Milberg attorneys successfully represented a health care worker in a whistleblower suit against Medline Industries, Inc., one of the nation’s largest suppliers of medical and surgical products to healthcare providers throughout the United States, along with its charitable arm The Medline Foundation (collectively, “Medline”), obtaining an $85 million settlement on behalf of the federal government that is rare for a case of its kind.
The whistleblower suit, brought by former Medline employee Sean Mason, was filed under the False Claims Act (FCA), which allows private citizens to sue companies that they discover are defrauding the government and to receive an award for their efforts. Mason’s suit alleged that Medline engaged in a widespread illegal kickback scheme targeting hospitals and other healthcare providers that purchase medical and surgical products paid for by federal healthcare programs, resulting in violations of the FCA. Although a party to the agreement, the U.S. Department of Justice elected not to intervene in the lawsuit. But Milberg and three other firms pursued the case as a qui tam action on behalf of the Federal government on a non-intervened basis. The settlement is among the largest settlements of a False Claims Act case in which the government declined to intervene.
“This case demonstrates that, even when the federal government does not intervene, whistleblowers and their counsel can still work with the DOJ to successfully prosecute claims of government fraud,” said Milberg partner Kirk E. Chapman, one of the attorneys who represented Mason. “Since the government cannot possibly take on all False Claims Act cases, some recoveries require the additional efforts of tenacious private whistleblowers, such as Sean, and their counsel.”
Following his discovery of Medline’s fraudulent scheme, Mason filed his original qui tam complaint in federal District Court in Chicago, Illinois in October 2007. Upon an investigation into Mason’s allegations, the United States declined to join the case. However, determined to hold Medline accountable for its illegal conduct, Mason and his counsel, Sherman Marek of Marek Law Office PC, nevertheless elected to continue with the case and brought on Milberg to help prosecute it. In February 2010, after a hard fought motion battle before Judge Suzanne Conlon, the court denied Medline’s motion to dismiss the action in its entirety. Discovery in the case commenced, and soon thereafter, Mason and Medline entered into a tentative settlement agreement that required approval from the United States, as a real party-in-interest. The DOJ approved the settlement agreement on March 10, 2011. For his part in bringing the fraudulent conduct to light and continuing the case on a non-intervened basis, Mason was awarded 27.5% of the settlement proceeds.
Milberg partner Ross Brooks and associates Alastair Findeis and Roland Marquez were also part of the legal team that represented Mason. Attorneys from Williams Montgomery & John Ltd and Clifford Law Offices PC also served as co-counsel.
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Case citation: Mason v. Medline, Civil Action No. 1:07-cv-05615 (Northern District of Illinois
About Milberg
Milberg LLP is widely recognized as a leading class action and complex litigation firm, representing individual and institutional investors, unions, and consumers. Founded in 1965, the Firm has litigated landmark cases resulting in groundbreaking legal precedents and corporate governance reforms benefitting shareholders. Milberg also maintains an active False Claims Act litigation practice. Through representation of whistleblowers who have independent knowledge of government contract fraud, Milberg counsel have been successful in securing the return of millions of dollars to federal and state treasuries. Please visit the Milberg website (www.milberg.com) for more information about the Firm.