Whistleblower’s Claim Survives Dismissal and Death

The Energizer Bunny has nothing on the whistleblower claim of Robert Cunningham.  Here’s what’s happened since Robert files his qui tam action against Millennium Labs back in 2009: the government declined to intervene; seven more whistleblowers filed related actions against Millennium; the government intervened in three of the new suits; his own suit was dismissed not once but twice; and on top of all that, he died.

Nevertheless, according to a decision on August 19, Robert’s claim—now pursued by his estate—to a chunk of the $34 million relators’ share of Millennium’s $256 million settlement payment lives on.

The case was before the Massachusetts federal district court because one of the other relators, Mark McGuire, filed a cross-claim against the other relators seeking declaratory judgment that he is entitled to the whole $34 million rather than merely a share of it.  Four relators, including Robert’s estate, moved to dismiss Mark’s cross-claim.

The court denied the motions based on Fed. Rule 12(b)(6), failure to state a claim, but granted the motions based on 12(b)(1), lack of jurisdiction.  The court ruled that Mark’s cross-claim was barred by the False Claims Act’s first-to-file rule, which bars all others from bringing the same action or any related action—including Mark’s cross-claim–after the first filer has notified the government of a fraud.  And the bar deprives courts of jurisdiction to entertain such later actions.

Mark argued that the rule didn’t apply because Robert’s case was ultimately dismissed.  The court disagreed, noting that (a) Robert’s case was still pending when Mark filed, and (b) the dismissal is currently under appeal.

So Robert’s claim to part of the $34 million relators’ award survives this round.

The case is U.S. v. Millennium Labs, No. 09-12209-NMG (D. Mass. Aug. 19, 2016).

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