Chicago Business Litigation Lawyer Blog
Peter Lubin Named to Super Lawyers;
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Video — Car Dealership Scams
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Some Whistleblower Claims Against Northwestern Settled
A wise philanthropist is a cautious philanthropist. Many people already know to check a few reputable websites before deciding whether or not to donate money to a particular organization. However, some charities are better than others at making sure that the majority of the funds they receive truly benefit the people and causes they are meant to help. If a charity fails to properly appropriate funds from the government, the repercussions can be particularly expensive.
A common cause for charity is cancer treatment and research. A recent whistleblower lawsuit has revealed that even the government must be mindful of who it donates money to. The lawsuit which involves allegations of misappropriation of funds for cancer research has been settled for $2.93 million. The defendant was Northwestern University and the funds provided by the government were allegedly misused by Dr. Charles Bennett. Bennett, worked for Northwestern University as a principal researcher in studies that sought to better understand rare diseases and to develop systems to better identify when cancer drugs have bad side effects. He reaped wide acclaim for his work in this research but, as he did so, he was also allegedly incurring high personal expenses and using cancer research funds to finance them.
Bennett and his wife allegedly took trips for pleasure and then billed the flight, hotel, and meal costs to the National Institutes for Health, claiming that it was all part of his cancer-fighting work. Bennett also allegedly submitted phony bills for his work from 2003 to 2010 while he was working on numerous grants that provided more than $8 million for research. Some of the travel allegedly occurred on a “near weekly basis, and in some cases incurred expenses that were highly excessive” according to the lawsuit. Moreover, Bennett allegedly used whatever grant money was left over at the end of funding periods to fund his salary.
The lawsuit was brought by Melissa Theis under seal as a whistleblower lawsuit in 2009. Theis began working as a temp at Northwestern’s Feinberg School of Medicine in November 2007 as a purchasing coordinator before she was hired full time by the university. Theis said she first suspected something when she noticed red flags in the invoices and reimbursement requests “almost immediately” after she began working there.
In September 2008, Theis says she discussed her concerns with her supervisor and an accounting services unit at the University. However, according to the lawsuit, “Northwestern refused to seriously address the issues she had brought.” Theis quit her position with the University in 2008 and filed her whistleblower lawsuit in 2009. After she filed her lawsuit, federal investigators from the U.S. Department of Health and Human Services, the FBI, the NIH, and the U.S. Attorney’s office conducted an investigation into Theis’s allegations.
The lawsuit alleged that the University did not have sufficient controls in place to detect or prevent inappropriate spending.
The University has not admitted to any wrongdoing as part of the settlement.
Although the University has agreed to settle with the government, there are still claims against Bennett and the head of the University’s Lurie Comprehensive Cancer Center, Dr. Steven Rosen, which have yet to be settled. The whistleblower lawsuit is a civil proceeding to obtain a refund of government monies allegedly misappropriated. The whistleblower receives a percentage of the recovery or settlement.
US Postal Prepares For Trial in False Claims Suit Against Lance Armstrong
Lance Armstrong caused an international sensation when he finally admitted to using performance enhancing drugs while competing in the Tour de France. Floyd Landis, Armstrong’s ex-teammate, who has also confessed to doping, filed a whistleblower lawsuit in Washington D.C. against Armstrong in 2010. The lawsuit alleges that Armstrong defrauded the American government, which sponsored Armstrong in his races. Now the U.S. Justice Department has joined the legal battle.
Landis filed his case under the False Claims Act which givens private citizens a financial incentive to file suit on the government’s behalf against individuals and entities who they know are cheating the government. Whistleblower cases are first filed “under seal” which means that they are not initially announced to the public. This gives the government an opportunity to investigate the allegations before deciding whether or not to join the case. The Justice Department has recently announced that it is intervening in the lawsuit against Armstrong and other named defendants. This has greatly increased Landis’s chances of success because the government normally only joins lawsuits that it thinks it can win.
Violators of the False Claims Act are liable for up to three times the damages plus an additional $5,500 to $11,000 for each false claim. U.S. Attorney Ronald C. Machen Jr. has said that Armstrong and his associates “took more than $30 millions from the U.S. Postal Service based on their contractual promise to play fair and abide by the rules.” The amount the government might be able to recover in a court of law amounts to between $90 million and $100 million. If they win, Landis, as the plaintiff who first filed the case, can collect up to one-third of that money.
According to media reports, Armstrong offered $5 million to settle the case, but the government wanted at least $10 million. News reports have also said that Armstrong wants immunity from criminal charges as part of his settlement with the U.S. Postal Service. The government does not appear to have offered that as part of the deal.
However, it is not uncommon for settlement negotiations to restart, even as the two teams are preparing for trial. Most civil cases are resolved before trial and the government’s involvement in the case will no doubt put pressure on the defendants to settle.
Armstrong’s attorneys have argued that the U.S. Postal Service made more money off of its sponsorship of Armstrong than it ever paid to Armstrong and his team. However, this is irrelevant to the matter of whether or not Armstrong broke the law. If Armstrong and his teammates received $30 million from the U.S. government by promising to follow the anti-doping rules and broke that promise, then they are liable for having broken their word, regardless of how much money the U.S. postal service gained. Machen’s lawsuit also alleges that the U.S. Postal Service continues to suffer by being associated with Armstrong and his team. The U.S. government can use this to show that they have suffered much more in damages than the initial $30 million paid to Armstrong and his team.
Armstrong is arguing that the U.S. Postal Service should have known that he was taking performance enhancing drugs because of the allegations at the time and an investigation conducted by French police. However, Armstrong, the teams lead rider, was vehemently denying the allegations all the time that he was under investigation.
Doctor Asserts Slander Claims Over Accusation of Negligence During Surgery – Tunca v. Painter
An Illinois appellate court reversed a circuit court order dismissing a doctor’s lawsuit for slander per quod against two colleagues. Tunca v. Painter, et al, 965 N.E.2d 1237 (Ill. App. 2012). Two doctors who worked at the same hospital as the plaintiff alleged that the plaintiff was negligent during a surgery, resulting in injury to the patient. The plaintiff alleged that their statements were defamatory, causing damage to his professional reputation and a decline in patient referrals. After the circuit court dismissed multiple claims of slander per se and per quod, the plaintiff appealed. The appellate court held that the defendants’ statements were slanderous on their face, and ruled in the plaintiff’s favor.
The plaintiff, Dr. Josh Tunca, is a surgeon specializing in gynecological oncology. Defendant Dr. Thomas Painter is a vascular surgeon who worked at the same hospital. Defendant Dr. Daniel Conway was chairman at the time of the hospital’s quality review committee. After Dr. Tunca performed surgery to remove an ovarian tumor in June 2006, a severe blood clot formed in the patient’s femoral artery. Dr. Painter performed a femoral-femoral bypass, correcting the condition. Id. at 1241. Dr. Painter allegedly told the hospital’s vice president and medical affairs director that Dr. Tunca had “inadvertently cut the [patient’s] left iliac artery,” and made similar statements to other doctors. Id. at 1241-42. Dr. Conway allegedly spoke to Dr. Tunca, in the presence of other doctors, “regarding his allegedly cutting the [patient’s] artery.” Id. at 1242.
Dr. Tunca filed suit against Drs. Painter and Conway in July 2007, alleging slander per se against both defendants. This is a claim that the statements in question are unambiguously defamatory. He claimed that their statements, made in the presence of others, were “false, malicious, slanderous, and…inten[ded] to injure plaintiff’s good name and credit in his profession.” Id. After several dismissals of his slander claims, the plaintiff filed a third amended petition alleging slander per quod against both defendants, adding allegations that the defendants’ statements had been “disseminated throughout the hospital,” affecting his ability to treat patients and his ability to get new patients. Id. at 1245. After the Cook County Circuit Court dismissed these claims, the plaintiff appealed.
Courts Dismisses Defamation Claims Brought as Part of Employment Discrimination Lawsuit – Artunduaga v. University of Chicago Medical Center
An Illinois federal district court dismissed claims of defamation per se and defamation per quod brought as part of a lawsuit alleging employment discrimination, holding that the statements in question amounted to non-actionable opinion. Artunduaga v. University of Chicago Medical Center, at al, No. 12 C 8733, mem. op. (N.D. Ill., May 16, 2013). The motion before the court only sought dismissal of the defamation claims and a claim for intentional interference with employment. The court stated that the statements at issue, while not legally defamatory, could still support the plaintiff’s employment discrimination claims. The case identifies the elements necessary to support a defamation claim under Illinois state law.
The plaintiff began a residency at the University of Chicago Medical Center (UCMC) in June 2011, under the supervision of defendant Dr. David Song. She met with Dr. Song and others in November 2011 in order to discuss her “unsatisfactory performance.” Id. at 2. A memorandum summarizing the meeting was sent to multiple hospital employees. The plaintiff was later placed on probation, and she eventually learned that her one-year contract would not be renewed. Dr. Song sent her a letter on April 30, 2012 that reportedly summarized her employment status and gave her an assignment for the remainder of her residency, with copies to two hospital officials. At a grievance hearing regarding the plaintiff on May 16, 2012, Dr. Song read aloud an email from another doctor containing criticisms of the plaintiff. The plaintiff claimed that Dr. Song added his own “critical assessment[s]” of her performance. Id.
Television Crime Program Reenactment Leads to Defamation, False Light Lawsuit – Butler v. Discovery Communications
A television reenactment of a bombing, in which a man suffered severe injury and his friend lost his life, did not give rise to claims for false light invasion of privacy or defamation, according to an Illinois federal court. Butler v. Discovery Communications, LLC, No. 12 cv 6719, mem. op. (N.D. Ill., May 9, 2013). The court found that the reenactment’s portrayal of the plaintiff, while different from the plaintiff’s account of the incident, did not portray the plaintiff in an offensive or damaging fashion, nor did it harm the plaintiff’s reputation in a manner constituting defamation.
The defendant, Discovery Communications, broadcast an episode of its show “Wicked Attraction” on June 15 and July 7, 2012, about an incident involving the plaintiff, Alphonso Butler, that occurred on February 15, 2000. Butler was with his “best friend,” Marcus Toney, that night, when Toney received a package from his estranged wife. Id. at 1. According to Butler, Toney asked him to open the package, but then stepped between Butler and the package and opened it himself. The package contained a pipe bomb that exploded when Toney opened the box. The blast killed Toney and injured Butler. Toney’s wife and her boyfriend are in prison for his murder.
Sands Casino and Former Manager Trade Accusations
Firing an employee is always a delicate matter. Not only are wrongful termination lawsuits a possibility, but there’s always the possibility that the employee has some information on the company which might be less than flattering. In a recent lawsuit, Steven Jacobs alleges he was wrongfully terminated by Sands China Ltd. as their chief executive officer. He also claims to be in possession of certain incriminating documents which Sands China might prefer not be revealed in a court of law.
The documents consist of about 40 gigabytes of information, which Sands says that Jacobs took “surreptitiously” when he was fired in 2010. The information includes three reports prepared by Steve Vickers of International Risk Ltd. The reports allegedly featured the investigation of “certain Macau government officials” and others, according to the letters sent by Sands’s lawyers to Jacobs’s lawyers, asking for the return of the documents.
Jacobs alleges that the reports were commissioned by Sands and include incriminating information “on foreign government officials, as well as individuals with whom they were doing business that were suspected of having ties to Chinese organized crime.”
Jacobs alleges that his employment with Sands was wrongfully terminated after he had disagreements with Adelson, Sands’s majority owner and chairman. The disputes include arguments over what Jacobs alleges were illegal demands that secret investigations be conducted of Macau government officials for information which Sands could then use as leverage against unfavorable regulations.
After Jacobs made these allegations, the U.S. Justice Department and Securities and Exchange Commission opened investigations to determine if Adelson’s company violated the Foreign Corrupt Practices Act. This Act bars any company with operations in the U.S. from making improper payments to foreign officials in order to win or maintain business.
Although Sands denies Jacobs’s allegations, it did admit a few months ago that it had found likely violations of the books, records, and internal provisions of the Foreign Corrupt Practices Act. Around the same time, Adelson said in a declaration that the investigation had been commissioned by Jacobs, not by the company. Adelson claims that he knew nothing of the investigation until after Jacobs had been fired. In his declaration, Adelson states, “I never asked or authorized Jacobs to conduct a private investigation or ‘create a dossier’ on Macanese officials. … We believe unequivocally that Jacobs initiated the investigation on his own for his own purposes.”
Last year, Sands was sanctioned by Nevada District Judge Elizabeth Gonzalez for failing to disclose the fact that it was sitting on a trove of documents in Nevada which Jacobs sought to use as evidence. The company, however, claimed that the documents could not be removed from Macau and that they are “privileged” and therefore exempt from disclosure. Gonzalez disagreed however, and ruled that Jacobs could legally use the documents as evidence.
Currently, the case has reached a standstill. Sands is now appealing three other rulings by the lower court to the Nevada Supreme Court and, most recently, it has won a postponement hearing on whether Sands China, being a Chinese company, can be tried in Nevada.
Jacobs claimed that this is nothing more than stalling the case in order to keep the incriminating documents against Sands hidden. Sands called these accusations “baseless”.
Online Defamation — Our Chicago Libel Attorneys Defend and Prosecute Online Slander and Libel Cases
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Estee Lauder Sued in Class Action For Alleged False Claims That Skin Cream Repairs DNA Damage
The Class Action Lawsuit claims that Estee Lauder’s skin cream claims about repairing DNA are fraudulent. But as unbelievable as it sounds, dermatologist Dr. Jeanette Graf said creams can repair DNA.
“Whether it’s in the form of peptides, whether it’s in the form of retinols, whether it’s in the form of enzyme inhibitors — all of which play a role together in diminishing the amount of DNA damage,”
Graf told CBS News.