Dismissal by the Fifth Circuit Court of Appeals Shows Need for Strong Qui Tam Attorney

When reporting a case of potential fraud against the United States by private contractors, the following report showcases the importance of choosing an experienced whistleblower attorney like those of Berger and Montague. Moreover, working with a competent whistleblower attorney through the pleadings process can significantly reduce your chances of facing an outcome similar to the dismissal holding recently issued by the Fifth Circuit Court of Appeals in a case involving allegations of medical device fraud.

Background of Steury v. Cardinal Health Reveals Allegations of Wrongful Termination and Retaliation

The details of Steury v. Cardinal Health involve allegations of healthcare fraud, particularly the sale of defective intravenous pump devices to VA and private hospitals over a period of time spanning from 1996 to 2001 while assuring each hospital that the pumps were operational and safe. The qui tam plaintiff in this case was employed as a sales representative by Cardinal Health during the time these devices were sold and alleged that the pumps posed a significant risk of introducing deadly air bubbles into the IV line. According to Cardinal Health, it was only made aware of the defect in 2001 and suspended production for three months to investigate the problem. Despite Cardinal’s attempt to keep the defect a secret from employees and customers, news of the deficiency quickly spread amongst Cardinal employees, creating an anxious situation in light of a sizable upcoming order for pumps from a VA hospital in Ohio.  Believing Steury to be the source of the leaked information, Cardinal promptly fired her, giving rise to her wrongful termination and retaliation claim under the FCA’s whistleblower policy.

Fifth Circuit Agrees With District Court and Dismisses Steury’s Claims

The procedural background of this case reveals a complex and perpetual series of filings, amendments and appeals all in an attempt to hold Cardinal Health responsible for its efforts to not only shield information about pump malfunction from medical institutions but to simultaneously assure VA and private hospitals that the pumps were in proper working order. In its analysis, the Court reviewed the standards set forth in the False Claims Act with regard to pleadings and the complexity of facts required to properly advance a claim. It reasoned that, under the FCA, a plaintiff must present proof that the defendant knowingly and intentionally presented a false claim to the government for payment. The Court further distinguished between claims that are a true “FCA problem” and those that amount to a mere breach of contract between two parties (i.e., do not result in a percentage award for the plaintiff). Steury’s cause of action ultimately fails to meet FCA standards due to a lack of any specific contractual provision requiring the government to certify compliance prior to payment or reimbursement. The Court also held that there is no requirement under the FCA, outside an express contract provision, requiring medical devices sold under government contracts to be merchantable – which is a legal term referring to a device’s reasonable fitness for the ordinary purpose for which it is manufactured and sold.

Avoid Ms. Steury’s Pitfalls by Working With an Experienced Whistleblower Attorney

If you feel dissuaded by the above story, understand that many qui tam plaintiffs experience uphill battles and you should not give up in your quest to bring fraudulent contractors to justice. A knowledgeable whistleblower lawyer will be able to dissect your claim against the requirements set by the FCA for proving intentional fraud and hopefully obtain a fair and adequate qui tam award on your behalf. By working with an attorney who understands the rules of federal civil procedure, state and federal whistleblower laws and the best way to properly plead a claim, you can rest assured your case will be handled with the highest level of care.