Legal News

April is the Qui Tam Month

By Ashby Jones

T.S. Eliot deemed April the cruelest month. We’re deeming it the qui tam month.

A few weeks ago, we blogged on a huge whistleblower settlement involving Northrop Grumman, one in which pocketed the plaintiff/whistleblower nearly $49 million. It was the largest whistleblower — or qui tam — settlement ever involving alleged military-procurement fraud.

Today, we open the papers to news of another whopper of a qui-tam settlement, one which will net the plaintiff/whistleblower about $45 million.

The case involved Quest Diagnostics and its Nichols Institute Diagnostics unit. The pair agreed to pay $302 million to resolve criminal and civil allegations regarding various diagnostic test kits manufactured and sold until 2006, prosecutors said Wednesday. The diagnostic tests allegedly provided inaccurate and unreliable results, prosecutors said. Under the arrangement, the duo will pay $262 million plus interest to resolve the claims. Click here for the WSJ story.

“The American public has the right to expect medical device manufacturers to make accurate claims in their labeling, especially when the failure to meet those claims could indicate that the performance of the device is suspect,” said U.S. Attorney Benton J. Campbell in a statement.

The company, based in Teterboro, N.J., also expects to pay various states approximately $6 million to resolve in settlements.

The investigation began as a result of whistleblower lawsuit, with the whistleblower receiving about $45 million of the recovery, prosecutors said. In total, it is one of the largest recoveries in a case involving a medical device, prosecutors said.

Full post as published by Law Blog - WSJ.com on April 16, 2009 (boomark / email).