Comprehensive Guide to Whistleblower Laws: New York

Landmark Whistleblower Cases in New York Federal Courts: Key Legal Insights and Lessons

New York: A Leading Venue for Whistleblower Cases

New York’s federal courts have become a central hub for whistleblower lawsuits, particularly those brought under the False Claims Act (FCA). The state’s strong financial, healthcare, and regulatory sectors make it a focal point for exposing fraud against the government.

Key Factors Making New York a Whistleblower Hub:

• Aggressive Enforcement: The U.S. Attorney’s Offices in the Southern and Eastern Districts of New York are known for their robust enforcement of the False Claims Act.

• Healthcare Fraud: New York’s large healthcare system makes it a target for FCA cases involving Medicare and Medicaid fraud.

• Financial Sector: As the financial capital of the world, New York sees a significant number of whistleblower cases involving securities fraud and improper financial practices.

• Court Expertise: New York’s federal courts are well-versed in handling complex qui tam lawsuits and have a history of landmark whistleblower settlements.

Below, we examine notable whistleblower cases in New York federal courts, highlighting key insights and takeaways.

Novartis Pharmaceuticals Settlement (2020): Kickbacks and False Claims

Case Overview: In 2020, Novartis Pharmaceuticals agreed to pay over $642 million to settle allegations that it violated the False Claims Act by providing improper payments to patients and physicians to boost prescription sales.

Allegations:

• Novartis provided lavish meals, speaker fees, and entertainment to physicians to incentivize them to prescribe its drugs, which resulted in false claims submitted to federal healthcare programs.

• The company also engaged in improper financial arrangements by funneling payments to cover patient copays for Novartis medications through third-party foundations.

Role of Whistleblowers: The case was initiated under the qui tam provisions of the False Claims Act. Multiple whistleblowers, including former Novartis employees, brought forward evidence of improper payments and violations of anti-kickback laws.

Key Takeaways:

• Whistleblowers play a critical role in uncovering pharmaceutical industry schemes that harm federal healthcare programs like Medicare and Medicaid.

• This settlement underscores New York’s central role in combating fraud through robust enforcement of the False Claims Act and Anti-Kickback Statute.

Fifty-Five Hospitals Settlement (2015): Cardiac Device-Related False Claims

Case Overview: In 2015, fifty-five hospitals across the United States agreed to pay over $34 million to resolve allegations that they improperly billed Medicare for unnecessary cardiac implant procedures, violating the False Claims Act, in a case arising out of the Western District of New York.

Allegations:

• The hospitals knowingly submitted claims for reimbursement for implantable cardioverter defibrillators (ICDs) that were performed on patients outside the coverage criteria established by Medicare.

• Medicare guidelines require a waiting period before implanting ICDs following certain cardiac events, such as heart attacks or bypass surgeries, to allow for recovery.

• The hospitals allegedly implanted ICDs during periods when they were not reasonable or necessary under Medicare rules.

Role of Whistleblowers: The case was brought under the qui tam provisions of the False Claims Act, which allow whistleblowers to file lawsuits on behalf of the government. The whistleblowers’ information was critical in uncovering the systematic billing violations and achieving a resolution.

Columbia University Settlement (2016): Research Grant Mismanagement

Case Overview: Columbia University agreed to pay $9.5 million in 2016 to resolve allegations that it improperly sought and received federal grant funds for research projects, violating the False Claims Act.

Allegations:

• Columbia University improperly applied for and received federal grant money for facilities and administrative costs for research conducted at buildings that were not eligible for such funding.

• The university submitted claims for expenses related to research performed at locations that did not comply with federal grant guidelines.

Role of Whistleblowers: The lawsuit was filed under the qui tam provisions of the False Claims Act by a whistleblower who identified Columbia’s improper billing practices related to federal research funding.

Why Whistleblowers Need Experienced Legal Counsel

• Whistleblowers can play a critical role in exposing fraud and protecting public resources. Laws like the False Claims Act and OSHA offer protections and financial incentives to individuals who file lawsuits in good faith.

• However, it is critical to properly investigate a claim and draft a complaint. Experienced counsel is needed.

• A good relationship with the civil prosecutors at the US Attorney’s Office is also important to making sure that the Government files its own action in the case.

How Dynamis LLP Can Help

At Dynamis LLP, our attorneys specialize in:

• Representing whistleblowers in qui tam lawsuits under the False Claims Act.

• Fact investigation and development of qui tam lawsuits, which will include drafting a complaint.

• Leveraging our relationships with prosecutors to present the best possible case in order to improve chances that the Government will intervene.

Whether you are a first-time whistleblower or someone who has done this before, Dynamis LLP has the experience to guide you through the process.

Contact Dynamis LLP today for a confidential consultation.

At Dynamis LLP, with an established team of lawyers located in New York, we specialize in representing whistleblowers across industries (learn about our services). Whether you are considering reporting misconduct or need assistance with a retaliation claim, our attorneys provide tailored guidance to protect your rights and navigate the complexities of whistleblower laws effectively.

Protect your rights by contacting attorneys at Dynamis LLP. Our experienced whistleblower attorneys are here to guide you through every step. Contact whistleblowers@dynamisllp.com today.