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Perius v. Abbott Laboratories

June 26, 2009


The opinion of the court was delivered by: David H. Coar United States District Judge



This case concerns plaintiff Gregory Perius's claim that he was fired by Kos Pharmaceuticals, Inc., a company subsequently acquired by defendant Abbott Laboratories, Inc., because he was a whistleblower. The drug sales and marketing practices he claims to have complained about were and are the subject of a federal investigation, a fact that has posed numerous challenges for this litigation. Many of the defendant's witnesses have asserted the attorney-client privilege or the Fifth Amendment right against self-incrimination, leaving some questions-particularly those concerning the motive for Perius's termination-unanswered. But despite this significant evidentiary gap, both parties have filed cross-motions for summary judgment, asserting that the facts, even when viewed in the light most favorable to the opposing side, support a judgment in the movant's favor. Because the court agrees with Abbott that no jury could conclude that Perius is entitled to whistleblower protection under the False Claims Act, 31 U.S.C. § 3730(h), the court GRANTS Abbott's motion for summary judgment on Perius's sole claim under federal law and relinquishes its supplemental jurisdiction over the remaining state-law claims. The court also DENIES Perius's motion for summary judgment, GRANTS in part and DENIES in part Abbott's motion to strike Perius's responses, and DENIES Perius's motion to modify Magistrate Judge Soat Brown's protective order.

I. FACTS*fn1

Both parties claim that many of the other side's facts, while labeled "undisputed," are in fact in dispute. The court has considered these arguments, along with Abbott's motion to strike Perius's responses to its statement of facts. The court has ignored "facts" that are irrelevant, argumentative, unsupported by the citations provided, or legal conclusions. The court also has considered Perius's motion to modify Magistrate Judge Brown's protective order. Because that motion is untimely, and because, in any event, the information Perius seeks does not bear on the decisive issue in this case, the motion is denied. Accordingly, the following facts, unless otherwise noted, are undisputed:

Kos Pharmaceuticals, Inc., hired Perius in 1997. He held the position of Regional Director, supervising numerous district managers who in turn supervised pharmaceutical sales representatives. (AF ¶1.)*fn2

In February 2005, Kos's general counsel, Andrew Koven, received a telephone call from the general counsel of Innovex, a company that provided contract sales personnel to Kos, informing him that the FBI was questioning an Innovex employee about Kos. (AF ¶2.) Soon thereafter, in March 2005, Kos learned that the United States Department of Justice was investigating the company's sales and marketing practices. (Id.) The government initiated its investigation as a result of a qui tam complaint filed by a former Kos employee (not Perius). (AF ¶3.) As part of the investigation, the DOJ issued several federal subpoenas duces tecum, including one directed to the company and others directed to four employees, including Perius, Nick Polczinski, and Wendy Kopatich. (AF ¶2.)

As a result of the government's investigation, Koven hired the law firm of Holland & Knight LLP ("H&K") (1) to assist the company and individual employees in complying with the DOJ investigation; and (2) to conduct its own internal investigation. (PF ¶12.) Both Richard King, executive vice president of commercial operations at Kos, and John Hogan, an H&K attorney, acknowledged that, because the company was under investigation, there was a possibility of litigation. (PF ¶11.)

Perius's Compliance with the Government's Subpoena

Upon receiving the subpoena, Perius-who at the time did not know what a subpoena was and what was required of him-became concerned and suffered stress. (AF ¶12; PF ¶1.) And after his first interview with H&K in early March 2005, Perius became concerned that he and his district were being singled out for using sales and marketing techniques that he believed were used throughout the company. (AF ¶12.) At the same time, he did not believe that he or Kos had done anything wrong. (PF¶1.) But he was concerned enough to seek assurances from Koven and other Kos executives that he would not need his own legal counsel. (PF ¶4.)

Koven told Perius to cooperate fully with H&K. (PF¶1; AF¶9.) Perius knew, of course, that H&K was not affiliated with the DOJ or any other governmental agency, but he did understand the firm to be a conduit to the DOJ for documents produced by the company in response to the subpoena. (PF ¶1; AF ¶9.)

Between March and June 2005, Perius produced documents as requested over time to the DOJ, in compliance with his subpoena. (AF ¶10.) He promptly gathered documents he believed were responsive and, along with a copy of his computer hard drive, sent everything to H&K. (AF ¶10; PF ¶2.) H&K would then review the documents for any privileged communications, place them on CDs, affix bates labels, and send the disks back to Perius, who would then send the disks to Assistant United States Attorney Mel Johnson, in the U.S. Attorneys' office. (PF ¶¶2,5.) The final production of disks took place on June 9, 2005. (AF ¶13.)

The materials Perius sent included documents relating to Kos's sales and marketing practices, and they could potentially be used in a prosecution against the company. (PF ¶¶6,7.) At his deposition, Hogan asserted attorney-client privilege in response to questions about the content of the materials Perius forwarded to the government and any deletions or alterations of those documents by H&K prior to their transmittal to the government. (PF ¶8.) For summary judgment purposes, the court may assume that there was damaging information in the documents, which are the subject of a protective order.

Perius produced the documents because he was required to do so under the subpoena. (AF ¶11.) At the time, Perius did not believe that either he or Kos were breaking any laws or doing anything wrong. (AF ¶14.) And, other than the documents he produced in response to his subpoena, Perius did not tender any documents to the government during his employment at Kos, nor did he have any contact or speak with any government official or investigator. (AF ¶¶15,16.)

Perius's Participation in Kos's Internal Investigation

As part of Kos's internal investigation, which lasted from March 2005 through December 12, 2006, when Abbott acquired Kos, H&K attorneys interviewed numerous Kos employees. (AF ¶7.) Perius was among them, and he met with H&K five times, with meetings occurring in both Chicago and Miami. (AF ¶8.) Perius was advised by both Kos's legal counsel and H&K that he should communicate directly with them regarding the investigation. (PF ¶5.)

On March 4, 2005, Perius and his subordinates were interviewed by John Hogan and Michael Manthei, both H&K attorneys. Perius told them about the company's long-standing sales and marketing practices. (PF ¶3.) H&K attorneys interviewed him three or four more times between March 2005 and January 5, 2006, and on each occasion Perius advised them of the company's sales and marketing practices. (PF ¶5.)

Hogan met with AUSA Stacy Ward more than ten times regarding the DOJ's investigation of Kos's sales and marketing practices. He did not tell her or any other AUSA what he had learned from Perius regarding the ...

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