A Failure of Remedies: The Case of Big Pharma (An Essay)

By Paul J. Zwier and Reuben Guttman
Emory Corporate Governance and Accountability Review
Emory Law

This Article examines the U.S. pharmaceutical industry and the harms imposed on individual patients and healthcare consumers—including private and government third party payers—from practices proscribed by Federal and State laws regulating marketing and pricing. 1

The Article pays particular attention to the False Claims Act (FCA), which has become the government’s primary civil weapon against fraudulent and/or wrongful conduct causing the expenditure of government dollars.
Read the entire Essay at http://law.emory.edu/ecgar/content/volume-3/issue-2/essays/failure-remedies-case-big-pharma.html

The Impact of Justice Scalia

Saturday 13 February, 2016 was a biting cold day in the nation’s capital that seemed like it would go down in history only for its frigid temperature. By mid-afternoon, news flashed across TV and computer screens reporting the passing of Antonin Scalia, an Associate Justice of the Supreme Court.

With three branches of government, including 535 voting members of Congress, hundreds of federal judges and countless members of the Executive Branch, it is a rare occasion when the passing of a single individual can change the course of American governance. The death of Justice Scalia was one of those occasions. In a court split sharply, five votes to four, along ideological lines, Justice Scalia was not just a part of the conservative majority; he was an outspoken leader. His ‘voice’ was heard in sometimes caustic dissents, in aggressive questioning during oral arguments when he seemingly took the role of advocate, and through his writings and interviews.

He supported efforts to restrict the court’s decision in Roe v Wade, protecting a women’s ‘right to choose’; he rejected constitutional protection of same sex marriage; he voted with the majority in Bush v Gore, effectively deciding the presidency in favour of George Bush; he voted to strike down voting rights laws and he wrote the majority opinion in District of Columbia v Heller, striking down a law banning hand guns while protecting, under the Second Amendment, the right to own firearms. He was an ‘originalist,’ meaning he said the Constitution should be interpreted from only the words written by the ‘Founding Fathers.’ This logic led him to question the court’s intervention that resulted in the de-segregation of the nation’s public schools through the 1954 decision in Brown v Board of Education. Justice Scalia’s ‘originalist’ view also meant he disregarded the contemporary context (such as the wave of shootings in public schools or the attempted assassination of President Reagan, who had appointed him) that caused legislators to press for laws banning guns. At a time when the massive wealth of corporations and a few individuals has been channelled to influence federal elections, Justice Scalia sided with the majority in Citizens United v FEC, striking down provisions of Bi-partisan Campaign Reform legislation regulating the expenditures of corporations and unions in support of political candidates.

As a part of the court’s majority, he was a key vote in procedural changes that have had a sweeping impact on American jurisprudence. Court decisions re-defining pleading standards, restricting class actions and compelling arbitration have fundamentally altered the ability of consumers, and those impacted by pervasive workplace discrimination, to bring cases and do so in an open court of law.

My colleagues across the US have, of course, spent the weekend contemplating the tenure of Justice Scalia and the impact of his passing. Nancy Gertner, a former federal judge in Boston and currently a professor at Harvard Law School, sent me the following thought after writing her own insightful piece on Justice Scalia in The Boston Globe: ‘He was at once principled, trying to see everything through the lens of originalism, and at the same time, rigid, unwilling to admit that his constitutional interpretation was distorted by his own conservative calculus.’

Robert Ahdieh, vice dean and K.H. Gyr professor of private international law at Emory University School of Law in Atlanta, noted: ‘There have been few, if any, more forceful writers among justices of the Supreme Court than Justice Scalia. Combined with his sharp intellect and his deep sense of conviction, and his service on the court will long be remembered.’

Jon Karmel, a Chicago based attorney who is one of the nation’s preeminent union-side labour lawyers, drew specific attention to the impact of the Justice’s passing on labour unions in the US: ‘Public sector unions in the United States, which enjoy a membership rate nearly five times that of private sector unions, were sure to suffer a death blow by the Supreme Court. Until yesterday.

‘In Harris v Quinn, a seemingly small case out of Illinois, the Supreme Court last year held in a decision of five votes to four that a discrete group of public employees, non-union home healthcare workers, could not be charged fair share fees because they were not ‘full-fledged’ public employees. That narrow holding was used as an invitation by the conservative majority to overrule a 1977 decision, Abood v Detroit Board of Education  a precedent that is vital to the very concept of public employee unionism. In paragraph after paragraph, page after page, the main Harris opinion written by Justice Alito sought to undermine the legitimacy of Abood. 

‘The vehicle for destroying Abood is Friedrichs v California Teachers Association, a ginned up case that rocketed out of the Ninth Circuit on the plaintiff’s consent that judgement was appropriate against her based on Abood. Oral arguments were heard last month and a decision in favour of Ms Friedrichs by five votes to four was expected in June. No more. Labour unions and working people dodged a nuclear bomb. Friedrichs would have bankrupted public sector unions, as Scott Walker did in Wisconsin, and political money spent in favour of workers and their issues would have dried up. That is the point of Right to Work and other dues attacks on unions. Until money is taken out of politics, and maybe a new Supreme Court will do just that, the political playing field cannot be one sided.’

President Obama has committed to nominating a replacement for Justice Scalia. Republican Senate Majority Leader Mitch McConnell has threatened to block the Senate confirmation process until the next president has been sworn in. The Majority Leader’s threat is perhaps the litmus test for the significance of what happened this past Saturday.

New Hampshire and Hillary’s $675k

Top trial lawyer Reuben Guttman reflects on the New Hampshire primary.

Every four years, candidates trudge through the snows of New Hampshire, courting voters to gain political legitimacy as measured by a solid showing in the nation’s first Presidential Primary. Front runners are expected to trounce the opposition and challengers must beat expectations to stay in the race. None of this is written; it is the common law of US Presidential elections as handed down by journalists, news commentators, and pundits.

From the towns of Exeter to Rochester, candidates knock on doors, and press the flesh at coffee shops, public schools, and shopping malls. They talk about those without health insurance; those who struggle under adversity to support families; and military veterans who have made personal sacrifices for their country. New Hampshire is an up close and personal experience for voter and candidate. It is also a political battle ground that has killed the hopes of front runners. President Lyndon Johnson had this experience in 1968, bowing out of a race for re-election after a poor New Hampshire showing. Four years later, New Hampshire ended the candidacy of Maine Senator Edmond Muskie when he seemingly showed weakness when tearing up during a speech in front the state’s largest newspaper, the Manchester Union Leader. Back then, the Union Leader’s Publisher, William Loeb, had political leverage exceeding his actual readership; a Union Leader endorsement was a coveted prize for those seeking New Hampshire success as a path to the Presidency.

This year marked another illustrious chapter in the history of this quintessentially American Presidential rite of passage. Hillary Clinton came into the 2016 New Hampshire primary after squeaking by her opponent, Vermont Senator Bernie Sanders, by less than a percentage point in the Iowa Caucus. She pressed the flesh in the coffee shops and on the streets as she did back in 2008 when she ran for President and scored a narrow New Hampshire Primary win over Barack Obama. Her target this time around was to win the approval of voters in a state whose median household income is $66,000. As she talked to working class families, she talked about those she met on the campaign trail and those with problems or issues that seemingly might resonate with voters. In trying to connect with voters, there is something she did not discuss; at least not on her own and not as part of her “stump speech.” She did not talk about another group of people she met on her journeys; the Wall Street bankers.

The banter between candidate Clinton and voters in the gritty New Hampshire terrain was undoubtedly in marked contrast to the banter between the former Secretary of State and the Wall Street bankers who paid her hundreds of thousands of dollars to speak at their outings. Go back in time to 2014 and the South Carolina resort city of Bluffton where Clinton was paid $225 thousand to speak at a Goldman Sachs event. That was one of three Goldman events which generated a combined $675 thousand for Clinton; three days’ “work” earned her ten times the median household income for a New Hampshire family.

From her perspective, Clinton says that she took the money because that is what Goldman paid her. No doubt this is true. But was Goldman paying to gain insight or influence?

Clinton claims that in accepting these speaking fees – and she was paid by Wall Street institutions other than Goldman — her votes or opinions were not influenced. Really? How can she be so sure? Lawyers, of course, understand the notion of conflict of interest. It is hard to really understand how monies or relationships influence human behavior and so – at least in the legal profession – conflicts of interest rules are rigid. It is no defense to maintain that although a conflict exists, “I have enough will power to resist any influence.” Of course, the legal profession not only concerns itself with actual conflict but also the appearance of conflict. People can only believe the system works if it has at least the appearance of integrity.

But do voters really care about these matters? Perhaps. The votes have been tallied; Hillary Clinton lost the 2016 New Hampshire Primary by more than 20 percentage points. Was it her speaking engagements that swayed voters? Will this resounding defeat be the death knell for a candidate who was all but coroneted? This is what makes New Hampshire so interesting; up close and personal politics just causes people to think hard and ask questions.

Reuben Guttman is a trial lawyer and founding partner at Washington, DC-based firm Guttman, Buschner & Brooks.

U.S. Supreme Court Holds Offers Of Full Relief To Named Plaintiffs Do Not Moot Putative Class Actions

The U.S. Supreme Court holds that settlement offers and other offers of full relief to named plaintiffs do not moot class action claims. The ruling restricts (but may not completely limit) defendants’ ability to use settlement offers or Rule 68 offers of judgment to resolve named plaintiffs’ claims in putative class and collective actions.

On January 20, 2016,the United States Supreme Court issued a decision in the closely-watched case of Campbell-Ewald Co. v. Gomez.[1]  The Court held that an unaccepted offer for complete relief in the form of a settlement offer or under Rule 68 of the Federal Rules of Civil Procedure does not moot named plaintiffs’ claims in a putative class action.  The case split along ideological and party lines.  Justice Ginsburg authored the majority opinion, which was joined by Justices Sotomayor, Kagan, Kennedy and Breyer.  Justice Thomas wrote a concurring opinion, while Chief Justice Roberts wrote a dissenting opinion, joined by Justices Scalia and Alito.  Justice Alito authored an additional dissenting opinion.


Plaintiff Jose Gomez filed a putative nationwide class action against Campbell-Ewald Company, accusing the company of violating the Telephone Consumer Protection ACT (TCPA) by sending unsolicited marketing solicitations via text message.  Gomez was was one of over 100,000 recipients of such texts and sought to represent a putative class.  Gomez sought treble damages for alleged willful violations of the TCPA, as well as costs, attorney fees, and injunctive relief prohibiting Campbell from sending unsolicited text messages.

Campbell made both a settlement offer and an offer of judgment under Rule 68 of the Federal Rules of Civil Procedure that would have given Gomez full relief on his TCPA claim before the deadline to file a motion for class certification. Gomez did not accept either offer and and allowed a 14-day wait period under Rule 68 to expire.  Campbell subsequently moved to dismiss the case for lack of subject-matter jurisdiction.  The district court denied the motion but ultimately granted Campbell summary judgment on an unrelated issue following limited discovery.  The U.S. Court of Appeals for the Ninth Circuit reversed the grant of summary judgment.  The Supreme Court granted certiorari to determine whether a case becomes moot under Article III of the Constitution if the plaintiff receives an offer of complete relief.

In deciding Campbell-Ewald, the Supreme Court made it clear that an unaccepted offer of full relief under Rule 68 or pursuant to settlement does not moot a case and does not end  putative class or collective action.  The ruling significantly narrows the grounds on which a defendant can obtain early dismissal of a class or collective action.

Applying basic contract principles, the majority opinion held that an unaccepted settlement offer or offer of judgment for full relief cannot alone moot a plaintiff’s claims under Article III of the Constitution. It reasoned that once a settlement offer or offer of judgment is rejected, it has “no continuing efficacy.”[2]  Moreover, the majority held that because Rule 68 provides that an unaccepted offer of judgment is deemed “withdrawn” if not accepted within 14 days of service, that is the “sole built-in sanction.”[3]  Accordingly, if a settlement offer or offer of judgment is not accepted, the parties remain adverse, retaining “the same stake in the litigation they had at the outset.”[4]  The majority opinion did not address whether a request for class relief impacts the mootness analysis because Gomez’s claims were held not to be moot simply by virtue of not accepting the offers of complete relief.

The decision should be read as being limited to situations where the offer of relief fails to satisfy a plaintiff’s claim.  The majority opinion made it clear that it was not deciding whether a claim can be mooted “if a defendant deposits the full amount of the plaintiff’s individual claim in an account to the plaintiff, and the court then enters judgment for the plaintiff in that amount.”[5]  Chief Justice Roberts’ dissent opined that “[t]he agreement of the plaintiff is not required to moot a case.”[6]  Accordingly, he held that an unaccepted offer of judgment is a legal nullity as a matter of contract law but still moots a case because once “the defendant is willing to give plaintiff everything he asks for, there is no case or controversy to adjudicate.”[7]  Roberts held that it was irrelevant whether plaintiff spurned the offer because there would be no injury for the court to redress so long as full relief was made available to plaintiff.

The Supreme Court’s ruling substantially limits the ability of defendants to use settlement offers or Rule 68 offers of judgment to resolve named plaintiffs’ claims in putative class or collective actions, a strategy that has often been employed in both consumer and employment maters.  Although the decision does not expressly address the class or collective action context, following the majority’s opinion in Ewald-Campbell, a named plaintiff that lets a settlement offer or Rule 68 offer of judgment lapse avoids the avoid mooting of his or her claims.  Notwithstanding Roberts’ dissent, this makes sense.  A case and controversy remains even where a defendant is willing to satisfy the individual claims of a putative class representative because the representative does not bring claims in an individual capacity and the defendant is not willing to offer full relief to the putative class.  If the putative representative was only seeking relief on individual claims, a class or collective action would never have been filed in the first place.

As stated above, it is worth noting that the decision is limited to unaccepted offers and that majority expressly declined to decide whether a claim can be mooted  if a plaintiff actually receives full relief.  The dissenting opinions suggest that full relief could be deposited with the district court on the condition that it be released to the plaintiff when the case is dismissed as moot.  However, a class action settlement must be approved by a district court as fair to absent members even prior to class certification.  Although courts do not consider whether a class action would be manageable when approving a “settlement class”, settlement classes must otherwise satisfy all the requirements or Rule 23(c) and (b) of the Federal Rules of Civil Procedure.[8]  Similarly, a collective action settlement – such as one involving allegations of wage and hour violations of the Fair Labor Standards Act (FLSA) – must be approved by a Court as fair to putative members in most if not all circumstances.  Having purported to bring an action on behalf of a class of individuals, a putative representative and his or her attorneys have a responsibility to pursue the best interests of these putative class or collective action members.  It is difficult to envision a situation in which a settlement resulting in the deposit of the full amount of the plaintiff’s individual claim would be approved by court if it clearly abandons viable class claims and wholly disenfranchises absent class or collective action members.  Such a determination should, and presumably will, entail a judicial determination that the action was not properly brought on behalf of absent class members.

Some courts have also held that a named plaintiff may still pursue relief on behalf of a class even if a named plaintiff’s claims are moot.  Because the majority opinion does not address this issue, district courts will be obligated to apply any controlling circuit-court precedent that authorizes plaintiffs to serve as class representatives where individual claims are moot.

On a final note, plaintiffs’ counsel also has an obligation to act in the best interest of their clients, and in some circumstances, it may be in the best interest of a client to accept an offer of full relief where a client has sought to act as a class or collective action representative.  Rather than using unanswered questions from the Ewald-Campbell decision to argue that the substantive claims of the class have been mooted, companies could be well served by arguing that acceptance of an offer of full relief renders the plaintiff an inadequate representative under Rule 23 of the Federal Rules of Civil Procedure.


If you have any questions or would like more information on the issues discussed in this LawFlash, please contact Justin Brooks at jbrooks@gbblegal.com.

GBB’s experienced team of attorneys can assist individuals who wish to vindicate their rights and provide counseling to companies seeking to comply with employment laws or who need defense against litigation.


[1] No. 14-857 (U.S. Jan. 20, 2016), available at http://www.supremecourt.gov/opinions/15pdf/14-857_8njq.pdf

[2] Id. at 8.

[3] Id. at 9.

[4] Id.

[5] Id. at 11.

[6] Id. at 9 (C.J. Roberts, dissenting).

[7] Id.

[8] Amchem Products, Inc. v. Windsor, 521 U.S. 591, 621 (1997)

Guttman: Whistleblower program will be one of the most significant national gatherings of 2016

Feb. 18 and 19, the Center for Advocacy and Dispute Resolution and the Emory Corporate Governance and Accountability Review will partner to present “Fraud Against the Government & SEC Whistleblower Actions Training.” This event will feature more than 20 authorities on fraud, including U.S. attorneys, experts from the U.S. Securities and Exchange Commission and judges.

The training will be held from 8:30 a.m. to 4 p.m. each day in Tull Auditorium, Gambrell Hall at Emory Law.

Reuben Guttman, partner with Guttman Buschner & Brooks, PLLC and senior fellow with the Center for Advocacy and Dispute Resolution, said, “We think that for would-be whistleblowers and their counsel, the Emory program will be one of the most significant national gatherings in 2016. The program will offer them an opportunity to hear directly from regulators about how they can work to maximize their contributions to federal whistleblower programs.”

Attendees can earn up to 12 CLE credits along with the Certificate of Completion of Emory University School of Law’s Advocacy and Dispute Resolution Training in Case Investigation. Registration is now open.

Featured panelists and instructors include:

  • John A. Horn, U.S. Attorney for the Northern District of Georgia
  • William M. Nettles, U.S. Attorney for the District of South Carolina
  • David Rivera, U.S. Attorney, Middle District of Tennessee
  • Sean McKessey, Director, Office of Whistleblower, U.S. Securities and Exchange Commission
  • Benjamin Singer, Chief, Securities & Financial Fraud Unit, Fraud Section, Criminal Division, U.S. Department of Justice
  • Walter Jospin, Regional Director, Atlanta Regional Office, U.S. Securities and Exchange Commission
  • William P. Hicks, Associate Regional Director, Atlanta Regional Office, U.S. Securities and Exchange Commission
  • Stephen E. Donahue, Assistant Regional Director, Atlanta Regional Office, U.S. Securities and Exchange Commission
  • Randy Chartash, Chief, Economic Crime Section at United States Attorney’s Office
  • Reuben Guttman, Partner, Guttman Buschner & Brooks, PLLC and Senior Fellow, Center for Advocacy and Dispute Resolution, Emory University School of Law
  • John Floyd, Partner, Bondurant Mixson & Elmore LLP
  • Michael A. Sullivan, Partner, Finch McCranie LLP
  • Sam Sheldon, Partner, Quinn, Emmanuel Urquhart & Sullivan, LLP
  • Bob Magnanini, Partner, Stone and Magnanini, LLP
  • David Bocian, Partner, Kessler, Topaz, Meltzer, Check, LLP
  • Traci Buschner, Partner, Guttman, Buschner & Brooks, PLLC
  • Christopher Haney, CPA, CFE, CHC, Forensus Group, LLC
  • Richard Harpootlian, Harpootlian Law
  • Jerry Martinj, Partner, Barrett Johnston Martin & Garrison, LLC
  • Amy Berne, Chief, Civil Division, United States Attorney’s Office, Northern District of Georgia
  • Sally Molloy, Assistant U.S. Attorney at U.S. Attorney’s Office, Northern District of Georgia
  • Paul Zwier, Professor; Director Center for Advocacy and Dispute Resolution, Emory University School of Law
  • Hon. Matt McCoyd, Magistrate Court Judge, DeKalb County; Associate Director Center for Advocacy and Dispute Resolution, Emory University School of Law