High Bar for Retaliation Claims Reaffirmed by the Northern District of Ohio
Earlier this year, the Northern District of Ohio reaffirmed the high standard for pleading a retaliation claim under the False Claims Act (FCA) by dismissing a relator’s claim that he was improperly retaliated against after raising concerns about alleged fraudulent conduct involving speaker fees under the FCA and the Federal Anti-Kickback Statute (AKS).
The case, United States ex rel. Manieri v. Avanir Pharmaceuticals, Inc., was brought by a former employee of Avanir Pharmaceuticals who alleged that the company violated the FCA and AKS by paying speaker fees to physicians in exchange for a promise that the physician-speaker would prescribe an Avanir drug. Avanir previously settled the case surrounding the allegations (combined with two other lawsuits brought by former employees) for more than $108 million in criminal penalties, forfeiture, and civil damages. Avanir also entered into a Corporate Integrity Agreement with the United States Department of Health and Human Services Office of Inspector General and agreed to cooperate in the prosecution of four company executives.
Manieri, the relator in the case alleged that he was terminated from Avanir as retaliation for objecting to the speaker fee kickback scheme with company leadership. Interestingly, Manieri amended his complaint in the retaliation case twice, making slight tweaks to the factual details around his conduct opposing the kickback scheme and his subsequent termination. The court took issue with those slight changes, noting that Manieri “chang[ed] his story,” and dismissed his second amended complaint.
In its decision, the court opined that Manieri failed to meet the elements of retaliatory discharge under the FCA. Those elements include: (1) that his pre-termination conduct was a protected activity under the FCA; (2) the employer had knowledge of the protected activity/was aware that the employee was taking action in a qui tam action or expressed concerns; and (3) showing that “but for” the protected activity, the employee would not have been terminated. The court found that Manieri did not establish any one of the requirements.
Some of the facts that the court considered included that once Manieri was aware of the alleged scheme, he did not begin an investigation into the payments and only raised the issue with his supervisor during a routine, regularly-scheduled phone call. The court also found that Manieri did not raise potential illegality of the scheme with management, but only raised general “concerns” that the arrangement may have been “crossing the line.” There was no evidence presented in the case that Manieri raised any concerns to the compliance program or legal department, and protected conduct under an FCA retaliation claim must do more than “merely urge compliance with regulations” or express discomfort, but one must actually take action to file a claim or try to stop the FCA violation.
So while this case serves as a reminder of the high bar to prove an FCA retaliation case, it also seems that Manieri may not have had the strongest case to make to begin with.