Court Axes Whistleblower’s Case Against Omnicare and CVS Over Fake Prescriptions

A Northern District of Illinois court has dismissed a qui tam action under the Illinois False Claims Act (IFCA), a statute that grants recovery to citizens who blow the whistle on false government claims. The plaintiff, Byron Strakusek, sued defendants Omnicare, Inc. (Omnicare) and its parent, CVS Health Corp. (CVS) for allegedly submitting claims for prescription drugs without a valid prescription to Medicaid in violation of several laws.

In her Jan. 29 opinion, Judge Rebecca R. Pallmeyer recounted the plaintiff’s allegations. Without describing the nature of his role, the court wrote, Strakusek worked at Omnicare between July 2011 and December 2013, when the alleged misconduct occurred.

He subsequently complained that the defendants caused the submission of false claims to the Illinois Medical Assistance Program for controlled substances that were dispensed without a valid prescription. In turn, he sought recompense under the IFCA for reporting the allegedly fraudulent claims, not once but twice. The court noted that the instant complaint is a “copy” of one Strakusek filed in the same federal court almost seven years ago.

In support of their motion to dismiss, Omnicare and CVS contended that the plaintiff did not sufficiently plead facts supporting their direct involvement in the alleged wrongdoing, and his claim was prohibited by the doctrine of res judicata based on the decision rendered in the previous case. They also argued that a provision of the IFCA bars Strakusek’s claim and that CVS be dismissed, as the alleged wrongdoing took place years before CVS purchased Omnicare.

Taking the issue of claim preclusion first, the court held that the prior adjudication indeed barred the action because it involved the same parties or their privies, the same claims, and ended in a final judgment on the merits to which the plaintiff is bound. In addition, the court held that the IFCA’s public disclosure bar, a provision enacted to “ensure that it is true whistleblowers who are able to bring claims under the Act, rather than opportunists seizing on information that is already publicly available,” also defeated the plaintiff’s claims due to the filing of the first case.

The court explained that because the prior court unsealed the plaintiff’s first complaint after it was dismissed and before the instant complaint was filed, the unsealed filing constituted publicly available information and prevented the plaintiff’s secondary IFCA claim.

The court also held that the plaintiff failed to state a claim for which relief could be granted. For two of the counts, the plaintiff did not meet the heightened federal pleading requirements for fraud. With regard to CVS’s request to be dismissed from the suit, the court agreed that the plaintiff had failed to plead specific facts tying CVS to the conduct at issue.

The court granted the plaintiff leave to file an amended pleading by Feb. 25.

The plaintiff is represented by Konicek & Dillon, P.C. and Owens Law, LLC, and the defendants by Williams & Connolly LLP and Falkenberg Ives LLP.