On February 11, 2013, a jury in federal district court in Illinois found a nursing home operator (Company) liable under the False Claims Act and the Illinois Whistleblower Reward and Protection Act for fraudulent billing and certifications.  U.S. v. Momence Meadows Nursing Center Inc., No. 04-cv-2289 (C.D. Ill.).  The jury also found that the Company retaliated against the employees who reported the alleged misconduct.  The verdict form can be accessed here.

Two former employees (Plaintiffs) commenced the case in 2004.  They claimed that the Company provided inadequate care for its elderly and disabled patients, and that it filed multiple false or fraudulent claims to state and federal agencies.  The complaint alleged that the inadequate care contributed to the death of three patients and an outbreak of bedsores at the facility.  Plaintiffs further alleged that the Company retaliated against them in 2003 because they complained of the inadequate care and the billing practices. 

After a nine-day trial, the jury found for Plaintiffs on all counts.  The jury assessed the Company with more than $19M in penalties for filing false claims and another $9M in penalties for providing “worthless” services.  And the jury awarded more than $400K to the two Plaintiffs. 

This sizeable award may encourage similar types of whistleblower claims in the nursing care industry.  It also requires employers to appreciate the risk of claims under a range of state whistleblower laws, in addition to the False Claims Act.  Plus, it underscores the need for employers to take concerted steps to identify whistleblower retaliation risks and conduct rigorous and routine audits with respect to billing practices.  Check out our list of the Top Ten Ways To Minimize Whistleblower Risks.

Posted in False Claims Act
Print:
Email this postTweet this postLike this postShare this post on LinkedIn
Photo of Steven J. Pearlman Steven J. Pearlman

Steven J. Pearlman is a partner in the Labor & Employment Law Department, where he is Head of the Restrictive Covenants, Trade Secrets & Unfair Competition Group and Co-Head of the Whistleblowing & Retaliation Group.

Employment, Restrictive Covenant & Trade Secret, and Whistleblower…

Steven J. Pearlman is a partner in the Labor & Employment Law Department, where he is Head of the Restrictive Covenants, Trade Secrets & Unfair Competition Group and Co-Head of the Whistleblowing & Retaliation Group.

Employment, Restrictive Covenant & Trade Secret, and Whistleblower Practice. Steven’s national practice focuses on defending companies in federal and state courts and in arbitration fora against the full spectrum of employment-related claims, including claims of executives; restrictive covenant violations; employee raiding; theft of trade secrets; whistleblower retaliation under the Sarbanes-Oxley Act, the Dodd-Frank Act and similar state laws; and wage-and-hour violations, including class, collective and PAGA actions.

Steven has successfully handled trials in multiple jurisdictions; prevailed in seeking and defending against applications for temporary restraining orders and preliminary injunctions; defended one of the largest Illinois-only class actions in the history of the federal courts in Illinois (over 90k putative class members); and prevailed following his oral arguments before federal and state appellate courts. He brings his litigation experience (beginning in 1998) to bear in counseling clients to minimize risk and avoid or prepare for success in litigation.

Investigations. Reporting to boards of directors, their audit committees, CEOs and in-house counsel, Steven conducts sensitive investigations and has the unusual experience of testifying in federal court in connection with investigations. His investigations have involved complaints of sexual harassment involving C-suite officers; systemic violations of employment laws and company policies; and fraud, compliance failures and unethical conduct.

Thought Leadership and Accolades. Steven was named Lawyer of the Year for Chicago Labor & Employment Litigation in the 2023 edition of The Best Lawyers in America. He is a Fellow of the College of Labor and Employment Lawyers. Chambers has reported:

  • Steven is “one of the best in the country and has a lot of experience”;
  • Steven is as an “outstanding lawyer” who is “very sharp and very responsive,” a “strong advocate,” and an “expert in his field”;
  • He is thoughtful, attentive and demonstrates an acute understanding of matters top of mind for business-minded general counsel; and
  • “He is someone who can navigate the twists and turns of litigation without difficulty.”

Steven was 1 of 12 individuals selected by Compliance Week as a “Top Mind.” Earlier in his career, he was 1 of 5 U.S. lawyers selected by Law360 as a ”Rising Star Under 40” in the area of employment law and 1 of “40 Illinois Attorneys Under Forty to Watch” selected by Law Bulletin Publishing Company. Steven is a U.S. Library of Congress Burton Award Winner for “Distinguished Legal Writing.”

Steven was appointed to Law360’s Employment Editorial Advisory Board and selected as a Contributor to Forbes.com. He has appeared on Bloomberg News (television and radio) and Yahoo! Finance, and is often quoted in leading publications such as The Wall Street Journal. The U.S. Chamber of Commerce has engaged Steven to serve as lead counsel on amicus briefs to the U.S. Supreme Court and federal circuit courts of appeal.

In 2024, Steven received the Excellence in Pro Bono Service Award from the United States District Court for the Northern District of Illinois and the Chicago Chapter of the Federal Bar Association.

Read more about Steven J. Pearlman
Show more Show less
Related Posts
Third Circuit: Whistleblowers Are Not Shielded From Discipline for Misconduct
December 15, 2022
Florida District Court Limits Scope of Protected Activity under the FCA
June 16, 2022
6th Circuit: FCA Whistleblower Protections Extend to Post-Employment Retaliation
April 23, 2021