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United States v. Coloplast Corp.

United States District Court, D. Massachusetts

September 13, 2019

THE UNITED STATES OF AMERICA, and THE STATE OF CALIFORNIA, ex rel. KIMBERLY HERMAN, AMY LESTAGE and KEVIN ROSEFF
v.
COLOPLAST CORP., et al.

          ORDER

          DATE RYA W. ZOBEL SENIOR UNITED STATES DISTRICT JUDGE

         After a five-day trial, a jury returned a verdict for plaintiff Amy Lestage, finding that defendant Coloplast Corp. retaliated against her for reporting company conduct that allegedly violated the False Claims Act (“FCA”). It awarded damages in the amount of $762, 525 as compensation for (1) Coloplast's decision to place Lestage on paid administrative leave, and (2) the manner in which Coloplast reassigned accounts to Lestage when she returned to work. Coloplast has renewed its motion for judgment as a matter of law (Docket # 459) and moves alternatively for a new trial (Docket # 462). Both motions are denied.

         I. Background[1]

         Coloplast develops, manufactures, and markets medical devices and services related to medical conditions and surgeries like incontinence and ostomy. It sells its products to distributors and dealers, and to this end employs Key Account Managers (“KAMs”) to maximize sales to, and manage the relationship with, its most profitable customers. It compensates each KAM with a base salary as well as commission based on the growth of their account portfolio. Plaintiff began working for Coloplast as a sales and services representative in 2004 and was promoted to KAM in 2011.

         In December 2011, Lestage and two former Coloplast employees filed a False Claims Act qui tam lawsuit against Coloplast and several other entities including Byram Healthcare, one of its largest distributors. The qui tam action alleged that Coloplast, Byram, and others had engaged in an illegal kickback scheme to inflate their Medicare and Medicaid reimbursement amounts and thereby defraud the federal government. As required in qui tam cases, the complaint was initially filed under seal. An unsealed amended complaint filed on November 20, 2014, for the first time publicly identified Lestage as a relator.

         At this time, in November 2014, plaintiff's accounts at Coloplast included Byram, ABC Home Medical, Home Care Delivered, Buffalo Hospital Supply, Inc., and Claflin Medical Equipment Co. On December 19, 2014, Perry Bernocchi, the CEO of Byram, notified Coloplast that it no longer wanted to work with Lestage and asked for a different KAM to be assigned. Around this time, Coloplast also learned of Lestage's role in the qui tam case. On December 23, 2014, it placed plaintiff on an indefinite, fully-paid, administrative leave. In December 2015, Coloplast and the federal government settled the qui tam action. On January 15, 2016, Coloplast asked plaintiff to return to work. Having delivered her third child less than two months earlier, plaintiff elected to take twelve weeks of leave under the Family and Medical Leave Act (“FMLA”) before returning to work on April 12, 2016. At that point she was assigned three of her old accounts-Claflin, Home Care Delivered and Buffalo-plus four new ones-Geriatric, AmeriSource Bergen, Blackburns, and Concordance. Neither Byram nor ABC were returned to her.

         On June 1, 2015, Lestage filed the instant FCA retaliation claim against Coloplast. She alleges the company took adverse action against her because of her role as a qui tam relator by (1) placing her on paid administrative leave for 388 days, and (2) assigning her a portfolio of low-growth accounts upon her return. In February 2018, this court denied Coloplast's motion for summary judgment and in April 2019 the dispute was tried to a jury. Before resting its case Coloplast moved for judgment as a matter of law, on which the court reserved. The jury returned a special verdict in favor of plaintiff and awarded $762, 525 in compensatory damages. Coloplast subsequently renewed its motion for judgment as a matter of law, and, in the alternative, filed a motion for new trial.

         II. Standard

         “The standard for granting a Rule 50 motion is stringent. ‘Courts may only grant a judgment contravening a jury's determination when the evidence points so strongly and overwhelmingly in favor of the moving party that no reasonable jury could have returned a verdict adverse to that party.'” Malone v. Lockheed Martin Corp., 610 F.3d 16, 20 (1st Cir. 2010) (quoting Rivera Castillo v. Autokirey, Inc., 379 F.3d 4, 9 (1st Cir. 2004)). In making its determination, the court may not weigh the evidence, determine the credibility of the witnesses presented, or attempt to resolve conflicting testimony. MacQuarrie v. Howard Johnson Co., 877 F.2d 126, 128 (1st Cir. 1989).

         Under Federal Rule of Civil Procedure 59(a), a court may order a new trial “only if the verdict is against the law, against the weight of the credible evidence, or tantamount to a miscarriage of justice.” Crowe v. Marchand, 506 F.3d 13, 19 (1st Cir. 2007) (quoting Casillas-Díaz v. Palau, 463 F.3d 77, 81 (1st Cir. 2006)).

         III. Discussion

         In reaching its verdict, the jury made five specific findings that mirror the elements of an FCA retaliation claim: (1) plaintiff engaged in protected conduct under the FCA (by filing a qui tam action); (2) Coloplast knew of plaintiff's protected conduct on or before December 23, 2014 (the date the alleged retaliation began); (3) Coloplast retaliated against plaintiff because of her protected conduct by both (a) placing her on indefinite administrative leave, and (b) the choice of accounts assigned to her upon her return in 2016; (4) defendant's conduct caused plaintiff to suffer damages as a result of one or both (a) the administrative leave, and (b) the assignment of accounts; and (5) plaintiff should be awarded compensatory damages in the amount of $762, 525.

         A. Judgment as a Matter of Law

          Coloplast challenges the sufficiency of the evidence adduced at trial. Yet the evidence sufficiently supports ...


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