Malanga v. NYU Langone Med. Ctr. — Nov. 2015 (Summary)

FALSE CLAIMS ACT – RETALIATION

Malanga v. NYU Langone Med. Ctr.
No. 14cv9681 (S.D. N.Y. Nov. 12, 2015)

The District Court for the Southern District of New York denied a motion to dismiss a claim brought by a former director of research against a university and her supervisor regarding retaliation under the False Claims Act (“FCA”), among other things.

The director alleged university employees were unlawfully billing the federal government for blood tests, overcharging federal grants for patient visits, and paying the salary of a post-doctorate employee out of an unrelated federal grant. Furthermore, the director reported the university to the Department of Defense for allegedly failing to adhere to study protocols by failing to follow up with 300 patients, at least one of whom died. The study was suspended as a result. In alleged retaliation, the director claimed her supervisor corroborated false complaints to the university human resources department made by another employee.

The district court upheld the director’s retaliation claim under the FCA, holding that if the court accepted the director’s allegation that the university’s billing practices were outside the scope of her job duties, the court could not determine whether she was subject to a heightened pleading standard as a “fraud alert” employee. Additionally, the district court held it was “inappropriate” to consider performance evaluations that alleged the director altered medical records and exhibited unprofessional conduct at an early stage of litigation. The district court also held the director did not waive her right to a federal retaliation claim by bringing a claim under a New York Labor Law prohibiting retaliatory conduct against employees who report improper patient care because the Supremacy Clause trumped any waiver of rights and remedies contained in the state law.