U.S. ex rel. Gale v. Omnicare, Inc. (Summary)

QUI TAM

U.S. ex rel. Gale v. Omnicare, Inc., No. 1:10-CV-00127 (N.D. Ohio Oct. 1, 2013)

The United States District Court for the Northern District of Ohio denied two motions from a prescription drug company attempting to bar a former employee’s qui tam action.  The former employee claimed that the drug company gave skilled nursing facilities illegal discounts in exchange for referrals of other patients with government-reimbursable drug costs.

The drug company moved to exclude all evidence of Medicare Part D and Medicaid reimbursements at trial, arguing that the former employee did not specifically plead these damages or provide sufficient notice that he was pursuing these damages.  The court found that while the former employee did not specifically state that he was pursuing these damages, he could seek them because the damages were based on the same wrongful conduct described in the complaint.  Also, the court found that the drug company was given sufficient notice that the former employee would be pursuing these damages.

The court also held that the former employee’s Medicare Part D and Medicaid damages were not barred by election of remedies, res judicata and release, based on the settlement in a previous qui tam case by another relator.  The court found that the drug company did not assert the election of remedies and res judicata defenses in its answer, as required, and although it did assert release, it withdrew that defense.  The court may grant leave to the drug company to assert one of the defenses “if justice so requires.”  The court held that justice did not require, since with only three weeks until the trial, the former employee would not have enough time to properly respond to the drug company’s amended complaint.