you may think is the right style may not be appropriate for a particular audience.  This is just something to think about; communication is a two way street.

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