Mike Townsend v. Bayer HealthCare
774 F.3d 446
8th Cir.2014Background
- Townsend, a Bayer pharmaceutical sales rep, reported physician Dr. Kelly Shrum to Arkansas authorities after learning Shrum imported non‑FDA Mirena and billed Medicaid at FDA‑approved prices; the report led to an investigation, a search warrant, charges, and conviction.
- Townsend told Bayer supervisors he had reported Shrum; Bayer had an internal culture to report physician misconduct to the company, not authorities.
- Bayer terminated Townsend in May 2010, citing a deactivated company credit card; the card had been reactivated at Bayer’s request over a month before termination.
- Townsend sued under the False Claims Act (FCA) anti‑retaliation provision, 31 U.S.C. § 3730(h), claiming he was fired for reporting and cooperating with the government.
- A jury awarded doubled back pay and $568,000 emotional‑distress damages; the district court ordered reinstatement and awarded fees; Bayer appealed on timeliness, sufficiency of evidence, evidentiary rulings, reinstatement, and damages.
Issues
| Issue | Plaintiff's Argument (Townsend) | Defendant's Argument (Bayer) | Held |
|---|---|---|---|
| Timeliness: Is Townsend’s FCA retaliation suit time‑barred by Arkansas’ 180‑day public‑employee whistleblower statute? | §3730(h) has no short 180‑day bar for private employees; suit is timely under longer state analogs or the later 3‑year amendment. | Arkansas’ 180‑day whistleblower period is the most analogous and bars the suit filed >180 days after termination. | Court: 180‑day public‑employee statute is not analogous for a private‑sector FCA plaintiff; suit was timely under other Arkansas statutes. Affirmed. |
| Sufficiency of evidence: Did Townsend prove protected activity, knowledge by decision‑makers, and causation? | He engaged in protected FCA activity (reporting and cooperating); decision‑makers knew of the investigation; Bayer’s stated reason was pretextual amid a "culture of silence." | Report was stale; decision‑makers lacked knowledge; no causal link. | Court: Evidence (culture of silence, contemporaneous admissions, pretext) permitted reasonable jurors to find protected activity, knowledge, and causation. JAML denied. |
| Scope of §3730(h): Must whistleblower show employer was involved in fraud or acting in concert with fraudster to state a retaliation claim? | FCA protects employees who lawfully act to stop violations by any actor; no requirement that employer be the fraudster or co‑conspirator. | Retaliation protection should be limited to whistleblowing about employer’s own fraud. | Court: §3730(h) protects employees reporting or assisting to stop violations generally; employer need not be the fraudster or act in concert. |
| Evidentiary and remedial issues: Were comparator and privilege rulings and reinstatement/damages decisions erroneous? | Comparators (Amber Jordan) admissible; privilege instruction unnecessary; reinstatement appropriate; emotional‑distress award supported. | District court erred excluding Amy Kern comparator, should have instructed no adverse inference from privilege, reinstatement improper because position would be eliminated, emotional‑distress award excessive. | Court: Admission of Jordan evidence proper; excluding Kern not reversible because she wasn’t a valid comparator; no prejudicial error from refusal to give a privilege‑inference instruction; reinstatement was permissible; emotional‑distress award was excessive—remit to $300,000 or grant new trial on that issue. |
Key Cases Cited
- Diesel Mach., Inc. v. B.R. Lee Indus., Inc., 418 F.3d 820 (8th Cir. 2005) (standard for reviewing sufficiency of evidence/JAML)
- Graham Cnty. Soil & Water Conservation Dist. v. United States ex rel. Wilson, 545 U.S. 409 (U.S. 2005) (use state limitations period analogous to FCA retaliation claims)
- Riddle v. Dyncorp Int'l Inc., 666 F.3d 940 (5th Cir. 2012) (declining to borrow public‑employee statute for FCA retaliation claim)
- Wilkins v. St. Louis Hous. Auth., 314 F.3d 927 (8th Cir. 2002) (elements of an FCA retaliation claim)
- United States ex rel. Schweizer v. Océ N.V., 677 F.3d 1228 (D.C. Cir. 2012) (FCA retaliation protects assistance in investigation/prosecution)
- Reeves v. Sanderson Plumbing Prods., Inc., 530 U.S. 133 (U.S. 2000) (pretext inference from falsity of employer’s explanation)
- McKennon v. Nashville Banner Publ'g Co., 513 U.S. 352 (U.S. 1995) (limitations on equitable remedies when employer would have terminated for legitimate reasons)
- Bennett v. Riceland Foods, Inc., 721 F.3d 546 (8th Cir. 2013) (emotional‑distress award affirmance; guidance on amounts)