Dismissal Of False Claims Suit Shows Scientific Sophistication, Experts Say

Sophistication, Experts Say Author: Thomas W. Durso An October dismissal of a lawsuit filed under the federal False Claims Act-which allows whistleblowers to sue institutions defrauding the government and to recover up to three times the funds involved, plus additional penalties-shows that the courts are becoming more sophisticated in judging science-related cases brought under the law, according to several observers. Kathryn M. Milam, a former postdoctoral researcher at the Brain Tumor Research Center of the University of California, San Francisco, was the plaintiff. She could not persuade a judge in United States District Court in Maryland that her failure to match experimental results that several UC-San Francisco researchers reached in the early 1980s-results used to win federal grants-constituted fraud on the government. The federal False Claims Act was passed during the Civil War to target and punish military contractors and suppliers who defrauded the government through the sale of faulty equipment ( F. Hoke, The Scientist, Sept. 4, 1995, page 1). A 1986 revision of the law allows taxpayers who have evidence of fraudulent claims on the government to sue companies, institutions, and people on behalf of the government and share in the recovery of the contract or grant funds illegally obtained. Under this provision, known as qui tam, a handful of watchdogs have sued universities and their scientists; in some cases, they have won awards reaching six figures. DISTINCTION: Dan Burk notes the difference between fraud and scientific disputes. Dan L. Burk, an assistant professor at Seton Hall University's School of Law, is a critic of the False Claims Act provision, which allows successful plaintiffs to collect up to triple the amount of grant monies won through fraudulent claims (D.L. Burk, The Scientist, Sept. 4, 1995, page 12). Burk, like other observers, says the Milam decision illustrates the difference between outright fraud and scientific disagreement. "If I make an honest labor goof-I use this reagent and I should have used some other reagent-that is probably not going to be a false statement," Burk notes. "An honest difference of scientific opinion is not a knowing false statement to the government. It looks like the courts are starting to draw some lines." "The judge was able to see through what was really a dispute about science and scientific methods and the meaning of data and to recognize we weren't talking an issue of fraud here," says UC lawyer Christopher Patti, who helped defend the Milam case. "I think it will have positive implications for cases that involve-as this one did-claims of, essentially, fraud based on disagreements on scientific data," Patti adds. "This case makes clear in a way no other case has in the past that there has to be something very much more than a scientific dispute, or whether or not science is good or bad, before there can be False Claims Act liability. I think it gives scientists some breathing room to investigate, to use their judgments without fear of major federal liability." Milam's case involved experimental results several UC-San Francisco Brain Tumor Research Center (BTRC) investigators reached while studying the cytotoxic effects of certain drugs on brain tumor cells in vitro. The defendants included five individuals associated with the BTRC in the early 1980s: Charles B. Wilson, the director; Laurence J. Marton, a principal investigator for a BTRC laboratory; Dennis F. Deen, associate director and principal investigator for a BTRC lab; Burt G. Feuerstein, another BTRC principal investigator; and Philip J. Tofilon, an assistant research pharmacologist in Deen's lab who later moved to the University of Texas M.D. Anderson Cancer Center. Also named as defendants were the UC regents, the BTRC itself, and M.D. Anderson. All denied Milam's charges that they reported false experimental results to the National Institutes of Health to garner more than $1 million in grants. Since NIH is located in Maryland, Milam sued in U.S. District Court there. But Judge Walter E. Black, Jr., dismissing the case, noted that several other scientists at UC-San Francisco were able to replicate the results in question and that Milam had introduced a step not used in the original experiments, thus altering the process. "At most, the court is presented with a legitimate scientific dispute, not a fraud case," Black wrote in his 48-page ruling. "Disagreements over scientific methodology do not give rise to False Claims Act liability. Furthermore, the legal process is not suited to resolving scientific disputes or identifying scientific misconduct." Nonetheless, most observers feel that Black's demarcation between fraud and dispute in the Milam case will not significantly affect the use of the False Claims Act in pending and future cases involving science. Lisa R. Hovelson, executive director and general counsel for Taxpayers Against Fraud (TAF), The False Claims Legal Act Center, in Washington, D.C., says she found "nothing surprising" in Black's ruling. "The decision doesn't change anything in terms of what the appropriate use of the False Claims Act is," says Hovelson, whose nonprofit organization acts as a clearinghouse for information about the law and backs litigation of false claims cases. "It finds that based on the evidence in record, [Milam] could not meet the elements of the False Claims Act [and] could not prove her case," Hovelson adds. "That's not unlike many other decisions we read, whether in defense contracting or Medicare or whatever." Hovelson notes that the False Claims Act, as applied to science cases, has never been used to resolve disputes over scientific theory; its application has been permitted by the courts in cases of fraud, falsification, or fabrication in taxpayer-funded research. "This decision doesn't alter that," she states. Seton Hall law professor Burk notes that Milam's case did not involve "core scientific fraud"-falsification or fabrication of data, or plagiarism of another scientist's work. "I wouldn't read [Black's] statement too broadly," he says. "If the judge meant it broadly, then I think he's mistaken." Agreement with the Milam decision extends even to past False Claims Act plaintiffs. 'A SEPARATE SET OF FACTS': Victor Herbert says the milam case should not raise fear for whistleblowers. "[Milam] says that these people at this university were defrauding the government because their research was fraudulent, and that she was unable to replicate their research," says nutritionist Victor Herbert, a physician and lawyer who unsuccessfully sued the National Academy of Sciences (NAS) about five years ago. "Well, that doesn't make their research fraudulent. The judge is correct that the qui tam action is not the place to determine whether their research was fraudulent. This is not clear-cut fraud. . . . It's her word against theirs." Suing under the False Claims Act, Herbert had charged that NAS improperly published his copyrighted material in order to fulfill its part of a $556,000 contract with the federal government for the 10th edition of the list of recommended daily allowances of various vitamins and minerals in 1985. Herbert, a professor of medicine at Mount Sinai School of Medicine and at the Bronx VA Medical Center in New York, lost the case. It was recently revived as a copyright-infringement suit and sent to the U.S. Court of Federal Claims in Washington, D.C., where it was scheduled for trial February 12. Asked whether the Milam decision will raise fear for whistleblowers, Herbert replies, "None whatsoever. It's a separate set of facts. The False Claims Act is for addressing false claims. It is not for addressing whether something is or isn't scientifically valid." Milam herself, in a written statement given to The Scientist, termed Black's ruling "contrary to the provisions of the False Claims Act and the increased willingness of courts to entertain science-related claims under the Act." Now pursuing a legal career, she noted that she does not have "the legal or personal resources" to appeal the decision. "I believe that the decision is an aberration that will not provide legal precedent for science-related False Claims Act cases," Milam wrote. "Judge Black's decision will not be a major blow to other whistleblowers who pursue such claims." Research psychologist Carolyn Phinney won more than $1.2 million under Michigan state laws when a jury ruled that a former supervisor at the University of Michigan had defrauded her of her intellectual properties, including research and grant applications, one of which resulted in a grant of more than $300,000 from NIH. The university, which the jury found to have retaliated against Phinney, is appealing the decision. Phinney, who did not pursue her case under the False Claims Act, nonetheless warns of the implications the ruling in the Milam case may have for future whistleblowers. "I can understand Judge Black's frustration with an issue like this not being handled in some other forum," she says. "But the reality is, there is no other forum that will handle these cases. The courts are the method of last resort, I believe, but they must be available if there's no other forum that will do the job. "[Black] is right-disagreements over methodology that are mere scientific disagreements may not be the subject for the court. But fraud, intentional misrepresentation, is under the jurisdiction of the court. Why should scientific fraud be different from business fraud or medical fraud or fraud in the space program? Why is he picking out science for having the special status?" Will Black's decision dissuade whistleblowers from stepping forward? "I hope not," Phinney replies. "I think that one judge's . . . opinion will not prevent people from trying to protect the public from scientific fraud using the False Claims Act. That would be very sad if it did, because there's no other mechanism available in many cases." a lawyer and surgeon, says the Milam case differs from other successful False Claims suits. Eugene Dong, a lawyer and an associate professor of cardiothoracic surgery at Stanford University's School of Medicine, is credited with first identifying the applicability of the False Claims Act to scientific fraud. But after reading a report of Black's decision in the Milam case, he says simply, "I'm not excited." Dong claims the ruling is consistent with other cases in which judges believing they are dealing with scientific disputes decline to proceed with False Claims Act litigation. According to Dong, the False Claims Act comes into play only if it can be proved that the misconduct being alleged results in some form of harm or injury to the country-such as the waste of taxpayer dollars on phony research. "The issue is whether or not something false has been used to get money from the government," Dong says. Officials at universities that have been sued under the False Claims Act praise Black's ruling. Patti, the UC lawyer who helped defend the Milam case, goes so far as to say it will not affect the efforts of watchdogs who spot legitimate scientific fraud. "The decision should not be read too broadly," he advises. "It does not really have anything to do with fraud involving the financial aspects of federal grants, and it does not relieve from liability anyone who makes up data or misrepresents what their data is. This case I do not believe undermines the ability to go after people who engage in what I would call genuine fraud." 'NOT THE PLACE': Barbara Mishkin says scientific disputes don't belong in Feberal Court. Barbara Mishkin is a Washington, D.C., lawyer representing the University of Alabama and several of its researchers in the university's appeal of a May 1995 decision requiring it to pay more than $1.6 million to the federal government, nearly $500,000 of which goes to epidemiologist Pamela Berge. A jury in U.S. District Court for Maryland-where the Milam case was dismissed-agreed with Berge that the Alabama researchers had used her dissertation work as theirs in winning NIH grants. Mishkin says she feels strongly that "federal courts [are] not the place to resolve disputes about science," though she concedes the Milam and Berge cases may be "somewhat different." "I don't know, therefore, whether one could properly generalize from Milam to Berge," Mishkin says. "It would depend on how broadly the language is written. "Even if it's not useful in this one case, it's still a very nice decision to have on the books, because it would be a big help if the courts realized they aren't the best venue for resolving disputes about science. It really wasn't what the qui tam decision was created to handle." Berge herself declines to comment, referring questions to her lawyer, Alexander T. Bok of Boston, who is also representing a University of Pittsburgh biomedical engineer in a False Claims Act suit against the university and several of its researchers involving NIH funds. However, Bok did not respond to repeated requests to be interviewed. After a False Claims Act suit is filed, it is kept under seal for 60 days while the U.S. Justice Department decides whether to join the plaintiff in suing. Even if the Justice Department declines to join, whistleblowers may pursue their cases independently. TAF's Hovelson, who says only about a half-dozen unsealed False Claims Act cases involve science, has some words of caution for institutions celebrating the Milam decision and seeing it as a blanket precedent for such cases. "Universities have commented quite a bit about whether this is an appropriate vehicle or an appropriate place to have these allegations brought out. I think they're missing the point," she says. "Clearly the people in these institutions that are using public funds have had trust placed in them as the integrity of the research being paid for by the taxpayers. They should not be exempt from accountability simply because they're from academia or part of the scientific community." "Other [successful False Claims Act] cases are different," Dong agrees. "The judges found something and that is that the false information was used in some way to make a false claim on the United States government. They're considerably different than what is denominated a scientific dispute." "I just see this as a minor setback," adds Michigan psychologist Phinney. "It is inevitable that these cases are going to end up in court. If there's illegal conduct in science, clearly it belongs in the courts." Thomas W. Durso is a freelance writer based in Deptford, N.J.

Dismissal Of False Claims Suit Shows Scientific Sophistication, Experts Say

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