Brain Injury Lawyer

Brain Injury Lawyer

Many lawyers know how devastating a brain injury can be for the survivor or their loved ones. By contacting a respected brain injury lawyer, people can have peace of mind in knowing that there are professionals there to offer you support and legal advice.

       

The Impact of Brain Injuries

A brain injury can require years of treatment and ongoing care. Often, the associated costs exceed the million dollar mark and can overwhelm the survivor and their families. According to the Center for Disease Control, there are 825 hospital visits, per 100,000 people due to a brain injury. Of these 17 people will lose their life and 91 will be hospitalized. Car accidents and slip and falls are the leading reason for a brain injury to happen followed by sports related activities and gunshot wounds. It is possible for oxygen deprivation or a stroke to also cause a non-traumatic brain injury. Out of all the people who have experienced this type of injury, two percent will need daily assistance from a medical caregiver. Regardless of what might have happened, if you are experiencing physical pain, emotional trauma, and significant financial losses after a brain injury, a brain injury lawyer can help.

 

Accidents That May Be Prone to Brain Injuries

When you get a free case review from a brain injury lawyer, he or she will likely ask you some basic details about what happened. If you have not already called, or chosen, a lawyer, it is recommended that you retain one who knows how to handle brain injury cases. These cases are not like others and generally will involve a broad range of medical terminology and other special factors. With the right brain injury lawyer on your side you can ensure you recover maximum damages.

Some common injuries that a brain injury lawyer may be familiar with include, but are not limited to:

Car accidents

Truck accidents

Motorcycle accidents

Bike accidents

Near drowning

Birth injuries

Medical malpractice

Slip and fall/ trip and fall

Workplace accident

Construction accident

Sports or athletic accidents

Assault

Gunshot wound

 

Brain Injury – The Silent Injury

As a brain injury lawyer we have known of many cases that involved a client with severe injury, but yet they did not know about it for several days, or even weeks. The reason for this is due to the symptoms being invisible or attributed to something else. Due to brain injuries having the possibility of being “silent” it is very important medical attention is sought whenever a blow or puncture to the head occurs.

Common symptoms of a brain injury include:

Loss of consciousness

Loss of balance

Dizziness

Distorted vision

Headache

Nausea

Irritability/ mood swings

Neck pain

 

Sometimes a brain injury can be so serious that it hinders the ability for the victim to resume their daily life. Cognitive or physical impairment is possible and may require a caretaker and many hours of rehabilitation. If this is true to your situation, a good brain injury lawyer should take these things into consideration so as to ensure you recover damages that account for the total losses – including future losses.

 

Thanks to our friends and contributors from Cohen & Cohen, P.C., for their insight into brain injuries.

Now, This Might Hurt a Little: Physical Therapy and Sports Medicine Practice Pays $790,000 to Settle False Claims Act Lawsuit

Brown, LLC Whistleblower awarded $142,200.

Whistleblower law firm Brown, LLC continued with its streak of victories with its whistleblower lawsuits by obtaining a $142,200 whistleblower award for an individual who blew the whistle on a alleged variety of fraud on Medicare and Tricare. With the assistance of the U.S. Attorney for the District of South Carolina, Brown LLC was able to help an honest and diligent whistleblower put an end to the fraudulent billing of government health insurances by a Therapy and Sports Medicine, Inc. practice headquartered in Columbia, South Carolina.

The whistleblower alleged that the practice where she had previously worked as a receptionist and scheduler, had knowingly submitted false claims to Medicare and TRICARE for one-on-one therapy services when in reality those services were provided to patients on a group basis. The whistleblower also alleged that the practice had knowingly submitted claims for services provided by unsupervised assistants, and claims for attended electrical stimulation services that were actually unattended. These schemes enabled the practice to receive higher reimbursements than it deserved, thereby cheating the government and the taxpayer.

The relator, which is the term used for a plaintiff who brings a qui tam action under the False Claims Act (FCA) was able to establish the case through very little documentary evidence, but a very detailed, credible host of allegations regarding the Medicare Fraud.  Brown, LLC worked with the Plaintiff to draft a successful False Claims Act lawsuit and following the procedure set forth in the FCA by filing the matter under seal, conducting a relator interview and ultimately assisting the United States government in crafting a whistleblower settlement.

This settlement illustrates an important point: even whistleblower cases where there’s not a substantial amount of money at stake or not a lot of documents can still reap sizable benefits, both for the public and the whistleblower and help hold companies accountable.

As the U.S. Attorney for the District of South Carolina said in announcing the settlement,

“Medical billing fraud drives up the cost of healthcare and diverts critical resources from federal healthcare programs. Whistleblower suits, like this one, are one of the government’s most effective tools at detecting fraud and protecting the integrity of our burdened healthcare system.”

If you’re aware of fraud upon Medicare, Medicaid, TRICARE, or any other government program, please contact the whistleblower lawyers at Brown, LLC who offer free whistleblower consultations by calling (877) 561-0000 or emailing fightfraud@jtblawgroup.com. You can read more about Brown LLC’s whistleblower achievements by clicking here. 

Going Green Doesn’t Always Mean Keeping Green – Renewable Energy Program False Claims Act Settlement

Various entities must pay $2.6 million to resolve False Claims Act (FCA) violations alleging the received reimbursements for programs and costs they did not incur. The False Claims Act allows private individuals (referred to as relators) to bring actions against entities who defraud the United States government and shares with the victorious a portion of the recovery which is known as a whistleblower award.

Congress’s well-intentioned Recovery and Reinvestment Act of 2009 incentivized corporations to enable “renewable energy properties,” with government reimbursement up to 30% for certain projects.  Where there is money available for a good thing, however, there are always people and companies ready to wear the badge of goodness and exploit it for their own economic gain.

The allegations of the United States are that a company known as Eagle Valley applied for the bio-friendly program for reimbursement for its investment in one of its non-green actual physical plants.  The application indicated that Eagle Valley agreed with Evergreen to perform certain types of services. Evergreen was incentivized on a percentage basis for the cost of building the plant.

Without using the actual numbers to illustrate what occurred, assuming Eagle Valley put in for $10 million dollars of reimbursement from the federal government, Eagle Valley told the government that $3.3 million of those monies would go to Evergreen. The United States taxpayers through the federal government paid Eagle Valley, but Eagle Valley never paid Evergreen and Evergreen never sought payment. It is unclear what led to those circumstances, but what is clear is that after Eagle Valley received funds that were designated to go elsewhere, they were not entitled to keep those funds after the earmarked company was not paid and was not going to be paid.

Former FBI Special Agent Jason T. Brown    and head of Brown, LLC (a law firm that focuses on protecting whistleblowers ) indicated:

“Once again this was great work on behalf of the federal government holding those accountable who have allegedly ripped off the taxpayer.  Every year there’s billions of dollars of fraud and through the False Claims Act whistleblowers can help the taxpayer recoup its losses while receiving a whistleblower award for their cooperation.” 

 

Although this case was not handled by Brown, LLC, Mr. Brown’s whistleblower law firm remains active and vigilant in protections whistleblowers and prosecuting whistleblower lawsuits nationwide. The firm offers free whistleblower consultations by calling (877) 561-0000 or emailing fightfraud@jtblawgroup.  Brown, LLC is a private firm and although it works cooperatively with the federal government, is not part of the federal government.

 

The Secrets of the Best Whistleblower Lawyer(s) – Part 1

Who is the best whistleblower lawyer near me?  Still a common question, with a complicated answer.  One needs to delve into what area of whistleblower lawyer one needs.

The most common and successful whistleblower actions in recent years involve the False Claims Act, which used to be known as the Lincoln Law.  The False Claims Act (“FCA”) is implicated when the whistleblower also known as the relator knows of companies, doctors, medical facilities, defense contractors or others who have and/or are defrauding the federal government, which in turn is defrauding you, the taxpayer.  The FCA has aggressive penalties which include triple damages, and relator awards can obtain up to 30% of the government’s recovery which can result in a substantial whistleblower award.

Whistleblower awards are evaluated based on a multitude of factors, such as how cooperative and forthcoming you’ve been, whether you profited from the fraud, how long you knew of the fraud before blowing the whistle to name a few.  Mathematically, if you know about a Million Dollar False Claims Act, and the fraudster is solvent enough, they can be hit with a 3-million-dollar verdict.  If the government intervenes in all likelihood your percentage as a whistleblower award will only go as high as 25%, but in all likelihood 20% or less, which in this example still could result in a $600,000 whistleblower award, which is not bad for doing the right thing.  Consider that when the government intervenes the average settlement is around 12 million dollars, 20% of that could result in  2.4 million dollar whistleblower award.   Of course, results vary depending on what your actual case is.

Qui tam litigation is not for general practice lawyers, it is a highly specialized area of law that requires interfacing with the Federal Government in secrecy and making sure you keep that secret.  Most firms that practice and are accomplished whistleblower law firms have former FBI Special Agents (like our firm Brown, LLC), or United States Attorneys or both on their staff to navigate the landscape.

The bulk of the cases seem to focus on Medicare Fraud, and Medicaid Fraud, but a savvy firm can try to maximize your case if it possibly implicates states statutes that provide for additional forms of discovery like the Illinois, California and New York statutes.

If you’re looking for a Chicago Whistleblower lawyer, it’s important that they are familiar with both the state and federal whistleblower laws, similarly a New York Whistleblower lawyer should know whether they can obtain further mileage out of the New York Qui Tam statute.

Outside of the False Claims Act, the other statutes that have resulted in big settlements for whistleblowers include the SEC whistleblower laws, the CFTC whistleblower laws and the IRS whistleblower laws, along with a swath of state whistleblower laws and various other sneaky statutes that may be implicated.

Since whistleblower cases are shrouded in secrecy, firms don’t always tout their accomplishments, then again others do.  A fair question to ask a firm you’re considering is if they’re handling a case similar to the fact pattern you present or how they will handle the case you present in terms of where they’re filing, and whether its even worth filing at all?

There are many secrets of top whistleblower lawyers, but the best way to learn them and to find out if you have a case is to speak with a whistleblower law firm, like Brown, LLC (877) 561-0000 who can offer you a free, confidential whistleblower consultation.

Healthcare Whistleblower Lawsuits via The False Claims Act (FCA)

The healthcare industry plays a crucial function in society allowing the population access to medical services in times of illness, illness prevention and other matters like end of life dignity. The United States has made healthcare services more accessible to the American population through federally funded programs like Medicare and Medicaid.  No matter what your political opinion is of the program, they assist with individuals accessing health care who ordinarily may not be able to. Unfortunately, there are many service providers, doctors, hospitals, and other facilities who are taking advantage of government health care systems through fraudulent activities, which include over-billing, kickbacks and other schemes that harm the system. This, in turn, means these individuals and organizations are robbing the government, as well as the U.S. taxpayers, of their money.

In the last eight years, more than $2 billion a year has been recovered by the Department of Justice on an annual basis after cases were filed against companies who conducted illicit activities that harmed the government.  In the first half of the 2016 Financial Year, there were 383 civil actions, along with 428 criminal actions recorded that affected Medicare and Medicaid combined.

Whistleblowers serve a vital role to play in helping the government and the Department of Justice recover funds that were illegally stolen from them through fraudulent activities by companies in the healthcare and pharmaceutical industries. The False Claims Act (FCA) allows people to come forward with such information and, in turn, gain a percentage of recovered funds as a reward for being the whistleblower in a Qui Tam lawsuit with the use of a whistleblower lawyer, such as Brown, LLC.

Parties Responsible for Fraud in The Healthcare Industry

It is important for individuals to understand that anyone in the healthcare industry can commit fraud that has a negative impact on  the federally funded programs. There are many types of insitutions, officials, and even individuals that may conduct such fraud – and employees need to understand when they might have a whistleblower case and the signs to look our for to determine whether there is medicare fraud or Medicaid fraud.   

Hospitals – When a hospital bills a patient’s Medicare or Medicaid for services that were not provided to the patient or when they provide a patient with unnecessary services, it means they are conducting illegal activities. Some hospitals also tend to admit a patient into the hospital when the patient only required outpatient treatment.  In California and Illinois, if private insurance is defrauded, there is a mechanism for whistleblowers to bring a private action as well.

Physicians and Medical Providers – Medical service providers like psychiatrists and physicians may claim funds from Medicare or another health care agency for services they did not provide a patient, or they may conduct double billing, where the bill for two sessions when the patient only had a single appointment. Many medical service providers have also been found guilty of upcoding services when they claim from a federally funded medical program, which means they provide one service to a patient but claim for a similar service that holds a higher fee.   They may also engage in kickbacks (paying for referrals) which violate the Anti-Kicbkack Statute (AKS) or self-dealing where the physician refers the patient to a pharmacy or some other entity he or she owns without disclosing it (Stark Act) violations.

Pharmaceutical Companies – Companies that manufacture pharmaceutical drugs, are sometimes found to participate in off-label marketing strategies and sell drugs for purposes other than what they were developed for. In some cases, pharmaceutical companies have been found guilty of manipulating data from clinical trials in their favor or adulterating drugs to pass quality testing.

Pharmacies – Pharmacies may sometimes bill the patient’s medical aid provider for prescription drugs that were not provided to the patient. In some cases, pharmacies may over-bill the insurance agency or falsify prescriptions for a patient. These are all fraudulent activities.

Medical Device Manufacturers – There have been cases where manufacturers of medical devices charge a client’s medical insurance program for unnecessary devices, they charge for more expensive devices than what was provided to the patient, or they provide the patient with defective devices and charge Medicare or Medicaid for these devices.

These are, of course, only a few examples of service providers in the healthcare industry where fraud is often detected. There are many other examples as well – all areas of healthcare can become fraudulent in reality.

Reporting Healthcare Fraud as A Whistleblower

A large number of fraudulent activities can be reported by whistleblowers when they become aware of such activities conducted by a health care provider, a hospital, or another service provider.  The law does not allow one to receive a recovery unless they blow the whistle correctly which requires the use of a whistleblower attorney.

Some fraudulent activities that employees should keep an eye out for in the workplace:When doctors, hospitals, and other medical services providers upcode the services or devices provided to patients in order to gain additional funds from a health care program.

When doctors, hospitals, and other medical services providers upcode the services or devices provided to patients in order to gain additional funds from a health care program.

When a service provider is provided incentives to prefer one product or service over another, such as a specific type of medication or a specific laboratory.

When a physician, therapist, or any other medical service provider charges a patient’s medical aid for services or treatments that the patient was not provided.

When pharmaceutical companies ask their reps and employees to conduct off-label marketing.

When any of these activities occur, or other fraudulent activities are detected, an employee should come forward with the information by contacting an experienced whistleblower  attorney like Jason T. Brown, a former FBI special agent who represents whistleblowers.  Whistleblower awards average around 20% of the recovery which could be a considerable recovery for the government and the whistleblower.

Biotech Whistleblower Case Settles for Approximately $2 million – Unnecessary Services

Biotech Whistleblower Case Settles for Approximately $2 million – Unnecessary Services

GenomeDx Biosciences, a biotechnology company in San Diego, has settled allegations that it improperly billed Medicare and private insurance companies for unapproved genomic testing. As part of the settlement, GenomeDx will pay $1.99 million to the United States. The two whistleblowers who were represented will together receive almost $350 thousand as a whistleblower award (before fees).  

The case was filed under the federal False Claims Act by Whistleblower Law Firm Brown, LLC, a firm led by former FBI Special Agent Jason T. Brown. Attorney Brown commended the hard work his team and the government put in, noting the work of Assistant United States Attorney Joseph Price of the San Diego Division, Doug Rosenthal from Main Justice, and others from the DOJ and US Attorney’s office who worked on the case. Internally, whistleblower lawyers Jason T. Brown, Benjamin Lin and Patrick Almonrode, and staff member Angiee Rosario, contributed to the result, as well as other staff members at the firm.

Whistleblowers are the linchpin of the False Claims Act. Courageous individuals who blow the whistle on fraud stand to benefit, but more importantly help hold accountable institutions and individuals whose fraud make medical care more expensive for all.  

The case against GenomeDx focused on their billing for a genetic test for prostate cancer. The complaint alleged that the company conducted and billed Medicare for unnecessary test, including even tests performed on tissues of people who had already unfortunately passed on.  

“The Department of Justice is committed to ensuring that Medicare reimburses costs for laboratory testing that are reasonable and necessary for the individual patient,” said Assistant Attorney General Jody Hunt for the Department of Justice’s Civil Division, in a separate press release. “Medically unnecessary and unproven testing increases costs for federal health care programs.”

 “The message is clear, if you take advantage of programs like Medicare, you will be held accountable,” said John Brown, FBI Special Agent in Charge of the San Diego Field Office.

Jason T. Brown encouraged other individuals who know of Medicare Fraud, Medicaid Fraud, or Insurance Fraud to contact his office to speak with his whistleblower team. According to Brown, “It’s estimated that 10% or more of health care costs are due to fraud, and the more courageous individuals that come forward, the better it is for everyone.” The case is at No. 17-CV-1959 (S.D. Cal.) The Department of Justice press release may be found here: https://www.justice.gov/opa/pr/genetic-testing-company-agrees-pay-199-million-resolve-allegations-false-claims-medicare the claims resolved by the settlement are allegations only, and there has been no determination of liability.

The False Claims Act – An Aggressive Tool to Combat the Opioid Crisis

Two things have taken a toll on our overburdened healthcare system in recent years: Medicare Fraud and the Opioid Epidemic.  The False Claims Act (FCA) may serve as an antidote to both. 

Conceptually, the FCA is a tool that can be used to address the over prescription of opioids since inherently over prescription means it is unneeded and thereby fits squarely into the False Claims fabric to litigate and eliminate unneeded services.  The Federal Government has jurisdiction when the prescription of opioids leaps into the Medicare & Medicaid world then the taxpayers have been defrauded by paying for things that are worse than unneeded as they create a cycle of dependence for the user, and a cycle of billing for the medical provider.

The United States Department of Justice took a super-aggressive step with the their ironically named Prescription Interdiction & Litigation (“PIL”) Task Force, by filing a complaint under seal pursuant to the FCA against pharmacies for allegedly violating the Controlled Substances Act and the False Claims Act.  The violations allegedly are so perverse that at least two people have died as a result of these over prescriptions emanating from these facilities.

But the DOJ and the PIL team went further then usual and also asked for emergent injunctive relief to prevent the Defendants from prescribing any further opiates.  The Court signing off on this pushes the envelope a bit arguably, since the Defendant is not even given notice of the restraining order until after it’s served with it, since the motion to obtain one was under seal and thus, the Defendant did not have an opportunity to challenge the validity of this request.  Presumably, after being served with it, they would have some remedy to address it, albeit if the Defendant is guilty of all the items complained of, they will be hard pressed to upend such an order.

A casual review of the docket does not reveal whether there’s an opioid whistleblower, but under the Federal False Claims Act a whistleblower stands to receive up to 30% of what the government’s economic recovery is in the fraud as whistleblower award for revelations regarding the over prescription of opioids under the Medicare program or Medicaid Program.   Similarly, the State of California has the California Insurance Claims Fraud Prevention Act which may permit up to 50% of the governments recovery for a California state whistleblower laws or under the State of Illinois, Illinois Insurance Claims Fraud Prevention Act the Illinois whistleblower can receive up to 40% of the amount recovered.  While the False Claims Act addressed the federal programs, California and Illinois state allow a whistleblower to bring an action to recoup for private insurance.

Opioid whistleblowers can come in different shapes and fashions.  Generally, a whistleblower is thought of as an insider, and the strongest cases are brought by people from within the scheme since they may have the detailed information needed to properly file the False Claims Act lawsuit.  However, there’s all sorts of scams that are run with opioid drug pushing that include the use of illegal runners, and even the unfortunate drug dependent user may be eligible to file an action if he or she knows enough of the plan. 

If you have information regarding the illegal prescription of opioids or the over-prescription of opioids, you should call our whistleblower law firm at (877) 561-0000 to discuss what your rights are. With the Federal Government aggressively tackling this problem, if you are on the inside and you’re not part of the solution the government may think you’re part of the problem, so the sooner you call, the sooner you can educate yourself about your rights. We offer free whistleblower consultations and can advice you confidentially of your options.

Why Potential Whistleblowers Should Speak with A Lawyer Right Away

Big companies bury themselves with accountants and lawyers to defend and justify their conduct, so if you’re in the midst of a fraudulent scheme, you need to speak with a whistleblower lawyer as soon as possible to understand your rights and make sure you don’t become the scapegoat for the conduct.

Whistleblowers are protected through various programs and statutes, but only if they are navigated properly. There’s an SEC Whistleblower Program to report when companies who are subject to SEC regulations are corrupt and with an SEC whistleblower lawyer you can potentially remain anonymous from start to finish.  Similarly, with commodities, the CFTC whistleblower program which had a record year with hundreds of millions of dollars of recoveries has mechanisms to protect the whistleblower.  There’s also the IRS whistleblower program which requires a very detailed and specific case designed to catch tax cheats who did over $2 million of fraud, but generally much more.  Also, many states have their own respective whistleblower programs with states like the California Whistleblower Laws and Illinois Whistleblower Laws allowing one to bring a case when private insurance companies are defrauded and New York Whistleblower Laws having teeth to combat tax cheats.

However, by far the most expansive use of whistleblower protections and recoveries comes from the False Claims Act (FCA), which has had billions upon billions of recoveries year after year.  People who speak with False Claims Act attorneys must have cases in which the government is defrauded. Generally, the most abuse is found with Medicare Fraud and Medicaid Fraud and it can be elegant with structuring where certain locations of facilities are and whether they’re on campus or off campus, timing of submissions of claims or altering locations of claims to ensure larger recoveries, upcoding in many different ways such as the billing a higher code for more Medicare reimbursement and false diagnosis.  In some egregious cases, not only do health care providers bill for services not rendered, but even worse they bill for services rendered but not needed!  Imagine being subjected to an unnecessary surgery just so the doctor can receive a bonus or make a yacht payment.  Also popular are illegal kickbacks in which the medical provider pays for Medicare or Medicaid patients and Stark Act issues where the medical provider restricts the patient’s choices and compels them to go to a pharmacist or facility such as physical therapy where the provider has an undisclosed interest.

Whistleblowers should do the right thing and candidly discuss with their whistleblower lawyer the facts of their case to see what type of rights you have.  The longer you silently sit by while you witness the Medicare Fraud or Medicaid Fraud, the more compromised you are.  Don’t fall for calling their whistleblower hotline which is oftentimes a hotline that will lead to the whistleblower’s firing.  Once you become aware of the fraud or once you’ve decided you want to do something about it you should speak with a professional who focuses their practice on whistleblower rights.   In the medical field, you wouldn’t expect to show up to work without any training and know how to perform surgery, similarly the right whistleblower law firm will have the right tools and advise to counsel you about how to perform the qui tam operation to allow the greatest chance of success.

With success there is also a tremendous possible upside. With billions recovered last year alone, whistleblower awards could amount to up to 30% of the recovery, which means last year courageous individuals received hundreds of millions of dollars for doing the right thing.

If you know of Medicare Fraud, Medicaid Fraud or many other types of fraud,  the company already has a head start on covering it up, you need to speak with a whistleblower lawyer like former FBI Special Agent Jason T. Brown of Brown, LLC, who can educate you about your rights and help navigate the best path to success.

Making Millions in Malaysia, Must the Money be Metered?

Goldman Sachs was a leading wealth investor in Malaysia until just a few years ago before migrating out of the country, evidently with a lot of money, if you believe Malaysia. Investigations by the new finance minister of Malaysia now suggests that Goldman Sachs might have been involved in illicit activities while it was raking in money during its presence in the country, and the government is now demanding that Goldman Sachs pay up for the “scheme” that they were seemingly implementing.  With the globalization of financial whistleblower cases, issues that have a United States nexus may be able to be litigated either under an SEC Whistleblower framework, Customs fraud or sometimes under the False Claims Act (FCA) itself as classical qui tam lawsuits.

Malaysian Government Demands Reimbursement from Goldman Sachs

Earlier this year, Lim Guan Eng, the new finance minister of Malaysia, announced that the local government is now seeking reimbursement from Goldman Sachs after they were found to have possibly been conducting an illicit scheme within the country.

Recently, a governmental scandal has unfolded within the Malaysian region, after billions of dollars disappeared with no apparent evidence where the funds went. No, this wasn’t a cryptocurrency pump and dump scheme, it was believed by Malaysia to be tied in with Goldman Sachs.  The scandal caused the Malaysian government to suffer a significant loss and become larger in debt, which had a significantly adverse effect on the country’s local economy.

After researching the loss, the new finance minister of Malaysia, Lim Guan Eng, mentioned that they have been investigating the activities of financial powerhouse Goldman Sachs, who was a leading investor in the area. The investigation found evidence that the company might have been implementing illicit actions during their time in Malaysia, and some of these actions could potentially be linked to the current debt that the country finds themselves in. Several connections between the actions of Goldman Sachs and the recent scandal in the country has also been noted, according to Lim Guan Eng.   Allegations however, are merely allegations, and the more definitive allegations of what the conduct was have yet to emerge.

While no definite statements have been published yet, the government is seeking reimbursement from Goldman Sachs in order to recover from the economic damage sthat they had suffered through the actions that they believe were caused by Goldman Sachs.

Several parties have already been interviewed in order to gain more insight into the matter, but parties have thus far denied their knowledge of any illicit activities. The bank that was used by Goldman Sachs made several millions of dollars from the transactions performed by the company, but also advised several media publications that they had no knowledge of any particular illicit activity by the client.

Conclusion

Goldman Sachs made millions, if not billions, of dollars in Malaysia, and recent investigations have led to allegations against Goldman Sachs in which Malaysia is demanding compensation. Is this another example of corporate corruption or perhaps government mismanagement or both?  It’s too early to tell.  Perhaps this is an example of violations of the FCPA Foreign Corrupt Practice Act that could dovetail into an SEC whistleblower complaint or perhaps it’s something else.  Individuals with information about the events are encouraged to call a whistleblower law firm to share their information to see if it’s actionable.

Muscle Milk = Missing Milk & Muscle?

Muscle Milk is a well known product that came into prominence in the last decade touting its benefits, its taste and at times its leanness.  A nationwide class action lawsuit was certified in California alleging that Muscle Milk:

  1. The Muscle Milk Labeling and its various benefits cannot be independently verified.
  2. Representations regarding the extent of the content of the amino acid L-Glutamine may be exaggerations.
  3. Calling the product lean is an unfair or false comparator because it is not leaner compared to comparable products.

In the past Cytosport, the maker of Muscle Milk settled a class action for allegations regarding the fat content of its product for $5 million dollars.  Cytosport is now owned by Hormel Foods and is the defendant in the Muscle Milk litigation.

As a whistleblower law firm, we are always interested to hearing from those individuals that may have insider information regarding the labeling of this product.

Further, if you have consumed muscle milk in New Jersey, New York or anywhere else, we’re interested in hearing from you and whether you think you’ve been defrauded or received the benefit of the product.

The Court recently certified a class action based on the allegations.  Please note that certification of a class is not a finding of liability or guilt against the company, it just means from a legal technical perspective the moving papers satisfied the procedural requirements in Federal Rule of Civil Procedure 23.

If you have information regarding Muscle Milk or have used Muscle Milk please call our whistleblower lawyers or class action lawyers at (877) 561-0000.

Here is a copy of the Court’s opinion certifying the Muscle Milk Class Action:

CLASS ACTION

ORDER (1) GRANTING IN PART AND DENYING IN PART PLAINTIFFS’ MOTION FOR CLASS CERTIFICATION; AND (2) GRANTING IN PART AND DENYING IN PART DEFENDANT’S MOTION TO EXCLUDE EXPERT TESTIMONY

  1. JAMES LORENZDistrict Judge.

Pending before the Court is Plaintiffs’ motion for class action certification. Defendant filed an opposition, and Plaintiffs replied. As part of opposition to Plaintiffs’ motion, Defendant filed a motion to exclude the testimony of Plaintiffs’ expert Elizabeth Howlett, Ph.D. Plaintiffs opposed the motion and Defendant replied.1 This matter is submitted on the briefs pursuant to Civil Local Rule 7.1.d.1. For the reasons which follow, Plaintiffs’ motion for class certification is granted in part. Defendant’s motion to exclude Dr. Howlett’s testimony is granted in part for purposes of class certification only.

  1. BACKGROUND

Plaintiffs are consumers who purchased Defendant’s protein shake and/or protein powder products. They allege that (1) the Nutrition Facts panel and packaging of some of Defendant’s ready-to-drink protein shake products overstated the amount of protein content; (2) the Ingredients section on the labels of their Muscle Milk protein powder products included amino acid L-glutamine, L-glutamine was also listed as an ingredient of the “Precision Protein Blend” elsewhere on the labels, and an L-glutamine molecule was shown on a chart of the amino acid profile for some of the products, implying that L-glutamine was included in its unbonded form, when none was included; and (3) prominently displaying on its Muscle Milk protein powder packaging that the product was “lean” or contained a special blend of “Lean Lipids,” when the products contained oils and were no leaner than other protein powders on the market which were not marketed as “lean.”

Plaintiffs contend that Defendant’s product labeling is false and misleading in violation of California, Florida and Michigan state consumer protection laws. After Defendant’s summary judgment motion was granted in part, the following claims remain: violation of California False Advertising Law, Cal. Bus. & Prof. Code §§ 17500 et seq. (“FAL”); violation of California Consumer Legal Remedies Act, Cal. Civ. Code §§ 1750 (“CLRA”); violation of California Unfair Competition Law, Cal. Bus. & Prof. Code §§ 17200 et seq. (“UCL”); violation of Florida Deceptive and Unfair Trade Practices Act, Fla. Stat. §§ 501.201 et seq. (“FDUTPA”); violation of Michigan Consumer Protection Act, Mich. Comp. Laws § 445.903(1)(c) (“MCPA”); and breach of express warranty under California Uniform Commercial Code — Sales, Cal. Com. Code § 2313. Plaintiffs seek, among other remedies, injunctive relief and restitution.

Plaintiffs move for class action certification under Federal Rule of Civil Procedure 23(b)(3). They seek to certify two nationwide classes, one for the purchasers of Defendant’s liquid shakes, and the other for protein powder purchasers defined as follows:

All persons in the United States who, within four (4) years of the filing of this Complaint, purchased Defendant’s Cytosport Whey Isolate Protein Drink; Monster Milk: Protein Power Shake; Genuine Muscle Milk: Protein Nutrition Shake; and Muscle Milk Pro Series 40: Mega Protein Shake. All persons in the United States who, within four (4) years of the filing of this Complaint, purchased Defendant’s Muscle Milk: Lean Muscle Protein Powder; Muscle Milk Light: Lean Muscle Protein Powder; Muscle Milk Naturals: Nature’s Ultimate Lean Muscle Protein; Muscle Milk Gainer; and High Protein Gainer Powder Drink Mix; Muscle Milk Pro Series 50: Lean Muscle Mega Protein Powder (14 oz. to 10 lbs. products); and the [sic] size Monster Milk: Lean Muscle Protein Supplement (2.06 and 4.13 lbs. products).

(Doc. no. 157 (notice of mot.) at 2.)2 Plaintiffs request that the nationwide classes be certified for UCL and FAL violations. (Id.)

Plaintiffs also move for certification of subclasses for California, Florida and Michigan residents under each state’s consumer protection statutes, as well as the Magnuson-Moss Warranty Act, 15 U.S.C. §§2301 et seq. (“MMWA”). (Doc. no. 157 at 2-4.) Like the nationwide classes, there are two subclasses for each state, one for the liquid shake purchasers and the other for protein powder purchasers. The respective lists of relevant products are the same as for the nationwide classes. (See id. at 3-4.)

  1. DISCUSSION

“The class action is an exception to the usual rule that litigation is conducted by and on behalf of the individual named parties only.” Wal-Mart Stores, Inc. v. Dukes, 564 U.S. 338, 348 (2011) (internal quotation marks and citation omitted). A party seeking class certification must be prepared to prove that it meets the requirements of Federal Rule of Civil Procedure 23(a) and the requirements of at least one of the categories under Rule 23(b). Comcast Corp. v. Behrend, 569 U.S. 27, 33 (2013).

The district court must conduct a rigorous analysis to determine whether these prerequisites of Rule 23 have been met. Gen. Tel. Co. v. Falcon, 457 U.S. 147, 161 (1982). The moving party “must . . . satisfy through evidentiary proof” Rule 23 requirements. Comcast, 569 U.S. at 33. Accordingly, “the class determination generally involves considerations that are enmeshed in the factual and legal issues comprising the plaintiff’s cause of action,” Coopers & Lybrand v. Livesay, 437 U.S. 463, 469 (1978) (internal quotation marks and citation omitted), and it “may be necessary for the court to probe behind the pleadings before coming to rest on the certification question,” Falcon, 457 U.S. at 160, which may “entail some overlap with the merits of the plaintiff’s underlying claim,” Dukes, 564 U.S. at 351. If a court is not fully satisfied that the requirements of Rules 23(a) and (b) are met, certification should be denied. Id. at 161. However, “Rule 23 grants courts no license to engage in free-ranging merits inquiries at the certification stage. Merits questions may be considered to the extent—but only to the extent— that they are relevant to determining whether the Rule 23 prerequisites for class certification are satisfied.” Amgen Inc. v. Conn. Ret. Plans and Trust Funds, 568 U.S. 455, 466 (2013).

  1. Rule 23(a) Requirements

“Rule 23(a) ensures that the named plaintiff is an appropriate representative of the class whose claims he or she wishes to litigate. The Rule’s four requirements — numerosity, commonality, typicality, and adequate representation — effectively limit the class claims to those fairly encompassed by the named plaintiff’s claims.” Dukes, 564 U.S. at 349 (internal quotation marks and citations omitted). “A party seeking class certification must affirmatively demonstrate his compliance with the Rule — that is, she or he must be prepared to prove that there are in fact sufficiently numerous parties, common questions of law or fact, etc.” Id. at 350 (emphasis in original).

  1. Numerosity

Rule 23(a)(1) requires the class to be “so numerous that joinder of all members is impracticable.” Fed. R. Civ. P. 23(a)(1); Staton v. Boeing Co., 327 F.3d 938, 953 (9th Cir. 2003). The plaintiff need not state the exact number of potential class members; nor is a specific minimum number required. Arnold v. United Artists Theatre Circuit, Inc., 158 F.R.D. 439, 448 (N.D. Cal. 1994). Rather, whether joinder is impracticable depends on the facts and circumstances of each case. ld. Plaintiff has shown that several million of Defendant’s products were sold in California alone during the relevant time. Defendant does not dispute that this is sufficient to meet the numerosity requirement, and the Court finds that this requirement is met.

Defendant claims, however, that the putative class members are not “ascertainable.” It makes four arguments. First, Defendant argues that Plaintiffs’ proposed “class definitions embrace many consumers who do not have valid claims” in that some putative members have no standing because they suffered no injury, and would therefore have to be individually screened out of the class. (Doc. no. 170-1 (opp’n) at 56.) To the extent the argument is directed at the class definition, it was rejected in Briseno v. ConAgra Foods, Inc., 844 F.3d 1121 (9th Cir. 2017). At class certification stage, it is sufficient that the class be defined by an objective criterion, i.e., whether the class members purchased the relevant products. See id. at 1124 (affirming decision to the same effect). This is met here, because Plaintiffs list the relevant products in the definition of each proposed class.

To the extent the argument is directed to standing specifically, it is also rejected. “In a class action, standing is satisfied if at least one named plaintiff meets the requirements.” Bates v. United Parcel Serv., Inc., 511 F.3d 974, 985 (9th Cir. 2007). Defendant attacked each class representative’s standing in its summary judgment motion. The Court concluded that all class representatives had standing at least as to some of their claims. (Doc. no. 209 (order) at 4-8.)

To the extent Defendant suggests that the class definition is overbroad because it may potentially contain some members who were not injured, the issue is better addressed in terms of the predominance requirement under Rule 23(b)(3). Briseno, 844 F.3d at 1125 n.4 (citing Torres v. Mercer Canyon, Inc., 835 F.3d 1125, 1136-39 (9th Cir. 2016)). Moreover, as a practical matter, overinclusiveness in class actions involving low-cost consumer goods presents a low risk of fraudulent or mistaken claims, “perhaps to the point of being negligible” because they generate “consistently low participation rates,” which makes it “very unlikely that non-deserving claimants would diminish the recovery of participating, bona fide class members.” Id. at 1130 (internal quotation marks, citation and footnote omitted).

Second, Defendant contends that “Plaintiffs’ class definitions are unworkable because the members cannot be reliably identified,” as “[m]ost customers do not remember the specific types of products they bought or when they purchased them.” (Doc. no. 170-1 at 57.) Defendant concedes that this argument was rejected in Briseno (id. at 58 n.51), which held that Rule 23 does not require the class representative to prove an “administratively feasible” way to identify each putative class member. 844 F.3d at 1128-29. “[N]either Rule 23 nor the Due Process Clause requires actual notice to each individual class member,” but allow for “notice by publication . . ., or even at an appropriate physical location,” id. at 1128-29, to the members who cannot “be identified through reasonable effort,” Fed. R. Civ. Proc. 23(c)(2)(B) (emphasis added).

Third, Defendant maintains that the class settlement in Delacruz v. CytoSport, U.S. Distr. Ct. N.D. Cal. case no. 11cv3532, “released any claims based on the protein present in Muscle Milk shakes sold between July 18, 2007 and December 31, 2012.” (Doc. no. 170-1 at 57.) The settlement agreement and the order granting final approval of settlement each include a broad release clause, which apparently intended to preclude claims such as the claims asserted in this action. (See Delacruz, doc. no. 67-1 (first am. settlement agreement) at 6-7 & 16-17; doc. no. 91 (order) at 13-15.) However, a class action settlement’s “bare assertion that a party will not be liable for a broad swath of potential claims does not necessarily make it so.” Hesse v. Spring Corp., 598 F.3d 581, 590 (9th Cir. 2010).

A settlement agreement may preclude a party from bringing a related claim in the future even though the claim was not presented and might not have been presentable in the class action, but only where the released claim is based on the identical factual predicate as that underlying the claims in the settled class action.

Id. (internal quotation marks and citations omitted). The claims asserted in this action are not based on the “identical factual predicate” as Delacruz. Delacruz was not directed at any representations made with respect to Defendant’s protein powders, and to the extent it was directed at the liquid shakes, it did not attack representations regarding the quantity of protein. (See Delacruz, doc. no. 185-14 (second am. compl.); doc. no. 67-1 at 2, 11-12; doc. no. 91 at 4, 7-8.) Accordingly, Delacruz does not limit the scope of the class proposed in this action.

Fourth, Defendant argues that the label for Monster Milk: Lean Muscle Protein Supplement, a protein powder, was changed during the proposed class period to exclude the reference to “Lean Lipids.” Defendant argues that individuals who purchased this product after the label change “cannot be included in any class.” (Doc. no. 170-1 at 57.) Although Defendant is correct that the reference to “Lean Lipids” was removed, other allegedly misleading references to “lean” remained. (Doc. no. 157-22 (Kashima Decl. App’x A); cf id. at 2-15 (referencing “Lean Lipids”) & id. at 16-17 (no longer referencing “Lean Lipids,” but including the claims “new leaner formula,” “lean protein,” and “lean muscle protein supplement”).) Accordingly, the removal of “Lean Lipids” from some of the labels has no effect on class certification in this action.

  1. Commonality Under Rule 23(a) and Predominance Under Rule 23(b)(3)

The second element of Rule 23(a) requires the existence of “questions of law or fact common to the class.” Fed. R. Civ. P. 23(a)(2). To meet this requirement, the putative class members’ claims must depend on a common contention, which must be of such nature that it is capable of class-wide resolution. Decision on the contention must resolve an issue that is central to the validity of each one of the claims in one stroke. [¶] What matters to class certification is not the raising of common questions . . . but, rather the capacity of a classwide proceeding to generate common answers apt to drive the resolution of the litigation. Dissimilarities within the proposed class are what have the potential to impede the generation of common answers.

Dukes, 564 U.S. at 350 (internal quotation marks and citation omitted).

Similarly, the predominance inquiry under Rule 23(b)(3) “tests whether proposed classes are sufficiently cohesive to warrant adjudication by representation.” Amchem Prods, Inc. v. Windsor, 521 U.S. 591, 623 (1997). Unlike Rule 23(a)(2), which is met when there is “even a single common question,” Dukes, 564 U.S. at 359 (quotation marks and brackets omitted), Rule 23(b)(3) requires that “common questions predominate over any questions affecting only individual class members.” Amgen, 568 U.S. at 469 (internal quotation marks and citation omitted, emphasis in original).

Because “Rule 23(a)(2)’s `commonality’ requirement is subsumed under, or superseded by, the more stringent Rule 23(b)(3) requirement that questions common to the class `predominate over’ other questions[,]” Amchem, 521 U.S. at 609, see also id. at 623, the Court considers these requirements — commonality and predominance — together. The predominance inquiry begins “with the elements of the underlying cause of action.” Erica P. John Fund, Inc. v. Halliburton Co., 563 U.S. 804, 809 (2011).

Defendant argues that certification should be denied because the alleged claims are “idiosyncratic individual claims.” (Doc. no. 170-1 at 37.) With respect to the protein powder products, “no one cared about” the L-glutamine and “lean” representations, and each consumer purchased the products for his or her own individual reasons. (Id.) With respect to the protein shake products, according to Defendant, Plaintiffs cannot prove a “common shortfall” for the protein content statement, because any such shortfall differs among the various protein shake formulations. For all products Defendant attacks Plaintiffs’ proposed method of calculating damages on a class-wide basis. (Id. at 50.) Finally, Defendant argues that a nationwide class cannot be certified because of individual choice of law questions. (Id. at 35-37.) These arguments are addressed below.

  1. Warranty Claims

Plaintiff seeks certification of the MMWA claim for the California, Florida and Michigan subclasses. (Doc. no. 157 at 2-3.) This claim was dismissed in the order granting in part Defendant’s summary judgment motion. (Doc. no. 209 at 10-12.) Accordingly, the request to certify the MMWA claim is denied as moot.

Plaintiffs’ intent with respect to the state law claims for breach of express warranty is unclear. In the notice of motion, Plaintiffs state that if their MMWA claim is not certified, they seek to certify the state law warranty claims. (Doc. no. 157 at 3 n.2.) However, Plaintiffs do not brief certification of these state law claims, although they refer to them in two footnotes. (Doc. no. 157-1 at 32-33 n. 14 & 15.) They also state that they “only move for certification of their MMWA claims at this time.” (Id. at 34 n.16.) Their intent regarding certification of the state law breach of express warranty claims is therefore unclear.

To the extent Plaintiffs may have intended to certify these claims, the issue is moot as to the Florida and Michigan claims, which were dismissed at summary judgment. (See doc. no. 209 at 8-10.) As to the California claim, Plaintiffs do not meet their burden.

Defendant argues that Plaintiffs cannot meet the predominance requirement because breach of express warranty requires individual proof of reliance and causation. On summary judgment, the Court determined that California law does not require proof of reliance. (Doc. no. 209 at 10 (citing Jud. Council of Cal. Civ. Jury Instr. (“CACI”) no. 1230 cmt (2017) (quoting Hauter v. Zogarts, 14 Cal.3d 104, 115 (1975)); Cal. Comm. Code § 2313(1) & Cal. Code Cmt. 2).) However, it requires proof of causation. CACI no. 1230 ¶6 (“That the failure of the [product] to be as represented was a substantial factor in causing [plainitff]’s harm.”). Plaintiffs do not address causation for this cause of action. (Seedocs. no. 157-1, 185.) Accordingly, to the extent Plaintiffs request that the California subclass include a claim for breach of express warranty, their motion is denied for failure to properly support it.

  1. California Consumer Protection Claims
  2. Elements

Plaintiffs allege false or misleading statements on Defendant’s product labels in violation of the UCL,3 FAL4 and CLRA, Cal. Civ. Code § 1770(a)(5).5

The standard for determining whether a defendant misrepresented the characteristics, uses or benefits of goods and services under Civil Code section 1770, subdivision (a)(5) is the same as that for determining whether there was false advertising under the UCL and false advertising law.

Chapman v. Skype, Inc., 220 Cal.App.4th 217, 230 (2013); see also Williams v. Gerber Prods Co., 553 F.3d 934, 938 (9th Cir. 2008) (am. Dec. 22, 2008). In this regard, “it is necessary only to show that members of the public are likely to be deceived.” Tobacco II Cases, 46 Cal.4th 298, 312 (2009) (internal quotation marks, brackets, ellipsis and citation omitted). The “focus is on the defendant’s conduct, rather than the plaintiff’s damages, in service of the statute’s larger purpose of protecting the general public against unscrupulous business practices.” Id. at 312; see also id. at 324. Accordingly, no individualized proof is required to show deceptiveness.

In class actions alleging UCL and FAL violations, once a class representative establishes statutory standing,6 injunctive relief and restitution are “available without individualized proof of deception, reliance and injury.” Tobacco II Cases, 46 Cal.4th at 319-20.

The CLRA claim requires the additional “showing of actual injury as to each class member.” Steroid Hormone Prod. Cases, 181 Cal.App.4th 145, 155 (2010); see also id. at 156 (discussing Cal. Civ. Code § 1780(a) (“Any consumer who suffers any damage as a result of the use . . . of a . . . practice declared to be unlawful by Section 1770 may bring an action. . . .”)). However, injury, as well as reliance and causation, can be proved “by showing that the alleged misleading statement was material, even if [Defendant] might be able to show that some class members would have bought the products even if they had known [the representation was false].” Steroid Prod. Cases, 181 Cal. App. 4th at 156-57. “Materiality of the alleged misrepresentation generally is judged by a `reasonable man’ standard. In other words, a misrepresentation is deemed material if a reasonable man would attach importance to its existence in determining his choice of action in the transaction in question. . . .” Id. at 157 (internal quotation marks, brackets and citation omitted).

  1. Class Member Reliance and Causation — L-glutamine and “Lean” Statements on Protein Powder Labels;Daubert Motion

Defendant argues certification should be denied because Plaintiffs presented no proof that the L-glutamine and “lean” statements were deceptive. (Doc. no. 170-1 at 42, 45.) As discussed above, for all three California consumer protection claims, the issue is decided on a class-wide basis, regardless of each individual consumer’s understanding. See Tobacco II Cases, 46 Cal.4th at 312 (“it is necessary only to show that members of the public are likely to be deceived”); see also Chapman, 220 Cal. App. 4th at 230 (same standard applies to UCL, FAL and CLRA claims); Williams, 553 F.3d at 938 (same). Moreover, it is not necessary to prove actual falsity, it is sufficient to prove that the representation, “although true, is either actually misleading or . . . has a capacity, likelihood or tendency to deceive or confuse the public.” Chapman, 220 Cal. App. 4th at 226 (internal quotation marks and citations omitted); see also Tobacco II Cases, 46 Cal.4th at 312. Whether Plaintiffs are successful in proving deceptiveness or not, the outcome of this issue affects the claims on a class-wide basis. The merits of this issue therefore do not preclude class certification. Accordingly, it is neither necessary nor appropriate for the Court to decide it at this stage. See Amgen, 568 U.S at 466.

Defendant next maintains that individual “proof of causation and thereby reliance” is required. (Doc. no. 170-1 at 39.) The argument is based on the premise that to avoid individual proof of causation, Plaintiffs must show that the “lean” and L-glutamine representations were material to the class members. This is not required for the UCL and FAL claims, but is required for the CLRA claim. See Steroid Prod. Cases, 181 Cal. App. 4th at 156-57.

In support of their contention that the L-glutamine and “lean” representations are material, Plaintiffs primarily rely on their marketing expert Elizabeth Howlett, Ph.D. (Doc. no. 157-8 (“Howlett Report”) at 8.) Defendant moves to exclude Dr. Howlett’s opinions as inadmissible under Rule 702 of the Federal Rules of Evidence. (Doc. no. 170-1 at 59.) For the reasons stated below, Defendant’s Daubertmotion is granted in part.

The party offering evidence bears the burden of showing that the evidence is admissible. See Bourjaily v. United States, 483 U.S. 171, 175-76 (1987). Accordingly, Plaintiffs bear the burden of showing that Dr. Howlett’s materiality opinions are admissible. To be admissible, among other things, expert opinion must be based on sufficient facts or data. Fed. R. Evid. 702(b).

Dr. Howlett based her opinion on two factors — role of L-glutamine in muscle recovery and immune system function, and Defendant’s own marketing research. (Howlett Report at 8; see Videotaped Deposition of Dr. Elizabeth Howlett (“Howlett Depo.”) at 30-35; see also id.at 21.)7 Dr. Howlett did not cite any references for her opinions regarding the function of L-glutamine in the body, but relied on “common knowledge.” (Howlett Depo. at 31-34; see also Howlett Report at 8.) However, she admitted that the effect of L-glutamine on the body was “out of [her] area of expertise.” (Howlett Depo. at 37.) She also admitted that Defendant’s marketing research materials referenced in her report were not referencing L-glutamine, but were more generally addressing protein content. (Id. at 32-35.)

Plaintiffs point to Dr. Howlett’s deposition testimony that the primary source of the information she reviewed for her report was Defendant’s own marketing research. (Doc. no. 185 at 26 (citing Howlett Depo. at 21).) The problem with this argument is that Dr. Howlett’s report cites to only a few pages out of those documents (Howlett Report at 8), which do not address L-glutamine. (Howlett Depo. at 32-35). Based on the foregoing, Dr. Howlett’s opinion that L-glutamine representations were material to the consumers is unsupported by sufficient facts or data. Defendant’s motion to exclude this opinion is granted for purposes of the pending motion for class certification.

In addition to moving to exclude Dr. Howlett’s opinions, Defendant offered the opinion of its marketing expert Ravi Dhar to argue that the L-glutamine representations were not material. (Doc. no. 170-1 at 43 (citing doc. no. 170-7 (“Dhar Report”).) Dr. Dhar opined, based on a consumer survey he conducted, that “the overwhelming majority of the respondents do not even mention L-glutamine as a reason for buying the products.” (Dhar Report at 10; see also id. at 10-13.)

Plaintiffs do not address Dr. Dhar’s opinion. Instead, they offer evidence of their own independently of Dr. Howlett’s opinion. They rely on, among other things, the deposition testimony of Adam Schrententhaler, Defendant’s Director of Product Development (Transcript of the Testimony of Adam Schrententhaler (“Schrententhaler Depo.”)),8 and Defendant’s own marketing research (doc. no. 170-38 through 40 (Kashima Decl. Exs. M-O)). (See doc. no. 185 at 19-20, 37.)

Adam Schrententhaler and his team formulated all Defendant’s products, “created all the label content, [and] produced claim substantiation.” (Schrententhaler Depo. at 13.) He testified it was Defendant’s understanding that L-glutamine played a role for athletes in muscle maintenance or building. (Id. at 124.) Defendant’s marketing research shows that muscle maintenance and building were important to consumers who purchased protein supplements. (See, e.g., Ex. N at 034911; Ex. O at 034303.)9 L-glutamine content was specified, and its function for athletes was highlighted, on some of Defendant’s protein powder labels. (Kashima Decl. Ex. K at 29-36 (“5g L-glutamine to enhance muscle tissue recovery/repair”).) This evidence tends to show, independent of Dr. Howlett’s opinions, that L-glutamine representations were material.

Plaintiffs contend that their evidence is sufficient to prevail on the predominance issue with respect to the L-glutamine representations. (Doc. no. 185 at 20.) They argue that materiality is a merits issue that should not be decided at the class certification stage. (Id. at 18.) According to Plaintiffs, the relevant inquiry is whether materiality can be proven on a class-wide basis and not whether the alleged misrepresentations were in fact material. (Id. at 20.) Citing Clemens v. DaimlerChrysler Corp., 534 F.3d 1017, 1026 (9th Cir. 2008), Plaintiffs allow that “to the extent [they] must show some prima facie showing of materiality at class certification, `[s]urveys and expert testimony regarding consumer assumptions and expectations may be offered but are not required; anecdotal evidence may suffice.'” (Doc. no. 185 at 19 (emphasis in original) (quoting Clemens, 534 F.3d at 1026).)

Clemens did not address class certification. It held that to prevail on the issue of materiality at summary judgment, evidence of consumer assumptions and expectations may be sufficient to raise a genuine issue of fact. 534 F.3d at 1026.10 Unlike summary judgment, prevailing on a motion for class certification requires the court to resolve any factual disputes necessary to determine whether class certification requirements are met. Ellis v. Costco Wholesale Corp., 657 F.3d 970, 983 (9th Cir. 2011). In Ellis, the district court decision was vacated because the court did not resolve the factual dispute, presented through conflicting expert opinions, whether there was a nationwide common pattern and practice of alleged employment discrimination that could affect the class as a whole. This was required before the court could decide whether there was commonality of issues of fact or law for purposes of class certification. Id. at 98-84. Ellis expressly rejected the reasoning, relied upon by Plaintiffs here, that because both sides presented admissible evidence, a finding of commonality was appropriate. Id. at 984.

Materiality of the alleged misrepresentations is central to finding commonality and predominance, and therefore to class certification of the CLRA claim. If the alleged misrepresentations are material, individualized proof of reliance and causation is not required, and can be presumed on a class-wide basis. Steroid Prod. Cases, 181 Cal. App. 4th at 156-57. If they are not material, the claim does not necessarily fail, but individual proof of reliance and causation will be required for each would-be class member, thus precluding class certification.

Both parties presented admissible evidence tending to show that the L-glutamine representations were or were not material. Ellis requires the Court to resolve the factual dispute. Plaintiffs bear the burden to show that all requirements for class certification are met. This includes a showing of materiality. See Comcast, 569 U.S. at 33.

Plaintiffs do not address Dr. Dhar’s opinion, but merely dismiss it as “some conflicting evidence” and argue that “Defendant’s self-serving, post-dispute expert reports do not foreclose certification of the proposed Class.” (Doc. no. 185 at 20.) Given admissible evidence on both sides of the materiality issue, which appears to be evenly balanced, Plaintiffs’ arguments are insufficient to carry their burden of showing that the L-glutamine representations were material.

The parties also dispute whether Defendant’s “lean” representations on the protein powder labels were material. Plaintiffs rely on Dr. Howlett’s opinion that “fat level of Lean Muscle Milk Products is material.” (Howlett Report at 8; see also Howlett Depo. at 37, 42-43.) In this regard, Dr. Howlett’s opinion was focused on the “Lean Lipids” representation on the product labels. (Howlett Depo. at 42-43, 79.) She based her materiality opinion on Defendant’s marketing research which stated that weight loss management was important to consumers. (Howlett Report at 8 (citing Ex. O at 34303); Howlett Depo. at 38, 42-43.)

Defendant criticizes this basis because the document considered by Dr. Howlett does not reference “Lean Lipids” and addresses a whole category of protein products on the market, not only Muscle Milk products. (Doc. no. 170-1 at 46.) This argument is rejected. Defendant’s research concluded that weight loss management was important to consumers. (See, e.g., Ex. O at 34303.) It is therefore not a stretch to opine that consumers find fat content representations material. It is undisputed that “Lean Lipids” refers to the fat in Defendant’s product. Defendant’s motion to exclude Dr. Howlett’s materiality opinion regarding “Lean Lipids” representation is denied.

In addition to attacking the admissibility of Dr. Howlett’s opinion, Defendant relies on Dr. Dhar’s report. (Doc. no. 170-1 at 46.) Based on a consumer survey, Dr. Dhar opined that the “lean” statements on the labels did not have an impact on the purchase decision. (Dhar Report at 15-17.)

In response, in addition to Dr. Howlett’s report, Plaintiffs point to Defendant’s marketing research showing that a significant portions of consumers purchase protein powder for weight loss and weight management. (See, e.g., Ex. M. at 34847-48; Ex. N. at 34911.) They do not address Dr. Dhar’s report, however, other than to dismiss it in a summary fashion outlined in the context of L-glutamine representations above. As noted, where both sides have come forward with admissible evidence of materiality, which appears to be evenly balanced, this is insufficient for Plaintiffs to meet their burden of showing, for purposes of class certification, that the “lean” representations were material.

For the foregoing reasons, Defendant’s motion to exclude Dr. Howlett’s opinion is granted insofar as she opined that the L-glutamine representations were material. This opinion is excluded for purposes of the pending class certification motion only. Defendant’s Daubertmotion is denied in all other respects. Plaintiffs failed to meet their burden, with respect to the CLRA claim only, that the L-glutamine and “lean” representations were material, and that causation can be proved on a class-wide basis. This precludes certification of the CLRA claim to the extent it is based on L-glutamine and “lean” statements on protein powder labels.

iii. Class Member Injury — Protein Content Statements on Protein Shake Labels

With respect to the protein shakes, Defendant argues that Plaintiffs cannot meet the predominance requirement because they “failed to offer any common evidence of injury,” and because the parties would have to test each batch and bottle of the many formulations of protein shakes. (Doc. no. 170-1 at 49.) Individual proof of injury is not required for the class members to prevail on the UCL and FAL claims; however, it is required for the CLRA claim. Steroid Prod. Cases, 181 Cal. App. 4th at 155.

Defendant also argues that Plaintiffs used invalid methodology to test the protein content of the shakes. (Doc. no. 170-1 at 48-49.) Alternatively, it argues that protein content was not uniformly overstated, because in some instances it was accurately stated and in others it was actually greater than stated. (Id. at 49.) These arguments go to the issue whether Plaintiffs can prove deceptiveness of the protein content statement. As previously discussed, regardless of Plaintiffs’ success or failure on this issue, the result applies to the class as a whole.11 See Tobacco II Cases, 46 Cal.4th at 312 (“members of the public are likely to be deceived”); see also Chapman, 220 Cal. App. 4th at 226 (not necessary to prove actual falsity). As the issue does not preclude class certification, it need not, and should not, be decided at this stage. See Amgen, 568 U.S at 466.

Defendant next contends that the claim should not be certified because Defendant offered many varieties of the protein shakes during the class period, and each variety had its own stated protein content and alleged shortfall. (Doc. no. 170-1 at 47-49.) Defendant maintains that this shows there is no “common shortfall” for all protein shake varieties. (Id. at 48.) Accepting at face value the contention that the discrepancy varies among the various shake formulations, and considering that the standard is whether “members of the public are likely to be deceived,” Tobacco II Cases, 46 Cal.4th at 312, it is not fatal to class certification if the shortfall is not the same for each variety.

Although different products may have to be tested for protein content, Defendant’s argument that each batch and bottle of each variety of the shake will have to be tested to determine whether the class members were injured (doc. no. 170-1 at 49) is rejected. The parties stipulated for purposes of class certification that the amount of protein did not vary materially between different batches of the same product during the class period. (Doc. no. 104 at 1.) Further, Elizabeth Kimball, Defendant’s nutritional scientist and compliance manager (Deposition of Elizabeth Willard Kimball, Ph.D. (“Kimball Depo.”) at 45-46),12 admitted that there were no variations with respect to the base product formula between various flavors of the same product. (See Kimball Depo. at 45-46, 48-52.)

As Defendant itself suggests, a proper sampling method is sufficient to determine whether the actual protein content varies from the statements on the labels. (See doc. no. 170-1 at 49 n.38.) There is no dispute whether the alleged shortfall can be proved or disproved by sampling, but only as to the validity of the chosen sampling method. Methodology is relevant to the sufficiency, and potentially admissibility, of the evidence to prove deceptiveness, and need not be resolved for purposes of class certification. Defendant’s argument that certification should be denied because Plaintiffs would have to make an individualized showing of protein content is rejected.

  1. Calculation of Damages

Defendant next contends that class certification should be denied based on Comcast v. Behrend, 569 U.S. 27 (2013), which held that “the plaintiffs must be able to show that their damages stemmed from the defendant’s actions that created the legal liability.” Leyva v. Medline Indus. Inc., 716 F.3d 510, 514 (9th Cir. 2013)(citing Comcast, 569 U.S. at 37-38). In Comcast the plaintiffs advanced four theories of antitrust liability, only one of which was approved for class treatment. Comcast, 569 U.S. at 35. The plaintiffs’ proposed damage calculation would include damages caused by all four theories of liability combined. Id. at 36. The holding of Comcast is based on the “unremarkable premise” that if the plaintiffs prevailed, they would be entitled only to damages resulting from one theory of liability. Id. at 35. The Court concluded,

It follows that a model purporting to serve as evidence of damages in this class action must measure only those damages attributable to that theory. If the model does not even attempt to do that, it cannot possibly establish that damages are susceptible to measurement across the entire class for purposes of Rule 23(b)(3).

Id.

Plaintiffs seek restitution. (Doc. no. 157-1 at 28.) “The difference between what the plaintiff paid and the value of what the plaintiff received is a proper measure of restitution.” In re Vioxx Class Cases, 180 Cal.App.4th 116, 131 (2009). Plaintiffs propose two alternative models of calculating damages stemming specifically from Defendant’s protein, L-glutamine and “lean” representations. To the extent these models attribute damages to each alleged misrepresentation separately, they comply with Comcast.

Defendant also argues that class certification should be denied because neither of the proposed damages models has been performed. Defendant cites no binding authority holding that class certification should be denied unless the experts have already calculated damages,13 especially when, as here, the parties bifurcated class certification and merits discovery. (Doc. no. 170-4 (Kaplan Decl. Ex. H (Joint Rule 26(f) Report and Discovery Plan)) at 78.) Plaintiffs filed expert declarations explaining their proposed models.

Plaintiffs propose conjoint analysis to calculate class-wide damages attributable to protein content statements on the protein shake labels, and L-glutamine and “lean” statements on the protein powder labels.14 Conjoint analysis is a quantitative consumer preference analysis used to measure the relative value of various product attributes. (Doc. no. 157-8 (“Howlett Report”) at 9.) It has been used in marketing research since the 1970s. (Id. at 10.) Dr. Howlett opined that it is possible “to use the conjoint analysis to quantify the Price Premium associated with the allegedly false `Protein, L-Glutamine, and Lean Claims’ on a class-wide basis.” (Id. at 6.)

Dr. Howlett proposes to use the choice-based variant of the conjoint analysis. (Id. at 11.) In a choice-based conjoint analysis, the study respondents are presented with a product that has multiple options for each studied attribute, such as a specific number of car color options and whether the car has a sunroof. (Id. at 9.) The choices presented to the respondents have all combinations of the studied attributes. By analyzing the respondents’ choices, it is possible to quantify the relative impact of each attribute on product preference, i.e.,the value of each attribute. (Id.) With statistical analysis, it is possible to derive the distribution of preferences across all respondents. (Id.at 11.) If one of the studied attributes is price or premium over average market price, the analysis can determine the dollar value of each attribute or the percentage of the average market price associated with each attribute. (Id. at 9, 12.)

For the pending case, Dr. Howlett proposes to use a national online survey directed to a sample of consumers who purchased one or more of relevant protein shake or powder products. (Id. at 12.) Defendant’s shake products are to be used to study the importance of the protein amount, and the protein powder products to study L-glutamine and “lean” representations. (Id. at 13.) The study would ensure that the product attributes of the highest importance to the sampled consumers are included. (Id.) The responses will be statistically analyzed to determine the value of each of the three attributes, for example an additional gram of protein, presence or absence of L-glutamine and presence or absence of “Lean Lipids” statements. (Id. at 14-15.) The value of each additional increment of protein or presence of L-glutamine or “Lean Lipids” will be separately multiplied by total product purchases to arrive at class-wide damages. (Id. at 16.)

Defendant criticizes Dr. Howlett’s proposed study by arguing that she “assumes the ultimate conclusion that consumers cared about and paid a price premium for the L-glutamine or Lean Lipids statements,” because she intends to include them in the conjoint analysis. (Doc. no. 170-1 at 55.) These attributes must be included, because they are the attributes studied by her analysis. Dr. Howlett testified that if consumers are indifferent to these attributes, the result of the analysis would show it. (See Howlett Depo. at 51-53.) Defendant’s argument omits the pertinent part of Dr. Howlett’s testimony. (See doc. no. 170-1 at 55 (citing Howlett Depo. at 51:24-52:14).)

Defendant further contends Dr. Howlett “does not know if she could obtain pricing data she needs.” (Doc. no. 170-1 at 56.) Defendant misconstrues Dr. Howlett’s deposition testimony about pricing data. (See doc. no. 170-1 at 56 (citing Harris Depo. at 57-58).) She testified she would use data from market research firms such as Information Resources, Inc. and Nielsen, which “almost certainly” is available. (Howlett Depo. at 57-58.) Nowhere in the cited deposition testimony did Dr. Howlett indicate she could not obtain the pricing data. Furthermore, Defendants produced their sales data for each product relevant to this action by state and date. (Doc. no. 157-1 at 41 n.25.)

Finally, Defendant argues that Dr. Howlett’s analysis does not meet the Comcast requirement that damages be tied only to the liability theory at issue for class treatment. Plaintiffs’ L-glutamine claim is based on the contention that the protein powder products did not contain any appreciable amount of unbonded L-glutamine, as opposed to bonded L-glutamine. Defendant contends Dr. Howlett does not explain how she will determine the value of the unbonded, as opposed to bonded, L-glutamine. (Doc. no. 170-1 at 55.) Plaintiffs’ do not address this argument. (See doc. no. 185 at 26, 29-31.) Because damages must be based on the specific theory of liability, certification is denied as to the consumer protection claims based on L-glutamine statements.

As an alternative method of calculating damages attributable to protein content statements on protein shake products, Plaintiffs propose hedonic regression analysis to be conducted by Jeffrey E. Harris, M.D., Ph.D. (See doc. no. 157-7 (“Harris Report”) at 6.) Because Dr. Howlett’s proposed conjoint analysis of the same statements is sufficient to meet Plaintiffs’ burden to show that damages can be calculated on a class-wide basis, the Court need not address Defendant’s criticisms of the alternative method.

For the foregoing reasons, Plaintiffs met the commonality and predominance requirements for (1) the UCL, FAL and CLRA claims to the extent they are based on statements of protein content on protein shake labels; and (2) UCL and FAL claims to the extent they are based on “lean” statements on protein powder labels.

  1. Florida Consumer Protection Claims

Plaintiffs allege that the false or misleading statements on Defendant’s product labels also violated the FDUTPA, Fla. Stat. §§ 501.201 et seq. To prevail on this claim, a plaintiff must show that that “the alleged practice was likely to deceive a consumer acting reasonably in the same circumstances.” Fla. Offc. of Atty Gen. v. Commerce Comm. Leasing, LLC, 946 So.2d 1253, 1258 (Fla. D. Ct. App. 2007) (internal quotation marks and citation omitted.) The plaintiff “need not show actual reliance on the representation or omission at issue.” Id.(citation omitted). Defendant does not disagree. (See doc. no. 170-1 at 24.) This standard is the same as for the UCL and FAL claims. The measure of damages under the FDUTPA is the difference in the market value of the product as sold and the product as promised. Ft. Lauderdale Lincoln Mercury, Inc. v. Corgnati, 715 So.2d 311, 313-14 (Fla. D. Ct. App. 1998). It is the same measure as restitution under the UCL and FAL. Accordingly, for the reasons stated in the context of California consumer protection claims, Plaintiffs meet the commonality and predominance requirements for a FDUTPA violation based on the protein content statements on protein shakes and “lean” statements on protein powders.

  1. Michigan Consumer Protection Claims

Plaintiffs allege that Defendant also violated the MCPA, Mich. Comp. Laws § 445.903(1)(c). The statute prohibits “[u]nfair, unconscionable, or deceptive methods, acts, or practices in the conduct of trade or commerce” defined in pertinent part as “representing that goods or services have sponsorship, approval, characteristics, ingredients, uses, benefits, or quantities that they do not have.” Id. This provision is identical to the CLRA, Cal. Civ. Code § 1770(a)(5). As with California consumer protection claims,

members of a class proceeding under the [MCPA] need not individually prove reliance on the alleged misrepresentations. It is sufficient if the class can establish that a reasonable person would have relied on the representations.

Dix v. Am. Bankers Life Assur. Co., 415 N.W.2d 206, 209 (Mich. Supr. Ct. 1987) (footnote omitted). Plaintiffs concede that the analysis under the MCPA should be the same as under the CLRA. (Doc. no. 157-1 at 31 n.12.) The measure of damages under the MCPA is the same as restitution under California consumer protection statutes — difference in value between the product as promised and product as sold. See Mayhall v. A.H. Pond Co., Inc., 341 N.W.2d 268, 271-72 (Mich. Ct. App. 1983). Accordingly, for the reasons stated in the context of California consumer protection claims, Plaintiffs meet the commonality and predominance requirements for a Michigan subclass asserting an MCPA violation based on the protein content statements on protein shakes.

  1. Nationwide Class for FAL and UCL Violations

Finally, Plaintiffs seek certification of a nationwide class for the FAL and UCL claims. Defendant argues that a nationwide class cannot be certified because California law does not apply to out-of-state putative class members, and that each class member’s own state law should apply, thus precluding a finding that common issues predominate for a nationwide class.

California state law applies to the conflict-of-law issue presented by Plaintiffs’ motion to certify a nationwide class. See Mazza v. Am. Honda Motor Co., 666 F.3d 581, 589 (9th Cir. 2012).

California law[, rather than the law of a foreign state,] may be used on a classwide basis so long as its application is not [unconstitutionally] arbitrary or unfair with respect to nonresident class members, and so long as the interests of other states are not found to outweigh California’s interest in having its law applied.

Wash. Mut. Bank v. Super. Ct., 24 Cal.4th 906, 921 (2001) (citations omitted).

“Under California’s choice of law rules, the class action proponent bears the initial burden to show that California has `significant contact or significant aggregation of contacts’ to the claims of each class member.” Mazza, 666 F.3d at 589 (quoting Wash. Mut. Bank, 24 Cal.4th at 921). “Such a showing is necessary to ensure that application of California law is constitutional.” Id. at 589-90 (citing Allstate Ins. Co. v. Hague, 449 U.S. 302, 310-11 (1981)).

It is undisputed that Defendant is incorporated and headquartered in California, its principal place of business is in California, the final decisions regarding representations made on product labels were made in California, and many of the products were produced in California. (Cf. doc. no. 157-1 (mot.) at 41-42 (citing Kashima Decl. Ex. A (excerpts from depo. of Adam Schrententhaler)) with doc. no. 170-1 (opp’n) at 35-37.) This constitutes sufficient contacts between the claims of out-of-state putative class members and the state of California to meet the constitutional requirement. See, e.g., Mazza, 666 F.3d at 590 (corporate headquarters, advertising agency and large part of the putative class in California).

When the class action proponent makes a showing of the requisite contacts, [g]enerally speaking[,] the forum will apply its own rule of decision unless a party litigant timely invokes the law of a foreign state. In such event that party must demonstrate that the latter rule of decision will further the interest of the foreign state and therefore that it is an appropriate one for the forum to apply to the case before it.

Wash. Mut. Bank, 24 Cal.4th at 919 (internal quotation marks, brackets and citations omitted). Defendant contends that the UCL and FAL should not apply to the out-of-state class members, and that their respective state laws should apply instead. (See doc. no. 170-1 at 35-37.) Defendant bears the burden to show that the “governmental interest approach,” i.e., the choice-of-law analysis under California law, favors foreign law. See Mazza, 666 F.3d at 590 (“burden shifts to the other side to demonstrate that foreign law, rather than California law, should apply to class claims”) (internal quotation marks and citation omitted).

Under the first step of the governmental interest approach, the foreign law proponent must identify the applicable rule of law in each potentially concerned state and must show it materially differs from the law of California. The fact that two or more states are involved does not in itself indicate there is a conflict of laws problem.

Wash. Mut. Bank, 24 Cal.4th at 919-20. Defendant filed a chart titled “Material Differences in State Consumer Protection and Deceptive Trade Practices.” (Doc. no. 170-6 (Decl. of Matthew Kaplan Ex. T).)15 It contends that some, but not all, states require reliance or causation, some require intent to induce reliance, some have a shorter or longer statute of limitations than California, and some states do not authorize class actions under consumer protection laws. (Id. at 2.) Plaintiffs counter that there is no material difference, because the UCL and FAL are “additive rather than exclusive” to the consumer protection laws of other states. (Doc. no. 157-1 at 43-44; doc. no. 185 at 35.) Plaintiffs cite no binding authority for this proposition. The California appellate cases they cite do not conclude there are no material differences. See Wershba v. Apple Computer, Inc., 91 Cal.App.4th 224, 242 (2001) (“California consumer protection laws are among the strongest in the country.”); Clothesrigger, Inc. v. GTE Corp., 191 Cal.App.3d 605, 616 (1987) (“California’s more favorable laws may properly apply to benefit nonresident plaintiffs when their home states have no identifiable interest in denying such persons full recovery.”). Wershba approved a class-wide settlement of a California unfair business practice claim across a nationwide class because, notwithstanding the differences in the consumer protection laws of various states, “this is not necessarily fatal to a finding that there is a predominance of common issues among a nationwide class.” 91 Cal. App. 4th at 244. Clothesrigger held that the trial court did not make the findings required by the governmental interest analysis and remanded for findings. 191 Cal. App. 3d at 613-16, 619-20. The differences among state consumer protection laws, for example, in the requirement of defendant’s intent or knowledge, or a statute of limitations that is shorter than California’s, are material. See Mazza, 666 F.3d at 590-91; see also McCann v. Foster Wheeler LLC, 48 Cal.4th 68, 88-90 (2010) (statute of repose under foreign law would bar the action).

If there is a material difference, the foreign law proponent must next establish the foreign “jurisdiction’s interest in the application of its own law under the circumstances of the particular case” to show that “a true conflict exists.” Mazza, 666 F.3d at 590 (quoting McCann, 48 Cal.4th at 90) (emphasis added). Defendant does not analyze the state interests under the circumstances of this particular case, but points to the findings made in Mazza. (Doc. no. 170-1 at 36.) Mazza observed that in the false advertising context, “[e]very state has an interest in having its law applied to its resident claimants,” 666 F.3d at 591-92 (internal quotation marks, brackets and citation omitted); “each state has an interest in setting the appropriate level of liability for companies conducting business within its territory,” id. (citing McCann, 48 Cal.4th at 91); and “[e]ach state has an interest in balancing the range of products and prices offered to consumers with the legal protections afforded them,” id. Mazza concluded that it was error to “discount[] or not recogniz[e] each state’s valid interest in shielding out-of-state businesses from what the state may consider to be excessive litigation.” Id. These interests are valid for any state. Based on the foregoing, in a case where a plaintiff seeks to apply California consumer protection law to a California corporation on behalf of foreign citizens who purchased defendant’s products outside California, a true conflict arises where California law affords either greater or lesser consumer protection because other states may choose to offer lesser consumer protection and a more business-friendly climate than California, while others may offer more consumer protection and a less business-friendly environment.

Third, if the court finds that there is a true conflict, it carefully evaluates and compares the nature and strength of the interest of each jurisdiction in the application of its own law to determine which state’s interest would be more impaired if its policy were subordinated to the policy of the other state, and then ultimately applies the law of the state whose interest would be more impaired if its law were not applied.

Mazza, 666 F.3d at 590 (quoting McCann, 48 Cal.4th at 82 (citations and quotation marks omitted)). In making this analysis,

the court does not weigh the conflicting governmental interests in the sense of determining which conflicting law manifested the `better’ or the `worthier’ social policy on the specific issue. An attempted balancing of conflicting state policies in that sense is difficult to justify in the context of a federal system in which, within constitutional limits, states are empowered to mold their policies as they wish. Instead, the process can accurately be described as a problem of allocating domains of law-making power in multi-state contexts—by determining the appropriate limitations on the reach of state policies—as distinguished from evaluating the wisdom of those policies. Emphasis is placed on the appropriate scope of conflicting state policies rather than on the `quality’ of those policies.

McCann, 48 Cal.4th at 97 (internal quotation marks, brackets, ellipses and citation omitted); see also Mazza, 666 F.3d at 593.

Defendant does not offer an analysis of its own, but relies entirely on the holding in Mazza: “because the interests of those other states in applying their own laws to their own consumers is stronger than California’s `attenuated’ interest, the Ninth Circuit held that `each class member’s consumer protection claim should be governed by the consumer protection laws of the jurisdiction where the transaction took place.'” (Doc. no. 170-1 at 36 (quoting Mazza, 666 F.3d at 594).)

California legislature expressed a strong interest in regulating false advertising which emanates from California into other states. It is unlawful under the UCL and FAL to make or disseminate a false or misleading statement “or cause [it] to be made or disseminated before the public in this state, or to make or disseminate [it] or cause [it] to be made or disseminated from this state before the public in any state.” Cal. Bus. & Prof. Code §§ 17500, 17200 (incorporates § 17500 by reference). Under the facts of the pending case, applying these provisions to out-of-state sales is consistent with the principle that “a jurisdiction ordinarily has the predominant interest in regulating conduct that occurs within its borders. . . .” McCann, 48 Cal.4th at 97-98 (internal quotation marks and citations omitted).

Based on this principle, McCann and Mazza found foreign law applicable to their facts. In Mazza, the defendant, American Honda Motor Company, was headquartered in California and its advertising agency, which produced the allegedly misleading materials, was located in California. However, the advertising campaign, as it pertained to the relevant representations, was “very limited,” and it was “likely that many class members were never exposed to the allegedly misleading advertisements.” Mazza, 666 F.3d at 595. In Mazza, whether a purchaser was exposed to the allegedly misleading statement depended in large part on whether the ultimate seller chose to present it, for example, when the representations were made in product brochures, Acura Style magazine, video or other presentations, which were available only at dealerships. Id. at 586-87 (through “small scale marketing efforts,” dealers were “encouraged” to show promotional materials at dealership kiosks). Accordingly, “the communication of the advertisements to the claimants and their reliance thereon in purchasing vehicles—took place in the various foreign states, not in California.” Id. at 594. In this regard, the Court concluded,

We recognize that California has an interest in regulating those who do business within its state boundaries, . . ., but we disagree with the dissent that applying California law to the claims of foreign residents concerning acts that took place in other states where cars were purchased or leased is necessary to achieve that interest in this case.

Id. (emphasis added).

Mazza relies in large part on McCann, 48 Cal.4th 68 (2010), because the choice of law issue is governed by California law. Mazza, 666 F.3d at 589. McCann decided that foreign law applied because the incident occurred in Oklahoma when the plaintiff was an Oklahoma resident and the defendant was conducting business in Oklahoma. 48 Cal.4th at 98. The fact that the defendant was a New York company was not persuasive, because Oklahoma had an interest in promoting business, whether by domestic or foreign companies. Id. at 97. The fact that the plaintiff later moved to California for unrelated reasons was happenstance that should not determine the choice of law. Id. The Court recognized that the outcome could be different, if the defendant’s conduct occurred in California:

California’s interest in applying its laws providing a remedy to, or facilitating recovery by, a potential plaintiff in a case in which the defendant’s allegedly tortious conduct occurred in another state is less than its interest when the defendant’s conduct occurred in California.

Id. at 99.

In the pending case, the alleged misconduct occurred entirely in California. (See Schrententhaler Depo. at 60-61).) All allegedly false representations were made on Defendant’s product labels, and all products were sold with labels. All final decisions regarding the labels were made and approvals were given in California, where Defendant is incorporated and maintains its principal place of business. Defendant distributed its products nationwide.

The fact that some products were purchased in one state rather than another should be immaterial to the choice of law under the facts of the present case, because the alleged misconduct occurred entirely in California. Defendant points to no state with a greater interest in enforcing its laws under the facts of this case. Applying the UCL and FAL nationwide does not impede other states in applying their policies, whether through consumer-friendly or business-friendly legislation, to the conduct that occurs within their borders. In light of the foregoing, Defendant has provided no grounds to conclude that any other state’s interest, including any state’s “interest in promoting business,” Mazza, 666 F.3d at 593, would be more impaired than California’s, if California law did not apply.

Defendant’s argument that the questions of law presented by each state’s own consumer protection laws defeat a showing of commonality and predominance is rejected. For the reasons stated above, and in the context of California consumer protection claims, Plaintiffs meet the commonality and predominance requirements for the UCL and FAL claims on a nationwide basis to the extent they are based on statements of protein content on protein shake labels and “lean” statements on protein powder labels.

  1. Typicality

The typicality requirement of Rule 23(a)(3) focuses on the relationship of facts and issues between the class and its representatives.

[T]he commonality and typicality requirements of Rule 23(a) tend to merge. Both serve as guideposts for determining whether under the particular circumstances maintenance of a class action is economical and whether the named plaintiff’s claim and the class claims are so interrelated that the interests of the class members will be fairly and adequately protected in their absence.

Dukes, 564 U.S. at 249 n.5 (internal quotation marks and citation omitted). “[R]epresentative claims are `typical’ if they are reasonably co-extensive with those of absent class members; they need not be substantially identical.” Hanlon v. Chrysler Corp., 150 F.3d 1011, 1020 (9th Cir. 1998).

The test of typicality is whether other members have the same or similar injury, whether the action is based on conduct which is not unique to the named plaintiffs, and whether other class members have been injured by the same course of conduct.

Wolin v. Jaguar Land Rover N. Am., LLC, 617 F.3d 1168, 1175 (9th Cir. 2010) (internal quotation marks and citations omitted).

Defendant does not dispute that Plaintiffs’ claims are typical of the class members’ claims. Plaintiffs and putative class members were injured by the same conduct — Defendant’s allegedly misleading statements on product labels. The relevant conduct is not unique to named Plaintiffs. The legal theories Plaintiffs seek to assert on behalf of the class apply equally to Plaintiffs and the class members. Plaintiffs therefore meet the typicality requirement.

  1. Adequacy

Rule 23(a)(4) requires a showing that “the representative parties will fairly and adequately protect the interests of the class.” Fed. R. Civ. P. 23(a)(4). This requirement is grounded in constitutional due process concerns: “absent class members must be afforded adequate representation before entry of judgment which binds them.” Hanlon, 150 F.3d at 1020. In reviewing this issue, courts must resolve two questions: “(1) do the named plaintiffs and their counsel have any conflicts of interest with other class members, and (2) will the named plaintiffs and their counsel prosecute the action vigorously on behalf of the class?” Id. In other words, the named plaintiffs and their counsel must have sufficient “zeal and competence” to protect the interests of the rest of the class. Fendler v. Westgate-California Corp., 527 F.2d 1168, 1170 (9th Cir. 1975).

Defendant does not dispute that the adequacy requirement is met. No conflict of interest is apparent from the record between Plaintiffs and their counsel on one hand and the putative class on the other.

With respect to Plaintiffs, the issue is whether they “maintain a sufficient interest in, and nexus with, the class so as to ensure vigorous representation.” In re Online DVD Rental Antitrust Litig., 779 F.3d 934, 943 (9th Cir. 2015) (internal quotation marks, brackets and citation omitted). Based on Plaintiffs’ declarations, they have suffered the same injury as they allege on behalf of the class, understand their duties if appointed class representatives, and are willing to undertake them, including vigilantly prosecuting the case on behalf of the class. To date, Plaintiffs have been actively involved in the prosecution of this action, including providing information to class counsel, participating in written discovery and giving deposition testimony. They intend to continue to actively prosecute the case on behalf of the class. (Doc. no. 157-2 (“Roman Decl.”); 157-3 (“Clay Decl.”); 157-4 (“Reichert Decl.”); 157-5 (“Ehrlichman Decl.”).) Although Plaintiff Christopher Roman has criminal history, Defendant does not contend he cannot adequately represent the class. Roman’s history does not include crimes which would adversely reflect on his credibility. (See Deposition of Christopher Roman (“Roman Depo.”) at 12-18.)16Plaintiffs therefore meet Rule 23(a)(4) adequacy requirements.

Based on the counsels’ declarations, California attorneys Jeffrey R. Krinsk and Trenton Kashima, as well as Michigan attorneys Nick Suciu III, Jason J. Thompson, and Amy L. Marino meet Rule 23(a)(4) adequacy requirements and Rule 23(g) requirements for appointment of class counsel. (Doc. no. 157-9 (“Suciu Decl.”), 157-10 (“Thompson Decl.”), 157-11 (“Krinsk Decl.”), 157-11 (Ex. A to Krinsk Decl.), 157-13 (“Marino Decl.”) at 2).

  1. Rule 23(b)(3) Requirements

Certification under Rule 23(b)(3) is proper when “the questions of law or fact common to class members predominate over any questions affecting only individual members, and . . . a class action is superior to other available methods for fairly and efficiently adjudicating the controversy.” Fed. R. Civ. Proc. 23(b)(3).

As discussed above, this action meets the predominance requirement. The superiority requirement includes consideration of:

(A) the class members’ interests in individually controlling the prosecution or defense of separate actions;(B) the extent and nature of any litigation concerning the controversy already begun by or against class members;(C) the desirability or undesirability of concentrating the litigation of the claims in the particular forum; and(D) the likely difficulties in managing a class action.

Fed. R. Civ. Proc. 23(b)(3). This inquiry “requires the court to determine whether maintenance of this litigation as a class action is efficient and whether it is fair,” such that the proposed class is superior to other methods for adjudicating the controversy. Wolin, 617 F.3d at 1175-76.

Defendant argues class action is not superior because individual issues predominate and there are material differences among state consumer protection laws. (Doc. no. 170-1 at 58-59.) Defendant also contends that “Plaintiffs have not offered any means [to] exclude uninjured class members.” (Id. at 58 (citing Chow v. Neutrogena Corp., 2013 WL 5629777 *2 (C.D. Cal. Jan. 22, 2013).) The latter argument is based on the contention that each class member may not have been exposed to the allegedly misleading advertisements, and therefore would not suffer the same injury. See Chow, 2013 WL 5629777 *1-2. All of Defendant’s arguments were rejected in the context of analyzing the predominance requirement.

This is a consumer class action involving low-priced consumer goods and a large number of potential class members. Prosecution of the alleged claims requires discovery, including product testing, and expert analysis, including consumer surveys. It would therefore most likely not be feasible for class members to individually prosecute the consumer protection claims asserted herein. See Briseno, 844 F.3d at 1129. The class members’ interest in individually controlling the prosecution of individual actions is small. According to Plaintiffs, no other similar cases are pending. (Doc. no. 157-1 at 41.)

This action bears a substantial connection to California, as Defendant is located in California (Schrententhaler Depo. at 61), two of the named Plaintiffs, as well as numerous other consumers, purchased Defendant’s products during the class period in California (see Clay Decl. at 2; Roman Decl. at 2). The record does not reflect any reason not to concentrate the litigation of the claims in this District. Finally, it does not appear that this action will be more difficult to manage than other class actions.

For the foregoing reasons, the Court finds that all requirements for class action certification under Rule 23(b)(3) are met with respect to (1) the nationwide classes as to the UCL and FAL claims to the extent they are based on statements of protein content on protein shake labels and “lean” statements on protein powder labels; (2) the California subclasses as to the UCL, FAL and CLRA claims to the extent they are based on statements of protein content on protein shake labels; and UCL and FAL claims to the extent they are based on “lean” statements on protein powder labels; (3) the Florida subclasses as to the FDUTPA violation based on the protein content statements on protein shakes and “lean” statements on protein powders; and (4) the Michigan subclass as to the MCPA violation based on the protein content statements on protein shakes.

III. CONCLUSION

  1. Plaintiffs’ motion for class certification is granted in part and denied in part. The following classes are certified:

(a) A nationwide class comprising of all persons in the United States who, within four (4) years of the filing of this action, purchased Defendant’s Cytosport Whey Isolate Protein Drink; Monster Milk: Protein Power Shake; Genuine Muscle Milk: Protein Nutrition Shake; and Muscle Milk Pro Series 40: Mega Protein Shake. The class is certified for purposes of prosecuting violations of the California Unfair Competition Law, Cal. Bus. & Prof. Code §§ 17200 et seq., and California False Advertising Law, Cal. Bus. & Prof. Code §§ 17500 et seq., to the extent the claims are based on the protein content statements on product labels.

(b) A nationwide class comprising of all persons in the United States who, within four (4) years of the filing of this action, purchased Defendant’s Muscle Milk: Lean Muscle Protein Powder; Muscle Milk Light: Lean Muscle Protein Powder; Muscle Milk Naturals: Nature’s Ultimate Lean Muscle Protein; Muscle Milk Gainer; High Protein Gainer Powder Drink Mix; Muscle Milk Pro Series 50: Lean Muscle Mega Protein Powder (14 oz. to 10 lbs. products); and Monster Milk: Lean Muscle Protein Supplement (2.06 and 4.13 lbs. products). The class is certified for purposes of prosecuting violations of the California Unfair Competition Law, Cal. Bus. & Prof. Code §§ 17200 et seq., and California False Advertising Law, Cal. Bus. & Prof. Code §§ 17500 et seq., to the extent the claims are based on the “lean” statements on product labels.

(c) All persons residing in California who, within four (4) years of the filing of this action, purchased Defendant’s Cytosport Whey Isolate Protein Drink; Monster Milk: Protein Power Shake; Genuine Muscle Milk: Protein Nutrition Shake; and Muscle Milk Pro Series 40: Mega Protein Shake. The class is certified for purposes of prosecuting violations of the California Unfair Competition Law, Cal. Bus. & Prof. Code §§ 17200 et seq., California False Advertising Law, Cal. Bus. & Prof. Code §§ 17500 et seq., and California Consumer Legal Remedies Act, Cal. Civ. Code § 1770(a)(5), to the extent the claims are based on the protein content statements on product labels.

(d) All persons residing in California who, within four (4) years of the filing of this action, purchased Defendant’s Muscle Milk: Lean Muscle Protein Powder; Muscle Milk Light: Lean Muscle Protein Powder; Muscle Milk Naturals: Nature’s Ultimate Lean Muscle Protein; Muscle Milk Gainer; High Protein Gainer Powder Drink Mix; Muscle Milk Pro Series 50: Lean Muscle Mega Protein Powder (14 oz. to 10 lbs. products); and Monster Milk: Lean Muscle Protein Supplement (2.06 and 4.13 lbs. products). The class is certified for purposes of prosecuting violations of the California Unfair Competition Law, Cal. Bus. & Prof. Code §§ 17200 et seq., and California False Advertising Law, Cal. Bus. & Prof. Code §§ 17500 et seq., to the extent the claims are based on the “lean” statements on product labels.

(e) All persons residing in Florida who, within four (4) years of the filing of this action, purchased Defendant’s Cytosport Whey Isolate Protein Drink; Monster Milk: Protein Power Shake; Genuine Muscle Milk: Protein Nutrition Shake; and Muscle Milk Pro Series 40: Mega Protein Shake. The class is certified for purposes of prosecuting violations of the Florida Deceptive and Unfair Trade Practices Act, Fla. Stat. §§ 501.201 et seq., to the extent the claim is based on the protein content statements on product labels.

(f) All persons residing in Florida who, within four (4) years of the filing of this action, purchased Defendant’s Muscle Milk: Lean Muscle Protein Powder; Muscle Milk Light: Lean Muscle Protein Powder; Muscle Milk Naturals: Nature’s Ultimate Lean Muscle Protein; Muscle Milk Gainer; High Protein Gainer Powder Drink Mix; Muscle Milk Pro Series 50: Lean Muscle Mega Protein Powder (14 oz. to 10 lbs. products); Monster Milk: and Lean Muscle Protein Supplement (2.06 and 4.13 lbs. products). The class is certified for purposes of prosecuting violations of the Florida Deceptive and Unfair Trade Practices Act, Fla. Stat. §§ 501.201 et seq., to the extent the claim is based on “lean” statements on product labels.

(g) All persons residing in Michigan who, within six (6) years of the filing of this action, purchased Defendant’s Cytosport Whey Isolate Protein Drink; Monster Milk: Protein Power Shake; Genuine Muscle Milk: Protein Nutrition Shake; and Muscle Milk Pro Series 40: Mega Protein Shake. The class is certified for purposes of prosecuting violations of the Michigan Consumer Protection Act, Mich. Comp. Laws § 445.903(1)(c), to the extent the claim is based on protein content statements on product labels.

  1. Excluded from the above classes are: (a) Defendant and any entity in which Defendant has or had a controlling interest; (b) the officers and directors of Defendant at all relevant times, the members of Defendant’s officers’ and directors’ immediate families and their legal representatives, heirs, successors, or assigns; (c) any judge to whom this action is assigned, any members of such judges’ staffs, and any members of such judges’ immediate families; and (4) all persons or entities that purchased the relevant products for purposes of resale.
  2. Plaintiffs Chayla Clay, Chris Roman, Erica Ehrlichman, and Logan Reichert are appointed as class representatives for the nationwide classes. In addition, Plaintiffs Chayla Clay and Chris Roman are appointed as class representatives for the California classes, Plaintiff Logan Reichert is appointed as class representative for the Florida classes, and Plaintiff Erica Ehrlichman is appointed as class representative for the Michigan class.
  3. Attorneys Jeffrey R. Krinsk, Trenton Kashima, Nick Suciu III, Jason J. Thompson, and Amy L. Marino are appointed as class counsel under Rule 23(g).
  4. No later than September 14, 2018, the parties shall jointly propose a class notice in compliance with Federal Rule of Civil Procedure 23(c)(2)(B).
  5. Defendant’s Daubertmotion is granted with respect to the opinion of Elizabeth Howlett, Ph.D. that the statements on protein powder labels regarding L-glutamine were material. The opinion is excluded for purposes of this Order only. Defendant’s motion is denied in all other respects.

IT IS SO ORDERED.

FootNotes

  1. Not counting exhibits which were filed non-electronically and several motions to file documents under seal, the parties filed in excess of 4,000 pages of briefing and exhibits.
  2. With the exception of deposition transcripts, all page references in citations to docketed documents are to the page numbers assigned by the ECF system.
  3. The UCL provides in pertinent part:unfair competition shall mean and include any unlawful, unfair or fraudulent business act or practice and unfair, deceptive, untrue or misleading advertising and any act prohibited by Chapter 1 (commencing with Section 17500) of Part 3 of Division 7 of the Business and Professions Code.

Cal. Bus. & Prof. Code § 17200.

  1. The FAL provides in pertinent part:It is unlawful . . . to make or disseminate . . . in any . . . advertising . . . or in any other manner or means whatever . . . any statement, concerning . . . personal property . . ., which is untrue or misleading, and which is known, or which by the exercise of reasonable care should be known, to be untrue or misleading. . . .

Cal. Bus. & Prof. Code § 17500.

  1. The pertinent CLRA provision reads,The following unfair methods of competition and unfair or deceptive acts or practices undertaken by any person in a transaction intended to result or that results in the sale or lease of goods or services to any consumer are unlawful: . . .(5) Representing that goods or services have sponsorship, approval, characteristics, ingredients, uses, benefits, or quantities that they do not have or that a person has a sponsorship, approval, status, affiliation, or connection that he or she does not have.

Cal. Civ. Code § 1770(a)(5).

  1. Defendant’s contention on summary judgment that Plaintiffs could not establish statutory standing because they did not rely on Defendant’s representations was granted in part and denied in part. (Doc. no. 209 at 5-8.) Nevertheless, there remains a named Plaintiff with statutory standing for each consumer protection claim as to each allegedly misleading statement. (Id.)
  2. Excerpts from the Howlett Depo. were filed as doc. no. 170-4 (Kaplan Decl. Ex. F) and doc. no. 185-7 (Marino Decl. Ex. E). Throughout this Order, page references to deposition testimony are to the page numbers in the transcript.
  3. Excerpts from the Schrententhaler Depo. were filed as doc. no. 157-26 and 157-32 (Kashima Decl. Exs. A & G).
  4. Page references are to the page numbers assigned by the parties in discovery.
  5. The plaintiff’s showing in Clemensdid not suffice, however, and summary judgment was granted for the defendant. Id.
  6. Defendant acknowledges this is a merits issue. (Doc. no. 170-1 at 49 (“Plaintiffs’ claims fail on the merits.”).)
  7. Excerpts from the Kimball Depo. were filed as doc. no. 157-33 (Kashima Decl. Ex. H.)
  8. This issue was not an impediment to class certification in In re Conagra Foods,which considered at length proposed expert opinions regarding class-wide proof of damages. 90 F.Supp.3d 945, 1025-32. 945 (C.D. Cal. 2015); aff’d Briseno v. ConAgra Foods, Inc.,844 F.3d 1121(9th Cir. 2017).
  9. Although class certification was denied for the CLRA claim based on the L-glutamine and “lean” statements, damages analysis is relevant to the UCL and FAL claims based on the same statements.
  10. Defendant’s brief devotes only one sentence to this issue (doc. no. 170-1 at 36) and the entirety of the discussion is presented in a 58-page single spaced chart in 8-point print. (Doc. no. 170-6 (Decl. of Matthew Kaplan Ex. T).) This is a brazen run around the page limits, which were already extended by parties’ request. (Seedoc. no. 154 (Order Regarding Briefing Plaintiffs’ Motion for Class Certification and Defendant’s Summary Judgment and DaubertMotions).) Failure to comply with orders of the Court is grounds for sanctions. Civ. Loc. Rule 83.1.

16. Excerpts from the Roman Depo. were filed as doc. no. 170-6 at 189-221, and doc. no. 185-8.

New York Catches Tax Cheats under its Tax Fraud Whistleblower Provisions

Whistleblower laws have wide range of powers and affects, but one of the most potent is New York’s Qui Tam provisions which enable an insider to turn in tax cheats and receive a whistleblower award.

Many Qui tam lawsuits are filed under the False Claims Act provide a way for the government to retrieve funds that they have been cheated of. These cases are usually filed by employees who work at a company that is conducting healthcare fraud, like Medicare Fraud or Medicaid Fraud. When the employee notices such activity, they can get in touch with a whistleblower lawyer to file an official report and initiate a secretive lawsuit against the employer. Different types of qui tam cases can be filed, and recent developments in New York are setting an example of how tax-related whistleblower lawsuits can be beneficial for the state government and to the whistleblower.  There are also IRS Whistleblower actions, but those cases must be incredibly detailed and show over $2 million in fraud (underpayments or no payments) and generally significantly higher amounts.

Tax Fraud Whistleblower Cases In New York

New York State is one of the few states in the country that provides appropriate laws that ensure citizens in the state can file for a qui tam case if they know of tax fraud. When such a case is filed with a tax fraud attorney, state authorities are notified of the case and given the opportunity to intervene before the case becomes public.

The False Claims Act laws in New York State was modified in 2010 to allow the citizens to come forward with information that suggests different types of tax-related fraudulent activities are being conducted at their employer. Additionally, the law also ensures that the individual who blows the whistle is appropriately awarded for the fact that they filed the qui tam lawsuit. The reward provided to the whistleblower is granted only after the state has recovered the lost funds from the accused party. Rewards provided to the whistleblower for tax fraud qui tam generally range from 15% to 30% of the amount that the state recovers.

Since the initiation of these laws in the New York State, the government has already been able to retrieve over $56 million in lost funds thanks to whistleblowers speaking up about fraudulent activity that is conducted oftentimes by their employers.     Some common schemes employers use to cheat on taxes is paying workers off the books, falsely designating workers as independent contractors instead of employees and outright not reporting income.

The state is setting an example for other states, as very few states currently have such laws implemented. Others states in the country are advised to consider looking at how New York has already benefited and in turn recouping money from tax cheats helps everyone with their taxes.

Conclusion

When tax fraud is detected, it is important to report the New York Tax Fraud the relevant authorities in the right manner utilizing a tax whistleblower lawyer. Citizens of the New York State are able to file qui tam cases under the False Claims Act, which then allows the whistleblower who filed the case to receive a reward if the case turns out to be successful. Contacting an experienced whistleblower attorney can ensure you have the foundation for at a case that may succeed, such as speaking with former FBI Special Agent and whistleblower lawyer Jason T. Brown of Brown, LLC.

$260+ Million Settlement False Claims Act (FCA) False Billing Whistleblower Case

Health Management Associates plead guilty to false billing as well as other violations of the False Claims Act as a result of a whistleblower action that was commenced looking into its billing practices. The hospital chain that has facilities throughout the United States was pressuring physicians into admitting patients to their hospitals, even when outpatient services would have been adequate to provide treatment to the patient. Physicians were incentivized for complying with the requests made by the management staff at HMA. After a full investigation, which started in 2013, the hospital chain agreed to pay a settlement fee of more than $260 million.

Whistleblower Case Against Health Management Associates

On the 25th of September 2018, the U.S. Department of Justice issued a press release stating that Health Management Associates was found guilty and agreed to pay a settlement fee that reached over $260 million in total.

The settlement was agreed by the major hospital chain after a whistleblower case was filed against them by two former employees. The whistleblower case accused HMA of defrauding the government by false billing. False billing allegations are core to actions under the False Claims Act and inherently involve allegations of Medicare Fraud and/or Medicaid Fraud.

The investigation found that the company had enforced rules that awarded physicians for admitting patients who came to the emergency room when an outpatient treatment would have been sufficient. Physicians did explain that they were forced into these actions by the management of HMA. This type of practice is comparable to upcoding, since billing for the in patient treatment generated significantly greater amounts of revenue for the hospitals and a burden to the taxpayers.

According to whistleblower attorney Jason T. Brown, “This is an excellent qui tam settlement as a case this extensive its challenging to show the individualized course of treatment did not warrant hospitalization especially when Doctors should err on the side of caution when patient health is at issue.  However, when a medical institution makes it a pattern and practice to admit patients upon self-reporting of issues that ostensibly don’t require hospitalization it does a disservice to everyone including the patient and the taxpayer who foots the bill for Medicare Fraud.  Great work by the government, the law firms involved, and to the courage of the whistleblowers who blew the whistle on this unlawful practice.”

Not only will the two employees who came forward be showered with praise for doing the right thing, but under the settlement mechanism of the False Claims Act, they will receive a whistleblower award of approximately $27 million dollars, no small sum for doing the right thing.  While the FCA calls for awards up to 30% of the sums recovered, it is based on the sums recovered based on the information provided by the whistleblower, also known as the relator, so it’s critical to articulate the case in a prompt and correct manner.

In addition to admitting patients to the hospital when admission was not necessary in terms of their medical condition, the investigation also discovered that the chain of hospitals overbilled government health care agencies for services that were provided to the patients during their admission.

Governmental health care agencies affected included Medicare and Medicaid, both of which are federally funded.

Conclusion

This is only one example of the many cases related to fraud in the healthcare industry, brought forward by whistleblowers. Employees who blow the whistle and report such fraud play an important part in reducing health care fraud and damage done to the United States governmental health plans, including Medicaid and Medicare. If you have noticed such misconduct in the workplace, it is important to contact an experienced whistleblower attorney, such as former FBI Special Agent Jason T. Brown at Brown, LLC, who can investigate your case and determine if it is worth filing. You may be eligible for a reward of up to 30% the amount claimed in a settlement, should your case be successful.

DEA Investigates Tennessee County for High Number of Opioid Prescriptions

Consistent with the current’s administration directive to try to file more opioid whistleblower lawsuits under the False Claims Act (FCA) and other statutes, the Drug Enforcement Administration (DEA) announced that they had initiated an official investigation into a high rate of prescription opioids being ordered by pharmacies in a certain Tennessee County. According to data collected by the DEA, painkiller prescriptions in the county reached a level that would provide every person in the county, including children, a total of 270 tablets during the year 2017. That may be a heckuva party for some, but one needs to see the wake of broken lives in the hangover.

Tennessee County Under Investigation

Clay County, forming part of the Tennessee County, is a very small area with only one single city, known as Celina. The county has a population of only 7,800 citizens. Celina is home to only four pharmacies in total, as well as a couple of churches, a few diners, and a number of antique shops. Everything in this rustic town echoes shadows of the past where it really is located in walking distance.

What triggered an investigation by the Drug Enforcement Administration is the fact that 1.5 million painkillers were purchased in 2017 by the four pharmacies that are found in Celina. According to the DEA investigators, this is an alarmingly high number of prescription painkillers purchased by the four pharmacies, especially considering the fact that the population of the city is so low. After some calculation, they found that the 1.5 million prescription pills would equal 270 pills for every single person who is part of the city – including the youth and children.

Anderson Hometown Pharmacy was investigated on the 27th of August. The other pharmacies that are part of the city are also being investigated at the moment, as well as the doctors in town that are prescribing these drugs to patients.

The owner of the pharmacy explained to federal agents who led the investigation that the aging population and workforce of the town was what led to the increased need for pain medication. This, however, still doesn’t explain why 1.5 million prescription-level painkillers were bought in just one year.

Further investigations are still ongoing to help federal agents find more information in regards to the case and to help them point down parties that might be involved in possibly illicit activities.

Conclusion

The investigation that is currently in an ongoing in Tennessee County will continue until the DEA can make a more definite determination on why prescriptions have reached such a high level. Employees at doctors and pharmacies may come forward in the meantime and blow the whistle, which would allow the DEA to obtain data on why prescription numbers are so high. If you find yourself in a situation where a doctor, specialist, or a pharmacy you are employed at conducts itself  in an unlawful manner, you should get in touch with  whistleblower lawyer such as Jason T. Brown at Brown, LLC, who is a Former FBI Special Agent and whose qui tam law firm is experienced in dealing with whistleblower cases.

$102 Million in Whistleblower Awards Rewarded to Pharmaceutical Whistleblowers

Pfizer, a giant global pharmaceutical company that produces some of the world’s most commonly used drugs, agreed to a settlement amount of $2.3 billion and pled guilty after in a whistleblower case that lasted for six years. After the settlement from Pfizer was finalized, $102 million in whistleblower awards were paid out to the whistleblowers who initiated the case and brought forward the evidence that advanced the case against Pfizer.

Pfizer’s $2.3 Billion Settlement

The majority of whistleblower cases reported under the False Claims Act (FCA) occur within the healthcare industry. Each year hundreds of millions of dollars and sometimes billions, are often recovered by the government after a successful qui tam case. In the history of these cases, the Qui Tam lawsuit filed against Pfizer marked the largest whistleblower settlement to date.

In 2003 six employees at Pfizer, came forward with evidence that suggested the pharmaceutical company was conducting fraud.  It was alleged that the company created an internal culture that suggested the organization’s purpose is to drive sales above all and the promotion of the drugs had to be done in manners that were not necessarily approved by the FDA, otherwise he would not be considered a “team player.”

They were advised to promote a pain medication known as Bextra for purposes other than what it was approved for, which is known as off-label promotion.  Off-label promotion may come in different ways where pharmaceutical sales representatives tell the medical facilities they are distributing the drugs to that the product has many more benefits than listed and tells them to prescribe it to their patients for things that were not approved by the FDA. After refusing to comply with the requests from Pfizer, the lead whistleblower was dismissed from his position and fired from the company.

Strong corroborated evidence of the off-label promotion was provided against Pfizer, which led to a full investigation by the government into the matters reported in the whistleblower lawsuit. The investigation lasted for more than five years. Ultimately, In 2009 Pfizer pled guilty due to the evidence brought forward against the company, as well as findings from an investigation initiated by the government and the lawyer who led to the case.

The company agreed to pay a settlement fee of $2.3 billion for the damages and for fines that were issued to them. The government awarded $102 million of the settlement paid by Pfizer to the individuals who initiated the whistleblower case.

The lead whistleblower obtained over $50 million of the reward for commencing the case.

Conclusion

After bringing forward evidence of fraudulent activities by Pfizer that stemmed from off-label promotion of its drugs, the whistleblowers were able to commence a lawsuit under the False Claims Act and hold it accountable for promoting products for things that were not approved by the FDA.  Pfizer’s record $2.3 billion settlement should put other pharmaceutical companies on notice that the government will not allow them to try to promote products in a way that has not been cleared by the FDA for the safety of the people.  If you’re asking yourself, “How do I report Medicare Fraud,” People who have information regarding off-label promotion or other inside information regarding the government being defrauded should speak with a pharmaceutical whistleblower lawyer like former FBI Special Agent Jason T. Brown of Brown, LLC to receive a free consultation regarding their rights.

What to Do When You’re in an Accident with a Truck

If you were unfortunately in an accident with a Truck, you need to speak with a truck accident lawyer that is experienced and is results oriented, like former FBI Special Agent Jason T. Brown, of Brown, LLC, Jersey City, NJ (but handling cases all over the country such as York, PA, Rochester, NY, Chicago, IL).  First of all, it’s important to take care of you first!  One of the questions truck accident defense lawyers like to ask is, “Who did you call first – your lawyer or your doctor?”  If you’re badly injured from a truck accident, of course, you need to seek medical treatment first, but they key is not to wait.  Don’t delay.  Delay favors the Truck Carrier.

From the moment of collision, the truck companies have insurance people and defense attorneys working on the case to try to insulate themselves from liability and to minimize the payout to the trucking accident victim, if anything at all.  They will try to reach out to you and lock you into your version of what occurred, even while you’re still in the hospital or on medicine that makes you loopy.  You have to avoid making statements before retaining counsel.  Even the most innocuous thing can hurt you.  For example, one of the most common questions a sly insurance investigator may ask you just a couple days after the truck accident, is something along the lines, “Hi – I’m John Smith with ABC Trucker’s Insurance, I just have a few questions, so we can find out what sort of compensation if any we’re going to offer you.  Before we begin, how are you doing today?”  As soon as you answer politely, “I’m doing great, how about you,” they will memorialize that the injured person indicated they were doing great only two days after the accident and use it against you.

Truck Accidents are serious business and the trucking insurance company has learned to spend big bucks up front to try derail your case before it begins which can save them the hundreds of thousands or millions you might be entitled to if you retained a truck accident injury lawyer shortly after the accident occurs.  Why are they such big cases?  First, the injuries are much more severe.  Truck accidents easily cause death, broken bones, concussions, and other life-altering injuries.  Also, under most state laws, the legislatures have recognized the potential for a truck injury to create major injuries, so they make the trucking company hold larger insurance policies than just a normal vehicle.

Ride-share accidents are on the rise, since the ride-share services promote individuals to carry passengers in a commercial setting, even though they may be brand new without being trained in ride-along fashion or familiar with the roads they are driving on. Since ride-shares like Uber Accidents and Lyft Accidents are commercial in nature when the are carrying a passenger, even though the smaller vehicles may not cause the extent of injury that a trucking injury would, they carry commercial policies and its best to retain ride-share counsel to deal with those entities as well.

Once you’ve retained your truck accident lawyer, he or she will guide you regarding the next steps, but acting quickly is the key.  You want to identify the police who took the report and obtain a copy (which counsel can do for you), find out if any tickets were issued, potentially photograph the scene of the accident to see if there are any factors that led to the accident, and put the truck on notice of the pending claim and to preserve all relevant evidence.  There’s many factors that need to converge to make your case a success, that is why if you were unfortunately in an accident with a truck or a ride-share, you should speak with Brown, LLC, Jersey City, NJ to know your rights and receive a free consultation.

How Long Does It Take to Resolve A Whistleblower Case?

In the last decade the amount of whistleblower awards have hit the billion dollar mark.  Sadly, that means there’s been billions and billions of fraud and funds that require recapturing.  One of the most common questions whistleblowers ask is how long does it take to resolve a qui tam lawsuit.  Like a fine wine good things take time, and a successful qui tam lawsuit depends on many, many factors, including the selection of the right whistleblower lawyer, candor with your qui tam counsel and filing the case properly under seal.  Even with all that, there are many more suits that lose than win and you should expect it to take a long, long time for the most part, with an occasional quick victory.

The Process of a Qui Tam Lawsuit

To understand how long a Qui Tam lawsuit really takes, it is important to consider the many processes involved in these specialized cases. There are various types of whistleblower statutes, the most prolific is the False Claims Act (FCA), the CFTC Whistleblower statute, the SEC Whistleblower statute and various other state False Claims Act and whistleblower statutes such as the Illinois False Claims Act, the California False Claims Act, and the New York Tax Whistleblower laws.  Each statute you must navigate differently, and all of them take time.

For statutes like the Federal and most state False Claims Acts you must file the matter with a whistleblower law firm and cannot file it pro se (without an attorney). The case starts with the whistleblower speaking with an attorney who focuses on qui tam matters.  Most whistleblower lawyers will offer a free, confidential consultation regarding the matter and will only receive payment if they win the case.  It is important when you call a whistleblower hotline or speak with the right qui tam counsel you candidly discuss the case, the proofs and your likelihood of success. Nothing is ever guaranteed.

If the case has potential, then the whistleblower attorney drafts the complaint based on the evidence to file the case. The qui tam lawsuit is then filed secretly under seal along with a Disclosure Statement, with all the relevant information and proofs.

At this time, the lawyer and the whistleblower needs to wait for the government to consider the case and do some investigation on their side. The government needs to decide whether or not they wish to intervene in the case which can take considerable time.  Generally, the case stays under seal for at least a year, but it can be many, many years until the government makes up its mind whether to take the case, which is known as a whistleblower intervention, or to decline the case allowing the case to be unsealed

Many times when the government conducts a thorough investigation and corroborates the allegations of the complaint, it often resolves the matter contemporaneously with its unsealing.  However if it is not resolved upon unsealing, the case turns into a normal piece of litigation with the Court setting the litigation schedule and depending on the jurisdiction the case can take another couple years until the trial.  Most cases resolve before trial, but some will have to be tried, and also there is an appeal process.

Conclusion

A whistleblower case can take a significant period of time since there are many procedures and steps that need to be taken in order for the case to be filed, investigated, litigated and completed. In some cases, the process can take several years before any true progress is made. On the short side, some cases can take a year to eighteen months, with most cases averaging 3-5 years and some could be a decade long battle. The length of time the case remains under seal can be used to your advantage as well which is why its important to speak with a seasoned whistleblower lawyer like former FBI Special Agent Jason T. Brown, from Brown, LLC and his qui tam team to determine If you have a whistleblower case worth filing.

How Much Is a Whistleblower Awarded for a Successful Case?

Filing a whistleblower case is courageous but risky.  Even though there are various statutes that prohibit retaliation against whistleblowers, once a case is commenced a whistleblower may feel like everyone is out to get them or that people are following them or their phones are tapped, or a variety of other symptoms that although they are unfounded are common beliefs from people going through the process.  Most of the concerns are unfounded since the initial qui tam lawsuit is filed under seal, which means the company committing the Medicare Fraud, Medicaid Fraud, or SEC violation is not even aware initially there is a charge against them.  That coupled with the fact the whistleblower lawsuit may take years sometimes takes the wind out of the potential relator’s sails, but with the right whistleblower law firm to address your concerns the process becomes more palatable.

Although justice should be a prime motivating factor in commencing a qui tam lawsuit, there is also a possible economic reward for the right information.  The whistleblower award is provided if the case turns out to be successful and the government is able to retrieve funds that were lost due to the fraudulent activity. This raises common questions whistleblowers ask:

How much can I win as a whistleblower?

What is the average whistleblower settlement?

Rewards for Whistleblower Cases

In recent years billions of dollars have been recaptured and sent back to the government for violations of the False Claims Act (FCA), the most commonly used whistleblower statute that fights fraud against the government.

The reward provided to a whistleblower varies from case to case and statute to statute. For cases that address Medicare Fraud and Medicaid Fraud, or Defense Contractor Fraud, if the case is successful a whistleblower can receive between 15% and 30% of the amount that is recovered during the case under the False Claims act and potentially more under different State False Claims Act statutes like the Illinois False Claims Act

If the government intervenes in a case under the FCA the relator (whistleblowers) percentage is generally 15-25%.  If the government declines intervention then it go as high as 30%?   So it’s better if the government doesn’t intervene in the case, right?  Well, as a rule that is wrong, since the average whistleblower settlement for a case intervened by the government is roughly $12.5 million dollars, and without government intervention it’s a couple million.  So although a whistleblower may stand to gain more percentagewise without the government’s intervention, it’s a smaller piece of the pie.  The numbers may be a little deceptive because some of the bigger settlements can be in the hundreds of millions of dollars and those are generally with government intervention, so they can skew the bell curve for awards.

Under various statutes like the New York False Claims Act, Illinois False Claims Act, the California False Claims Act there are other mechanisms in which you can also recover for violations against the state or private insurance.  Some actions may include tax fraud, which there is also an IRS Whistleblower provision, which in order to trigger Federally you would need a stellar case with crystal clear information spoon-fed to the government, but the New York Tax Fraud provisions can be advanced much easier with our without the government.  The IRS requires the IRS.  Also, popular in recent years are the use of the SEC whistleblower statutes and the CFTC whistleblower statutes where whistleblower awards can go up to 30%.

Conclusion

Whistleblower cases are challenging, but there is a certain satisfaction that can come from doing what’s right and if successful the whistleblower award can be as high as in the tens of millions of dollars if not more.  Many factors go into whether the whistleblower case is worth bringing, and what percentage of the award is given so it’s important to speak with an experience whistleblower lawyer who fights for and protects whistleblowers like Jason T. Brown (Former FBI Special Agent), of Brown, LLC who can educate you about your rights and the pros and cons of commencing a whistleblower lawsuit.

Common Types of Frauds in The Healthcare Industry Reported by Whistleblowers

Every year the American taxpayer is cheated out of billions of dollars as a result of fraud, such as systemic Medicare Fraud and Medicaid Fraud. The fraudulent activity occurs in all industries as people wrongfully think the government isn’t watching.  There are all sorts of mechanisms to ensure that companies and people don’t cheat the government and various whistleblower laws to award people with targeted information to come forward with their whistleblower case.

Take a recent case against Spa Castle Inc, for example, a company who committed tax fraud and  settled for $2.5 million under the New York Tax Whistleblower Laws which allow private citizens to commence whistleblower actions to hold tax cheats accountable.  The tax whistleblower in this case received a $575,000 New York Tax Whistleblower Award for reporting on how the massage parlors failed to report income, thereby failed to pay taxes, thereby cheating the taxpayer out of money.  The IRS has a whistleblower program as well, where if the insider has very specific information regarding over $2 million dollars of tax fraud they may act, but it must be very detailed insider information.

However, the most common industry where fraud against the government occurs is in the healthcare industry – with fraud such as hospitals and medical facilities submitting false claims such as providing unnecessary treatments, upcoding, using unlicensed individuals, engaging in kickbacks schemes and a host of other violations meant to cheat Medicare of Medicaid or private insurance out of money.

Types of Healthcare Fraud

There are different types of fraudulent activities that occur within the healthcare industry. Some cost the government more than the others. Understanding the types of healthcare fraud and how to recognize such fraud is important for whistleblowers. The ability of a whistleblower and the government to bring a claim are governed by the False Claims Act (FCA).

False Billing

False billing or billing for services not rendered is a relatively common type of fraud that occurs in the healthcare industry. This involves a physician or treatment facility, including care centers and hospitals, submitting claims to Medicare or another federally funded policy for services that were not provided to a patient. In some cases, the fraud would go as far as to forge a signature in order to make such false claims or doctor a chart to justify the bill.

Providing Unnecessary Treatments and Services

Many doctors and health care facilities have been found guilty of providing treatments that are unnecessary, with the sole purpose of committing Medicare Fraud and Medicaid Fraud and billing their insurance policy for the services rendered.  Medical necessity cases can be difficult to prove if reasonable minds disagree regarding the extent or course of the treatment.  One such example is the case against a doctor for falsely diagnosing patients with skin cancer in order to initiate unnecessary treatments on the patients when insured through Medicaid or Medicare.  There are many examples where the medical provider reflexively bills everyone for treatments that walk through the door, whether they need it or not.  For example, the Doctor may ask do you ever have a headache and when almost anyone answers yes, they might feel your temples and bill for a detailed cranial test or reflexology.

Double Billing

Double billing refers to scenarios where a medical provider bills a patient’s healthcare policy for two visits when the patient only had one appointment with the doctor. The doctor would often use a duplicate of the original claim for the “real” appointment and change a few details, such as the date, and then submit the same claim again.

Service or Item Upcoding

Services rendered by healthcare providers have specific codes assigned to them. Some codes yield higher payouts for the provider from a federally funded policy. The same goes for the prescription of medical devices. Some healthcare providers would submit a higher code to a patient’s healthcare provider than the code of the item or service provided to the patient with the sole purpose of additional profits.

Conclusion

The government relies on whistleblowers to come forward with concrete information to hold accountable many of these tax cheats, Medicare frauds and other cheating of the government and insurance.  Most False Claims Act whistleblower cases are filed against hospitals, care centers, physicians, or other parties in the healthcare industry. Double billing and claiming for unprovided services are common types of fraud committed by them. Whistleblowers play an important role in uncovering such fraudulent activities and helping the government retrieve ill-gotten funds. In turn, whistleblowers may be entitled to a whistleblower award for their information. Under the False Claims Act, the whistleblower must use a whistleblower law firm.  If you believe you have information regarding Medicare Fraud, Medicaid Fraud or many other types of fraud against the government you should consult with a whistleblower law firm like Brown, LLC led by former FBI Special Agent Jason T. Brown to go over your rights and determine how to make your case.

References

https://ag.ny.gov/press-release/ag-underwood-and-acting-tax-commissioner-manion-announce-criminal-conviction-and-false

Collective and Class Action Lawsuit Filed against Moe’s Southwest Grill Franchise for Alleged Unpaid Overtime and Unlawful Tip Retention under the Federal and New Jersey Wage and Hour Laws

On September 13, 2018, the lead Plaintiff Marco Gonzalez filed a collective and class action complaint in the United States District Court for the District of New Jersey, alleging that Defendants Fast Casual Partners, LLC and its owner Lee DiPrizito, who operate a number of franchised stores of Moe’s Southwest Grill restaurant in the States of New Jersey and New York, violated the federal Fair Labor Standards Act (“FLSA”) and the New Jersey Wage and Hour Laws and Regulations (“NJWHLR”), by failing to compensate its hourly-paid restaurant workers proper overtime wages and by unlawfully keeping tips.

The complaint alleges that to the extent Defendants paid the restaurant workers for hours in excess of forty (40) in a workweek, Defendants paid them straight time for overtime, that is, such payments were made at their regular hourly rates, rather than time and one-half (1.5) of their regular rates of pay as required by the FLSA and NJWHLR.  The complaint also alleges that Defendants unlawfully kept the credit card tips and catering tips without distributing them to the restaurant workers.

The complaint seeks to represent the following putative FLSA collective members with respect to the federal claims:

All hourly-paid restaurant workers employed by Defendants at any time from three (3) years prior to the filing of this Complaint through the date of judgment.

The complaint also seeks to represent the following putative Rule 23 class members with respect to the New Jersey claims:

All hourly-paid restaurant workers employed by Defendants in the State of New Jersey at any time from two (2) years prior to the filing of this Complaint through the date of judgment

Mr. Gonzalez brings this collective and class action on behalf of himself and all other similarly situated hourly-paid restaurant workers to recover unpaid overtime wages, unlawfully kept tips, liquidated damages, pre- and post- judgment interest, and reasonable attorneys’ fees and costs.

The case is Gonzalez v. Fast Causal Partners, LLC d/b/a Moe’s Southwest Grill, et al., Case No.: 2:18-cv-13840-SRC-CLW.

The plaintiff is represented by Brown, LLC (formerly the JTB Law Group).

If you have any questions or information to provide about the above article, you may contact the following attorneys:

Nicholas Conlon; nicholasconlon@jtblawgroup.com; (877) 561-0000
Ching-Yuan (“Tony”) Teng; tonyteng@jtblawgroup.com; (877) 561-0000

South Carolina Judge Enters Judgment for $114M in Favor of Whistleblowers

The United States government suffers an astronomical loss in the billions each year due to fraud in the healthcare industry. Doctors, laboratories, and many healthcare facilities commit fraud in many different ways. When misconduct occurs in these facilities and the patient is insured through a governmental program, such as Medicare or Medicaid, then it means money is being stolen from the U.S. government.

Early in 2018, a judge in South Carolina entered a judgment  that totaled $114 after three whistleblower cases were investigated. A number of health care facilities and doctors were linked to the case, all of whom were held responsible for the fraud they had committed. The evidence in regards to the fraudulent activity was brought forward by employees of these facilities.

Whistleblower Cases Against Health Care Facilities In South Carolina

After three whistleblower cases were filed this year, a South Carolina judge entered a judgment against them for $114M, payable by the healthcare institutes that were involved in the Qui Tam cases. This judgment was made after a jury at Charleston, SC, found the defendants in the case guilty for defrauding Medicare, a health care program that is funded by the government.

Three Qui Tam cases were filed, and the litigation of the three cases was conducted together. Only one of the whistleblowers involved in these cases testified in the courtroom.  Evidence was made available that proved these companies were paying certain physicians to order blood tests from the laboratories that were completely unnecessary. These drug tests yielded large fees, which were claimed from the federally funded insurance program of the patient. The physicians who participated in the fraud were instructed only to seek out patients who were insured by Medicaid or a similar healthcare agency.

In many cases, some expensive blood tests were ordered for cardiovascular diseases that the patient did not have. The doctor was, in turn, paid a $20 fee for ordering these tests. The pay to play or kickback scenario sometimes triggers violations of the Anti-Kickback statutes or if there is self-dealing the Stark Act.

The investigation found that Health Diagnostic Laboratory had submitted a total of 35,074 claims to government health care programs. Another 3,813 claims linked to these frauds were submitted by Singulex, a blood laboratory based in California.

Conclusion

Whistleblowers play an important role in the recovery of money lost by the government due to fraud in the healthcare industry. The case against Quest Lab, Singulex, and the Health Diagnostic Laboratory allowed the government of the United States to recover $114M in losses caused by fraudulent activities from these institutes. While no specific data was released regarding the awards issued to the whistleblowers, the reward amount was likely between $17.1M and $34.2M, divided between the employees who brought up the Qui Tam lawsuits. If you know of any healthcare fraud, Medicare Fraud, Medicaid Fraud or anyone else defrauding the government you should speak with a whistleblower law firm like Brown, LLC who offers free consultations and can advice you on your rights.

How Do Whistleblower Cases Combat Fraudulent Activity in the Health Care Industry?

Thousands of health care facilities have had to pay an aggregate of billions of dollars in penalties for committing fraud against the government and the taxpayer in the form of Medicare Fraud and Medicaid Fraud.  When employees of a facility committing fraud detect the misconduct, they can come forward with accusations and file a whistleblower case, also known as a Qui Tam action.

For some actions, like CFTC whistleblower actions, SEC whistleblower actions, and IRS whistleblower actions, the identity of the individual can remain confidential throughout the entirety of the process.  For the most common case filed, under the False Claims Act (FCA), while the identity of the whistleblower is initially sealed from the defendant, it is revealed when the case becomes unsealed after the government has had time to investigate the matter.  Many employees fear the potential consequences of their actions, but certain and aggressive laws have been implemented to ensure these employees are not only rewarded but also thoroughly protected against retaliation.

How Whistleblower Cases Work

Understanding how Qui Tam lawsuits work is an important factor for employees who witness fraudulent activity in their workplace. When an employee in the healthcare industry finds that their employers is conducting fraud – such as when false claims are made to the patients’ health care policies, then the employee may come forward with evidence in order to file a case against their employer.  This fraud may happen in many ways such as overbilling, upcoding, billing for services not rendered, and a variety of other health frauds that are often creative ways to overbill Medicare and Medicaid.

The False Claims Act specifies that any citizen is able to sue a business or a person who conducts fraud that leads to a loss of governmental funds. If you suspect or know of a fraud, you should consult with a Qui Tam attorney to learn about your rights and the pros and cons of proceeding with a whistleblower lawsuit.

The only parties who will be notified of the lawsuit during the early stages of the case are the government. The case is kept secret from the party that is being accused. The government can then decide if they would like to intervene in the case. If the government decides not to intervene, the whistleblower can still continue with the case with the whistleblower attorney they have retained to represent them.  Under the False Claims Act, you must have an attorney to file the case with you; you can not file the case without one.

The government after reviewing the complaint will conduct what is known as a relator interview, that is it will sit down and interview the individual complaining of the fraud.  From that interview it will determine whether there are any leads that should be followed, the course of the qui tam investigation and whether to intervene or not.  At some point the Defendant will be made aware of the investigation, and the whistleblower will be given a head’s up before that occurs.

If the case is settled, or if there is a judgment obtained, and the government has recovered the funds they have lost due to the fraudulent activity, a reward between 15% and 30% the settlement amount is provided to the whistleblower.

Conclusion

Even though many individuals observe misconduct in the workplace, often resulting in fraud, employees are often not sure what to do about it or how exactly whistleblower cases work. Fortunately, with appropriate guidance, the whistleblower can put together a solid case and even be rewarded in the process. Choosing the right lawyer becomes an essential factor here, so it is important to consult with a firm like Brown, LLC who has successfully handled whistleblower cases in the past, and can educate you about your rights.

CareCore National LLC Pays $54M Settlement In Qui Tam Case

An investigation that started in February 2013 resulted in the settlement of a Qui Tam case against CareCore National LLC. A licensed nurse who was employed at CareCore National LLC came forward with evidence of the unlawful practice that was being conducted. After two law firms represented the nurse, a False Claims Act (FCA) lawsuit was filed under seal with the federal court in Southern District of New York. The settlement called for CareCore to pay $54 million. Since the case was filed using the provisions in the FCA, the whistleblower award of roughly 20% or $10 million dollars will be given to the woman who had the courage to bring this matter to the government’s attention through her whistleblower lawyer.

The Qui Tam Case Against CareCore National LLC

On the 21st February 2013, a whistleblower case was filed secretly, under seal, against the health care agency CareCore National LLC. A licensed nurse, known as the relator in the case, brought evidence of misconduct in her workplace to two whistleblower law firm who focus on prosecuting these violations.

CareCore National LLC is a company based in Bluffton, South Carolina. They have several branches throughout the United States. The company provides an authorization service for doctors and other facilities who need to verify whether specific types of tests need to be conducted on patients, ultimately promoting their services as a cost-saving way to ensure only the necessary tests are performed on a doctor’s patients.

When any information is missing from a submitted file or when the authorization request submitted to the company does not comply with the set criteria, then nurses are instructed to submit them back to the doctor who originally submitted the request. The doctor would then be requested to review the request and provide the data that is missing from the authorization request.

According to the nurse who brought the whistleblower case forward, however, the company instructed nurses to instead rubber stamp all authorization requests as “Process As Directed.” This means the request is not submitted back to the doctor for review, but rather passed on and the tests are authorized, even when they are not truly necessary. In turn, this led to thousands of patients undergoing diagnostic tests like MRIs, even when not necessary to assist in their diagnosis. Claims were made from federally funded insurance providers. Ironically, the process was nicknamed P.A.D. and jokingly referred to as Padding the bill, which is not joke to taxpayers who every year have to foot the bill for billions of dollars in Medicare and Medicaid Fraud.

Conclusion

Thousands of whistleblower cases against healthcare organizations are filed each year with whistleblowers exposing corruption in such areas as Medicare and Medicaid Fraud.   The False Claims Act provides a way for the government to be repaid for fraudulent misconduct that causes them a loss. These cases play a vital role in preventing further fraud and bringing existing fraudulent activity against federally funded health insurance plans to the attention of the right lawyers who focus on whistleblower cases. If you’re wondering “How do I blow the whistle?” or “Do I have a whistleblower case?” you should speak with a whistleblower law firm like Brown, LLC who can provide a free confidential consultation.

What is a CFTC Whistleblower?

The CFTC Whistleblower program is an acronym for the Commodity Futures Trading Commission Whistleblower program.  The program is designed to provide whistleblower awards for the insiders or those with detailed information regarding violations of the Commodity Exchange Act.  The information must lead to the CFTC bringing a successful enforcement action.  As with other whistleblower programs, the CFTC has an anti-retaliation provision that prohibits taking action against someone who commences a CFTC action.  It is strongly recommended that someone considering commencing any qui tam lawsuit retain whistleblower counsel, particularly a CFTC whistleblower lawyer (like Brown, LLC – formerly JTB Law Group, LLC) to assist with navigation through the whistleblower process.

CFTC Covered Actions

A term of art in the CFTC whistleblower program is “Notices of Covered Actions.” A Notice of Covered Action refers to when the CFTC is successful with a settlement or judgment in excess of 1 million dollars in economic sanctions against a defendant.  One must vigilantly check the Notices, since if you submit a TCR, which is the form to file a CFTC whistleblower complaint, then you have 90 days from the Notice to apply for the award.

Commodity Exchange Act

The Commodity Exchange Act (CEA) is what regulates the trading of commodity futures.  You can read the full act here at 7 USC 1 – 27f.  Basically, there are many different ways in which futures can be the subject of a whistleblower action.  Insider Trading, pumping and dumping, blasting the news groups to manipulate the market, putting the interest of the company before the client to name a few.  Inherently, the nature of futures trading sounds sophisticated, and some of its designs are traps to separate the unwary from their money.  Further, in a complex system oftentimes individuals and companies find ways to corrupt if for their own economic benefit which is what the CFTC Whistleblower program seeks to remedy.

CFTC Whistleblower vs. SEC Whistleblower

An SEC whistleblower is someone who provides information regarding a publicly traded company where generally the company is violating various SEC provisions.  The CFTC whistleblower program is limited to commodities and futures trading.

CFTC Final Orders and Award Determinations

It is important to review the CFTC Final Orders and Awards page to try and ascertain whether information you provided has been acted upon.  On August 2nd, 2018, The Commodity Futures Trading Commission (CFTC) announced record breaking whistleblower awards totaling $45 million dollars. The CFTC pointed out the increased amounts reflect the “growing success of the CFTC’s Whistleblower Program, in particular the increasing volume and complexity of incoming whistleblower submission.”  Attached is a sample highly redacted order which you can view some whistleblowers received significant whistleblower awards and some had their requests denied.

CFTC Whistleblower Law Firm

Whistleblower Law is highly complex and always evolving.  There’s very stringent ways to file a whistleblower lawsuit and if you run afoul your case may automatically lose based on procedural technicalities.  If you have information regarding commodities or futures frauds, you should speak with a CFTC lawyer right away.  The lawyers at Brown, LLC protect CFTC whistleblowers and offer free confidential consultations and can speak with you after hours or during the weekend when its most convenient for you, but even if you don’t speak with our whistleblower law firm, you should consult with a whistleblower lawyer as soon as possible to protect your rights and to assist you in filing your CFTC claim.

New York’s False Claims Act – Alive & Well!

New York is one of the few states that has a very robust False Claims Act (FCA) that enables the state to go after tax cheats to a greater extent. On August 30th, 2018 the Appellate Court in New York allowed a case to proceed alleging a massive tax fraud that was initially dismissed at the trial level. An anonymous whistleblower filed a case against Moody’s alleging tax fraud. The allegations are highly technical in one sense, “Plaintiff relator asserts claims on behalf of the State and City against Moody’s under section 189(g) of the State Finance Law (the False Claims Act [NYFCA]), alleging that Moody’s “knew that MAC . . . did not qualify for the protections of the laws governing captive insurance companies,” yet submitted “materially false and fraudulent” tax returns treating MAC as a legitimate captive.” In another sense the allegations boil down to what they generally do, that the company cheated on its taxes, thereby cheating the taxpayer. The case against Moody’s is still in the allegation phase and although the Court is allowing the case to proceed indicating it has been pled with sufficient specificity it has made no decision regarding the underlying merits.

A relator is someone who brings an action on behalf of the government through a qui tam action, otherwise known as a whistleblower action. There are many different types of whistleblower claims New Yorkers or those who have information regarding New York violators of the law can bring. They include:

• Medicaid Fraud
• Tax Fraud
• Off the Books Employees (Tax Fraud)
• Revenue Concealment (Tax Fraud)
• Use of Dummy Companies (Tax Fraud)
• Defrauding the State Government
• Bid Rigging
• Kickbacks

Also, many cheats also involve defrauding the federal government which would implicate the Federal False Claims Act (FCA) as well for things like:

o Medicaid Fraud
o Defense Contractor Fraud
o IRS Fraud
o SEC Whistleblower Fraud
o CFTC Whistleblower Fraud

The whistleblower statutes are dense and complex and require navigating them the right way. In contrast to other areas of law, if you don’t file something properly under seal to commence your whistleblower lawsuit you may forfeit your right to an award.

Therefor, it is critical to consult with a New York Whistleblower lawyer to educated yourself about your rights and protect you if you decide to proceed. Some statutes, like the SEC Whistleblower provisions may enable you to proceed anonymously from start to finish with the use of an SEC whistleblower or CFTC whistleblower lawyer. Others, like the False Claims Act require the use of a qui tam law firm in order to receive a qui tam award. If you believe you a New York Whistleblower claim, you should speak with a whistleblower lawyer who has a track record of success to guide you through the process. Each day of delay compounds the risk that you are not the first to file which can deprive you of an award or that even worse if you knew about the fraud and failed to blow the whistle, you may be looked as a target in the investigation if someone beats you to the punch. Consider having a free confidential consultation with a New York whistleblower law firm before someone else who knows about the fraud does.

The Best Advice for Whistleblowers

As a whistleblower lawyer who handles cases all over the country from Jersey City to San Francisco, I have the greatest amount of respect for people who have the courage to come forth and put it all on the line to blow the whistle on things they know are wrong and need to be righted. The companies who engage in these frauds are the villains, and the whistleblowers deserve to be knighted.

Each year I compile a list of lessons learned and try to impart the wisdom of our whistleblower law firm onto those that are thinking of blowing the whistle, but don’t know what do. Here is my 2018 list of advice for whistleblowers.

Patience is a Virtue

Good things happen to people who know how to wait, but not to those who wait too late. There’s many different ways to blow the whistle, whether it’s through the False Claims Act (FCA) which addresses defrauding the government via companies committing Medicare Fraud, Medicaid Fraud and Defense Contractor Fraud, SEC Whistleblowers who disclose when the financial companies don’t have the best interest of the clients in mind including inside trading, pump and dumps, cryptocurrency and ICO fraud, CFTC whistleblowers who blow the whistle on the commodities frauds, and IRS whistleblowers who have substantial information regarding tax cheats. Due to the first filed rule, you need to make sure that you promptly file your case if its actionable, but don’t expect things to happen overnight. Sure, some of False Claims Act lawsuits take a year, but generally it’s a long process with extended periods of quiet time and once the FCA complaint is filed its out of your hands for a bit while the government decides what it’s going to do. Make sure you’re working with a False Claims Act law firm that you feel you have a connection with and that is affirmatively going to update you about your case and that you can reach out to on a regular basis even when nothing is going on to speak about your whistleblower case and answer all your questions – even if it’s again and again! A good qui tam lawyer will have gone through the qui tam process many of times, and this is probably your only time. It shouldn’t ever be a bother for them to comfort you in your time of need and curiosity. Some cases can take five or six years to play out and some longer. Remember to enjoy the road, because it’s a long one; don’t just think about the destination.

Think about your Parachute

The whistleblower statutes contemplate cases coming from those on the inside, in a superior position to provide information of wrongdoings, corporate fraud, and outright cheats. A good insider is generally an employee or close to those that will be held accountable when the case is ultimately disclosed. Even though almost every whistleblower statute imaginable has a provision that prohibits whistleblower retaliation, it will happen. The timing may be out of your control about when your identity is disclosed or when the company will conduct an internal hunt for who it thinks could be cooperating, but you have a running start since you’re the one commencing the action. Start to think about what your options are if you have to leave the company. Work on your resume. Look for other opportunities. Also, consider depending on how radical the fraud is do you really want to continue working at the company. We all need to make a living, but if you feel you’re compromising your soul, you need to search whether it’s worth it. Some egregious frauds we’ve encountered are Medicare Frauds where the doctors perform unnecessary surgery just so they can bill for it, Defense Contractor Fraud, where the company takes a shortcut and puts our soldiers at risk, and things like churning and bilking people’s accounts in the SEC context, where the company is hiding fees, taking fees, or doing other things to exploit people’s investments and retirements. You should think about your exit strategy early and generally when you’re still employed it’s an easier time to find new work. Further, it will be easier to find new work before the extent of the fraud of the company becomes public or else when you’re interviewing the taint of the dirty company may make it harder to find a new job.

Find a Whistleblower Law Firm You Feel Comfortable Working With

While the qui tam lawyers at our firm are personable, hardworking and have a track record of success, the chemistry needs to be right between our firm and the whistleblower we’ll be working with for us to consider representation. We’ve turned down cases that are actionable False Claims Act cases because we didn’t think there would be good chemistry and you should be discerning as well. Questions you should consider are will you have access to the qui tam lawyers handling your case, the head of the firm, and can the whistleblower lawyers contact you after hours or on the weekends when it may be easier for you to speak.

There is a proverb in the legal realm that a person who represents his or her own self in court has a fool for a client. There’s quite a bit of information and misinformation online regarding qui tam lawsuits. One thing is for certain; as of this writing in order to file a False Claims Act lawsuit, you must use a lawyer. That is, you cannot bring the action yourself pro-se without an attorney. You shouldn’t do it anyway, as even an attempt to file a whistleblower action the wrong way could result in you losing your case right from the start.

I hope these points added some guidance to you if you’re thinking about filing a whistleblower lawsuit. Even if our dedicated team of whistleblower lawyers is not the right fit for you in the long-term, we’d love to speak with you about your potential case in the short-term and go over in depth whether we help you with your matter or at least steer you in the right direction. We protect whistleblowers coast to coast, so whether you’re in Jersey City or San Diego, Houston, or Tampa or anywhere in between, feel free to call our whistleblower lawyers at (877) 561-0000, for a free whistleblower consultation and no matter what, we’ll wish you the best of luck with your qui tam case.

Trump Administration Impact of Whistleblower/Qui Tam Cases

One thing everyone should be able to agree on is that taxpayer fraud hurts us all.  Its hard to find someone who likes paying taxes and part of the reason they’re so high is because of all the waste, fraud and abuse in government.  People are wonderful.  They do things to help each other even when they don’t have to.  The flip side of the coin, is that people are sometimes disinterested or don’t want to involve themselves in a situation and become a whistleblower.  The qui tam process is a complicated one and without the right whistleblower lawyer it can become a maze that you might never escape.  The other coin itself is the fraud.

In recent years, billions upon billions of dollars have been recovered using a statute know as the False Claims Act (FCA) in which individuals who have the courage to come forward and file a complaint can receive a whistleblower award up to 25% of the recovery.  When you do the math that means hundreds of millions of dollars have gone to whistleblowers in recent years.

This blog is meant to be apolitical and not meant to stimulate a discussion regarding personal opinions about the new administration.  It is however, a discussion of the trends affecting qui tam and whistleblower laws over the last few years.

Although not directly related to this administration, but emerging roughly at the same time, a landmark case was decided called Escobar dealing with the issue of materiality in FCA complaints. The concept of materiality is whether the complained about violation really hurts the taxpayer or is just a very technical one.  One example is in the defense contract context.  The contract with the federal government may call for all sorts of requirements before billing the government for work rendered, including pre-approval from a certain officer.  Let’s say tens of millions of dollars of work were done and paid, but that officer never approved the work.  Even though technically, this could be considered a false claim, the Courts and the government will look to see whether the government would have approved the work anyway.  If the answer is yes, then the violation would not be considered material and you will in all likelihood lose your case under Escobar. 

The new administration has been taking a different posture with cases it declines.  Understanding whistleblower litigation, a case must be filed under seal and the government first decides whether it wants to intervene or not.  In the distant past non-intervention was close to death to a case. Then there was a wave of cases that succeeded without the government’s assistance.  Now, the United States Attorney’s Office has sometimes been taking the position that if there is not an intervention, they may insist or move for a dismissal.  My opinion may depart slightly from the other whistleblower lawyers who think this is a bad thing.  I think if the government weighs in early and says it does not view the violation as material it’s a good thing.  Why go through years of a case if the arbiter for the taxpayers, the government, says it wasn’t harmed can there be a harm?  I won’t take a 100% definitive position on that, because I can envision a massive fraud where a bureaucrat makes the wrong call about the harm, and that’s why there’s the chance to tee up issues like this to the Court.

Another area where the new administration is impacting whistleblower laws is by ending the practice of issuing guidance for regulations.  The guidance was sometimes used as support and less frequently as a basis to commence False Claims Acts.

The final areas to keep an eye on in the relator share or the whistleblower award amount.  In a successful qui tam case the whistleblower is graded in many different areas to determine what percentage of what recovered monies they are entitled to.  Anecdotally, it appears they are trying to knock down the percentage to the whistleblower.  While this may bring more short term gain to the government, it is myopic since it may discourage other whistleblowers from coming forward.

Keep in perspective – many whistleblowers are extremely courageous individuals who do the right thing and run the risk of being fired from their job, being harassed, and suffering other backlash.  Some of what they blow the whistle on is the most distasteful of frauds in the Medicare Fraud and Medicaid Fraud arena.  Medicare Fraud Whistleblowers sometimes blow the whistle on unnecessary services that are so extreme, that doctors are willing to perform unnecessary surgery just to line their own pockets.  That’s horrific and needs to be prioritized and eradicated.

It’s only year 2 into this new administration as of this writing, so we’ll keep an eye on these emerging trends in whistleblower laws.  Remember, if you need a whistleblower lawyer, the qui tam lawyers at Brown, LLC will offer you a free consultation and are only paid if they win your case.

Dynamex is Dynamite

An explosive legal opinion was issued by the California Supreme Court in April of this year, as they weighed in on a landmark land mined issue that is sure to impact and proliferate more California Wage & Hour Lawsuits.  A question that has always plagued companies is what constitutes an employer/employee relationship versus an employer/independent contractor relationship.  The California Supreme Court answered a few questions that people ponder such as:

“Am I an independent contractor or an employee?”

“In California how can I tell if I’m an employee or an independent contractor?”

“Am I entitled to overtime in California?”

The California Independent Contractor vs. Employee test is called the ABC Test, although some would argue there is nothing ABC about it.

The first and most important facet of the way the California Supreme Court addressed the issue is to view it from the prism that by default workers are employees, not independent contractors, and the employer has the burden to show otherwise.  In furtherance of illustrating that a worker is indeed an independent contractor and not an employee, the employer must establish all three prongs of the ABCs:

(A) The worker is free from the control and direction of the hiring entity in connection with the performance of the work, both under the contract for the performance of the work and in fact; and

(B) The worker performs work that is outside the usual course of the hiring entity’s business; and

(C) The worker is customarily engaged in an independently established trade, occupation or business of the same nature as the work performed.

Another fascinating aspect of the ruling is its retroactivity, meaning the Court’s ruling is applicable to past situations, not just issues moving forward.

This case has massive implications to various different industries from exotic dancers to construction workers, from mechanics to temp workers.  Almost anyone can be viewed as an employee versus an independent contractor under the California standard and may be owed significant amounts of overtime and damages.

In recent years, class actions have been stymied by the use of arbitration clauses.  However, California also has a law called the Private Attorney General Act, also known as PAGA, which essentially deputizes the individual to bring an action through the government, and since the government can not be hamstrung by arbitration, then the case can proceed in court.

Forward thinking individuals may also anticipate a wave of Tax Qui Tam actions, also known as IRS whistleblower actions, as for larger companies that avoided paying millions in taxes there may be tax consequences.  This is a complicated issue as there may also be back taxes owed by the employee who was formerly considered an independent contractor.  Also, one should not forget if they are in the health care or defense contractor industry, the False Claims Act (FCA) and California False Claims Act may kick in if there is other ways in which the company is defrauding the government.

Dynamex has tilted the playing field to allow workers to receive rights and protections as workers, not just being able to summarily cast them out when someone is inconvenient to the company without consequences.  In order to see how Dynamex affects you or to learn more about your California overtime rights, whether you’re an independent contractor or an employee, call our wage and hour lawyers at (877) 561-0000. For wage and hour lawsuits and consultations, there is no money up front, the conversation is confidential, and the firm is only paid if we win your case.

Brown, Jason Brown. International Sophistication is the Next Wave of United States Litigation including Whistleblower Laws.

While the EU may be far ahead of the United States in some of its regulatory actions, where the United States falls behind from a government perspective for better or for worse, generally trial lawyers advance cases in the United States that the rest of the world benefits from.  For example, certain mass torts like litigation against new generations of birth control, originally shadowed European regulations, but were held accountable in the United States by some amazing lawyering from firms and people like Roger Denton and Kris Kraft at Schlicter Bogard and Denton, Paul and David Rheingold at The Rheingold Law Firm, and Jason T. Brown, now with Brown, LLC (formerly JTB Law Group, LLC) and many others.

Cases like the Yaz Litigation where a new generation of hormone was arguably less safe than the earlier generations started in the United States, settled for billions and now worldwide attorneys are taking that template and litigating to hold the pharmaceutical companies accountable globally.

Big Pharma and other global corporations can be held accountable in other ways too, especially with pragmatic use of various qui tam statutes.  A qui tam lawsuit enables private citizens to commence a lawsuit on behalf of the government where the plaintiff is known as a relator since he or she is relating the claims of the government through the whistleblower lawsuit.

With the globalization of companies many individuals worldwide may be in a position to know about billion dollars worth of fraud perpetrated in the United States, but think they can’t bring an action since they are not physically located in the United States.  Consider some of the following situations.  Imagine, you are a whistleblower outside the United States who knows of a massive fraud from a publicly traded company.  You can potentially bring an SEC whistleblower action through the use of SEC whistleblower counsel and perhaps remain anonymous from start to finish.  If it involves commodities you may be able to bring a CFTC whistleblower action.  With potential qui tam awards up to 30% of the amount recovered, a billion dollar fraud could be a hundred million dollar plus recovery for the information.

The False Claims Act will also allow some international whistleblowers to bring an action in the United States.  One thing the large pharmaceutical companies do is research outside the U.S. to make it extremely challenging to obtain the needed discovery due to other countries privacy laws.  Well, if you are in the know and are aware of data that was falsified during clinical studies, lying to the FDA, pharmaceutical products that lack the efficacy they claim, you may be able to be a whistleblower in the United States even though you are not located here.

 

Further, the FCPA Foreign Corrupt Practices Act prohibits United States companies from essentially bribing in other countries to advance their business interests.  There’s a lot of that going on!

If you have information along any of these lines that you’d like to discuss, our international whistleblower lawyers can speak with you confidentially, and we’re only paid if we win your case.  Your information could potentially save lives, certainly save money and hold companies that believe they are beyond reproach accountable.

Whistleblower Hotlines

As a law firm who routinely handles whistleblower cases we have a whistleblower hotline.  The line enables potential whistleblowers to confidentially and freely discuss their potential qui tam claim.  As whistleblower lawyers who only represent individuals who expose fraud, not the companies that commit them, we are dedicated to prosecuting the claims of the people we represent if it’s a case we think is actionable and a fit for our firm.

However, internally within companies, the employer has its own whistleblower hotline to ostensibly report fraud within the company.  Take a step back and think how silly that is.  Yes, some companies probably earnestly want to do the right thing, but many other don’t, that’s why they committed the fraud itself.  When you call a company “whistleblower hotline” the information is received by the company who don’t have the whistleblowers best interest in mind.  Instead they are interested in protecting the company.  Even at the end of the day lines that are supposed to be anonymous and “protect the employee” oftentimes do not.

Inadvertently, when providing information, it is either singular in nature or so limited in nature that a company who wants to go on a mole hunt for the insider can easily do so.  Plus, since the well intentioned person used the internal mechanisms, the company will assume that the person doesn’t have a qui tam lawyer and try to lock them into statements that will damage their own case if they wanted to proceed, or worse yet, document things to try to retaliate and fire the whistleblower.

In short, while calling a company whistleblower hotline may seem like a good idea, it’s perilous.  If you feel the need to call one, ask them first whose interested they will be protecting – your or the company’s?   I’ll tell you now it’s the company, not you that they are paid from and working for, it’s not you.

The company may encourage you to report all sorts of fraud.  If it’s in the health care industry it can be Medicare Fraud, Medicaid Fraud, Insurance Fraud, SEC Fraud, Cryptocurrency Fraud, with many different subsects such as:

Opioid Over Prescription (a priority of the government)

Medicare Fraud – Billing for Services Not Rendered

Medicare Fraud – Upcoding

Performing Unnecessary Surgery

Unlicensed Individuals Billing for Medical Work

Pharmaceutical Whistleblowing – Diluted or Inert Batches. Falsifying Data.

SEC Whistleblower Fraud – Companies not having the best interest of the client in mind.

Another distinction between calling a whistleblower law firm and an internal hotline is that if you file certain types of cases with the use of counsel you stand to receive a whistleblower award which could be as high as 30% of the recovery.

If you know about a company committing fraud, call our whistleblower line at (877) 561-0000 before calling the company one.  You can speak with our qui tam lawyers free of charge and confidentially and we’re not paid unless we win your case.

Rounding Up RoundUp

It’s been widely known and litigated over the years that Benzene exposure can cause Non-Hodgkin’s Lymphoma (NHL), Acute Myeloid Leukemia (AML) & Myelodysplastic Syndrome (MDS).  But over recent years there has been a proliferation of litigation regarding the use of the pesticide RoundUp and it’s link to the various lymphomas.

Just like with the talcum powder litigation, the defendants try to point to every other cause other than their own product.  Although the link to talcum powder and ovarian cancer is consistently found by objective juries who hear all the evidence, Johnson & Johnson consistently says self-serving bootstrapping statements that it’s safe because everyone knows its safe, even when its own internal documents show otherwise.  Hundreds of millions of dollars have been awarded to victims of talcum powder.

Now, for the first time RoundUp victims have Rounded Up and had the opportunity to present the facts to a neutral jury.  Just like with the talcum powder litigation, the jury did not believe the defendants and came up with a $290 million dollar verdict for an individual dying from exposure to it.   The substance glyphosate is under worldwide scrutiny with many attempts to regulate and/or ban it.

With this major verdict on behalf of the glyphosate RoundUp victims more exposure is certain to come to this product liability action and perhaps others who have come down with signature types of diseases linked to these products will be able to have their day in Court and the juries may compensate them accordingly.

Just like with any other piece of litigation, rights may have time limits, called statutes of limitations.  Your ability to bring a lawsuit for injuries from talcum powder, Benzene or RoundUp exposure may be limited to when you first evidenced symptoms of the signature disease.  It is best to respectively consult with a Talcum Powder Ovarian Cancer Lawyer, Benzene Lymphoma Lawyer and RoundUp Lawyer to find out if you can still bring an action.

One thing is clear from the RoundUp verdict, weed killer is killing more than just weeds.

Survey.com: The Latest Gig Economy Company Sued in California for Independent Contractor Misclassification

Like many companies in the “gig economy,” Survey.com promotes itself as merely a mobile app company. Its app allows people to sign up for on-demand merchandising projects such as:

Stocking, facing, and rotating products

Setting up end caps, promotional fixtures, and point-of-sale displays

Affixing stickers and instantly redeemable coupons to your items

Retail Audits

Individuals who complete projects generally receive a payment from Survey.com based on the size of the project. Since Survey.com classifies the workers that perform merchandising projects for them as independent contractors, they are not paid as w-2 employees or given any employee benefits.

A recent lawsuit filed on August 6th, 2018 in the United States District Court for the Northern District of California contends that Survey.com misclassifies its Merchandisers as independent contractors and as a result, violated their rights under the Fair Credit Reporting Act, the Fair Labor Standards Act, and the California Labor Code.

Survey.com is the latest gig economy company to be sued for labor violations in the wake of the California Supreme Court’s April 30, 2018 decision Dynamex Operations West, Inc. v. Superior Court. The Dynamex decision rejected the longstanding test for whether a work was an employee or contractor (which had led many company to misclassify their workers as independent contractors), and replaced it with the so-called “ABC Test” which is far more favorable to the worker.

Under the ABC Test, the burden is on the company (in this case Survey.com) to demonstrate that every worker is not an employee by proving all three of these elements:

  • the worker is free from the control and direction of the hirer in connection with the performance of the work, both under the contract for the performance of such work and in fact;
  • the worker performs work that is outside the usual course of the hiring entity’s business; and
  • the worker is customarily engaged in an independently established trade, occupation, or business of the same nature as the work performed for the hiring entity.

Shortly after the Dynamex decision, Lyft and Postmates were both hit with class action lawsuits alleging their drivers should have been classified as employees. Similar to the lawsuits against Lyft and Postmates, the lawsuit against Survey.com argues that Merchandisers should have been classified as employees because they were not free from Survey.com’s control or directions in connection with the performance of their work, they work they performed was not outside the usual course of Survey.com’s business, and they were not customarily engaged in an independently established trade, occupation, or business of the same nature as the work performed for Survey.com.

The Dynamex opinion is a massive victory for California workers who have been misclassified as independent contractors. If you are a contractor for Survey.com or another gig economy company whose entire platform is built on the work of its contractors, it is very likely that are owed wages and potential penalties under California law. Although the Dynamex decision was issued in April 2018, it has been held to apply retroactively, meaning you may be eligible to recover wages earned in prior years, subject to the applicable statutes of limitations. For further guidance, please contact our office.

Large Truck Accidents = Large Truck Accident Verdicts

Law360 reported today that there has been a large escalation in truck accident verdicts.  Citing to a truck accident verdict in Texas for over $100 million, that followed another Texas verdict for $90 million dollars, some thought has been put in why these verdicts are starting to pick up as much steam a big rig on the highway without a speed limit or speed governor.

 

One school of thought is that the plaintiff’s truck accident counsel have integrated technology better and are integrating it into their presentations from start to finish.   In the past (and still in the present), the defense has had the leap and luxury of generally being notified of the truck accident first through insurance and boxing in the accident victim in a variety of ways such as  interviewing them without counsel and coercing them to make inadvertent statements to hurt their cases.  With technology people have mobile phones with search capabilities and almost immediately after an accident instead of being cajoled by the insurance company, there is the chance to speak with a truck accident law firm about one’s rights.

Some people have taken issue about the representations that insurance companies unfairly interview unrepresented parties early, asserting the truth is the truth.  But something subtle and simple can come back to haunt a truck accident plaintiff, like the questions, “How are you feeling today?” eliciting a reply of “I’m fine.  How are you.”  This can be written up by the claims adjuster that the victim was feeling fine the day he or she was interviewed shortly after the accident, so why do they have so many truck accident injuries now?

Another focus of root factor influencing these large truck accident verdicts is the more detailed examination of compliance.  Like the defendants and insurances companies who interlink and formulate corroborated defenses and defense techniques, the plaintiffs bar has been collectively pooling resources to keep abreast of what’s working, what to look for, and how to delve into regulatory issues affecting liability.

Further along the technology front, with advances in technology its easier to create computerized models of accidents for the jury to sink their teeth into recreating the accident and evaluate liability and accident reconstructionist are more accessible and at time affordable in the context of the potential liability.  Drones have been used to show 3D versions of the areas and juries can relate to the emerging technology.

If heaven forbid you find yourself in a truck accident you speak with an experienced law firm that handles truck accident litigation like Brown, LLC (formerly JTB Law Group, LLC). The truck accident lawyers at (877) 561-0000 are always ready to speak with you about your case and to travel to meet with you anywhere in the country.

The Stark Act has Stark Remedies – $237 Million False Act Judgment

In July 2018, the Department of Justice announced the enforcement of a $237 Million Dollar Judgment against a Healthcare System for Medicare Fraud – a judgment that was entered in May of 2013. The basis of the Medicare Fraud stemmed from violations of the Stark Act in which the medical system is forbidden from self-dealing. It is unlikely the government will see all that money however, as per the terms of the settlement the government will receive roughly $72 million dollars and the offending facilities will be sold off.

The Deputy Assistant Attorney General Benjamin C. Mizer, head of the Justice Department’s Civil Division stated, “Secret sweetheart deals between hospitals and physicians, like the ones in this case, undermine patient confidence and drive up healthcare costs for everybody, including the Medicare program and its beneficiaries “This case demonstrates the United States’ commitment to ensuring that doctors who refer Medicare beneficiaries to hospitals for procedures, tests and other health services do so only because they believe the service is in the patient’s best interest, and not because the physician stands to gain financially from the referral. The Department of Justice is determined to prevent the kind of abuses uncovered in this case, and we are willing to take such cases to trial to protect the integrity of the Medicare program.”

The Stark Law prohibits hospitals from billing Medicare for certain services (including inpatient and outpatient hospital care) that have been referred by physicians with whom the hospital has an improper financial relationship. The Stark Law has exceptions and exceptions to the exceptions so it is important to consult with a whistleblower law firm if you have knowledge of what you think may be improper self-dealing or a potential kickback type of situations.

At trial the government introduced evidence that the defendant required physicians to refer their outpatient procedures to them and then in turn overpaid them from Medicare for the referred procedures. They did so despite being cautioned that this could constitute medicare fraud and violations of the Stark Law. A jury heard the evidence and ruled for the government which was affirmed by the Fourth Circuit Court of Appeals.

The case was initiated by a physician who had the courage to refuse to sign the illegal contract and thus retained a Whistleblower Law Form to commence a qui tam under the False Claims Act. The statute provides the whistleblower up to 30% recovery with 20% being the norm, and in this case the Doctor will receive a whistleblower award of roughly $18 million dollars for having the courage to do the right thing.

“The type of abusive compensation arrangements at issue in this case is precisely what the physician self-referral law was designed to prevent,” said Inspector General Dan Levinson of the Department of Health and Human Services-Office of the Inspector General (HHS-OIG). “Patients need and deserve to know that the hospital services they receive are the product of sound medical judgment, rather than motivated by the physician’s financial interests. The extensive litigation and settlement in this case should send a signal to the hospital industry that these tainted financial relationships simply will not be tolerated.”

If you know of any similar type of Medicare Fraud or are unsure about whether an arrangement in the health care field is legal or illegal you should consult with a whistleblower law firm like the JTB Law Group, LLC at (877) 561-0000. Generally, whistleblower lawyers are only paid if they win your case and can provide free confidential consultations.

TALC IT ON – Johnson & Johnson Hit with Another Large Verdict for the Talcum Powder Ovarian Cancer Link

Twenty-two women who brought claims against Johnsons & Johnson in St. Louis Court alleging that talcum powder caused their ovarian cancer were vindicated yesterday after a jury who heard all the evidence came up with a $4.7 Billion Dollar verdict.  This comes with a string of verdicts against Johnson & Johnson who are perplexed how come neutral juries who keep evaluating all the evidence keep finding there is a link between talcum powder and ovarian cancer.

Johnson & Johnson has attributed the verdicts to bad science and experts but trial attorney Jason T. Brown commented, “Time and time again when juries are presented the evidence they see through the charade that Johnson & Johnson is putting forth.  To blame the experts is insulting to the multiple juries who have heard this case and equally insulting to Johnson & Johnson’s own experts who are some of the best that money can buy.  The juries simply don’t believe Johnson & Johnson.”  Mr. Brown points out that he was not on this trial team, but his firm does represent other women who had long term talcum powder usage and were diagnosed with ovarian cancer.

J & J will have a lot to digest and to discuss with its board as a billion dollar verdict sends a message.  Even a pharmaceutical giant like Johnson & Johnson can not afford to withstand billion dollar verdicts with another 9,000 ovarian talcum victims waiting in the wings for their day in Court.  Talcum Lawyer Jason T. Brown stated, “If there were a different mass tort and different defendant, they would have tried to figure out a way to pay all the woman they’ve harmed, but this is their flagship product and they want to keep fighting to beat down the woman who have already suffered so much.”  He also went on to say that while he thinks parts of the verdict will be sustained on appeal, he thinks it’s likely that the dollar amount will be remitted or reduced on appeal.

There is another docket of talcum cases in the District of New Jersey consolidated as a mass tort.  There have been no talcum trials or talcum verdicts in that docket.

Twenty Two Million Dollar Settlement for False Claims Act (FCA) Liability for Medically Unnecessary Services and Therapy

Healogics, Inc. entered into a settlement with the DOJ to pay roughly $22 million to put to rest allegations it violated the False Claims Act (FCA) for overbilling Medicare for medically unneeded and medically unnecessary therapy.  Specifically, it was alleged that Healogics, a medical company, that supervises nearly 700 hospital-based wound care centers across the country, improperly billed for its hyperbaric oxygen (“HBO”) therapy.  It is not alleged that the therapy wasn’t administered, but instead that it was not needed.  Whistleblower lawyer Jason T. Brown commented that, “This was an excellent settlement.  One has to ask oneself which is worse though – submitting fraudulent Medicare claims for services not rendered, or actually performing those services on people who don’t need them to justify the alleged Medicare fraud.”

HBO therapy is covered by Medicare as an oxygen enriching treatment to wound care that is supposed to be used in certain well defined circumstances.  Oftentimes, a medical company will push its services and products to marshal greater profits and create a buzz about it to generate further use even if its not medically necessary.

According to the settlement, the Defendant agreed to pay $17.5 million up front to settle claims for a four year period.  The agreement also calls for an additional $5 million if certain contingencies occur.

“Civil healthcare fraud enforcement has always been a core part of the mission of our office,” said United States Attorney Maria Chapa Lopez for the Middle District of Florida.  “With this settlement, our Civil Division confirms its commitment to our nation’s critical struggle against practices that put public health programs at risk.”

Sometimes in resolving whistleblower cases under the False Claims Act, defendants enter into Corporate Integrity Agreements with the Department of Health and Human Services Office of Inspector General.  These agreements include monitoring with things like claims and system reviews conducted by independent reviewers often at the entities expense.

In recent years whistleblowers have been handsomely rewarded with a percentage of the recovery and in this whistleblower the case the relator is set to recover up to $4,276,900 as a whistleblower award.  In order to bring a False Claims Act case and obtain a reward, however, the whistleblower must use whistleblower counsel.

 

The case citations are United States ex rel. Van Raalte, et al. v. Healogics, Inc., 14-cv-283 (M.D. Fla.) and United States ex rel. Wilcox. v. Healogics, Inc., et al., 15-cv-1510 (M.D. Fla.).

Overtime Lawsuit Filed Against Gerrard Excavating, Inc. for Alleged Violations of the Federal and Colorado Wage and Hour Laws

On June 8, 2018, the lead Plaintiff Michael Perez filed a collective and class action complaint in the United States District Court for the District of Colorado, alleging that Gerrard Excavating, Inc., one of the largest infrastructure/site development contractors in the northern region of Colorado, violated the federal Fair Labor Standards Act (“FLSA”) as well as the Colorado Wage Act (“CWA”) and Colorado Minimum Wage Order (“CMWO”) by failing to pay its Heavy Equipment Operators their rightfully hard-earned overtime wages for work they performed off-the-clock.

The complaint alleges that as hourly-paid Heavy Equipment Operators, Mr. Perez and the putative collective and class members were required to regularly work over forty (40) hours per week including time spent performing pre-shift work-related activities such as checking and warning up the machine and equipment, but the company did not pay them for such pre-shift work and therefore deprived them of overtime compensation, in contravention of the FLSA, CWA and CMWO.

The complaint seeks to represent the following putative FLSA collective members with respect to overtime claims under the FLSA:

All Heavy Equipment Operators employed by Defendant at any time from 3 years prior to the filing of this complaint through the date of judgment.

The complaint also seeks to represent the following putative Rule 23 class members with respect to overtime claims under the CWA and CMWO:

All Heavy Equipment Operators employed by Defendant in the State of Colorado at any time from 3 years prior to the filing of this complaint through the date of judgment.

Mr. Perez brings this collective and class action on behalf of himself and all other similarly situated Heavy Equipment Operators to recover unpaid overtime wages, liquidated damages, penalties, and reasonable attorneys’ fees and costs.

The case is Perez v. Gerrard Excavating, Inc., Case No.: 1:18-cv-01429-MEH.  The plaintiff is represented by JTB Law Group, LLC.

If you have any questions or information to provide about the above article, you may contact the following attorneys:

Nicholas Conlon;  (877) 561-0000
Ching-Yuan (“Tony”) Teng; (877) 561-0000

Owner of Nursing Facilities to Pay $30-million to settle False Claims Act allegations

Two former employees turned whistleblowers succeeded early this month in helping the US government recover millions of misspent health funds and hopefully dissuade similar cases from happening.

In a statement June 8, the Department of Justice said Signature HealthCARE, LLC, owner and operator of approximately 115 skilled nursing facilities from Louisville, Kentucky, agreed to pay $30 million to resolve allegations that it violated the False Claims Act. Specifically, according to the whistleblowers and the US government, Signature HealthCARE engaged in practices that allowed it to submit claims for “unreasonable, unnecessary, and unskilled services” to Medicare patients.

Among others, these include placing patients in the highest therapy reimbursement level by presumption rather than individual evaluation of the level of care they actually need; providing the shortest amount of time required for Signature HealthCARE to bill at a given reimbursement level, and discouraging provision of more therapy beyond this required minimum time; pressuring therapists and patients to complete the planned minutes of therapy even when patients were sick or refusing such therapy.

U.S. Attorney Cochran for the Middle District of Tennessee thanked the teams of civil enforcement attorneys and the relators or whistleblowers who report fraud such as this.

“When we determine that companies are cheating the taxpayers, we will hold them accountable as we have in this case,” Cochran said.

The Justice Department considers the settlement as another demonstration of their efforts to ensure the beneficiaries of government-funded healthcare programs are actually receiving what they clinically need, and not what companies’ profits dictate.

“Signature was charged with illegally boosting profits by providing excessive amounts of therapy to patients whether they needed it or not,” said Special Agent in Charge Derrick L. Jackson for the U.S. Department of Health and Human Services, Office of Inspector General. “The decision to provide therapy should never be based on corporate financial considerations rather than a patient’s medical needs,” he added.

The settlement resolves the lawsuit originally filed by former Signature therapy employees, in federal court in Nashville, Tennessee on March 2015.  They filed the lawsuit under the qui tam, or whistleblower, provisions of the False Claims Act (FCA), which permit private individuals to sue on behalf of the government for false claims and to share in any recovery.  The Act also allows the government to intervene and take over the action, as it did in this case.

Ms. Emerson and Ms. Tuesca will receive a portion of the $30 million recovered funds. Whistleblower awards under the False Claims act can be as high as 30% without government intervention and 25% with but generally settling in around 20%, so the whistleblowers in the instant matter could receive around $6 million dollars for their courage in exposing an alleged fraud against the government for overbilling Medicare.

The case is captioned United States ex rel. Emerson and Tuesca v. Signature HealthCARE, LLC, et al., Case No. 1:15-cv-00027 (M.D. Tenn.).  The claims resolved by the settlements are allegations only, and there has been no determination of liability.

If you have knowledge of Medicaid Fraud, Medicare Fraud, Fraud against the Government, SEC Violations, call our whistleblower lawyers at Call Toll Free (877) 561-0000.

Whistleblower Receives Award in latest string of False Claims Act Settlements

Since 2013, various hospitals have been caught allegedly defrauding the taxpayers to the tune of millions of dollars a year.  In an effort to avoid full exposure, they have paid millions of dollars to settle allegations of False Claims Act (FCA) violations that stemmed from a single whistleblower’s lawsuit in Arkansas. Last week the latest of these settlements was announced by the Justice Department.

In a statement June 5, The Justice Department said Allegiance Health Management, Inc., (Allegiance), a post-acute healthcare management company based in Shreveport, Louisiana, and four hospitals it owned and operated, have agreed to pay more than $1.7 million to resolve False Claims Act allegations that it submitted claims for reimbursement from Medicare for medically unreasonable or unnecessary services.

Since 2005, Allegiance arranged with numerous hospitals throughout the Southeastern United States to provide Intensive Outpatient Psychotherapy (IOP) services to patients on their behalf.  Allegiance established an Inspirations Outpatient Counseling Center in each of these hospitals where its employees and those under its direction and control identified potential patients, created patient treatment plans, and performed IOP services, among others.

This settlement resolves allegations that at each of the Inspirations Outpatient Counseling Centers, Allegiance provided IOP services to Medicare beneficiaries that did not qualify for Medicare reimbursement because 1) the patients’ medical condition(s) did not call for IOP treatment; 2) the patients’ treatments were not provided through an individualized treatment plan designed to help individual patients address specific mental health needs and reach achievable goals; 3) the patients’ progress was not being adequately tracked or documented; 4) the patients received an inappropriate level of treatment; or 5) the therapy provided was primarily recreational or diversional in nature, and not therapeutic.

The Allegiance hospitals that entered the settlement are: Allegiance Health Management, Inc.; Allegiance Behavior Health Center of Plainview, LLC; Allegiance Specialty Hospital of Kilgore, LLC; North Metro Medical Center a/k/a Allegiance Hospital of North Little Rock, LLC, and Sabine Medical Center a/k/a Allegiance Hospital of Many, LLC.

Before this, more than 20 other hospitals reached settlements to resolve the same False Claims Act allegations. Sixteen of these hospitals and their respective corporate parents collectively agreed to pay $15.69 million in May 2015. Two years before that, in October 2013, LifePoint Hospitals Inc. and two of its subsidiaries, PHC-Minden L.P., doing business as Minden Medical Center, and PHC-Cleveland Inc., doing business as Bolivar Medical Center, collectively paid more than $4.67 million.

As the whistleblower who brought the fraud to the federal government’s attention, he reportedly receives 17 percent of the settlement. Ladner filed a lawsuit in the Eastern District of Arkansas under the whistleblower provision of the False Claims Act, which permits private parties to file suit on behalf of the United States for false claims and share in a portion of the government’s recovery.  The individual commencing the action on behalf of the government is known as the relator and individuals must file a qui tam lawsuit with whistleblower counsel.

In this $1.7 million settlement, the awarded whistleblower stands to receive around $300,000. In the previous settlements, he has already received more than $3 million. The qui tam relator used to work for Allegiance. He was Program Manager at the Inspirations Outpatient Counseling Center located at Wesley Medical Center in Hattiesburg, Mississippi.

All in all, the string of settlements combine amounted to more than $22 million payments from various hospitals in at least seven states. Though these payments resolved the FCA cases, the allegations involved still remain as allegations.

Acting Assistant Attorney General Chad D. Readler for the Civil Division said they will continue to hold accountable “those who waste taxpayer dollars and place profit above the legitimate needs of patients.”

“Entities that bill for needless services – as alleged here – cheat taxpayers and threaten the integrity of government health programs,” said Special Agent in Charge CJ Porter for the Office of Inspector General of the U.S. Department of Health and Human Services.

The claims settled by the current agreement are allegations only, and there has been no determination of liability.  The lawsuit is captioned U.S. ex rel Ladner v. Allegiance Health Management, Inc., et al, No. 4:10-CV-170 (E.D. Ark.). #

If you have knowledge of Medicare Fraud, Medicaid Fraud, or any other fraud against the government, don’t hesitate to Call Toll Free (877) 561-0000.

Call Center Workers’ Overtime Lawsuit Against Southwest Gas Corporation Heating Up

A former Dispatcher who worked at a call center in Las Vegas, Nevada commenced a wage and hour lawsuit against her former employer over alleged unpaid overtime wages. The complaint was commenced on June 7, 2018 against Southwest Gas Corporation over failure to incorporate shift differentials into their regular rates of pay and unpaid overtime wages for work performed outside their scheduled shifts. Plaintiff is asking for relief and damages under the Fair Labor Standards Act (FLSA) and Nev. Rev. Stat. Ann. (hereinafter “N.R.S.”) §§ 608.016 and 608.018.

Southwest Gas Corporation has and continues to employ a staff of hourly-paid Dispatchers, whose principal job duty is to provide customer support to homeowners by addressing any gas issues and effectively dispatching technicians to resolves these issues. Dispatchers must communicate with homeowners and technicians by way of phone and computer.

Plaintiff alleged that Dispatchers were told to report to work fifteen minutes prior to their scheduled shifts in order to be ready to immediately begin calls once their shift started. Defendant required Dispatchers to submit timesheets that did not include the time spent working pre-shift and post-shift. As a result, Plaintiff and the putative collective and class members were required to regularly work over forty (40) hours a week and were not compensated for the time spent working before and after their scheduled shifts.

The complaint is asking for a jury trial. Plaintiff is seeking to maintain the case as an FLSA collective action and N.R.S. class action, and asks for Southwest Gas Corporation to pay Dispatchers their alleged unpaid overtime wages, as well as liquidated damages, attorneys’ fees and costs, and any other FLSA damages.

This was filed in the United States District Court for the District of Nevada, as Case No. 2:18-cv-01035-JAD-VCF. The Plaintiff is being represented by JTB Law Group, LLC.

If you worked as a Dispatcher at Southwest Gas Corporation, or otherwise have knowledge or interest regarding the overtime claims at issue in the lawsuit, please contact the JTB Law Group at (877) 561-0000.

New York Sports Club – Consumer Fraud Investigation

What exactly does a lifetime mean?  If you believe a certain complaint we’ve been told a lifetime to New York Sports Club may not mean more than a year or two.

JTB Law Group, LLC is investigating allegations that New York Sports Club allegedly had members pay an initiation fee to lock in a lifetime monthly rate of $19.95 a month and then increased the price anyway.  (https://www.wellandgood.com/good-sweat/new-york-sports-club-insanely-affordable-gym-memberships/)

To add insult to injury to its consumers, they allegedly are ducking behind arbitration clauses which make it less palatable to address the practice as a whole.  The JTB Law Group is investigating to what extent this happened, if at all.

Further compounding the issues include the inability to speak with a manager or someone accountable at most locations.  When it comes to signing up at the gym there always seems to be a body. When it comes to speak with a manager, they are rarely available to discuss the matter and emails to corporate go unheralded.

One location in particular is being investigated, the Bayonne New York Sports Club, which may have offered people the “lifetime membership” rates in 2015.  Other New Jersey New York Sports Clubs as well may have allegedly engaged in this practice.

If you are aware of any information regarding this practice, or if you yourself were a victim please call our firm at (877) 561-0000 to discuss the matter.

Three laboratory bosses to pay $114-M for violations of False Claims Act, paying kickbacks

Cases separately brought to court by three whistleblowers in 2015 continue to generate significant financial recoveries for federal health care programs and considerable whistleblower awards for the relators that brought them. Last week, the United States District Court in the District of South Carolina entered judgment amounting to more than $111 million against LaTonya Mallory, Floyd Calhoun Dent III and Robert Bradford Johnson, plus more than $3 million against Johnson and Dent. As provided by the False Claims Act, the amount represented three times the amount the three individuals illegally profited by submitting their false claims. The Court trebled the damage amounts, offset settlement payments received from the laboratories that submitted the false same claims, and with the whistleblower award computations awarded $63.8 million in penalties as requested by the United States, for a total qui tam judgment of more than $114 million.

Last January, Mallory, Dent, and Johnson were found liable of violating the False Claims Act (FCA) when they paid physicians in exchange for patient referrals to their laboratories. The court found them in violation of the Anti-Kickback Statute and related to this, causing their laboratories to bill federal health care programs for medically unnecessary testing. This judgment followed at least two settlements separately inked in the case by other involved laboratories in recent years.

Based on government investigations and the cases brought by the whistleblowers, the government presented evidence showing these individuals paid physicians in exchange for referrals that benefited their laboratories through financial claims to Medicare and Tricare. The government said the remuneration came disguised as processing and handling fees of between $10 and $17 for each patient referred to the blood testing laboratories:  Health Diagnostics Laboratory Inc. (HDL), of Richmond, Virginia; and Singulex Inc., of Alameda, California.

Add to this, the government also showed evidence that the said kickback scheme resulted in physicians referring patients to HDL and Singulex for medically unnecessary tests, which were then billed to federal health care programs.

The judgment says Mallory, HDL’s former CEO, and Johnson and Dent, were liable for causing the HDL’s submission of 35,074 false claims, worth $16,601,591, to Medicare and TRICARE. The jury also found Dent and Johnson liable for an additional 3,813 false claims, worth $467,935, submitted by Singulex.

Also resolved through this court’s order were three lawsuits originally filed by Dr. Michael Mayes, Scarlett Lutz, Kayla Webster, and Chris Reidel under the qui tam, or whistleblower, provisions of the False Claims Act.  Under the FCA, private citizens can bring suit on behalf of the government for false claims and they can share in any recovery.

The False Claims Act permits the United States to intervene in and take over the whistleblower suit, as the United States partially did in the three consolidated actions against Mallory, Dent, Johnson, and others in August 2015.

How much of the recovery will go to the whistleblowers is not yet known as of this writing, but whistleblowers can recover up to 30% of the recovered funds, but generally settle in around 20% when the government intervenes.  A whistleblower recovery of 20% of $114 million still could be around $25 million dollars, a large whistleblower award for those that the courage to come forth and report these wrongdoings.

The government gave recognition to the whistleblowers and anyone who takes steps to help uncover similar cases of health fraud. In a statement from the Justice Department on Tuesday, May 29, Acting Assistant Director of the Criminal Investigative Division Chris Hacker vowed that “The FBI will continue to aggressively investigate allegations of criminal misconduct between companies and individuals who engage in kickback schemes at the expense of the U.S. government.”

“We recognize the importance of those who came forward and brought allegations to light and realize that we cannot do our work without the public’s help,” Hacker also said.

The cases are captioned United States ex rel. Mayes v. Berkeley HeartLab Inc., et al., Case No. 9:11-CV-01593-RMG (D.S.C.); United States ex rel. Riedel v. Health Diagnostic Laboratory, Inc., et al., Case No. 1:11-CV-02308 (D.D.C.); and United States, et al. ex rel. Lutz, et al. v. Health Diagnostic Laboratory, Inc., et al., Case No. 9:14-CV-0230-RMG (D.S.C.). 

US intervenes in False Claims Act cases of whistleblowers against opioid-selling Insys

Five cases brought up by whistleblowers were consolidated and unsealed early this month as the United States intervened in the False Claims Act (FCA) cases against Insys Therapeutics, Inc.

The cases allege illegal marketing tactics related to Subsys, a sublingual spray form of fentanyl, a highly addictive opioid painkiller. Subsys was approved by the Food and Drug Administration in 2012 for persistent breakthrough pain among adult cancer patients who are already receiving but are tolerant to around-the-clock opioid therapy.

According to the five “whistleblower” lawsuits, the Arizona-based Insys Therapeutics, Inc. paid illegal kickbacks and defrauded federal health programs in selling Subsys.

Opioid lawsuits are highly prioritized by this administration as the epidemic has reached epic proportions and the government seeks ways to combat addiction.  Opioid Medicare Fraud or Opioid Medicaid Fraud allegations will trigger a swift reaction from the government particularly if programs meant to benefit injured people are exploited solely for economic gain and create a cycle of dependence.

Insys allegedly paid kickbacks to induce physicians and nurse practitioners to prescribe Subsys for their patients. The United States said in the complaint that these kickbacks took the form of sham speaker fees to physicians, jobs for the prescribers’ relatives and friends, and lavish meals and entertainment.

The United States also alleges that Insys improperly pushed physicians to prescribe Subsys for patients who did not have cancer. The government alleged that even the Insys employees lied to insurers about patients’ diagnoses to avail of reimbursements on prescriptions meant for Medicare and TRICARE beneficiaries.

In a statement, United States Attorney Nicola T. Hanna explained that the government’s intervention in the whistleblower lawsuits is just one among their efforts to fight the opioid crisis. The government believes that the illegal marketing activities such as the modes exposed in these whistleblowers’ lawsuits help fuel the opioid crisis.

Whistleblowers can file lawsuits such as these on behalf of the United States if they see that a party has submitted false claims for government funds. This is stated in the qui tam provisions of the False Claims Act, which also gives the whistleblowers a share in any recovered funds.

The United States has the right to intervene and take over responsibility for litigating such cases. In this complaint against Insys, for example, the United States intervened since last month.

“Insys allegedly bribed doctors who are more concerned with profits than patients,” said Christian J. Schrank, Special Agent in Charge for the Office of Inspector General of the U.S. Department of Health and Human Services. “Encouraging the inappropriate use of this too-often deadly opioid is intolerable enough, but the abuse is compounded when taxpayers are forced to pick up the bill,” he added.

As of this writing, the above are still allegations. Insys’ liability has not yet been determined. Meanwhile, the United States is also separately pursuing a number of criminal cases against Insys employees and Subsys prescribers.

The following are the whistleblowers’ lawsuits consolidated last week in Los Angeles and entered into by the United States government: United States, et al., ex rel. Guzman v. Insys Therapeutics, Inc., et al., 13-cv-5861; United States ex rel. Andersson v. Insys Therapeutics, Inc., 14-cv-9179; United States ex rel. John Doe and ABC, LLC v. Insys Therapeutics, Inc., et al., 14-cv-3488; United States ex rel. Erickson and Lueken v. Insys Therapeutics, Inc., 16-cv-2956; and United States ex rel. Jane Doe, et al. v. Insys Therapeutics, et al., 16-cv-7937. #

 

If you know of similar unhealthy arrangements that lead also to defrauding Medicare, Tricare or any other government fraud, call our whistleblower law firm toll free (877) 561-0000. 

Mental Health Clinic and Psychiatrist Owner Pay $805,000 to Settle False Claims Act (FCA) Allegations

Thanks to a whistleblower from Connecticut, the patients in the area utilizing psychiatric services will hopefully no longer become unknowing parties to misspending the government’s health budget or of any additional Medicare Fraud or Medicaid Fraud.

United States Attorney John H. Durham and Connecticut Attorney General George Jepsen announced May 14 that Dr. Erum Shahab and Waire, LLC, doing business as Ellington Behavioral Health (EBH), have entered into a settlement deal with the government. They agreed to pay $805,071 to resolve allegations that they violated the False Claims Acts.

Shahab is a psychiatrist who also owns the EBH, a psychiatric clinic in Ellington, Connecticut. The clinic treats people with depression and substance abuse. It promises the latest in psychiatric treatment.

In treating patients with substance use disorders, Shahab and the clinic regularly conduct urine drug screening tests on urine samples from their patients. They use a single urine sample to screen for use of multiple classes of drugs. For Medicare, this is considered a single test and billed only once for every patient.

But Shahab and EBH submitted claims to Medicare for multiple units of urine drug screening tests when they knew or should have known that only one unit of service could be billed per patient encounter, the government alleged along with the original whistleblower. Due to EBH’s improper coding of claims, Shahab and EBH received hundreds of thousands of dollars from the Medicare program that they were not entitled to receive, the government said in its complaint.

On top of this, Shahab and EBH also allegedly billed Medicaid for urine drug screening tests even when it did not actually test the urine samples or they tested it weeks or months after collecting the urine samples from the Medicaid beneficiaries.

The $805,071 settlement deal between the government and Shahab and EBH covers claims they submitted to the Medicare program from January 1, 2011 to September 30, 2013, and claims submitted to the Medicaid program from January 1, 2014 to June 30, 2014.

As the relator, Dr. David Simon, a former employee at EBH, will receive a share of the proceeds in the form of a whistleblower award amounting to $99,113. He filed his complaint in the U.S. District Court in Connecticut under the qui tam, or whistleblower, provisions of the both the federal and state False Claims Acts.

The whistleblower provisions of both the federal and state False Claims Acts provide that the whistleblower or relator is entitled to receive a portion of the proceeds of any judgment or settlement recovered by the government.

“Physicians and their medical practices must carefully code their claims, honestly bill for services, and ensure that taxpayers’ health care dollars are properly spent,” said U.S. Attorney Durham.

In 2012 and 2014, Dr. Shahab has also been reprimanded and fined by the government, in these cases allegedly due to improper handling of addictive drugs.

 

If, like whistleblower Dr. Simon, you suspect that a health care fraud is happening, call to speak with our whistleblower law firm toll free (877) 561-0000.

What to Do If You’re Being Sexually Harassed at Work

Sexual harassment continues to be a serious issue in the workplace. When a person has to put up with catcalls, crass jokes and sexual advances, it can make his or her job absolutely miserable. If you are being sexually harassed at your job, know that you do not have to stand for the kind of treatment. Here are the steps you should take to make it stop:

Know That You’re Not Alone

Getting sexually harassed can make you feel absolutely powerless. You may wonder why the offender is doing this in the first place and if you can ever make it stop. It is important to know that you are not alone. Many people experience sexual harassment, even in the workplace. Recognize that this is a society issue and it’s not your fault.

Tell the Offender to Stop

If you feel comfortable, let the offender know that you find his or her behavior offensive and you want it to stop. Sometimes people do not realize that their behavior is wrong and need to be told that it is. If you feel nervous about talking to the harasser, you should speak to his or her supervisor.

Document Everything

It is important to document every incident of sexual harassment at work. Write down the date, time, name of the offender, what he or she said and if there were witnesses present. If you ever have to pursue legal action, you can use the journal as evidence.

Follow Your Employer’s Procedure

If the harasser refuses to stop, you should follow your employer’s procedure for dealing with sexual harassment claims. If your employer does not have such a procedure, you should tell your immediate supervisor about what has been going on.

File an Administrative Charge

If the harasser is still bothering you after you have followed your employer’s procedure, it’s time for you to file an administrative file with the proper governmental agency. They will thoroughly look into your claim and attempt to resolve it with your employer.

File a Lawsuit

If the government agency is not able to resolve your complaint, you have the right to file a lawsuit against the offender and your employer. If you win the lawsuit, you may receive back pay for any time you had to take off work, damages for emotional distress and reimbursement for attorney fees. You may also require your employer to implement new policies to stop sexual harassment.

Navigating a sexual harassment lawsuit can be quite difficult on your own, so it may be in your best interest to hire an employment lawyer. He or she may help you build a strong case and gather necessary evidence. With an experienced lawyer on your side, you may feel a lot better about your situation.

Schedule a free consultation with a sexual assault lawyer VA residents use today to talk about your case in detail. You deserve justice for what you have been through.

Thanks to our friends and contributors from Cohen & Cohen, P.C., for their insight into sexual harassment laws.

$280 Million Foreign Corrupt Practices Act (FCPA) & SEC Settlement

Panasonic Avionics Corporation (PAC), part of  global electronics company Panasonic Corporation (Panasonic), has agreed to pay $137 million dollars for alleged violations of the Foreign Corrupt Practices Act (FCPA).  The charges arise out of a scheme to retain “dummy” consultants used to conceal third-party payments for accounting fraud.

Acting Assistant Attorney General Cronan said,  “The Criminal Division will take all appropriate action to ensure that the investing public is able to trust the accuracy of the financial statements of companies that avail themselves of American securities exchanges.”

These types of actions are comparable to SEC Whistleblower actions. Under the SEC Whistleblower program individuals who blow the whistle on companies engaging in fraudulent behavior stand to recover an SEC whistleblower award that could range up to 30% of the recover.  Therefore, the SEC whistleblower in this case could have received an SEC whistleblower award of a staggering $41 million dollars.

“Enforcement of the Foreign Corrupt Practices Act is critical in maintaining a fair and competitive international market to which all businesses are entitled,” said Acting Assistant Director Hacker.  “Along with our federal partners and the Department of Justice, the FBI will continue to aggressively investigate violations of the Foreign Corrupt Practices Act.”

According to admissions and court documents, PAC knowingly and willfully caused Panasonic to falsify its books and records through “dummy” consultants  who did little or no actual consulting.  In outstanding work done by the United States Government, The United States Attorney’s Office and the Federal agents (FBI) investigating the matter,  PAC admitted that it mischaracterized these payments as “consultant payments” on its general ledger, which it knew caused Panasonic to incorrectly designate those payments as “selling and general administrative expenses” on Panasonic’s books, records, and accounts.

SEC whistleblowers who know of companies falsifying their books, or who don’t have the best interest of the shareholders in mind are integral in making SEC qui tam cases.

By distorting the payments and providing false representations and Sarbanes-Oxley (SOX) subcertifications to Panasonic about PAC’s financials and financial controls, PAC caused Panasonic to falsify its books, records, and accounts in violation of the FCPA.

In a related proceeding, the U.S. Securities and Exchange Commission (SEC) filed a cease and desist order against Panasonic, who agreed to pay $143 million to the SEC. That makes the the combined total amount by the defendant $280 million, which could have triggered an $84 million dollar whistleblower award if someone blew the SEC whistle on this fraud.

If you know of any Foreign Corrupt Practices Act or need an SEC whistleblower lawyer, call (877) 561-0000 to consult with our firm.  The SEC whistleblower provisions have a mechanism where the whistleblower can potentially stay anonymous from start to finish. The SEC violations could stem from accounting falsifications, cooked books, no show jobs, or any of a variety of violations where the company is falsifying its records to the detriment of the shareholders.  Even if you’re not in the United States and know about these violations you could potentially receive an SEC whistleblowing award for your information.

Three Physicians pay $700,000 to settle FCA violations with drug testing laboratory

Three physicians separately entered deals with the US government to settle allegations that they received improper payments and caused false claims to be submitted to Medicare, United States Attorney Scott W. Brady announced May 8. The allegations remain as such, but the three physicians involved will pay a combined total of $700,000.

Dr. Robert Fetchero, D.O., of Jeannette, Pennsylvania, Dr. Sridhar Pinnamaneni, M.D., of Windermere, Florida, and Dr. Thelma Green-Mack, M.D., of Zionsville, Indiana, referred Medicare patients to Universal Oral Fluid Laboratories (“UOFL”) for drug testing services while allegedly engaged in a financial relationship with the lab. Another doctor who pled guilty on related charges had already begun his 80-month jail sentence in July last year.

Because of the so-called financial relationship between these physicians and UOFL, the latter was able to send claims to Medicare for drug testing services from 2011 to 2014. UOFL paid the involved physicians to refer their patients to the lab for drug tests. The United States alleged that the financial arrangement between the settling physicians and UOFL violated the physician self-referral law, commonly known as the “Stark Law,” and the Anti-Kickback Statute. This, in turn, gave rise to liability under the False Claims Act.

The Stark Law forbids physicians from referring certain health services payable by Medicare to providers that he or she (or an immediate family member) has a financial relationship with, unless an exception applies. The Anti-Kickback Statute bars them from offering, paying, soliciting, or receiving payment to induce referrals of services covered by federal health care programs, such as Medicare. Violating the Stark Law or Anti-Kickback Statute can result in damages and penalties under the False Claims Act that are up to three times the payment earned from the scheme.

“A physician’s medical judgment should never be compromised by improper financial incentives,” said United States Attorney Scott W. Brady in a statement.

The False Claims Act is a powerful statute that enables courageous individuals with inside information to essentially blow the whistle and potentially receive a whistleblower award up to 30% of what the government recovers.  Under the Federal False Claims Act the cases must have some sort of nexus to the Federal government – either overbilling or falsely billing Medicare or Medicaid for example. Certain states like California and Illinois permit the recovery for frauds against private insurance companies as well.

 

If you know of similar arrangements leading to false claims to Medicare, take the first step to correct it. Call Toll Free (877) 561-0000.

Physicians, providers indicted for health care fraud

Over the past week, the United States indicted a number of physicians for allegedly causing fraudulent claims to be submitted to Medicare or Medicaid and to other health insurance entities.

In Pennsylvania, five physicians of Redirections Treatment Advocates, LLC, an opioid addiction treatment practice with offices in Pennsylvania and West Virginia, were charged last week for alleged unlawful dispensing of controlled substances and for having committed health care fraud, Attorney General Jeff Sessions, United States Attorney Scott W. Brady of  the Western District of Pennsylvania and United States Attorney William J. Powell of the Northern District of West Virginia announced on May 1, 2018.

The United States alleged that these physicians, working as contractors at various locations, created and distributed unlawful prescriptions for buprenorphine, known as Subutex and Suboxone, a drug that should be used to treat individuals with addiction.  The government alleged that the physicians caused fraudulent claims to be submitted to Medicare or Medicaid for payments to cover the costs of the unlawfully prescribed buprenorphine.

In Portland around the same time, a federal Grand Jury handed down an indictment charging Abdirashid Ahmed, 38, of Lewiston and Garat Osman, 32, of Auburn, with health care fraud involving the MaineCare program and soliciting and receiving health care kickbacks from May 2015 through December 2017.

According to the indictment, Ahmed sought payments from a MaineCare provider and in return referred some beneficiaries to the provider.

Ahmed and Osman allegedly took beneficiaries to the provider and served as Somali interpreters during the visits.  As a result, fraudulent bills were allegedly submitted to MaineCare, with overstated health and interpreter services. MaineCare reimbursed the provider based on the fraudulent billing.

An indictment is merely an accusation, and a defendant is presumed innocent unless proven guilty in a court of law.

Medicare fraud is still robustly going on, with only a fraction of it being detected and caught. Oftentimes unless a whistleblower comes forward there is no way to find out about illegal kickbacks, overbilling or a variety of other overbilling that may happen.

Under the False Claims Act (FCA), a whistleblower can come forward initially anonymously and collect a whistleblower award up to 30% of what the government recovers under Federal Law and some state statutes provide higher awards.  In order to commence a False Claims Act you must have a whistleblower lawyer.

 

If you know of similar cases of medicare fraud or wrongdoing that could be risking your health on top of unfairly charging our health care, call Toll Free (877) 561-0000.

New FLSA Tip Credit Provisions Let Employees Keep Their Tips

On March 23, 2018, Congress amended the provisions in the Fair Labor Standards Act (“FLSA”) governing tipped employees.

Background: Minimum Wage and Tip Pooling

The FLSA allows an employer to pay a reduced hourly wage of at least $2.13 per hour to tipped employees, provided the tipped employees receive enough tips to bring their hourly rate to the prevailing minimum wage. The employees’ tips include those they receive directly, as well as tips distributed from a valid tip pool.

The FLSA has two perquisites for an employer to pay employees a reduced tip credit rate.

First, the employer must have informed the employee of the requirements for tipped employees under the FLSA;

Second, the employee must be permitted to keep all of his or her tips, except for tips that are shared with other tipped employees under a valid tip pool.

Traditionally, these requirements only applied to employees making less than the standard federal minimum wage (currently $7.25 per hour). An employer who violated either of these prerequisites could be held liable for the different between the rate paid to the employee and the standard minimum wage.

2011 Department of Labor Regulations

In 2011, the Department of Labor passed regulations regarding the FLSA tip credit provisions. The regulations provided that all tipped employees—not just those paid a rate less than $7.25 per hour—were entitled to keep all of their tips and could not be required to share tips with management of with non-tipped employees. This expanded the tip credit provisions to a significant number of employees who receive tips but still receive more than $7.25 per hour.

Recent Changes to the Law

The March 23, 2018 amendments changed the FLSA’s tip credit provisions in three ways.

First, under the current law, employees who make over $7.25 per hour can be required to share tips with non-tipped employees who did not interact with customers, whereas employees who make less than $7.25 per hour cannot be required to share tips with non-tipped employees who did not interact with customers;

Second, no employees, regardless of how much they are paid per hour, can be required to share tips with their managers or their employer.

Third, employees who are unlawfully required to share their tips with other employees who do not engage in customer service, or with management/ their employer, can recover the amount of tips taken from them, in addition to the difference between their actual pay rate and the standard minimum wage of $7.25 per hour.

The new tip-credit provisions clarify the long-standing requirement that only employees who engage in customer interaction may participate in employee tip pools. The recent amendments are particularly strict on the practice of management retaining tips, which is now prohibited for all tipped employees regardless of whether their wages are subject to a tip credit.

Having represented many tipped employees, the JTB Law Group knows that you work hard for your tips, and should be allowed to keep them. If you are not, you should contact us immediately.

Tennessee Health Care Executives Charged in $4.6-M kickback scheme

A kickback scheme that allegedly defrauded Medicare and lined the pockets of two health care executives was halted this week by the government. John Davis and Brenda Montgomery, two top executives and owners of health care companies involved in the scheme, were charged not only for the kickback scheme but also for having defrauded Medicare. They were arrested morning of April 9.

The government said that from around June 2011 to June 2017, Montgomery agreed to pay Davis illegal kickbacks in exchange for Medicare referrals for durable medical equipment. Montgomery owns the medical equipment company CCC Medical Inc. Davis, meanwhile, is former CEO of pain management company Comprehensive Pain Specialists (CPS). As head and owner of CPS, Davis allegedly used the CPS to generate need, and sales, for CCC Medical’s durable equipment, in exchange for 60 percent of Medicare proceeds collected on claims for these.

“The charges against John Davis and Brenda Montgomery, alleging almost three quarters of a million dollars in illegal health care kickbacks and the submission of over $4.6 million in fraudulent claims to Medicare, demonstrate the Department of Justice’s commitment to protect taxpayer dollars and to hold corporate executives accountable for fraudulent and abusive conduct,” said Acting Assistant Attorney General Cronan.

The government also charged the two for their efforts to cover up their scheme. These involve making kickback payments through a nominee, creating and filing false tax documents, creating and filing false tax documents, and, for Davis, intervening as CEO to prevent the owners of CPS from obtaining their own Medicare DME supplier numbers that would have allowed CPS to bill for its own Medicare DME orders.

The government said that since around May 2015, Davis and Montgomery renegotiated their illegal agreement to further obscure their personal contract from Medicare and from CPS owners and employees.  This, the government said, resulted in a sham purchase of a shell entity known as ProMed Solutions, LLC. Montgomery allegedly paid $150,000 for this, to induce Davis to continue driving CPS referrals to CCC Medical, the government lawyers said.

All these, so far, are still allegations. Davis and Montgomery are presumed innocent until proven guilty beyond a reasonable doubt in a court of law, the Department of Justice said on April 11.

U.S. Attorney Cochran promised “unrelenting efforts” to bring to justice individuals and corporations who he said choose profit at the expense of the health of those in greatest need.

“Stealing funds from our health care system places the vulnerable at greater risk and diverts public funds into the pockets of the greedy individuals who exploit those with the greatest need,” he said.

Trial Attorney Anthony Burba of the Criminal Division’s Fraud Section and Assistant U.S. Attorney Ryan Raybould of the Middle District of Tennessee are prosecuting the case.

More than 3,500 defendants have previously been charged by the government’s Medicare Fraud Strike Force. These defendants have collectively billed the Medicare program for over $12.5 billion. Private whistleblowers have helped the government achieve this.

 

If you know of similar kickback schemes or moves defrauding Medicare, help put a stop this. Call our Whistleblower Law Firm Toll Free (877) 561-0000