Reuben Guttman: The lawyer pharma loves to hate

Reuben Guttman wants us all to be concerned about what’s in our medicine cabinets. A Washington lawyer who specializes in prosecuting pharmaceutical fraud, Guttman has gone after Pfizer, Abbott, GlaxoSmithKline, and several other top drug makers — and he usually wins big, recouping billions of dollars for federal and state governments.

We invite you to read the full interview with Mr. Guttman conducted by By Karen Weintraub of StatNews.com

Spotlight on privatisation of the courts

As debate in the US continues over mandatory arbitration clauses that have led to private adjudications, a new film focuses attention on the use of private forums and sealed proceedings to resolve matters of potential public importance.

Spotlight, starring Michael Keaton, focuses on the team of investigative journalists from The Boston Globe who exposed sexual abuse by Roman Catholic priests. The movie takes its name from The Globe’s ‘Spotlight Team’ of investigative reporters.

As stories about investigative journalism go, Spotlight is not All the President’s Men. It is not so much about a team of reporters finding the facts on their own as it is a story about reporters struggling to pry the facts – and story – loose from attorneys who have settled their cases in private forums or who are litigating with key documents sealed by confidentiality orders.  In Spotlight, it is the lawyers who have put the facts and story together; but it is a story that they must keep to themselves.

In a line that explains the rationale for transparency of the judicial and legislative process, Justice Brandeis notes that sunshine is the best disinfectant. Court proceedings that seemingly involve only private interests may very well have public import. For example, cases alleging sexual harassment and employment discrimination, even when brought by a single plaintiff, may involve conduct that is pervasive and thus relevant to others who might muster the courage to step forward and vindicate their own rights. Matters litigated in the sunshine may cause private entities and government oversight bodies to take action to protect against prospective injury. But for the work of the Spotlight Team, the pervasive nature of egregious conduct would not have seen the light of day.

Public litigation in the United States has brought to the surface facts that make cars safer, workplaces more tolerable for protected classes and the air we breathe less dangerous to human health. It does not even take a court ruling or jury verdict to make the point – information that comes to light during the litigation process may fuel legislative oversight and/or regulation. This is not merely a collateral benefit; it is the way the system is supposed to work. And – as Spotlight reminds us – there is a real benefit to a transparent system of justice.

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

 

The Planned Parenthood Inquiry: Another View

by Reuben A. Guttman and Caroline M. Poplin, M.D., J.D.

Guttman practices law with Guttman, Buschner & Brooks PLLC and was counsel for whistleblowers in cases involving Abbott, Pfizer, GSK, CHS and Pharmerica, among others. Poplin, M.D., J.D., is Medical Director and Of Counsel for Guttman, Buschner & Brooks PLLC and also was involved in cases against Abbott, Pfizer, GSK, CHS and Pharmerica.

In recent months, Planned Parenthood, a health care provider for low-income women, has been under the focused scrutiny of a Congressional oversight committee. Among its many healthcare services, many of which involve preventive care, Planned Parenthood also provides abortions. The organization has been accused in political circles of selling fetal tissue. Though this may be a crime, there have been no criminal indictments let alone convictions and the evidence seems flimsy, if not fabricated, with congressional oversight itself pretextual.

Of course, if Capitol Hill politicians are sincerely interested in looking into how federal dollars are being spent for preventive medicine, care for the nation’s children, and care for the infirmed and the elderly, there are real targets to focus on; targets where billions of dollars have been spent for medical care which, in some cases, has neglected the fundamental tenet that has passed from practitioner to practitioner through the ages: “first, do no harm.”
For starters, look no farther than the pharmaceutical industry where some of the world’s largest drug companies – which feed on funds from Medicare, Medicaid, and the Veterans Administration – have pled guilty to conduct that has admittedly placed lives at risk. Abbott, GlaxoSmithKline, Pfizer, and Johnson & Johnson are just a few of the names that make the list.

In 2012, Abbott Labs pled guilty to violating the Food Drug and Cosmetics Act when it off-label marketed its drug Depakote to the elderly and children for purposes outside of the drug’s FDA-approved indication. In 2013, Janssen Pharmaceuticals – a subsidiary of Johnson & Johnson which makes baby powder and other products – pled guilty to misbranding its billion dollar anti-psychotic drug, Risperdal. Through ongoing litigation and investigation, information about how that drug was marketed is still trickling out to the public and undoubtedly not completely known.

Where would Congress start an investigation? Look no further than big pharma’s representations to Wall Street analysts touting sales goals well exceeding the reasonable revenue streams from the FDA’s approved indication for the product. Juxtapose those goals with company documents challenging company sales reps to meet their “mark,” drill down on the documents showing company-sponsored Hawaiian getaways for employees who exceed sales expectations, and maybe find a few company-sponsored contests which challenge sales teams to spin marketing messages, and the story begins to come into focus. Congressional investigators might also look at big pharma strategies to plant marketing messages in “scientific publications.”

For the legislator whose campaign coffers are so dependent on big pharma dollars to make inquiry a political non-starter, there are the pharmacies that serve the nursing homes. These Long Term Care (LTC) pharmacies are responsible for prudently dispensing prescriptions and providing honest information about pharmaceutical products to the doctors who write them. Notwithstanding their obligation as medical providers, some of the LTC pharmacies – including Omnicare and Pharmerica – have paid millions to settle claims that rebates paid to them by big pharma were no more than bribes to promote a product.

Congressional oversight might start with a look at public filings with the Securities & Exchange Commission which hint at impropriety. Pharmerica’s August 2015 Form 10-K Report filed with the Securities & Exchange Commission discloses that “we currently receive rebates from certain manufacturers and distributors of pharmaceutical products for achieving targets of market share or purchase volumes. Rebates are designed to prefer, protect, or maintain a manufacturer’s products that are dispensed by the pharmacy under its formulary.” It’s actually too bad that most patients don’t think to read SEC filings, and undoubtedly most Wall Street analysts never realize that one day they too may be patients.

Last year, Community Health Systems, which operates more than 100 local hospitals, settled government charges that it schemed to admit patients from the emergency room whose admission was not necessary according to prudent medical practice.

Big pharma, corporate hospital chains, and several publicly traded LTC pharmacies have collectively paid billions to settle these cases. Some of these include repeat offenders. Pfizer and Phamerica, for example, merited new corporate integrity agreements—the corporate equivalent of a return to rehab.
In many cases, the price of wrongful conduct has been measured in the dollars that are spent on unnecessary products and services by federal and state health care plans and sometimes by private payors.

Unfortunately, where drug company promotional activity places a promotional spin on the science of medicine it is difficult, if not impossible, to unscramble and put back together the market for honest medical information. And how does one pinpoint with precision the injury – both short-term and perhaps even latent – attributable to drugs that are administered without medical necessity or prudent instructions for their use? It is indeed a problem. Not to belabor the point: These are also issues about life or the right to life worthy of Congressional oversight.

Reuben Guttman Honored By Emory Law

On Friday, September 25th, Emory Law awarded Reuben Guttman, A founding partner of GBB,  with its Alumni Service Award  for “significant, sustained leadership and outstanding service to the Emory Law community.”   Among his other service to Emory Law, Mr. Guttman was a visiting professors at Universidad Panamericana in Mexico City training Mexican judges and practitioners on oral advocacy and trial practice, part of a U.S. State Department program in conjunction with Emory Law’s Center for Advocacy and Dispute Resolution.  Source: Emory Law News Center

Second Circuit Crafts New Test For Unpaid Intern Claims

The Second Circuit provides employers greater freedom to implement unpaid internship programs and a stronger defense for class-action lawsuits brought by interns. But stronger protections for interns may remain in other jurisdictions and under state employment laws.

OVERVIEW
On July 2, 2014, the U.S. Court of Appeals for the Second Circuit handed down a long-anticipated decision that establishes a new standard for assessing whether interns should be classified as “employees” eligible for minimum and overtime wage. Assessing two related cases, Glatt, et al. v. Fox Searchlight Pictures, Inc., et al. and Wang, et al., v. The Hearst Corp., the Second Circuit adopted a “primary beneficiary” test and identified seven nonexclusive factors relevant to the classification of unpaid interns. In doing so, the court declined to adopt an exclusive six-factor test urged by the US Department of Labor’s (DOL) and held that “courts may consider relevant evidence beyond [their own] specified factors[.]” The Second Circuit also held that the question of an intern’s employment status is a “highly individualized inquiry,” making it more difficult for future interns who may seek to bring class-action claims against companies. Nevertheless, the decision should not be read to authorize employers carte blanche to structure their internship programs however they wish. Nor should it be read as a death knell to unpaid intern claims or intern class actions under state law or in other jurisdictions.

BACKGROUND
The Second Circuit’s decision marks the culmination of a rash of intern litigation in the U.S. District Court for the Southern District of New York and beyond. In the Glatt case, the district court had granted summary judgment in favor of the plaintiff interns and approval of class certification on June 11, 2013. By contrast, the Wang court denied the interns’ motions for summary judgment and class certification. In the two years since those decisions, a large number of intern class-action lawsuits have been filed, with mixed results. The rulings in favor of the interns and uncertainty regarding the legality of unpaid interns caused companies reevaluate their internship programs. Some companies, such as Conde Nast, even suspended their internship programs. The Second Circuit provides employers operating within its boundaries a clearer framework for the implementation of unpaid internship programs and strong precedent to defend potential or current class-action clams. But it arguably does so at the expense of interns.

INTERN CLASSICIATION IN THE SECOND CIRCUIT IN A POST-GLATT WORLD
In Glatt, the Second Circuit rejected the DOL’s test found that the DOL test, claiming that it was unpersuasive and overly rigid. The Second Circuit determined that an analysis of intern status should focus on the question of whether an intern or an employer is the “primary beneficiary” of the relationship. The court explained that this primary beneficiary test is inherently flexible because it focuses on the economic reality of the employer-intern relationship and the benefits the intern receives in exchange for his or her participation in the internship program. The court identified the following seven, non-exclusive factors to aid courts in determining whether an intern is an employee under the New York Labor Law (NYLL) and federal Fair Labor Standards Act (FLSA):

  1. The extent to which the intern and employer clearly agree that there is no expectation of compensation. Promises of compensation, express or implied, suggest the intern is an employee and entitled to such compensation.
  2. The extent to which the internship provides training similar to the training provided in an educational environment, including clinical and practical training provided by educational institutions.
  3. The extent to which the internship is tied to the intern’s formal education program via receipt of academic credit for the internship or because the training receive integrates into the intern’s formal coursework.
  4. The extent to which the internship accommodates the intern’s academic commitments by corresponding to the academic year. This factor arguably counsels against summer jobs qualifying as unpaid internships.
  5. The extent to which the internship’s duration is limited to the period in which the internship provides the intern with beneficial learning.
  6. The extent to which the intern’s work complements, rather than displaces, the work of paid employees while providing significant educational benefits to the intern.
  7. The extent to which the intern and the employer understand that the internship is conducted without entitlement to a paid job at the conclusion of the internship. Thus, an understanding that the internship is to be ‘trial period’ counsels against the viability of it being unpaid.

The Second Circuit’s decision is most notable for its insistence that the company may benefit from the intern’s work without needing to pay the intern. Many interpretations of the DOL test concluded that there can be no immediate benefit to the company from the intern relationship. The decision suggests an internship in the Second Circuit may be unpaid if an intern receives an educational benefit and doesn’t serve as a direct replacement for paid employees even if the employer is also receiving a benefit from the relationship. The decision has received a great deal of criticism. For example, Suffolk University law professor David Yamada, who wrote the first law review article on unpaid internships back in 2002 opined: “All the factors they drew up were really without legal authority…They apparently decided to invent something new here, which is surprising at the appellate level.” says Yamada.

CLASS CERTIFICATION IN A POST-GLATT WORLD
The Second Circuit also dealt a blow to intern rights by refusing to certify the Fox interns as a class. The Second Circuit declared that “an intern’s employment status is a highly individualized inquiry” not conducive to class-action treatment. The court noted that even if a plaintiff could establish that its employer had a policy of replacing paid employees with unpaid interns, that fact alone would not mean that each intern in the putative class would prevail under the primary beneficiary test. The decision makes little sense as it stands to reason the job experience is the same or similar for all interns performing the same tasks. The Second Circuit’s directive that a trial court must conduct an individualized fact-specific inquiry could make it more difficult for future cases brought by interns to proceed on a class basis, but the court did make it clear that it is possible for a class to be certified under the appropriate circumstances. In doing so, the Second Court left the door open for interns to bring wage and hour representative on a representative basis.

IMPLICATIONS FOR WORKERS AND EMPLOYERS
Employers may consider expanding the scope of existing internship programs or implementing a new unpaid internship program. Any such expansion should be approached cautiously and employers should carefully assess all relevant law. Despite the Second Circuit’s guidance, engaging unpaid interns remains risky. This is particularly true for employers operating outside the Second Circuit where the Second Circuit’s test does not have the force of law. Additionally, at least one state has written the U.S. Department of Labor’s test that the Second Circuit rejected into law. In passing anti-discrimination protections for interns, the Connecticut legislature defined an intern as an “individual who performs work for an employer for the purposes of training,” if and only if:

  • the employer is not committed to hire the individual performing the work at the conclusion of the
    training period;
  • the employer and the individual performing the work agree that the individual performing the work
    is not entitled to wages for the work performed;
  • the work performed: (a) supplements training given in an educational environment that may
    enhance the future employability of the individual; (b) provides experience for the
    benefit of the individual; (c) individual does not displace any current employee of the employer; (d)
    is performed under the supervision of the employer or an employee of the employer; and (e)
    provides no immediate advantage to the employer providing the training and may
    occasionally impede the operations of the employer.

Thus, in Connecticut, wage and hour protections afforded under state statute may apply to interns when no such rights attach under the FLSA. The same may be true in other states. Workers should consult competent counsel if they think their employer has treated them improperly.

CONTACTS
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 employees who wish to vindicate their rights and provide counseling to companies seeking to comply with employment laws.