Phillips & Cohen sets record with whistleblower lawsuits

WASHINGTON, DC, Jan. 6, 2010 -- Whistleblower lawsuits filed by Phillips & Cohen LLP resulted in civil recoveries to government entities totaling $1.15 billion in 2009 - a record amount for whistleblower cases by an individual law firm in one year.

Those "qui tam" (whistleblower) lawsuits also provided the government with essential information used in parallel criminal prosecutions, resulting in an additional $1.34 billion in related criminal fines, for a total of nearly $2.5 billion in recoveries in 2009 related to matters initiated by Phillips & Cohen clients.

For the firm's 10 cases that settled in 2009, Phillips & Cohen clients received whistleblower rewards totaling $184 million. Under the False Claims Act, whistleblowers who file "qui tam" lawsuits to expose fraud against the government receive rewards based on a percentage of the amount the government recovers as a result of their cases.

"In each of our cases, we had whistleblower clients committed to stopping fraud and government lawyers and investigators who did exemplary work," said Erika A. Kelton, a Phillips & Cohen partner. "Those are essential factors in successful whistleblower cases."

Three of Phillips & Cohen cases set individual records for cases involving fraud against the government:

  • In the largest healthcare fraud recovery ever, pharmaceutical giant Pfizer Inc. paid $502 million to settle a qui tam lawsuit brought by Phillips & Cohen and paid $1.3 billion for a related criminal fine. The whistleblower alleged Pfizer was illegally marketing Bextra, a prescription painkiller, for dangerous and unapproved uses. This settlement was part of a $2.3 billion settlement the government announced in September 2009.
  • Northrop Grumman paid $325 million in April 2009 to resolve a qui tam lawsuit brought by Phillips & Cohen that alleged TRW Inc. -- which Northrop had acquired -- sold faulty electronic components to the government for military satellites, causing those satellites to fail in orbit. It was the largest settlement ever paid by a defense contractor in a whistleblower case and the second largest settlement ever paid involving defense contractor fraud.
  • Quest Diagnostics paid $262 million in April 2009 to settle a whistleblower lawsuit brought by Phillips & Cohen and paid an additional $40 million for a related criminal fine. The lawsuit alleged a Quest subsidiary manufactured and sold medical tests that provided faulty results, leading to harmful treatment and unnecessary surgeries for dialysis patients. It was the largest settlement ever paid by a medical lab company for a faulty product.

"In this time of tight budgets, it's particularly important that governments at all levels try to recover funds lost to fraud, a Phillips & Cohen partner. "Government contractors must be held accountable for every dollar spent."

"It's clear the False Claims Act has made a huge difference in the government's ability to fight fraud," said Mary Louise Cohen, a founding partner of Phillips & Cohen. "Whistleblowers are essential in that effort."

Phillips & Cohen, which has offices in Washington, DC, and San Francisco, represents whistleblowers nationwide in cases brought under the False Claims Act, similar state false claims laws and the Internal Revenue Service whistleblower program. It is the nation's most successful law firm representing whistleblowers, with cases resulting in $5.3 billion in civil recoveries and criminal fines.

The National Law Journal recognized Phillips & Cohen's success by selecting the law firm for its prestigious "Plaintiffs' Hot List" of 15 top law firms for 2009. Phillips & Cohen also was selected for the 2004 and 2007 "Plaintiffs' Hot List."

For more information about Phillips & Cohen, qui tam lawsuits and tax whistleblower cases, see www.phillipsandcohen.com.