Background

In 2016, individuals connected with West Virginia’s Camden Clark Medical Center filed a qui tam alleging false claims, kickbacks, and Stark Law violations by a competing health system, Marietta Area Healthcare.[1] That qui tam was ultimately voluntarily dismissed by the Camden Clark-connected whistleblowers prior to Marietta being served with the complaint.[2]

That’s when Marietta did what every hospital accused of fraud dreams of: they sued the whistleblowers.

Marietta claims that the whistleblowers engaged in malicious prosecution and tortious interference by filing a qui tam based merely on what it calls “flimsy accusations.”[3] According to Marietta, the whistleblowers sought to tarnish the competing hospital by triggering a federal investigation, which Marietta labeled in its complaint as an “egregious intentional misuse of the judicial system.”[4]

And then Marietta added a new defendant: the general counsel of the competing health system, Camden Clark Medical Center, who was not one of the whistleblowers.[5]

That general counsel was alleged in Marietta’s amended complaint to have developed, planned, and strategized with the whistleblowers the qui tam against Marietta.[6] According to Marietta’s complaint, the general counsel teamed with the whistleblowers to harm Marietta, including causing physicians to terminate their business relationship with them after learning of the federal investigation that flowed from the qui tam.[7] In other words, the general counsel is alleged to have caused the whistleblowers’ qui tam to hurt a hospital that was a business competitor of his health system.

Hospital’s Case Against Whistleblower Now Heading For Trial

The whistleblowers-turned-defendants and the general counsel from the competing health system moved for summary judgment, arguing several theories, including that several counts are barred by the litigation privilege and that the evidence lacks a showing of malice on the part of the whistleblowers and general counsel.[8] The hospital then dismissed one of the whistleblowers from the case.

The court on February 23, 2023, denied all of the defendant’s motions for summary judgment, holding that genuine issues of material fact exist in all of the hospital’s claims against the remaining whistleblower and the competing health system’s general counsel.[9] The federal judge stated that “there is a genuine issue of material fact as to whether the alleged interference in plaintiffs’ business was for a proper purpose,”[10] and thus denied the whistleblower and the general counsel summary judgment.

And, in what should have been a sign of the tide, on February 22, 2023, the day before denying summary judgment, the court set the hospital’s case down for trial. The trial is set to begin on March 27, 2023, in Wheeling, West Virginia. Both sides have requested a jury trial, and so a jury will be called on to answer whether the whistleblower and competing general counsel had improper motives for filing the qui tam.

[1] See United States ex rel. King et al. v. Marietta Area Healthcare, Inc. et al., Case No. 5:16-cv-175, Doc. 1 (N.D.W.V.) (Qui Tam Complaint).

[2] Id., Doc. 42 (Relators’ Notice of Voluntary Dismissal Without Prejudice).

[3] Marietta Area Healthcare, Inc. et al. v. King et al., Case No. 5:21-cv-25, Doc. 4, at 1 (S.D.W.V.) (Complaint).

[4] Id. at 2.

[5] Marietta Area Healthcare, Inc. et al. v. King et al., Case No. 5:21-cv-25, Doc. 107 (S.D.W.V.) (Amended Complaint).

[6] Id. at 8.

[7] Id. at 20.

[8] Marietta Area Healthcare, Inc. et al. v. King et al., Case No. 5:21-cv-25, Doc. 426 (S.D.W.V.) (Order Denying Motions for Summary Judgment). (summarizing arguments made on motion for summary judgment).

[9] Id.

[10] Id. at 18.

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