In yet another FCA Counterclaim Case a federal judge in Philadelphia refused to throw out counterclaims against a former employee who took patient health care information to support her False Claims Act case. United States ex rel. Notorfransesco v. Surgical Monitoring Assoc., 2014 U.S. Dist. LEXIS 172044 (E.D. Pa. 12/12/2014). What is particularly troubling about this case is that the defendant was allowed to proceed on a breach of an “implied fiduciary duty” theory. That would seem to apply to just about any employee working in the healthcare field. However, there is one aspect of Notorfransesco that distinguishes it from most other FCA cases: the relator there may have had other ideas in mind when she originally took the confidential information. The defendant alleged (and the judge had to accept for now) that initially she did so to pass the information along to competitors—not her whistleblower attorney or the government.
Also, bear in mind that just because the judge let the counterclaims go forward to the next phase of litigation does not mean the defendant will prevail on them. The judge himself expressed skepticism that the defendant will ever be able to prove damages. Still, no relator likes having even a meritless counterclaim hanging over his or her head. Unfortunately, the bringing of these counterclaims and the courts’ refusal to dismiss them summarily may become increasingly likely in non-intervened cases.
Practice point: careful thought and planning should go into any effort to obtain and use employer and customer or patient information when developing and filing False Claims Act cases. Quite often there is a better approach that can and should be chosen. One that can substantially minimize the risks of counterclaims like those filed in Notorfransesco.
