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Leysock v. Forest Laboratories, Inc.

United States District Court, D. Massachusetts

April 28, 2017

TIMOTHY LEYSOCK, Relator,
v.
FOREST LABORATORIES, INC., and FOREST PHARMACEUTICALS, INC., Defendants.

          MEMORANDUM AND ORDER ON DEFENDANTS' MOTION TO DISMISS

          F. DENNIS SAYLOR IV UNITED STATES DISTRICT JUDGE

         This is a claim of attorney misconduct, arising in a qui tam action alleging the submission of false claims to Medicare. The alleged false claims involve the off-label use of a pharmaceutical called Namenda, which is approved by the FDA for treatment of moderate to severe Alzheimer's disease. Relator Timothy Leysock alleges that defendants Forest Laboratories, Inc., and Forest Pharmaceuticals, Inc., illegally promoted the off-label use of Namenda to treat mild forms of the disease, and that false claims were submitted to Medicare as a result.

         The present dispute arises out of the conduct of counsel for relator, the Milberg law firm, in investigating the case. As set forth below, Milberg attorneys engaged in an elaborate scheme of deceptive conduct in order to obtain information from physicians about their prescribing practices, and in some instances about their patients. In essence, Milberg retained a physician and medical researcher, Dr. Mark Godec, to conduct a survey of physicians concerning their prescription of Namenda to Medicare patients. In order to obtain the cooperation of the physicians, Dr. Godec falsely represented that he was conducting a medical research study. Dr. Godec, at Milberg's direction, conducted two internet-based surveys as well as follow-up telephone interviews. Among other things, the physicians were induced to provide patient medical charts and other confidential medical information to Dr. Godec. Information derived from those surveys was then set out in the Second Amended Complaint in this action, and was relied on by the Court in denying defendant's motion to dismiss in 2014.

         Defendants have now moved to dismiss the Second Amended Complaint as a sanction for alleged violations of attorney ethical rules. For the reasons stated below, that motion will be granted.

         I. Background

         A. Procedural Background

         1. The Parties

         Forest Laboratories, Inc., and its wholly owned subsidiary, Forest Pharmaceuticals, Inc., are pharmaceutical companies. (2d Am. Compl. ¶¶ 15, 16). (The two companies will be referred to as a single entity for the sake of convenience.) Forest produces and sells a drug called Namenda, which has been approved by the Food and Drug Administration (“FDA”) to treat moderate to severe Alzheimer's disease. (Id. ¶ 1).

         Timothy Leysock is a resident of Florida. (Id. ¶ 14). From August 1996 until May 2012, he was employed by Forest as a sales representative. (Id.). His sales territory covered the counties of Palm Beach, Indian River, Martin, St. Lucie, and Okeechobee in Florida. (Id.).

         2. The Complaints

         Leysock, as relator, filed the original complaint in this action under seal on July 24, 2012. That complaint alleged that Forest was promoting the off-label use of two drugs-Savella and Bystolic-and paying physicians kickbacks for prescribing those drugs, all in violation of the False Claims Act, 31 U.S.C. § 3729 et seq. (Compl. ¶ 1-4, 12, 61). On October 2, 2012, Leysock amended the complaint to include more specific factual allegations concerning Forest's off-label promotion practices, and to add a reference to Namenda. (1st Am. Compl. ¶¶ 75-78).

         On April 16, 2014, the United States declined to intervene. On April 30, 2014, the Court unsealed the case. The same day, Leysock filed a Second Amended Complaint. The Second Amended Complaint focused only on the off-label promotion of Namenda; it did not allege wrongdoing as to Savella or Bystolic. In addition to factual allegations concerning improper off-label promotion by Forest, it also alleged certain specific instances of physicians prescribing Namenda for off-label use to Medicare patients. (2d Am. Compl. ¶¶ 86-202).

         In particular, the Second Amended Complaint detailed the practices of eight physicians who, allegedly, regularly prescribe Namenda for mild Alzheimer's disease in reliance on the off-label promotion by representatives of Forest. (Id. ¶¶ 89-156). Those eight physicians were identified by name and address. (Id.). The complaint also identified eight patients, one for each physician; although it did not identify the patients by name, it included detailed patient information, such as age, height, weight, dates of visits, diagnosis, treatment plan, and prescriptions. (Id.). It then identified 24 additional physicians, including their names and addresses, and what purported to be information about their Namenda prescribing practices. (Id. ¶¶ 157-202). Finally, it referred to “a nationwide survey” of physicians in which “approximately 60% stated they wrote off-label prescriptions of Namenda and did so in reliance on Forest's off-label promotion of the drug.” (Id. ¶¶ 203-04).

         3. Defendants' Motion to Dismiss

         On June 20, 2014, Forest moved to dismiss the Second Amended Complaint for failure to state a claim upon which relief can be granted. That motion was granted as to relator's conspiracy claim, but otherwise denied. In denying the motion as to the substantive FCA claims, the Court specifically relied on the complaint's detailed allegations concerning the practices of the eight physicians identified who prescribed Namenda for off-label use. See United States ex rel. Leysock v. Forest Lab., Inc., 55 F.Supp.3d 210, 218-19 (D. Mass. 2014). Among other things, the Court held that those detailed allegations were sufficient to satisfy the heightened pleading requirements of Fed.R.Civ.P. 9(b). Id. at 219.

         4. Defendants' Motion to Compel

         On February 8, 2016, Forest moved to compel the disclosure of information and documents underlying those factual allegations. Forest had learned that those allegations were all derived from a survey conducted by Dr. Mark Godec, who had apparently been retained by relator's counsel as an investigator. (Def. Mem. in Supp. of Mot. to Compel at 6). Relator had, apparently, not mentioned Dr. Godec in his initial disclosures. He had also refused to provide discovery related to Dr. Godec's study on the ground that it was protected by the attorney work-product doctrine. (Id. at 6-7). Forest requested leave to seek third-party discovery from Dr. Godec, and moved to compel the production of all information and documents underlying the factual allegations in the Second Amended Complaint. (Id. at 2).

         In opposing that motion, relator continued to contend that the factual investigation underpinning the Second Amended Complaint was protected by the attorney work-product doctrine. Among other things, he stated that Dr. Godec

was retained to assist counsel's investigation in anticipation of the filing of the SAC. . . . Dr. Godec, at Relator's counsel's direction and under Relator's counsel's supervision, conducted interviews of some physicians to whom Defendants had marketed Namenda. During those interviews, Dr. Godec asked questions prepared by, and under the supervision of, Relator's counsel. Dr. Godec took notes based on the interviews and disclosed the contents of the interviews to Relator's counsel.

(Pl. Mem. in Opp. to Mot. to Compel at 3-4).

         At the hearing on the motion to compel, relator agreed to produce the information and documents relating to Dr. Godec's research, and Dr. Godec was ultimately deposed.

         5. Defendants' Second Motion to Dismiss

         On October 7, 2016, Forest moved to dismiss the Second Amended Complaint as a sanction for unethical conduct of counsel, based on the information provided by relator and the deposition of Dr. Godec.[1]

         B. Factual Background

         Dr. Mark Godec is a physician licensed in Maryland and Virginia. (Godec Dep. at 317). He is also a former researcher at the National Institutes of Health. (Id. at 312).

         In September 2013, the Milberg law firm retained Dr. Godec to investigate Forest's off-label marketing and sales of Namenda. (Id. at 16). The investigation was conducted under the direction of attorneys at Milberg. (Id. at 44). The attorneys at Milberg, not Dr. Godec, developed the objectives for the investigation. (Id. at 42-43, 81-82).[2] During the investigation, Dr. Godec spoke to attorneys at Milberg on a daily basis. (Id. at 36).

         Dr. Godec enlisted a company called Charter Oak Field Services to assist him in the investigation. (Id. at 66). Charter Oak is a marketing research and consulting agency that conducts and facilitates market research in the healthcare industry. (Id.; Hancock Decl. ¶ 1). Among other things, Charter Oak has a proprietary database of physicians, which was a necessary and important component of the survey. (Hancock Decl. ¶ 1; see Godec Dep. at 66-67, 87).

         Dr. Godec told Charter Oak that “we were interested in conducting a survey of physicians nationwide regarding Namenda.” (Godec Dep. at 71). When speaking to representatives of Charter Oak, he referred to the work as a “study” or as “research.” (Id. at 82, 83). He did not disclose to Charter Oak that he had been retained by a law firm. (Hancock Decl. ¶ 3; Godec Dep. at 71-72).[3] He did not disclose that the information he intended to collect was to be used in a lawsuit, rather than for medical research purposes. (Hancock Decl. ¶ 3).

         Charter Oak helped create online surveys, solicit physician participation in those surveys, collect the survey results, and schedule follow-up telephone interviews with physicians. (Hancock Decl. ¶ 2; Godec Dep. at 66-67). Attorneys at Milberg, however, designed the surveys and prepared the first drafts. (Godec Dep. at 94-95). Although attorneys were intimately involved in designing the survey, no attorney ever communicated directly with anyone at Charter Oak. (Id. at 72-73, 81-82).

         Charter Oak believed that Dr. Godec was conducting surveys to support his own clinical practice or medical research. (Hancock Decl. ¶ 3). It would not have agreed to facilitate the surveys had it known that the results would not be kept anonymous and aggregated, or would not be used for research purposes. (Id. ¶ 5). Likewise, it would not have done so if it had known Dr. Godec had been retained by a law firm and that the information he collected was to be used in a lawsuit. (Id. ¶ 6).

         Charter Oak sent invitations to physicians soliciting their participation in the online surveys. (Godec Dep. at 96; Hancock Decl. ¶ 4). The invitations stated that the survey was a “market research dementia study” and asked physicians to complete “a brief survey regarding Dementia and your treatment practices.” (Def. Ex. 13, 14; Hancock Decl. ¶ 4). The invitation stated: “As always, we value your privacy. All responses will be anonymous and aggregated. The data collected will only be used for research purposes.” (Def. Exs. 13, 14).[4] Dr. Godec approved the invitation before it was sent out. (Hancock Decl. ¶ 4).

         At Milberg's direction, Dr. Godec conducted the first online survey in October and November 2013. (Godec Dep. at 33). Milberg attorneys decided how the survey was going to be conducted and helped draft the survey questions. (Id. at 94-95, 173).

         The first survey asked physicians generally about their off-label use of Namenda, as well Forest's promotion of such uses. (Id. at 173). Every physician who completed the survey and agreed to participate was paid an “honorarium” of $35. (Id. at 113-14).

         Dr. Godec provided the results of the online surveys to attorneys at Milberg. (Id. at 45-46). He followed up with telephone interviews of the 40 physicians who completed the first survey and who indicated a willingness to be interviewed. (Id. at 105-06, 118-21, 285-86). He worked from a script that he had prepared and that had been approved by attorneys at Milberg. (Id. at 97-98, 124-25; Def. Ex. 15). Charter Oak contacted the physicians to set up the interviews. (Godec Dep. at 99-100). In the interviews, Dr. Godec referred to the survey as a “Charter Oak” survey. (Id. at 102-03, 122).

         During the telephone interviews, Dr. Godec told the physicians that “we are studying drugs to treat patients with dementia.” (Id. at 138-39).[5] Among other things, he asked the physicians whether they had used Namenda to treat patients with mild Alzheimer's disease, and, if so, whether they relied on information received from Forest, or one of its representatives, when they did so. (Id. at 141, 145; Def. Ex. 15). Dr. Godec also asked about the “marketing channel(s)” by which the physicians received information about Namenda from Forest, as well as the particular communications about Namenda they had received from Forest. (Godec Dep. at 205; Def. Ex. 15).

         Dr. Godec provided the results of those interviews, which were in the form of handwritten notes, to attorneys at Milberg. (Godec Dep. at 45-46).

         Physicians who provided “appropriate answers” to the interview questions were then invited to participate in a patient “chart review.” (Id. at 221-23, 240).[6] Specifically, Dr. Godec solicited the charts of patients with mild Alzheimer's disease who had been treated with Namenda. (Id. at 224). Among other things, the written solicitation stated that “[f]or this study, we need a chart from a Medicare patient . . . .” (Def. Ex. 17).

         Dr. Godec told the physicians that “patient information needed to be removed from the chart, ” or that “[e]ach chart must be prepared to protect the patient's identity (name, Social Security number, identifying information removed).” (Godec Dep. at 224, 242, 247). However, at least some physicians were explicitly told that it was “OK to leave date of birth” on the charts. (Def. Ex. 17, 18, 19). Physicians who agreed to provide patient charts were paid a $250 “honorarium” for the first chart and a $150 “honorarium” for a second chart, if a second chart were requested. (Godec Dep. at 224, 240).

         The patient charts were sent directly to Dr. Godec, who then reviewed them. (Godec Dep. at 65, 267). He then passed them on to attorneys at Milberg. (Id. at 45, 65-66, 267).[7] On occasion, he would ask ...


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