A US district judge in New Jersey recently denied a motion to dismiss filed by laboratory whistleblower Chris Riedel of Hunter Laboratories in a lawsuit brought against him by laboratory whistleblowers Fair Laboratory Practices Associates (FLPA) and NPT Associates (NPT).
I only just now came across the suit, which was originally filed in April 2014, but it is still interesting nonetheless and far from being resolved.
FLPA and NPT are separate general partnerships formed in Delaware solely for the purpose of bringing qui tam (whistleblower) actions.
FLPA is composed of general partners Andrew Baker, Richard Michaelson, and Mark Bibi, the former CEO, CFO and general counsel, respectively, of Unilab, a clinical laboratory that was purchased by Quest Diagnostics in 2003.
FLPA filed a qui tam against Quest and Unilab in 2005, alleging they engaged in a “pull-through” scheme where they charged some of their customers/clients below market rates in exchange for Medicare/Medicaid referrals. Quest moved to have the case thrown out on the grounds that Mr. Bibi, who used to be general counsel for Unilab, was ethically precluded from blowing the whistle on a former client.
FLPA argued Mr. Bibi’s client was Unilab, a laboratory that no longer exists, and not Quest, and he is therefore able to sue Quest.