SDNY upholds jury verdict in research grant qui tam

by Ben Vernia | December 21st, 2010

On December 9, District Judge William H. Pauley, III, of the Southern District of New York denied the motions of a doctor and Cornell Univ., defendants whom a whistleblower alleged submitted false grant applications to the National Institutes of Health. In U.S. ex rel. Feldman v. Van Gorp, a jury found that the doctor had submitted false applications for continued funding for years three through five of a grant relating to a fellowship program for HIV/AIDS (the relator was a Fellow in the program).

Judge Pauley rejected the defendants’ arguments that the jury’s decision was unfounded in the evidence at trial. The false statements – i.e., that no changes had been made in the program’s personnel or structure – were material, he reasoned, because the continuation applications were a prerequisite to continued funding, and the parties had stipulated that the NIH guidelines applied to the progress reports contained in the continuation renewals, and required information that the relator alleged the defendants had omitted. The court rejected the defendants’ argument that the opinion of a member of the proposal’s initial review group rebutted the materiality of the omissions, writing that the IRG member did not even review the continuation requests, and that he had no independent recollection of reviewing the initial grant application.

Judge Pauley found evidentiary support, too, for the jury’s finding of scienter, including the testimony of the physician-defendant’s colleague:

He gave me basically a template and wanted me to put some information into the template about what had gone on that year. And I read what was written and I said to him, “But we never did this,” and he said “Don’t worry about it.”

In addition, the continuation requests clearly stated that no changes had been made even though the physician himself testified that he had modified it and that several persons listed in the grant application as “key personnel” had left the program.

Judge Pauley likewise rejected the defendants’ requests for a new trial, finding that the jury verdict was not against the weight of the evidence, and that he had not erred in deciding in limine that the measure of damages on a finding of liability by the jury would be the grant monies awarded as a result of each false statement.

Leave a Reply

Recent Posts

Recent Comments