Whistleblower Lawsuit Pays Off Big For Former GSK Employee

November 22nd, 2010. By Kristine B

Talk about your big payouts. A woman who acted as a whistleblower against GlaxoSmithKline will receive a whopping $96 million for her role in bringing the company to justice. Who knows, maybe eventually an Erin Brockovich-style movie will be made about her, too. This week, Pleading Ignorance looks into the story behind the whistleblower who helped officials in their case against GlaxoSmithKline—and what qui tam is all about.                                                 

The woman who acted as whistleblower in this case was Cheryl Eckard, who worked at GlaxoSmithKline from 1992 through 2003. When she was asked to visit the now-closed plant at Cidra, Puerto Rico, following citations for violations at the plant, Eckard was a manager of global quality assurance for GlaxoSmithKline. 

According to The Wall Street Journal (10/28/10), Eckard found massive problems at the Cidra plant, leading her to make recommendations to her superiors about how to fix things up. Those recommendations included to stop shipping all products from the plant and to notify the FDA about product problems, such as problems where drugs of different types were mixed up in the same bottle. 

But, according to the lawsuit, Eckard’s superiors ignored her, leading to her eventually telling them she would not be part of a cover-up. In 2003, Eckard was reportedly fired. Despite the firing, she says she continued to try to convince GlaxoSmithKline to make changes to the Cidra plant. It’s a screenplay waiting to happen: Woman sent to investigate plant, woman makes recommendations, woman is fired after following up on recommendations, woman is repeatedly ignored, woman files lawsuit against large corporation… 

Eventually, Eckard called the FDA, which led to the FDA investigation. Meanwhile, Eckard filed a lawsuit against GlaxoSmithKline under the US False Claims Act. Then, in 2010, GlaxoSmithKline agreed to pay $750 million to settle charges of allowing adulterated drugs onto the market. Of that, Eckard will receive $96 million, reportedly the largest award given to a single whistleblower in US history. 

A provision of the False Claims Act, also known as the Qui Tam Statute, allows private citizens to sue a person or company that knowingly submits false bills to the federal government. Although the qui tam lawsuit is filed by a private citizen, it is done on behalf of the federal government. Furthermore, it protects plaintiffs who are demoted, suspended or discriminated against because they have filed a claim under the False Claims Act. If a qui tam suit is successful, as was the case here, the whistleblower is entitled to between 15 and 30 percent of the money the government recovers. The whistleblower is also eligible for between $5,000 and $10,000 per false claim. 

A lawsuit filed under the False Claims Act is first served on the government and is not served on the defendant until the court orders it be served. The whistleblower is not allowed to discuss the lawsuit while the government investigates the allegations detailed in the complaint. 

The sad thing is that if GlaxoSmithKline had done the right thing from the start and listened to Eckard’s concerns, the lawsuit could have been avoided. Unfortunately, many companies see little or no benefit in doing the right thing, until doing the wrong thing costs them a lot of money. 

Pleading Ignorance cheers Ms. Eckard, who continued to fight to ensure the right thing was done, even when it meant she lost her job. Sometimes, good things happen to people who fight for them.

Asbestos News Roundup: 11.19.10

November 19th, 2010. By LucyC

A roundup of recent asbestos-related news and information that you should be aware of. 

Asbestos Lawsuits

Four new asbestos lawsuits were filed in recent weeks, naming a total of 323 defendant companies between them. 

Charleston WV: A couple from New Martinsville has named 95 companies as defendants in their asbestos suit, alleging that those companies are responsible for William R. Henthorn’s mesothelioma, for which he was diagnosed in September. 

According to the suit, Henthorn and his wife, Eva Louise Henthorn, claim the defendants caused the development of malignant mesothelioma because they exposed him to his asbestos. Mr. Henthorn was employed at the PPG Natrium Plant in New Martinsville from 1959 until 1977. 

The 95 defendants named in the suit are: A.O. Smith Corporation; A.W. Chesterton Company; Ajax Magnethermic Corporation; Allegheny Energy, Inc.; Allied Glove Corporation; American Optical Corporation; Armstrong International, Inc.; Armstrong Pumps, Inc.; Aqua-Chem, Inc.; Atlas Industries, Inc.; Bayer Corporation; Beazer East, Inc.; Brand Insulations, Inc.; Cashco, Inc.; Catalytic Construction Company; CBS Corporation; Champlain Cable Corporation; Consolidated Aluminum Corporation; Copes-Vulcan, Inc.; Crane Co.; Crown Cork & Seal Company; Dezurik, Inc.; Dravo Corporation; Durametallic Corporation; Eaton Corporation; Electrolux Home Products; F.B. Wright Company; Fairmont Supply; Flowserve U.S., Inc.; FMC Corporation; Foseco, Inc.; Foster Wheeler Corporation; General Electric Company; Genuine Parts Company; Gentex Corporation; George V. Hamilton, Inc.; Goulds Pumps, Inc.; Greene Tweed & Company; Grinnell Corporation; Hedman Resources Limited; Honeywell, Inc; Honeywell International, Inc.; Hunter Sales Corporation; IMO Industries, Inc.; I.U. North America, Inc.; Industrial Holdings Corporation; Ingersoll-Rand; Insul Company, Inc.; ITT Corporation; J.M. Foster, Inc.; Joy Technologies; M.S. Jacobs & Associates, Inc.; Marley Cooling Tower; Mallinckrodt Group, Inc.; Metropolitan Life Insurance Company; McCann Shields Paint Company; McCarls, Inc.; McJunkin Red Man Corporation; Milton Roy Company; Milwaukee Valve Company; Minnotte Contracting Corporation; Monongahela Power Company; Nagle Pumps, Inc.; Nitro Industrial Coverings, Inc.; Oglebay Norton Company; Ohio Power; Ohio Valley Insulating Company; Owens-Illinois, Inc.; Plotkin Brothers Supply, LLP; Powell Valve Company; Power Piping; PPG Industries, Inc.; Premier Refractories, Inc.; Riley Stoker Corporation; Safety First Industries, Inc.; Saint-Gobain Abrasives, Inc.; Sealite, Inc.; Spirax Sarco, Inc.; Square D Company; Stockham Valves & Fittings; Sunbeam Products, Inc.; Tasco Insulation, Inc.; Thiem Corporation; Townsend & Bottum, Inc.; Treco Construction Services, Inc.; UB West Virginia, Inc.; Unifrax Corporation; Union Carbide Corporation; United Conveyor Corporation; Vimasco Corporation; Virginia Electric and Power Company, Inc.; Washington Group International; WMX Technologies, Inc.; Yarway Corporation; and Zurn Industries, Inc. (WVirginiaRecord.com) 

Kanawha, WV: The widow of Dwain L. Chenoweth, who was diagnosed with lung cancer on Read the rest of this entry »

Caffeine Crackdown on Alcoholic Energy Drinks

November 18th, 2010. By janem

Alcoholic energy drink makers and no doubt hoards of 20-somethings won’t be happy with the FDA’s warning yesterday to remove caffeine from their products. Four companies, including Four Loko maker Phusion Projects have 15 days to come up with a new recipe or remove their products from store shelves. Whatever next, caffeine ban on “healthy energy drinks“? Heaven forbid…

It’s a good indicator that some of these drinks are harmful when they are referred to as “witches brew” and “blackout in a can”. (AP Photo/Paul Sakuma)

The agency’s decision to ban the combination of caffeine and alcohol in the products is mainly because the caffeine can “mask cues” that drinkers may use to determine how intoxicated they are. “This means that individuals drinking these beverages may consume more alcohol — and become more intoxicated — than they realize,” the FDA said.

Gregory Conko of the Competitive Enterprise Institute, which is a nonprofit group that supports limited government, said the FDA has gone too far. Conko said that the studies government officials used to make their decision are based on mixed drinks, not manufactured drinks, so their research is based on a slightly different product. Conko believes that people can responsibly drink a combination of alcohol and caffeine, but it would appear that his views are outnumbered. From lawmakers to doctors to concerned parents, the caffeine crackdown has been a long time coming.

According to the Centers for Disease Control and Prevention, two leading manufacturers saw their sales increase by 67 times between 2002 to 2008. (These companies will likely take a deep dive after yesterday’s decision, and no doubt  to Conko’s chagrin.)

2002: Wasn’t it around this time that teenage binge drinking started hitting the news? And incidents of college students winding up in hospital from car accidents to alcohol poisoning?  The CDC has the statistics:  People who drink alcohol mixed with energy drinks are three times more likely to binge drink than those who don’t mix the two substances together.

And there is more to back up the FDA’s decision. The Journal of Addictive Behaviors (April 2010) published a study that found people who drank alcohol mixed with energy drinks were three times more likely to leave a bar highly intoxicated, and four times more likely to try to drive, than bar patrons who had drinks with no caffeine. Recently in the journal Alcoholism: Clinical & Experimental Research, a study found that high consumption of energy drinks was associated with alcohol dependence and heavy drinking.

Aaron White, a health scientist administrator at the National Institute on Alcohol Abuse and Alcoholism, comments succinctly on the FDA’s decision: “I think the move [by the FDA] was made in order to protect the public from what could be a real recipe for disaster.”

No doubt the makers of “healthy energy drinks”, such as FRS, are concerned about this caffeine crackdown. Health Canada is already reviewing new recommendations on energy drinks. A report is soon to be issued that focuses on the safety of energy drinks without alcohol, which are considered to be natural health products and have different rules than food products. Another report looks at caffeine in all foods, including drinks that mix caffeine with alcohol.

Perhaps the FDA will follow Health Canada’s new rules, but “healthy energy drink” manufacturers will likely have a few more years to dupe the public into buying their products loaded with caffeine.  Back in 2005, the FDA warned manufacturers and advertisers of alcoholic energy drinks not to imply that consumption of the products will have a stimulating or energizing effect, but the warning fell on manufacturers deaf ears, which is evident through manufacturer’s aggressive marketing campaigns for their products.

“Energy drinks that combine alcohol with caffeine hardly seem healthy – and could be hazardous. These alcoholic energy drinks foster the illusion of alertness, but in reality impair – leading to car crashes, assaults and other violence and injury.”

Although this statement made a few years back sounds like fire and brimstone, a recent study found that young and underage drinkers who combine alcohol with caffeine, are more likely to suffer injury, be the victim of sexual assault, drive while intoxicated, and require medical attention than drinkers who consume caffeine-free beverages. Not to mention the needless burden to the health system.  This time, the FDA has my vote.

Investment Tip? Legal Lending: Place your Bets!

November 18th, 2010. By Hunter West

Would you entertain an investment that pays up to 24 percent annually? Sound too good to be true? A Ponzi scheme? 

Au contraire, Mon ami. Litigation is the new investment playground, my darlings… 

One aspect of the legal system that will surprise some is the growth in legal lending. That’s right—the business of lending (for profit) in order to fund litigation. 

Lawsuits are expensive. The larger legal houses may have the financial clout to self-finance. However for the remainder, financing the action in order to get you through to the settlement (and the payoff) can be a hardship, if not impossible. 

So lawyers borrow money to fund lawsuits from entities that are in the business of doing just that. 

The New York Times recently ran a fascinating story based on an investigation by the Center for Public Integrity, a non-profit based in Washington. There are a number of firms that specialize in floating loans to legal firms in order to finance lawsuits—presumably, after their efforts to secure financing through ordinary channels (the charted banks) fall through. 

In comes Counsel Financial, based in Buffalo and financed by CitiGroup. There’s also LawFinance Group. And LawCash, based in Brooklyn. They come to the rescue when traditional Read the rest of this entry »

Post-Op News You Don’t Want: Oops! Hospital Errors Still Happening

November 17th, 2010. By LucyC

Stories about hospital screw-ups and medical malpractice suits—you know, mistakes that nearly cost someone his life—are typically good coffee break fodder and undoubtedly the stuff of urban legend. However, I came across this news story today and it was a bit of a wake-up call. According to a report by United Press International, 12 California hospitals were recently fined between $25,000 and $75,000 each “for medical errors that caused, or were likely to cause, injury or death.” Twelve hospitals. 

One of the facilities that screwed up and got caught, according to officials with California’s Department of Public Health, is Southwest Healthcare System in Murrieta, CA. They were fined $25,000 for leaving a surgical instrument—”a metal device roughly 10 inches long and 2 inches wide used to hold tissue during surgery—inside a woman who had a baby in 2008.” I’m going to assume that that means the surgical team left the device inside the woman following her Caesarean section. Nobody noticed until the woman complained of pain. So she underwent exploratory surgery and the instrument was found. Apparently the report that was written about the incident listed one of the possible reasons for the mistake as unfamiliarity between the two doctors who were operating—meaning the docs didn’t know each other. Isn’t that why procedures were developed?

Again, to cite the UPI story, this particular facility has been fined by the state seven times. And, Southwest Healthcare System is not alone in its stunning lack of adherence to procedure: California Pacific Medical Center, Pacific Campus Hospital, San Francisco, was fined $50,000 and $75,000 for negligence involving two different patients; Citrus Valley Medical Center in Covina, Read the rest of this entry »