United States District Court, D. Massachusetts
UNITED STATES OF AMERICA and THE STATE OF CALIFORNIA, ex rel. KIMBERLY HERMAN, et al.
COLOPLAST CORP., et al.
MEMORANDUM OF DECISION
ZOBEL, SENIOR UNITED STATES DISTRICT JUDGE.
Coloplast Corp. moves for summary judgment on
plaintiff-relator Amy Lestage's claim that Coloplast
violated the anti-retaliation provision of the False Claims
Act (“FCA”), 31 U.S.C. § 3730(h).
summarize the facts in the light most favorable to the
non-moving party. See Planadeball v. Wyndham Vacation
Resorts, Inc., 793 F.3d 169, 172 (1st Cir. 2015).
2011, Lestage became a Key Account Manager
(“KAM”) at Coloplast. KAMs sell medical product
devices to distributors and dealers and manage those
contractual relationships. They are paid commissions based on
the percentage of growth of each account in their portfolio,
and these “[c]ommissions are a key component of a
KAM's compensation package, [and] in some cases amount to
half (or more) of a KAM's annual compensation.”
Docket # 285 ¶ 52. “If a KAM hits 100% of the
quota for his or her portfolio, he or she will earn the
‘target incentive' in commissions for that fiscal
year ....” Docket # 282 ¶ 9. If a KAM exceeds 100%
of the quota, she will receive a larger percentage of the
target incentive. Lestage exceeded 100% of the quota in both
FY 12/13 and FY 13/14, mainly due to her principal account,
Byram Healthcare, Inc., one of the named defendants in the
underlying qui tam action.
August 2014, the docket in this case was unsealed and on
November 20, 2014, the Amended Complaint publicly filed. At
that time plaintiff's identity as a relator was revealed.
In the Amended Complaint, relators alleged that defendants,
including Coloplast and Byram, engaged in an illegal kickback
scheme regarding the sale of ostomy and/or continence care
products reimbursed by Medicare and Medicaid, and defrauded
the federal government.
December 18, 2014, Byram's CEO sent a letter to Edmond
Veome, Coloplast's president, requesting that Coloplast
“provide Byram Healthcare with a different account
representative” and stating that it “no longer
wish[ed] to work with Amy Lestage regarding [their] business
together.” Docket # 274-10 at 2. Byram directed
Coloplast to its legal counsel regarding any questions it may
have on the matter.
December 23, 2014, Coloplast informed Lestage by letter that
it was placing her “on an indefinite, paid
administrative leave . . . while [it] investigated
[Byram's demand to remove her from its account].”
Docket # 283-10 at 2. The parties dispute whether Coloplast
knew at that point that Lestage was a relator in the qui
tam action. They also disagree whether to characterize
this event as a “suspension” or a “paid
administrative leave.” Whether termed a
“suspension” or “paid administrative leave,
” it is undisputed that plaintiff was required to
“immediately cease performing any services on behalf of
Coloplast.” Docket # 283-10 at 2.
told plaintiff that “while on leave, [her] salary will
be paid on the regular, biweekly process and [her] commission
will be paid out according to the monthly process. For any
month where [she is] on paid administrative leave, Coloplast
will guarantee a minimum commission payment of 100% of the
eligible [target incentive] for that month ($6, 666.67).
[She] also remain[s] fully eligible for any benefits [she
had] enrolled in.” Docket # 283-11 at 2. Indeed,
“[f]or FY14/15 and FY15/16, Coloplast paid Plaintiff
$80, 000 in commission while on leave whereas the average KAM
commission was less than $68, 000 during this same
period.” Docket # 282 ¶ 43. She also continued to
use the company-issued vehicle and fuel card, accrue paid
time off, receive contributions to her 401(k), maintain
health, disability, and life insurance benefits, and she
received a raise. She was, however, prohibited from
“performing any services on behalf of Coloplast”
or “hav[ing] any contact with Coloplast customers or
employees relating to [her] accounts . . . or any Coloplast
business.” Docket # 283-11 at 2. On May 6, 2015,
relators moved to file a Second Amended Complaint, in part to
add Lestage's retaliation claim against Coloplast.
Coloplast allowed Lestage to return to work on January 25,
2016, she had delivered a baby in November 2015 and elected
to take twelve weeks of maternity leave under the Family
Medical Leave Act (“FMLA”) beginning in January
2016. On April 12, 2016, following the end of her FMLA leave,
she resumed working and was allowed to accrue immediately
four days of paid time off to take a vacation.
to her leave, plaintiff's portfolio of accounts included
Byram, ABC Home Medical, Home Care Delivered, Buffalo
Hospital Supply, Inc., and Claflin Medical Equipment Co. Upon
her return in April 2016, she was taken off the Byram and ABC
accounts. She did maintain the Home Care Delivered, Buffalo
Hospital Supply, and Claflin accounts, and was also assigned
four new accounts: AmeriSource Bergen, Blackburns
Physician's Pharmacy, Concordance Healthcare Solutions,
and Geriatric Medical. The parties dispute the growth
potential of these four new accounts. It is undisputed,
however, that plaintiff, through her counsel, wrote to
Coloplast on December 28, 2015 that “given her status
as a relator against her key accounts, it would be impossible
for Ms. Lestage to return to an account position where she
would be handling clients, like Byram and Liberator, that she
had handled prior to the qui tam action.” Docket # 282
20, 2016, Coloplast answered the Amended Complaint and
asserted counterclaims against Lestage for breach of contract
and breach of duty of loyalty. The counterclaims allege that,
between 2010 and 2013, Lestage sent eleven emails outside the
company; that the emails contained confidential Coloplast
information; that her “Employment Agreement prohibited
Lestage from disclosing confidential information other than
for the sole purpose of performing her employment
duties” and required her to “take all reasonable
precautions to prevent the inadvertent disclosure” of
confidential information; and that, “on information and
belief, Lestage has shared the information forwarded to
non-Coloplast email addresses with individuals outside of
Coloplast.” Docket # 144 at 56. Coloplast says it
discovered the alleged violations inadvertently while
conducting “its investigation and responding to
inquiries from the government in this lawsuit.” Docket
# 284 at 5.
judgment is appropriate when “there is no genuine issue
as to any material fact” and “the moving party is
entitled to judgment as a matter of law.” Fed.R.Civ.P.
56(c). “An issue is ‘genuine' for purposes of
summary judgment if the evidence is such that a reasonable
jury could return a verdict for the nonmoving party, and a
‘material fact' is one which might affect the
outcome of the suit under the governing law.”
Poulis-Minott v. Smith, 388 F.3d 354, 363 (1st Cir.
2004) (citations and internal quotations omitted). In
considering whether a genuine issue of material fact exists,
the court “must view the evidence in the light most
favorable to the opposing party.” Tolan v.
Cotton, 134 S.Ct. 1861, 1866 (2014). “In order to
defeat a motion for summary judgment, the nonmovant may not
rest upon some combination of conclusory allegations,
improbable inferences, and unsupported speculation, but must
instead present definite, competent evidence to rebut the
motion.” Advanced Flexible Circuits, Inc. v. GE
Sensing & Inspection Techs. GmbH, 781 F.3d 510, 516
(1st Cir. 2015).