{"id":243,"date":"2014-12-22T12:20:31","date_gmt":"2014-12-22T16:20:31","guid":{"rendered":"http:\/\/blogs.duanemorris.com\/healthlaw\/?p=243"},"modified":"2014-12-22T12:20:31","modified_gmt":"2014-12-22T16:20:31","slug":"false-claims-act-defendants-may-have-possible-counterclaims-against-whistleblowers","status":"publish","type":"post","link":"https:\/\/blogs.duanemorris.com\/healthlaw\/2014\/12\/22\/false-claims-act-defendants-may-have-possible-counterclaims-against-whistleblowers\/","title":{"rendered":"False Claims Act Defendants May Have Possible Counterclaims Against Whistleblowers"},"content":{"rendered":"

Although whistleblowers benefit from strong public policies protecting the means by which they assert and support their False Claims Act (FCA)\u00a0allegations, a recent decision highlights a possible counterclaim theory that empowers defendants\u00a0to assert claims against\u00a0the whistleblower.\u00a0 In U.S. ex rel. Notorfransesco v. Surgical Monitoring Association, Inc. et al., <\/em>(E.D. Pa.),\u00a0 the whistleblower was a former employee of the defendant, and the defendant asserted a counterclaim based on the former employee’s taking and disseminating confidential information from the former employer, including using that information in the qui tam <\/em>complaint.\u00a0 The counterclaim asserted breach of contract, implied contract and promissory estoppel theories.<\/p>\n

The district court denied\u00a0the whistleblower’s motion to dismiss the counterclaim, holding that the counterclaim raised claims that were independent of the FCA allegations and therefore were not against public policy.\u00a0 The court also held that the defendant had plausibly asserted that it could be entitled to\u00a0 injunctive relief and damages.<\/p>\n

Claims by FCA defendants that are essentially claims for indemnification and contribution based on potential liability under the FCA are not allowed.\u00a0 In other words,\u00a0courts will not permit a defendant to assert that the whistleblower is responsible for the submission of false claims and therefore should contribute to, rather than benefit from, any damages owed resulting from the FCA lawsuit.\u00a0\u00a0Public policy\u00a0plainly precludes assertion of such a theory.<\/p>\n

But counterclaims are<\/strong> permissible where the FCA defendant’s counterclaim against the whistleblower does not require an initial\u00a0finding that the defendant is liable in the FCA case, including where the counterclaim is for breach of a confidentiality agreement.\u00a0 Courts\u00a0 will permit<\/strong> such a counterclaim, provided that it does not interfere with the whistleblower’s ability to state or prove the asserted FCA claim.\u00a0 In Notorfransesco,\u00a0<\/em>the court held that the defendant “would have viable claims\u00a0… regardless of the outcome of the FCA action” and therefore could proceed on those claims.<\/p>\n

The court cautioned that the defendant’s requested injunctive relief demanding return of their materials would not be proper if such materials are “reasonably necessary” to pursuing the FCA claim.<\/p>\n

This opinion, and others like it, emphasize that FCA defendants’ independent\u00a0claims are not precluded simply because of pending FCA allegations.\u00a0 In the right situation, therefore, the FCA defendant is not defenseless and may assert its own claims for relief.<\/p>\n

 <\/p>\n

 <\/p>\n","protected":false},"excerpt":{"rendered":"

Although whistleblowers benefit from strong public policies protecting the means by which they assert and support their False Claims Act (FCA)\u00a0allegations, a recent decision highlights a possible counterclaim theory that empowers defendants\u00a0to assert claims against\u00a0the whistleblower.\u00a0 In U.S. ex rel. Notorfransesco v. Surgical Monitoring Association, Inc. et al., (E.D. Pa.),\u00a0 the whistleblower was a former … <\/p>\n

Continue reading “False Claims Act Defendants May Have Possible Counterclaims Against Whistleblowers”<\/span><\/a><\/p>\n","protected":false},"author":104,"featured_media":0,"comment_status":"closed","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[413],"tags":[430,405,404],"ppma_author":[914],"class_list":["post-243","post","type-post","status-publish","format-standard","hentry","category-healthcare-litigation-2","tag-counterclaim","tag-false-claims-act","tag-fca"],"authors":[{"term_id":914,"user_id":104,"is_guest":0,"slug":"lebowitz","display_name":"Philip H. Lebowitz","avatar_url":"https:\/\/blogs.duanemorris.com\/healthlaw\/wp-content\/uploads\/sites\/8\/2014\/07\/lebowitzphillip-125x150.jpg","author_category":"","last_name":"Lebowitz","first_name":"Philip H.","job_title":"","user_url":"http:\/\/www.duanemorris.com\/attorneys\/philiphlebowitz.html","description":"Read Philip's bio.<\/a>"}],"_links":{"self":[{"href":"https:\/\/blogs.duanemorris.com\/healthlaw\/wp-json\/wp\/v2\/posts\/243","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/blogs.duanemorris.com\/healthlaw\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/blogs.duanemorris.com\/healthlaw\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/blogs.duanemorris.com\/healthlaw\/wp-json\/wp\/v2\/users\/104"}],"replies":[{"embeddable":true,"href":"https:\/\/blogs.duanemorris.com\/healthlaw\/wp-json\/wp\/v2\/comments?post=243"}],"version-history":[{"count":0,"href":"https:\/\/blogs.duanemorris.com\/healthlaw\/wp-json\/wp\/v2\/posts\/243\/revisions"}],"wp:attachment":[{"href":"https:\/\/blogs.duanemorris.com\/healthlaw\/wp-json\/wp\/v2\/media?parent=243"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/blogs.duanemorris.com\/healthlaw\/wp-json\/wp\/v2\/categories?post=243"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/blogs.duanemorris.com\/healthlaw\/wp-json\/wp\/v2\/tags?post=243"},{"taxonomy":"author","embeddable":true,"href":"https:\/\/blogs.duanemorris.com\/healthlaw\/wp-json\/wp\/v2\/ppma_author?post=243"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}