We have significant experience representing whistleblowers who have claims under the Federal False Claims Act and other whistleblower statutes. We are one of the few firms in the country to have successfully taken a False Claims Act case to trial without government intervention. The case against Cornell University's Medical School and one of its researchers, Wilfred van Gorp, resulted in a verdict in favor of our client, which has been upheld by the Court of Appeals in a precedential decision with far-reaching implications.
False Claims Act Cases
The Federal False Claims act allows a whistleblower, known as a Relator, to file a complaint on behalf of the United States government to recover funds secured by fraud. Under the Act, the government may recover up to three times the actual damages caused by the fraud. The Relator is entitled to a share of the recovery, representing anywhere from 10-30% of the total funds recovered, along with attorneys' fees and costs. The Relator (and those associated with the Relator, such as family members) are also protected from retaliation for raising a false claims act allegation.
The provisions of the Act are complicated and require strict compliance. For example, the allegations of the complaint must generally not be known to the government prior to the Complaint, which must be filed under "seal." For this reason, a Relator contemplating filing a complaint under the Act should consult with counsel experienced in this field. In addition, if you are contemplating filing an action, you should ask any prospective counsel whether they have actual experience trying such a case if there is not a settlement and/or the government declines intervention. Many firms boast of having filed cases under the False Claims Act, but relatively few have actually taken the cases to trial.
Our False Claims Experience
What follows is a representative sample of our experience under the False Claims Act.
In July, 2011, the United States Department of Justice announced a $1.6 million settlement with Kaplan, Inc., a subsidiary of the Washington Post Co., based on allegations brought by our client, David Goodstein. We filed suit on behalf of Mr. Goodstein in 2007. In the complaint, we alleged that Kaplan, in operating a surgical technician program at its CHI Broomall, Pennsylvania campus, committed fraud under Title IV by knowing obtaining federal student loan money in violation of federal regulations. In particular, Mr. Goodstein, the former director of education at the Broomall campus, alleged that CHI enrolled students in the program knowing that the students could not complete the program, because CHI did not have practical placements in hospital settings, which was a requirement for completion.
In 2010, we won a jury verdict in the United States District Court for the Southern District of New York against Cornell University and one of its former medical school faculty members, based on claims that the defendants had fraudulently obtained grant money from the National Institutes of Health by making misrepresentations as to a research training program for HIV. Our client, Daniel Feldman, had brought the lawsuit in 2003. The jury agreed with Dr. Feldman that the defendants had submitted to NIH three consecutive annual progress reports containing materially false statements that the program was being carried out in accordance with the initial grant application. The total amount of the judgment, with attorneys fees and costs, was approximately $1.6 million.
The defendants appealed to the Court of Appeals. On September 5, 2012, a panel of the the 2nd Circuit Court of Appeals unanimously rejected the defendants' appeal, and upheld the judgment in its entirety. In a widely-reported and far-reaching opinion, the Court agreed with our legal positions, and upheld, in a case of first impression for the Court, our theory of damages. The defendants have agreed not to pursue any additional appeals, bringing 9 years of litigation to a successful end for our client.
While at our predecessor firm, Mr. Salmanson took the lead in negotiating a multi-million dollar recovery based on allegations that Blue Shield had engaged in Medicare fraud. Our client, Lynn Bultena, along with three other whistleblowers, had filed suit alleging that Pennsylvania Blue Shield (now Highmark) had defrauded the government in reporting its performance as a Medicare intermediary. Mr. Bultena was credited with $16 million of the total $38.5 million recovered by the Government in the related cases. Mr. Bultena also separately settled his retaliation claim under the False Claims Act.
Other Whistleblower cases
We have represented whistleblowers in a wide variety of cases involving alleged violations of other federal and state laws. These cases have typically included claims of unlawful termination and/or retaliation. For example, we represented an individual who asserted that he had been terminated for refusing to use software in violation of his employer's license agreement; a teacher who asserted she was fired for refusing to alter state-mandated educational records; another teacher allegedly terminated for reporting a student sexual assault; and an employee who was allegedly terminated for blowing the whistle on his employer after uncovering kickbacks and similar criminal activity.
"How do you say thank you to someone who provided wonderful guidance during an awful experience? What I can say is a heart-felt ‘thank you’ and to let you know how grateful I am that you were by my side – along with your wonderful mixture of compassion and rationality. . . .All is well. Thank you for helping to make it so."
@ 2010 Salmanson Goldshaw, P.C. All rights reserved.