INSIGHTS On Massachusetts Personal Injury Law

Welcome to the SUGARMAN blog. We'll be sharing our perspectives on the state of the law and current legal issues in Massachusetts personal injury law. Issues relating to medical malpractice, construction site injuries, premises liability, product liability, motor vehicle accidents, insurance, and more will all be reviewed here by our team of lawyers who have prosecuted some of the most complex cases in Massachusetts personal injury law.

Articles Posted in Whistleblower Litigation

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Medtronic, one of the world’s most prominent manufacturers of medical devices, has been named in a whistleblower lawsuit alleging that it regularly promoted its spinal implants for use in the neck despite the fact that the devices were not approved for such use by the FDA and specifically were labeled as being inappropriate for the cervical spine. The specific implant was the Medtronic VERTE-STACK, which is “intended for vertebral body replacement to aid in the surgical correction and stabilization of the spine” and is part of Medtronic’s INFUSE Bone Graft system.  The whistleblower suit alleges that Medtronic defrauded government healthcare entities by charging for the implantation of the spinal implant devices when the company knew that the use was illegal or unsafe.  The company is already facing thousands of potential personal injury lawsuits related to the INFUSE products.

This lawsuit is just one example of what seems to be a common practice for medical device and pharmaceutical drug manufacturers – promoting “off-label” use of its products to physicians despite federal prohibitions against such practices and despite the risk for patient safety.  Such practices, while making millions for medical device manufacturers, pose significant and sometimes deadly risks to patients who are implanted with the devices.

The personal injury attorneys at SUGARMAN have litigated complex medical device and defective product cases for decades.  If you believe you may have a claim involving a defective medical device, please fill out a Contact Form, call us at (617) 542-1000 or e-mail info@sugarman.com.

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As we previously informed you, Massachusetts has a False Claims Act that provides financial incentive for whistleblowers to come forward and report corporate abuse or fraud against the Commonwealth. Since that time, Massachusetts has amended its False Claims Act (M.G.L., c. 12, §§5A-5O) to provide greater incentive for whistleblowers to come forward while also enlarging the claims that can be brought under the Act.

The amendments make several key changes to the Massachusetts False Claims Act. First, the amendments eliminate a court’s ability to reduce or eliminate the percentage of any recovered money (either through settlement or trial) that a whistleblower is entitled to as a result of a successful whistleblower lawsuit. Previously, courts could eliminate or reduce the percentage if the whistleblower participated in the fraudulent activity.
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In July 2010, Congress passed, and the President signed, the “Dodd-Frank Wall Street Reform and Consumer Protection Act” (“The Dodd-Frank Act”).  The Dodd-Frank Act was passed in response to the country’s near financial meltdown in 2008, in an effort to protect the consumers and the country from the perils of unlawful financial practices by individuals and financial institutions.  Among other protections, the Dodd-Frank Act contains a section entitled “Securities Whistleblower Incentives and Protection.”

This relatively new whistleblower law (a) requires the Securities and Exchange Commission (“SEC”) to pay substantial awards to eligible “whistleblowers” who voluntarily provide the SEC with information leading to successful enforcement of the securities laws; and (b) prohibits retaliation by employers of such whistleblowers.

A whistleblower’s right to recovery depends upon meeting certain requirements of the Dodd-Frank Act and related SEC rules.  The requirements for recovery by the whistleblower include:

–  the information reported by the whistleblower must be “original information”, which generally speaking means that the information must be based on the whistleblower’s independent knowledge or independent analysis, and the SEC must not have known about the information from any other source;

–  the enforcement by the SEC results in a sanction greater than $1,000,000; and
–  the individual reporting must meet the statutory definition of a “whistleblower,” and must not fall under any of the exclusions.
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Previously, Sugarman provided a general overview of Federal and State Whistleblower Claims and the Massachusetts False Claims Act. In Part 3 of the blog series, Sugarman Partner David McCormack explores the Massachusetts Whistleblower Statute protecting health care whistleblowers from retaliatory action.

In the context of health care and in furtherance of the aims of the Massachusetts False Claims Act, the Massachusetts legislature has enacted M.G.L. Chapter 149, Sec. 187. This statute makes it unlawful for a health care facility to refuse to hire, terminate or take any retaliatory action against a health care provider who “discloses or threatens to disclose” a practice of the health care facility that the provider “reasonably believes is in violation of a law or rule or regulation . . . or [is in] violation of professional standards of practice which the health care provider reasonably believes poses a risk to public health.” Essentially, the statute provides protection to any Massachusetts health care whistleblower from retaliatory action by a health care facility. This statute would conceivably provide protection for any health care whistleblower who, through his attorneys, files a qui tam action pursuant to the Massachusetts False Claims Act.
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Previously, SUGARMAN provided a general overview of both Federal and Massachusetts Whistleblower Claims. In continuation of a series of blogs, Sugarman Partner David McCormack explores the Massachusetts False Claims Act. 

The Massachusetts False Claims Act is set forth in Massachusetts General Laws, Chapter 12, Secs. 5A – 5O and was based, in part, on its federal counterpart. The Massachusetts False Claims Act contains a whistleblower provision that encourages private citizens to report fraud against the government of Massachusetts – fraud that would likely remain undiscovered without the whistleblower bringing it to light. In order to encourage whistleblowers to come forward, the Massachusetts False Claims Act provides strong financial incentive to do so if the whistleblower’s claims are proven to be legitimate.

Section 5B is the “meat” of the statute and defines what actions can subject a person or corporation to liability under the Massachusetts False Claims Act.  For example, Section 5B makes it unlawful to (1) present a false or fraudulent claim for payment from the Commonwealth or any state agencies; (2) enter into a contract with the Commonwealth knowing that the information in the contract is false; or (3) conspire to defraud the Commonwealth through the payment of a fraudulent claim. Examples that would violate these provisions include a physician performing a non-medically indicated procedure and then billing Mass Health or a contractor charging the Commonwealth for materials that it never delivered. Section 5B makes a corporation, partnership or person liable for acts of its agents, but specifically excludes liability for any acts related to limiting, reducing or evading the payment of taxes. 
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In a series of blogs, SUGARMAN Partners Benjamin Zimmermann and David McCormack will explore Whistleblower Claims under both federal (FCA) and Massachusetts False Claims Act (MFCA) law.

A hospital or physician routinely performs procedures that are not medically indicated or necessary and then bills Medicare or MassHealth. A government contractor charges for goods or materials that were never delivered. A pharmaceutical company artificially inflates the wholesale price for a prescription drug and then bills the inflated price to Medicare or MassHealth. A government vendor charges for a superior (and more expensive) product while actually providing an inferior (and cheaper) version. A toy manufacturer fraudulently represents to the federal government that a product passes a government certification test required to sell the product to the public.  

All the above are examples of private industry defrauding either the federal or Massachusetts government. What remedies are there for an “insider” at a company who knows of this fraudulent activity and who wishes to expose the fraud or scam?
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