MEMORANDUM AND OPINION
In this qui tarn action, the relator, Elaine George,
Based on the pleadings; the motion, response, and reply; the record; and the applicable law, this court denies the defendants’ motion to dismiss the second amended complaint. A scheduling and status conference is set for April 16, 2012, in Courtroom 11-B, at 5:00 p.m.
1. Background
A. The Parties
Guidant Corporation, headquartered. in Indianapolis, designed, developed, and marketed cardiovascular medical products. The product at issue in this case is the FlexView Microwave Surgical Ablation System (“the FlexView device”). (Docket Entry No. 82, ¶ 6). Boston Scientific Corporation headquartered in Massachusetts, also designs, develops, and markets medical products. In April 2006, Boston Scientific acquired Guidant’s Cardiac Rhythm Management and Cardiac Surgery Units, which included the FlexView device. (Id., ¶¶ 5-6).
In June 2006, during the transition from Guidant to Boston Scientific, Guidant hired Elaine George as a sales representative. (Id., ¶ 4). George had over sixteen years of experience in the medical-device sales industry and had won awards for her sales work. (Id., ¶ 26). George was hired as a territory manager for the Cardiac Surgery Division’s' Midwest region. She worked in central Illinois and throughout Missouri until she was fired in September 2006. (Id., ¶ 4).
B. The FlexView Device
The FDA approves medical products for specific uses, which are identified in the product label. Using a product for other purposes is “off-label.” The FDA generally prohibits manufacturers from marketing products for off-label uses. The FDA does not restriсt hospitals from purchasing, or physicians from prescribing or using, products for off-label uses. To the contrary, off-label use of many medical devices and drugs is an accepted medical practice.
The FDA approved the FlexView device for use in abláting — removing or destroying — soft tissue and striated, cardiac, and smooth muscle in surgical procedures. According to George’s complaints, the defendants trained their sales staff to promote off-label use of the FlexView device to treat atrial fibrillation, a condition in which the heart’s atria beats irregularly fast.
C. The Allegations on Retaliation
In July 2006, shortly after she began working for Guidant, George attended Boston Scientific’s Initial Training School in Santa Clara, California. (Docket Entry No. 82, ¶¶ 7, 28). At this training (and before, it appears), “George received extensive instructions regarding her responsibility to train doctors to use [the FlexView device] off-label to treat atrial fibrillationf.]” (Id., ¶27). One day of training focused on regulatory restrictions on off-label promotion. George alleges that at a presentation for a number of employees,
Defendants’ compliance personnel discussed the dangers to the company associated with illegal off-label marketing. They described federal enforcement actions by the FDA and Department of Justice taken against competitors who had run afoul of the off-label marketing prohibition. They described how the government considered off-label marketing to be fraud and how other companiеs had incurred liability in the tens of millions of dollars as a result of their off-label marketing efforts. These presentations made it clear that off-label marketing was a type of fraud against the federal government that should be avoided at all costs.
(Id., ¶ 29). One of the presenters, Charlie Merchant, a Boston Scientific sales trainer, specifically talked about off-label marketing restrictions in a way that led George to believe that the FlexView device could not be legally promoted for use in atrial fibrillation. “During the presentation, Ms. George asked for clarification as to whether there was any use for which BSC’s surgical ablation products could be promoted legally.” (Id., ¶ 30). As soon as George asked her question, Merchant callеd for a ten-minute break to talk to George. Merchant “reprimanded” George and “warned that such questions could jeopardize her employment status.” (Id.) He told her to “stop asking questions regarding off-label marketing” of Boston Scientific’s surgical-ablation devices. (Id.)
In August 2006, George attended Boston Scientific’s national sales meeting in Beaver Creek, Colorado. At that meeting, Boston Scientific officially launched the FlexView device. A product manager announced that Boston Scientific “was close to obtaining FDA approval”' to use the FlexView device in treating atrial fibrillation. (Id., ¶ 31). The product manager stated that Boston Scientific “was in a ‘race’ against its competitors” to receive such approval. (Id.) Geоrge asked at that presentation whether promoting the Flex-View device “would be viewed by the government as an illegal and prohibited off-label promotional activity” before the FDA issued its approval. (Id., ¶ 31). At a break, George’s manager, Meg Zavich, followed her into the bathroom and
reprimanded Ms. George for challenging [Boston Scientificj’s marketing activities and for inquiring about prohibited off-label efforts. Ms. Zavich told her that if she harbored such concerns, she “might not be cut out for the job.” Ms. Zavich said she might have made a mistake in hiring Ms. George and suggested that Ms. George consider resigning her position.
(Id., ¶ 32).
George alleged that during the following weeks, Zavich continuously criticized her. These criticisms led George to complain to Zavich that she was being held to a different-standard and asked to perform different functions'than other new hires. (Id., ¶33). George complained to Zavich that the “disparate treatment resulted from her challenging the company’s off-label promotional activities.” (Id.). Zavich did not deny that she treated George differently than the other new employees or George’s accusation about the reason. “She told Ms. George that it was her prerogative to hold Ms. George to different and higher standards and give her whatever assignments she wanted.” (Id., ¶ 34). Zavich again suggested that George consider resigning. (Id.).
At the end of August 2006, before George had finished training, Zavich placed her on a Performance Improvement Plan for poor performance. George objected, without success, to the subjective nature of the plan’s goals. (Id., ¶ 35). Zavich also required George “to reply within 30 minutes to every phone call or page from any account or [Boston Scientific] employee” or face job termination. (Id., ¶ 36). During George’s remaining time at Boston Scientific, Zavich called her several times during the week, including twice in the middle of the night. (Id.).
George contacted Boston Scientific’s Human Resources Department for advice. Following the procedure set out in the Boston Scientific employee manual, George asked the Human Resources representative, “Camaya,” to help with her conflict
On September 25, 2006, George was told to resign or face termination. On the same day, Merchant (the sales trainer) told another group at a training session “about Ms. George’s termination, saying that it should serve as a lesson to keep your mouth shut and do your job.” (Id., ¶ 40). Boston Scientific sent George an email three days later telling her that she was fired. (Id.) According to George, Boston Scientific gave false reasons for firing her. One reason was that she had not completed a report on time. George alleges that a supervisor had directed her to wait until Zavich could review the report before submitting it. A second reason was that George had submitted a weekly report late. George alleges that Zavich gave her permission to do so. The third reason was “[a]n incident involving [her] efforts to return ‘trunk stock’ to Charlie Merchant.]” George alleges that her efforts did not deserve the criticism she received. (Id., ¶ 39). George alleges that after she was fired, Boston Scientific executives had her “blacklisted” from other companies affiliated with the medical-device and healthcare industries. (Id., ¶ 42). She also alleges that Zavich later retaliated against at least two other employees who questioned Boston Scientific’s off-label promotion of the FlexView device. (Id., ¶ 41).
George filed this qui tam lawsuit on November 9, 2006. (Docket Entry No. 1). George amended her complaint on March 27, 2007 to add retaliation claims in violation of the False Claims Act, 31 U.S.C. § 3730(h), and Illinois public policy. (Docket Entry No. 7). This court granted the defendants’ motion to dismiss that complaint, but granted George leave to amend. (Docket Entry No. 81). George filed a second amended complaint, asserting only the False Claims Act retaliation claim. (Docket Entry No. 82). The defendants again have moved to dismiss. (Docket Entry No. 87). The question is whether George’s second amended complaint, with its additional factual allegations, sufficiently pleads a retaliatiоn claim under the Act.
II. The Applicable Law
A complaint may be dismissed when the plaintiff fails “to state a claim upon which relief can be granted.” Fed. R. Crv. P. 12(b)(6). In Bell Atlantic Corp. v. Twombly,
III. The Statute of Limitations
The defendants first argue that George’s retaliation claim is time-barred. “[T]he most closely analogous state limitations period applies” to retaliation claims under the Act. Graham Cnty. Soil & Water Conservation Dist. v. United States ex rel. Wilson,
The defendants have not responded to George’s argument that the Texas choice-of-law rules preclude applying the Texas statute of limitations. But even accepting the defendants’ argument — that Texas limitations applies — George’s claim is timely. The Fifth Circuit recently held that the governing Texas statute of limitations for a False Claims Act retaliation claim is not the 90-day Texas Whistleblower Act limitations period, as the defendants argue, but rather the two-year statute of limitations for personal injuries. Riddle v. Dyncorp Int'l Inc.,
IV. Retaliation
Under the False Claims Act’s antiretaliation provision,
Any employee, contractor, or agent shall be entitled to all relief necessary to make that employee, contractor, or agent whole, if that employee, contractor, or agent is discharged, demoted, suspended, threatened, harassed, or in any other manner discriminated against in the terms and conditions of employment because of lawful acts done by the employee, contractor, agent or associated others in furtherance of an action under this section or othеr efforts to stop 1 or more violations of this sub-chapter.
31 U.S.C. § 3730(h)(1). The elements of an FCA retaliation claim are that: “(1) the employee engaged in activity protected un
A. Does the Second Amended Complaint Sufficiently Plead that George Engaged in Protected Activity?
The defendants assert that the second amended complaint fails to allege that George engaged in protected activity “because she did not complain about Defendants defrauding the government or making false claims for federal funds, nor did she inform management of her intent to file a qui tam action.” (Docket Entry No. 87, at 9). The defendants contend that “merely questioning the legality of marketing techniques does not qualify as a protected activity.” (Id., at 8). George disagrees. (See Docket Entry No. 90, at 10 (“BSC personnel knew precisely what ‘off-label marketing’ means and that it creates a distinct possibility for qui tam litigation.”)).
To engage in protected activity under the Act, an employee need not “have
The Fifth Circuit recognizes internal complaints that “concern false or fraudulent claims for payment submitted to the government” as protected activity under the Act, but requires that the complaints raise concerns about fraud. See Patton,
The Seventh Circuit’s decision in Fan-slow illustrates the type of internal complaint that was enough to defeat summary judgment. In that case, the plaintiff-em
Cases in other circuits are consistent. In Karvelas, the First Circuit defined protected aсtivity as “investigations, inquines, testimonies or other activities that concern the employer’s knowing submission of false or fraudulent claims for payment to the government.”
Under these cases, the focus is on whether the internal complaint “allege[s] fraud on the government.” McKenzie,
The second occasion occurred at another Boston Scientific products presentation. After a products manager explained that the FlexView device might soon receive FDA approval for use in treating atrial fibrillation, George asked — again in front of numerous employees — whether the company’s current marketing of the product to treat atrial fibrillation, without FDA approval for such treatment, “would be viewed by the government as an illegal and prohibited off-label activity.” (Docket Entry No. 82, ¶ 31).
Through these questions, Georgе did not directly say to Boston Scientific, “Your marketing of the FlexView device is fraudulent and unlawful.” When viewed in context, however, her questions “are sufficient to support a reasonable conclusion that [Boston Scientific] could have feared being reported to the government for fraud or sued in a qui tam action by [George]” or by other employees attending the presentations. Sanchez, 596 • F.3d at 1304. George did more than merely criticize the way in which Boston Scientific instructed its sales representatives to market the FlexView device. In this respect, the allegations in George’s amended complaint are distinguishable from the employee’s summary-judgment evidence in Patton. See 418 Fed-Appx.- at 372. George asked about the legality of Boston Scientific’s off-lаbel-marketing practices after she and others were told that the federal government viewed such practices as fraud against the government. George’s twice-repeated questions about the legality, of Boston Scientific’s off-label marketing practices raised a “distinct possibility” that she, or other employees attending the presentation, might bring False Claims Act litigation against Boston Scientific for those practices. George alleged that both times, she was immediately reprimanded for questioning the legality of Boston Scientific’s off-label marketing and warned that her job could be at risk. George has plausibly alleged that her actions were aimed at matters that reasonably could lead to False Claims Act litigation against Boston Scientific.
B. Does the Second Amended Complaint Sufficiently Plead that Boston Scientific Was On Notice that George Had Engaged in Protected Activity?
The employer must be on notice that the employee is investigating fraud. See id. (citing Robertson,
was engaged in protected activity — that is, investigatiоn or other activity concerning potentially false or fraudulent claims that reasonably could lead to a FCA case. Yesudian,153 F.3d at 742-43 (noting that “requiring a plaintiff to advise his employer that he has filed or is contemplating filing a qui tam complaint would contravene the qui tam section of the Act itself’ and “frustrate ... congressional concernís]”). To require an express or even an implied threat of a qui tam action would impose an unrealistic requirement on employees — insisting that employees inform their employers of their intention to sue them on behalf of a “defrauded government” would eviscerate the FCA’s incentives to investigate fraudulent activities. Mikes [v. Strauss], 889 F.Supp. [746], at 753 [ (S.D.N.Y.1995) ].
Id.
Courts have found this notice prong satisfied based on allegations that the employеe complained directly to her supervisors. See Harrington,
In arguing that Boston Scientific lacked notice that George was engaged in protected activity, the defendants focus on the fact that George has not alleged who made the decision to fire her or whether that person knew about the questions George asked at the sales meetings. {See Docket Entry No. 87, at 10-11). But George did allege that Zavich — her manager and supervisor — did know about at least one of the occasions in which she questioned off-label marketing in a large sales meeting. George alleged that Zavich was present at the second sales meeting and heard George ask about the legality of off-label marketing. George alleged that at a break, shortly after she had asked her question, Zavich followed her into the restroom, reprimanded her for challenging Boston Scientific’s marketing activities, and suggested that if George had such concerns, Zavich might have made a mistake hiring her and that she should consider resigning. {Id., ¶ 32). George alleged that in the following weeks, Zavich held her to higher standards than other similarly situated employees; criticized her unfairly; put her on a Performance Improvement Plan; harassed her with late-night and frequent calls; unnecessarily required her to return any call or page within 30 minutes, regardless of the hour; and suggested that she resign. {Id., ¶¶ 32-36).
“To clear the low bar required to establish a prima facie case, the fact that high-
C. Does the Second Amended Complaint Sufficiently Plead that Boston Scientific Retaliated against George for Engaging in Protected Activity?
The last element required to prove a False Claims Act retaliation claim is that the employer’s “retaliation was motivated by the protected activity.” Shekoyan v. Sibley Int'l,
The core of the defendants’ argument is that George has not adequately alleged causation because Boston Scientific lacked notice that George had engaged in protected activity. {See Docket Entry No. 87, at 10-11); see also United States ex rel. Sikkenga v. Regence Bluecross Blueshield of Utah,
The defendants cite Strong v. University Healthcare System, L.L.C.,
The allegations in the challenged second amended pleading are that George first asked about the legality of the off-label marketing in July 2006, asked again in August, was immediately reprimanded on both occasions, and after the second occasion was advised to consider resigning аnd then subjected to retaliatory harassment and performance demands, culminating in her September firing. George has alleged additional evidence of causation besides temporal proximity. Among other things, George alleged that:
• both Merchant (the Boston Scientific sales trainer) and Zavich (George’s manager) verbally reprimanded her immediately following each of her inquiries, (Docket Entry No. 82, ¶¶ 30, 32);
• after the first inquiry, Merchant told her to stop inquiring into the legality of Boston Scientific’s off-label-marketing activities or risk losing her job, {id., ¶ 30);
• after the second inquiry, Zavich told her that she should consider resigning, {id., ¶ 32);
• Zavich admittedly held her to “different and higher standards” than other new sales representatives, {id., ¶¶ 33-34);
• Zavich placed her on a Performance Imprоvement Plan, although her training remained incomplete, to ensure that her performance would be judged subjectively rather than objectively, {id., ¶ 35);
• Zavich harassed her through repeated phone calls, including calls in the middle of the night, {id., ¶ 36);
• a human-resources representative instructed her not to discuss her allegations with anyone, whether inside or outside Boston Scientific, or risk termination; and told her that she should consider resigning, {id., ¶ 37);
• according to other employees, Boston Scientific was using her as “an example for the rest of the company,” {id., ¶ 38); and
• she was the victim of “distorted” and “trump[ed] up charges” used as a pretext for termination, {id., ¶ 39).
“The Fifth Circuit has held that ‘the combination of suspicious timing with other significant evidence of pretext[] can bе sufficient to survive summary judgment’ ” on a retaliation claim. Dyson,
V. Conclusion
The defendants’ motion to dismiss the second amended complaint alleging retaliatory discharge under the False Claims Act, (Docket Entry No. 87), is denied. A scheduling and status conference is set for April 16, 2012, in Courtroom 11-B, at 5:00 p.m.
Notes
. This suit began before the relator married; her name then was Elaine Bennett.
. The factual allegations, which, if nonconclusory, this court must take as true for purpose of the motion to dismiss, come from George’s second amended complaint. See Randall D. Wolcott, M.D., PA. v. Sebelius,
. See generally, e.g., Ralph F. Hall & Robert J. Berlin, Whеn You Have a Hammer Everything Looks Like a Nail: Misapplication of the False Claims Act to Off-Label Promotion, 61 FOOD & DRUG L.J. 653, 655-56 (2006).
. George asks this court to take judicial notice of "the then-existing legal climate” in which companies in the pharmaceutical and medical-device industries were under federal investigation for possible False Claims Act violations for their off-label-marketing techniques. (Docket Entry No. 90, at 12). The defendants respond that this court should not take judicial notice because "a reasonable dispute exists as to whether an allegation regarding off-label marketing is widely known to cause FCA liability!.]” (Docket Entry No. 91, at 6). This court need not take judicial notice of the widespread knowledge about off-label marketing giving rise to gоvernment investigation and potential False Claims Act liability because George made nonconclusory allegations in her second amended complaint that Boston Scientific was aware of such a risk and told its employees about it. (Docket Entry No. 82, ¶ 29). George alleged that Boston Scientific had told her and other trainees about
federal enforcement actions by the FDA and Department of Justice taken against competitors who had run afoul of the off-label marketing prohibition .... [and] how the government considered off-label marketing to be fraud and how other companies had incurred liability in the tens of millions of dollars as a result of their off-label marketing efforts.
(Docket Entry No. 82, ¶ 29).
Moreover, George's argument is not that "off-label marketing ... automatically implicate^] FCA liability,” as the defendants describe it. (Docket Entry No. 91, at 5). Instead, George argues that it was widely known that the federal government was investigating pharmaceutical and medical-device companies for possible False Claims Act violations based on off-label-marketing activities. Again, the court need not rely on judicial notice, see Funk v. Stryker Corp.,
. As the Fifth Circuit explained in Strong:
In addition, Strong has grossly mischaracterized our holding in Shirley. The plaintiff in Shirley proved causation not by relying solely on temporal proximity, but by also showing that she had no disciplinary history during her nine years of employment and quickly was fired for incidents for which no evidence existed. See Shirley v. Chrysler First, Inc.], 970 F.2d [39] at 43 [(1992)].
And, importantly, her boss made disparaging comments about her EEOC complaint and “harassed [her] to death about it” before firing her.
Id.