False Claims Act Whistleblower Recovers More than $2.5M in Damages in False Claims Act Whistleblower Retaliation Case
In November 2019, Danita Erickson, a former sales representative at Biogen, prevailed at trial on her claims under the whistleblower protection provision of the False Claims Act and Title VII gender discrimination. Erickson alleged that Biogen terminated her employment in retaliation for her internal whistleblowing about the off-label promotion of Zinbryta for aplastic anemia (a use outside the FDA-approved labeling). After raising her concerns to her manager and a senior manager of a division, Erickson went from being the second-highest ranked salesperson in the combined territories of Seattle, Tacoma, Western Washington, and Alaska to being listed as a “bottom performer” in the West Division and slated for termination.
Following post-trial motions, Judge Coughenour issued an order denying Biogen’s motion for a new trial and awarding Ms. Erickson the following damages:
$729,140 in front pay, reduced from $2,143,722 awarded at trial.
$300,000 in punitive damages, reduced from $1,690,000 due to the statutory cap;
$781,000 in back pay, doubled from the actual back pay award of $390,500;
$651,040 in attorneys’ fees and $74,014.73 in litigation costs; and
a tax gross up on economic damages to offset the tax implications of the economic damages award.
The decision provides an important guide to the remedies available under the whistleblower protection provision of the False Claims Act. Congratulations to Ms. Erickson and her counsel Gordon Thomas with Honeywell LLP on this significant win.
A prevailing False Claims Act retaliation plaintiff can recover front pay, which is an alternative to the equitable remedy of reinstatement. The purpose of an award of front pay is to make a victim of retaliation whole. At trial, a damages expert estimated that Ms. Erickson’s future lost earnings from age 48 to 63, offset by mitigation in the form of a lower-paying sales job, would total $2,143,722.
Biogen sought to remit the award to three years of front pay on the basis that the jury award of front pay was grossly excessive. Judge Coughenour lowered the front pay award to $1,119,640, representing five years of front pay, on the ground that Ms. Erickson is a talented sales representative and a highly skilled professional, and therefore it would be speculative to predict Ms. Erickson’s career trajectory.
In her trial brief, Ms. Erickson noted that “[i]t is clear—after terminating Plaintiff, never offering to release her from her noncompete, refusing to allow her manager to provide a reference, and the adversarial nature of the present litigation—that Biogen is not interested in having Plaintiff return to the workforce.” One wonders why Biogen took these retaliatory actions that increased their exposure to back pay liability.
Double Back Pay
At trial, the jury awarded Ms. Erickson $395,000 in back pay (lost wages and benefits offset by mitigation earnings). In accordance with the False Claims Act anti-retaliation provision, Judge Coughenour amended the judgment by doubling the back pay award from $390,500 to $781,000, but he awarded prejudgment interest only on the actual back pay award.
Ms. Erickson’s counsel at Gordon Thomas Honeywell LLP spent 1,681 hours working on the case, including trying the case, deposing 18 witnesses, working with expert witnesses, preparing for trial, etc. Counsel requested a lodestar fee of $637,290, which is the number of hours reasonably expended on the litigation multiplied by a reasonable hourly rate.
Biogen sought to discount $52,202.50 in fees spent on legal conferences involving two or more attorneys, but Judge Coughenour found that “collaboration is necessary to take a case to trial, and it is permissible to award attorney fees for legal conferences.” He also declined Biogen’s request to discount $13,095 in entries that it flagged as unproductive time and to discount $11,125 for work that Biogen characterized as administrative, which was performed by paralegals at rates of $225 or less.
Judge Coughenour reduced the requested lodestar only by $16,442 for time spent litigating an unsuccessful disability claim. He awarded the full amount of Ms. Erickson’s taxable and non-taxable litigation costs including fees, depositions, transcripts, witness fees, medical records, parking, travel, expert fees, meals, shipping, and same-day trial transcripts, among other items.
Tax Gross Up
Ms. Erickson requested a tax gross up of $561,656 to put her in the same position as if she had earned the wages over time (at a lower tax rate than as a single lump sum award). Finding that the tax consequences of a lump sum award of this size appear steep, as supported by the testimony of the damages expert, Judge Coughenour awarded a tax gross up but limited it to economic damages and excluded the FCA doubling of back pay.