A 2009 whistleblower complaint against Millennium Laboratories (San Diego) that it thought had been resolved has been revived, in part, by the First Circuit Court of Appeals. The appeal was filed because of a January 2012 dismissal of an amended complaint, U.S. ex rel. Estate of Robert Cunningham v. Millennium Laboratories of California Inc., filed on Feb. 25, 2011, after the original whistleblower, Robert Cunningham, an employee of Millennium competitor Calloway Laboratories, died. The dismissal, issued by District of Massachusetts Judge Joseph Tauro, was based in part on disclosures made during a suit Millennium had filed against Calloway in the Superior Court of California five days before Cunningham’s original whistleblower complaint on Dec. 29, 2009. That suit against Calloway alleged defamation and intentional interference with contractual relations and detailed some of the alleged fraudulent activities Millennium had engaged in upon which the amended whistleblower complaint was based. According to the written decision by a three-judge panel in the April 12, 2013, court of appeals ruling that revived the whistleblower complaint against Millennium, there were three separate aspects to Millennium’s alleged schemes. Aspects 1 and 3 involved billing multiple times for testing performed using a single test kit (aspect 1) and […]
A 2009 whistleblower complaint against Millennium Laboratories (San Diego) that it thought had been resolved has been revived, in part, by the First Circuit Court of Appeals.
The appeal was filed because of a January 2012 dismissal of an amended complaint, U.S. ex rel. Estate of Robert Cunningham v. Millennium Laboratories of California Inc., filed on Feb. 25, 2011, after the original whistleblower, Robert Cunningham, an employee of Millennium competitor Calloway Laboratories, died.
The dismissal, issued by District of Massachusetts Judge Joseph Tauro, was based in part on disclosures made during a suit Millennium had filed against Calloway in the Superior Court of California five days before Cunningham’s original whistleblower complaint on Dec. 29, 2009. That suit against Calloway alleged defamation and intentional interference with contractual relations and detailed some of the alleged fraudulent activities Millennium had engaged in upon which the amended whistleblower complaint was based.
According to the written decision by a three-judge panel in the April 12, 2013, court of appeals ruling that revived the whistleblower complaint against Millennium, there were three separate aspects to Millennium’s alleged schemes.
Aspects 1 and 3 involved billing multiple times for testing performed using a single test kit (aspect 1) and fraudulent activity related to confirmation testing (aspect 3). The court document provides details of these two aspects of the alleged fraud by Millennium and concludes that disclosures made in the California suit filed by Millennium were sufficient to dismiss based on jurisdictional grounds.
However, aspect 2 of the amended complaint alleging excessive and unnecessary testing was not discussed in sufficient detail to be dismissed. The court vacated the earlier court’s dismissal with prejudice and remanded the matter to the district court for further consideration. Millennium must wait until that ruling before it will find out if it will be subject to further legal action or not.
Lessons for Other Laboratories
Any laboratory engaged in drug screen testing should have its compliance officer review this case because of the detailed descriptions included in the court document written by the three-judge panel.
The details revealed therein concerning the allegations against Millennium, even though they are no more than allegations at this time, are revealing in that they illustrate how long a company can survive and continue to function even under the relatively severe charges leveled against it by competitors or even regulators.
That said, the risk associated with public disclosures made in these various lawsuits can damage a company’s reputation beyond repair, and even though it may survive the legal challenge, it may not survive the reputational damage.
The Takeaway: Ongoing litigation can damage a lab’s reputation beyond repair. When involved in a legal battle, resolve the issues as quickly as possible.
