In the world of qui tams, it is usually the whistleblower pushing cases to trial. But on February 23, 2023, a federal judge in West Virginia set down for trial a hospital’s case against a whistleblower. Now, in a trial set for late March 2023, a jury is set to determine whether a whistleblower and the general counsel for a competing health system engaged in malicious prosecution and tortious interference by filing a qui tam against a West Virginia hospital.

Background

In 2016, individuals connected with West Virginia’s Camden Clark Medical Center filed a qui tam alleging false claims, kickbacks, and Stark Law violations by a competing health system, Marietta Area Healthcare.[1] That qui tam was ultimately voluntarily dismissed by the Camden Clark-connected whistleblowers prior to Marietta being served with the complaint.[2]

That’s when Marietta did what every hospital accused of fraud dreams of: they sued the whistleblowers.

Marietta claims that the whistleblowers engaged in malicious prosecution and tortious interference by filing a qui tam based merely on what it calls “flimsy accusations.”[3] According to Marietta, the whistleblowers sought to tarnish the competing hospital by triggering a federal investigation, which Marietta labeled in its complaint as an “egregious intentional misuse of the judicial system.”[4]

And then Marietta added a new defendant: the general counsel of the competing health system, Camden Clark Medical Center, who was not one of the whistleblowers.[5]

That general counsel was alleged in Marietta’s amended complaint to have developed, planned, and strategized with the whistleblowers the qui tam against Marietta.[6] According to Marietta’s complaint, the general counsel teamed with the whistleblowers to harm Marietta, including causing physicians to terminate their business relationship with them after learning of the federal investigation that flowed from the qui tam.[7] In other words, the general counsel is alleged to have caused the whistleblowers’ qui tam to hurt a hospital that was a business competitor of his health system.

Hospital’s Case Against Whistleblower Now Heading For Trial

The whistleblowers-turned-defendants and the general counsel from the competing health system moved for summary judgment, arguing several theories, including that several counts are barred by the litigation privilege and that the evidence lacks a showing of malice on the part of the whistleblowers and general counsel.[8] The hospital then dismissed one of the whistleblowers from the case.

The court on February 23, 2023, denied all of the defendant’s motions for summary judgment, holding that genuine issues of material fact exist in all of the hospital’s claims against the remaining whistleblower and the competing health system’s general counsel.[9] The federal judge stated that “there is a genuine issue of material fact as to whether the alleged interference in plaintiffs’ business was for a proper purpose,”[10] and thus denied the whistleblower and the general counsel summary judgment.

And, in what should have been a sign of the tide, on February 22, 2023, the day before denying summary judgment, the court set the hospital’s case down for trial. The trial is set to begin on March 27, 2023, in Wheeling, West Virginia. Both sides have requested a jury trial, and so a jury will be called on to answer whether the whistleblower and competing general counsel had improper motives for filing the qui tam.

Husch Blackwell is Monitoring Developments in the Hospital’s Case Against Whistleblower

Given the unique circumstances of a hospital turning the tables on a whistleblower and a competing health system’s general counsel, Husch Blackwell will continue monitoring developments in this case. Contact Husch Blackwell partner Jonathan Porter for updates.


[1] See United States ex rel. King et al. v. Marietta Area Healthcare, Inc. et al., Case No. 5:16-cv-175, Doc. 1 (N.D.W.V.) (Qui Tam Complaint).

[2] Id., Doc. 42 (Relators’ Notice of Voluntary Dismissal Without Prejudice).

[3] Marietta Area Healthcare, Inc. et al. v. King et al., Case No. 5:21-cv-25, Doc. 4, at 1 (S.D.W.V.) (Complaint).

[4] Id. at 2.

[5] Marietta Area Healthcare, Inc. et al. v. King et al., Case No. 5:21-cv-25, Doc. 107 (S.D.W.V.) (Amended Complaint).

[6] Id. at 8.

[7] Id. at 20.

[8] Marietta Area Healthcare, Inc. et al. v. King et al., Case No. 5:21-cv-25, Doc. 426 (S.D.W.V.) (Order Denying Motions for Summary Judgment). (summarizing arguments made on motion for summary judgment).

[9] Id.

[10] Id. at 18.

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Photo of Jonathan Porter Jonathan Porter

Jonathan uses his years of experience as a federal prosecutor to guide clients through the challenges associated with government investigations and regulatory compliance.

Jonathan brings to clients a thorough working knowledge of how the U.S. government targets and pursues criminal and civil investigations,

Jonathan uses his years of experience as a federal prosecutor to guide clients through the challenges associated with government investigations and regulatory compliance.

Jonathan brings to clients a thorough working knowledge of how the U.S. government targets and pursues criminal and civil investigations, particularly those involving the healthcare industry. He is a former Assistant U.S. Attorney for the Southern District of Georgia, and in that capacity, he brought charges against numerous individuals and companies under federal law, including criminal charges of health care fraud, wire fraud, and violation of the Anti-Kickback Statute, and civil complaints alleging violations of the False Claims Act.

At the Department of Justice, Jonathan was a key member of multiple international health care fraud takedowns, in which Jonathan charged dozens of doctors, nurses, and other licensed medical professionals, along with marketers and health care executives for alleged participation in healthcare fraud schemes involving billions of dollars in false billings. In total, these charges resulted in more than 30 guilty pleas plus a conviction in the nation’s first trial of a medical professional charged as part of Operation Brace Yourself, which Jonathan first-chaired. Jonathan also was active in dozens of civil investigations brought under the False Claims Act. Jonathan resolved tens of millions of dollars in civil settlements and judgments for False Claims Act violations.

Jonathan also advises clients on a range of regulatory issues, along with the development and implementation of corporate compliance programs. He uses his unique perspective as a former AUSA, providing a prosecutor’s eye for detail in helping clients understand how DOJ and other agencies view compliance, particularly in light of the changing standards for compliance as outlined in the DOJ’s Evaluation of Corporate Compliance Programs (ECCP) and implemented in the Department’s white-collar crime enforcement initiative.