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July 2016 Archives

Atrium Medical Corp. Settles False Claims Act Allegations for $11.5 Million

In March 2013, Esther Grace Sullivan, a sales representative and territory business manager at Atrium Medical Corp. ("Atrium" or the "Company"), alleged that the Company was paying doctors to use its iCast stents for unapproved uses, a violation of the False Claims Act ("FCA"). Medical stents are used to stop arteries from re-closing and Atrium's stents were approved to treat tracheobronchial obstructions, but doctors have used them for other vascular system purposes. The FCA claims against Atrium involved providing doctors dinners, giving them grants, and offering other kickbacks in order to incentivize them to use Atrium's medical stents. Although the government is typically involved in FCA cases, since these cases involve defrauding the government and cheating it out of large sums of money, the government was not interested in being part of the lawsuit. Nonetheless, the Plaintiff moved forward with her claims.

McDonald's Appeals Class Certification

McDonald's Corporation ("McDonald's," or the "Corporation") is appealing to the Ninth Circuit the District Court's certification of a class of more than 800 franchise workers who allege they weren't properly compensated. Plaintiffs claim managers violated the Fair Labor Standards Act by editing employees' time sheets to reduce hours, refusing to pay overtime, and banning meal and rest breaks.

HealthFirst Successfully Dismisses Lawsuit Concerning Allegations

HealthFirst Inc. ("HealthFirst"), a nonprofit healthcare insurance provider based in New York, is the subject of a qui tam lawsuit for allegedly violating the False Claims Act ("FCA"). A whistleblower is claiming that HealthFirst gave kickbacks and other incentives to doctors to encourage them to refer patients to HealthFirst. It is alleged that doctors were given access to exclusive investment opportunities in HealthFirst facilities, supplied with free medical products, and paid handsomely as medical directors for minimal work in outpatient programs. In return for these benefits, doctors told their patients to use HealthFirst's services.

Uber Employees Brought Back Into Arbitration

In late July 2016, drivers for Uber Technologies Inc. ("Uber" or the "Company") lost their bid to have a Maryland federal judge reverse his earlier ruling that the dispute must proceed in arbitration. The drivers filed a class action suit in Maryland late last year, spearheaded by the named Plaintiff, Elizabeth Varon, alleging that they were underpaid and that Company withheld tips. The drivers sought to be compensated for the costs of doing business (gas, car maintenance, etc.), and to be reimbursed for the $1 fee Uber takes off of every fare to pay for background checks on drivers.

Amgen Settles Class Action Lawsuit for $95 Million

In mid-July 2016, Amgen Inc. ("Amgen" or the "Company"), a global biotechnology firm, concluded nearly a decade of class action litigation by agreeing to a $95 million settlement with investors. Originating in 2007, the suit alleged that Amgen made misleading statements about the safety and marketing of anti-anemia drugs, Aranesp and Epogen, which included statements that were at odds with clinical studies, and falsely projected a positive direction for the Company that investors bought into. Consequently, the price of Amgen stock was overinflated because of the misleading statements, a violation of the Securities Exchange Act.

Consumer and business fraud: a large and growing national problem

When it comes to the realm of false advertising and misleading marketing practices, legions of New Yorkers and other consumers across the country can either relate stories regarding the woes of others or tell harrowing tales of their own.

Qui tam whistleblower lawsuits under the False Claims Act

The lawyers at Shepherd, Finkelman, Miller & Shah, LLP, have represented myriad clients over the years who have stepped forward on behalf of the federal government to spotlight fraud committed against the nation's taxpayers. Many of those clients have brought whistleblower claims under the federal False Claims Act, which has proven to be a most effective instrument for blunting illegal conduct and recouping unlawful gains collected by defendants.

Home Care Co. Pays $21.5M to End FCA Suit

Medicare is a national social insurance program that provides health insurance to Americans who are aged 65 or older, younger people with disabilities, and people with end-stage renal disease and amyotrophic lateral sclerosis. As a social insurance program, it is largely funded by payroll taxes on employers and workers, and accounts for about 17% of the 2016 proposed Federal budget. The program contracts with regional insurance companies to process fee-for-service claims per year in order to provide health insurance options for eligible Medicare patients.

St. Jude Settles Securities Suit for $39M

As an investor, the companies you invest in have a duty to disclose any information that may affect their stock values. In 2012, a class of investors sued St. Jude Medical Inc. ("St. Jude" or "the Company") for allegedly lying about the quality of the new leads on its cardiac rhythm management ("CRM") devices.

"Natural" Labeling Cost $4.5M for Seventh Generation

The connotation of the word "natural" may be followed by images of flowers growing in a large field or a glacial waterfall rushing down a forest mountainside. So, naturally, consumers may be surprised to see synthetic ingredients such as Methylisothiazolinone or Benzisothiazolinone on their natural-labeled products. In fact, a class action lawsuit against Seventh Generation Inc. ("Seventh Generation" or the "Company") accused the Company of illegally misleading consumers by labeling its cleaning products as "natural," despite its use of synthetic preservatives.

Morgan Stanley Settles $6M for FLSA Suit

In 2014, a Fair Labor Standards Act ("FLSA") case against Morgan Stanley & Co. LLC ("Morgan Stanley" or the "Company"), which alleged the Company was not paying its employees overtime, ended with a $4.2 million settlement. Subsequently, on June 30, 2016, after facing several identical lawsuits, Morgan Stanley agreed to pay-out another $6 million to settle those matters.