Townsend v. Bayer HealthCare Pharm. Inc., No. 13-1468 (8th Cir. 2014)
Annotate this CaseTownsend worked as an Arkansas pharmaceutical sales representative for Bayer, selling Mirena, a contraceptive device. Townsend visited physicians, including Dr. Shrum. Townsend learned Shrum was importing from Canada a version of Mirena that was not FDA-approved, at half the cost of the approved version. Shrum had submitted Medicaid claims at the same rate as the approved version and bragged about $50,000 in extra profit. Townsend sought guidance from his superiors. Bayer told Townsend not get involved. Townsend called the Medicaid Fraud Hotline, although he feared losing his job. Shrum was charged with Medicaid fraud. Meanwhile, Bayer changed its method of reimbursing sales expenses. Not understanding the change, Townsend’s wife spent funds intended for those expenses, causing Townsend’s account to be closed temporarily. Although Townsend's account had been reactivated, Bayer fired him, claiming his closed account prevented him doing his job. Townsend sued, citing anti-retaliation provisions of the False Claims Act, 31 U.S.C. 3730(h).). A jury awarded Townsend back pay, doubled to $642,746, and $568,000 in emotional distress damages. The court denied front pay and ordered Bayer to reinstate Townsend. The Eighth Circuit affirmed on all issues except the emotional distress damage award and remanded to allow Townsend the option of accepting a remittitur of $300,000, or a new trial on emotional distress damages.
Court Description: Civil case - False Claims Act. In action alleging Bayer fired plaintiff in violation of the anti-retaliation provisions of the False Claims Act, the action was not barred by the 180-day limitations period contained in Ark. Code Ann. Section 21-1-604; the evidence was sufficient to prove defendant terminated plaintiff in retaliation for his report about a physician selling "gray market" drugs and overbilling Medicaid and that the stated reason for his discharge was a pretext; the protections of the anti-retaliation provision apply to an employee without requiring proof that the employer was acting in concert with the customer to defraud the government or acting in concert with the customer to orchestrate the retaliation; challenges to evidentiary rulings rejected; argument that defendant was entitled to a new trial based on the trial court's refusal to give its proposed jury instruction on attorney-client privilege rejected; whether the statute mandates an employee's reinstatement or leaves the matter to the district court's discretion, the district court did not err in ordering plaintiff's reinstatement; district court did not err in denying defendant's request to remit plaintiff's back pay award; the jury's award of $568,000 for emotional distress was excessive as a matter of law given the extent and duration of plaintiff's distress, and plaintiff is given the option of accepting a remittitur of $300,000 or a new trial on the issue.
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