Author: JGL Law

In a recent Maryland Daily Record article, New law allows divorce by consent but family law lawyers unsure of its long-term impact, Jeffrey Greenblatt discusses a new Maryland divorce law that may lead to faster divorces in some cases. Under the law, divorcing couples in Maryland without minor children, can now forego the state’s one-year separation requirement and file for divorce via a mutual settlement agreement. 

By removing the 12-month separation requirement, lawmakers have provided an option for “divorce by mutual consent,” thus reducing the potential acrimony of a trial and burden of a 12-month waiting period. According to Greenblatt, “Anyone who is able to come to an agreement is going to be able to get out of the marriage almost instantly. I don’t think it is going to make people who are not already predisposed to resolving their differences to move any more quickly. It’s not going to change people who want to fight. If they want to fight, they’re going to fight.”

Couples with minor children do not qualify under the new law and must still wait the 12-month period of separation before filing for divorce. For more information on the new law, or questions about divorcing in Maryland, contact Jeffrey Greenblatt at jgreenblatt@jgllaw.com.

Westlaw Journal’s October 12, 2015 issue covered a False Claims Act settlement of $1.75 million that two companies will pay to resolve allegations they defrauded the U.S. Army while working under contract to provide vehicle maintenance services to the Afghanistan military.

Jay Holland and Brian Markovitz weigh in on the settlement and discuss the importance of the False Claims Act and the role whistleblowers play in reporting fraud against the government.

For the complete Westlaw Journal article, 2 Firms Pay $1.75 Million to End Afghanistan Contract Fraud Case, click the PDF below. 

Following up on the Chattanooga-Hamilton County Hospital Authority v. USA ex rel. Robert Whipple case, the Supreme Court refused to reverse a Sixth Circuit ruling in a False Claims Act (FCA) case. As reported by Law360, Erlanger Medical Center’s claim that an administrative audit did not constitute public disclosure needed to kill an FCA claim was denied by the Supreme Court.

The high court ruling clears the way for an FCA suit filed in March 2011 against Erlanger for fraudulent Medicare and Medicaid reimbursements. Whistleblower, Robert Whipple accused the Tennessee hospital of improperly billing the government for claims between 2005 and 2006.

JGL’s Jay Holland and Brian Markovitz represent Whipple along with co-counsel Jamie Bennett. Commenting on the case, Markovitz said, “We look forward to moving on to the merits.”

This blog is a summary of recent significant appellate decisions by the Court of Special of Appeals of Maryland in the areas of Workers’ Compensation, Insurance, Landlord-Tenant, Guardianship, Lead Paint, Corporations and Associations, Foreclosure, and Family Law. 

Workers’ Compensation

Long v. Injured Workers’ Insurance Fund, No. 2615, Sept. Term, 2013 (Md. Ct. Spec. App. Sept. 30, 2015).

http://www.mdcourts.gov/opinions/cosa/2015/2615s13.pdf.

Issue:   As a matter of first impression, when an injured worker is a sole proprietor, should his or her compensation under the Maryland Workers’ Compensation Act, calculated as two-thirds of the employee’s average weekly wage (“AWW”), be based upon the income of the sole proprietorship after deducting business expenses or upon the gross profit of the sole proprietorship, without considering business expenses?

Held:   The court noted that the general rule applied by other jurisdictions is that “’profits derived from a business are not to be considered as earnings and cannot be accepted as a measure of loss of earning power unless they are almost entirely a direct result of [the claimant’s] personal management and endeavor.’” Slip op. at 16 (alteration in original).  The court recognized a built-in exception to the general rule, applicable in this case, where an individual is “the only employee of the sole proprietorship, and all of the income of the sole proprietorship was the direct result of his ‘personal management and endeavor.’”  Id.  Mindful of this, the court stated that, while there were some cases from other jurisdictions where wages were determined using gross income, they were distinguishable “because they involve situations where either: 1) the sole proprietorship had no net income; or 2) before the Commission, the claimant presented some alternative to net income as a basis of determining AWW.”  Id. at 16-17.  Therefore, the court held “that under the circumstances of this case, the Commission did not err in concluding that AWW should be based on Long’s net profits. As demonstrated, the overwhelming majority of cases decided by our sister states supports the conclusion reached by the Commission in this case. To disregard appellant’s business expenses in calculating the AWW of a sole proprietor would lead to an unjustifiably inflated AWW figure – a figure far higher than the economic advantage Long gained by working.”  Id. at 21.

Insurance

Rigby v. Allstate Indemnity Company, No. 0263, Sept. Term, 2014 (Md. Ct. Spec. App. Sept. 30, 2015).

http://www.mdcourts.gov/opinions/cosa/2015/0263s14.pdf.

Issue:   Whether the driver of an automobile “was a ‘dependent person’ and therefore an ‘insured,’ under [an] umbrella policy, which defines ‘insured’ to include ‘any dependent person’ in the policy holder’s care, ‘if that person is a resident of’ the policy holder’s household.”  Slip op. at 6.

Held:   Recognizing that no Maryland decision addressed this issue, the court analyzed two extra-territorial decisions providing analysis of the terms.  The court utilized the Kansas Supreme Court’s definition of “dependent person,” namely: “one who relies on another to provide ‘substantial contributions . . . , without which he would be unable to afford the reasonable necessities of life.’”  Id. at 12 (ellipsis in original).  In this case, although the driver lived in the same home as the policy holder, they were unrelated and he paid rent.  Moreover, he moved in and out of the home on three separate occasions.  Additionally, although they had a “semblance of familial relationship,” the policy holder never claimed the driver as a dependent on his tax return, never gave him any money, credit cards, or an allowance, never paid for his medical care or designated him as a beneficiary of his health insurance policy, and admitted that he exercised no control over his comings and goings.  Under the facts, the court held that the driver was not a “dependent person” within the meaning of the policy.  Id. at 13.

Citing the Michigan Supreme Court, the court also determined that the phrase “in the care of” is not ambiguous and applied that court’s non-exhaustive list of questions.  Considerations include: 1) legal responsibility for care; 2) dependency; 3) supervisory or disciplinary responsibility; 4) substantial essential financial support; 5) the circumstances of the living arrangements; 6) the age of the person alleged to be “in the care of”; 7) his or her physical or mental health status; and 8) whether he or she is gainfully employed.  Id. at 15-16.  The court observed that seven of the eight factors favored the conclusion that the driver was not “in the care of” the policy holder.  Id. at 16.  Therefore, the court held that the driver was neither a “dependent person” nor “in the care of” the policy holder.  Id. at 17.

Landlord-Tenant

Kirk v. Hilltop Apartments, LP, No. 2054, Sept. Term, 2013 (Md. Ct. Spec. App. Sept. 30, 2015).

http://www.mdcourts.gov/opinions/cosa/2015/2054s13.pdf.

Issue:   In a breach of lease action on a lease providing for automatically renewable one-year lease terms, whether the amount in controversy is calculated based on the number of months remaining in that year’s lease term or by multiplying the annual fair market rental payment by the number of years remaining in the lessee’s life expectancy.

Held:   The lessee’s lease, by its express terms, automatically renewed for successive one year terms unless terminated for good cause.  Therefore, the lessee had the right to possess the property for an indefinite period of time.  As such, “the correct method of calculating the amount in controversy in this case, that is, the value of [the Lessee]’s right to possession of the leased premises, should be determined by multiplying the annual fair market rental payment by her remaining estimated life expectancy.” Slip op. at 16.

Guardianship

James B. Nutter & Co. v. Black, No. 1563, Sept. Term, 2013 (Md. Ct. Spec. App. Sept. 30, 2015).

http://www.mdcourts.gov/opinions/cosa/2015/1563s13.pdf.

Issue:   Where a disabled person, who has a court appointed guardian, entered into a reverse mortgage but the guardian later refuses to ratify it, is the agreement void or merely voidable?

Held:   The court recognized that a disabled person lacks the capacity to enter into a contract or convey an interest in real property.  Slip op. at 13.  Importantly, guardianship proceedings afford constructive notice of one’s disability.  Id. at 13-14.  Although Maryland’s guardianship statute does not directly address whether a deed conveyed by a disabled person is void, the court has previously held that a disabled person holds no legal title to property.  Id. at 22.  Therefore, the court held that the purported reverse mortgage transaction was void ab initio.  Id. at 25.

Lead Paint

Barr v. Rochkind, No. 1152, Sept. Term, 2014 (Md. Ct. Spec. App. Sept. 29, 2015).

http://www.mdcourts.gov/opinions/cosa/2015/1152s14.pdf.

Issue:   “[W]hether a lead paint plaintiff who relies on circumstantial evidence to establish the elements of her prima facie negligence case — including proof that the defendant’s property contained lead paint — has a burden of production to present evidence ruling out any reasonable probability that her elevated blood lead levels were caused by other potential sources of lead exposure.”  Slip. op. at 8-9.

Held:   In a case where there is no direct evidence that a property contained lead paint, a party may rely on circumstantial evidence, but, as the Court of Appeals has previously explained, it must be based upon “a reasonable likelihood or probability rather than a possibility.”  Id. at 11. Quoting from the Court of Appeals, the court explained that a plaintiff must further “tender facts admissible in evidence that, if believed, establish two separate inferences: (1) that the property contained lead-based paint, and (2) that the lead-based paint at the subject property was a substantial contributor to the victim’s exposure to lead.”  Id.  In this case, the plaintiff primarily relied on an affidavit from a pediatrician with expertise in treating childhood lead poisoning who opined that there is a presumption that houses built during the relevant time period typically contained lead paint.  Id. at 14.  However, such an opinion is insufficient to display that a specific property contained lead paint and further fails to display that an increased lead level was not due to exposure from other known sources of lead that could reasonably account for it.  Id.; id. at 16.  Summary judgment was, therefore, appropriate.

Corporations and Associations

Hogans v. Hogans Agency, Inc., No. 775, Sept. Term, 2014 (Md. Ct. Spec. App. Aug. 28, 2015).

http://www.mdcourts.gov/opinions/cosa/2015/0775s14.pdf.

Issue:   Whether a stockholder may be required to sign a confidentiality agreement prior to inspecting a corporation’s books of account pursuant to Md. Code Ann., Corps. & Ass’ns §§ 2-512 and 2-513.

Held:   In this case, the stockholder was a minority shareholder in the company with a sufficient percentage of outstanding stock to inspect and copy the corporation’s books of account.  However, he also was an owner of a competitor of the corporation.  Therefore, the court agreed with the trial court’s exercise of discretion to “require the stockholder to sign a confidentiality agreement where the confidentiality agreement and its terms advance the purpose of “protect[ing] the corporation against disclosure and misuse of confidential documents and information by the stockholder.  Slip op. at 12.

Foreclosure

Anderson v. O’Sullivan, No. 654, Sept. Term, 2014 (Md. Ct. Spec. App. Aug. 27, 2015).

http://www.mdcourts.gov/opinions/cosa/2015/0654s14.pdf.

In a case of first impression in Maryland, a defendant in a foreclosure action sought to avoid foreclosure by asserting the “Redemptionist Theory” and the “Vapor Money Theory.”  Slip op. at 7.  The court quoted the Third Circuit’s summary of the “Redemptionist Theory”:

[T]he “Redemptionist” theory … propounds that a person has a split personality: a real person and a fictional person called the “strawman.” The “strawman” purportedly came into being when the United States went off the gold standard in 1933, and, instead, pledged the strawman of its citizens as collateral for the country’s national debt. Redemptionists claim that [the] government has power only over the strawman and not over the live person, who remains free. Individuals can free themselves by filing UCC financing statements, thereby acquiring an interest in their strawman. Thereafter, the real person can demand that government officials pay enormous sums of money to use the strawman’s name.

Id. at 8.  Quoting the Kentucky Court of Appeals, the court observed that “[t]he ‘Vapor Money Theory,’ on the other hand, contends that banks essentially lend a borrower their own money when a loan is issued:

The “vapor money” (or “no money lent”) theory posits that Congress has never given banks the authority to extend credit and, thus, banks act beyond their charters when making loans. Proponents claim banks create money “out of thin air,” through ledger entries and bookkeeping tricks, by “depositing” a borrower’s promissory note without the borrower’s permission, listing the note as an “asset” on the bank’s ledger entries, and then lending a borrower back his own “money.” Since banks do not have enough “real money in their vaults” to cover the sums lent, loans are not backed by actual money—the only real money is gold or silver; paper money is worthless since it is created by an illegitimate Federal Reserve—making them invalid ab initio and creating no obligation for repayment.

Id. at 9.  The Court noted that “[n]o Maryland court has directly opined on either theory in a reported opinion, but many federal and state courts have, and they have found unanimously, and unequivocally, that neither qualifies as a valid defense to or meritorious argument to foreclosure.”  Id. at 7 (footnote omitted).  The court held that these theories “have not, will not, and cannot be accepted as valid.”  Id. at 11.

Family Law

Conover v. Conover, No. 2099, Sept. Term, 2013 (Md. Ct. Spec. App. Aug. 26, 2015).

http://www.mdcourts.gov/opinions/cosa/2015/2099s13.pdf.

Issue:   Whether a non-biological, non-adoptive parent “may invoke Maryland’s paternity laws to confer upon her parental standing to seek custody or visitation without interfering with the constitutional rights of the natural parent…and without satisfying the stringent standards of Janice M. v. Margaret K., 404 Md. 661 (2008) and Koshko v. Haining, 398 Md. 404 (2007).”  Slip op. at 1.

Held:   In this same-sex divorce case, the non-biological, non-adoptive parent, Brittany Conover, asserted that she met the paternity factors for a father as set forth in Md. Code Ann., Est. & Trusts § 1-208(b).  The court held that “[a] non-biological, non-adoptive spouse who meets one, two or even three tests under ET § 1-208(b) is still a ‘third party’ for child access purposes.”  Id. at 12.  The court further stated that “[u]nder Janice M., he or she is not a ‘legal parent’… He or she must still show exceptional circumstances to obtain access to a child over the objection of a fit biological parent and to overcome the natural parent’s due process rights. Moreover, there is no gender discrimination or sexual orientation discrimination because all non-biological, non-adoptive parents face the same hurdle, no matter what sex or sexual orientation they are.”  Id. at 12.

Sieglein v. Schmidt, No. 2616, Sept. Term 2013 (Md. Ct. Spec. App. Aug. 25, 2015).

http://www.mdcourts.gov/opinions/cosa/2015/2616s13.pdf.

In this case, a child conceived by in vitro fertilization (“IVF”) was born during the parties’ marriage.  Md. Code Ann., Est. & Trusts § 1-206(b) provides: “A child conceived by artificial insemination of a married woman with the consent of her husband is the legitimate child of both of them for all purposes.”  Although the father asserted he was not the “father” within the meaning of the statute because the child was conceived through IVF, the court concluded that “within the context of marriage, the precise physical procedure has no necessary impact on the relationships of the parties involved—mother, father, and child.”  Slip op. at 20.  Thus, when individuals “were married at the time of conception and birth, and willingly and voluntarily agreed to conceive a child through assisted reproductive services using anonymously donated genetic material…§ 1-206(b) applies to establish the legal parentage of both” spouses.  Id. at 20-21.

Reinstated a verdict in favor of the parents of a child struck and killed by a car at a school bus cross-walk. Davis v. Board of Education for Prince George’s County (Md. Ct. Spec. App. 2015)

At the recent Federal Bar Association Annual Meeting and Convention in Salt Lake City, Utah, Jay Holland was appointed to the Executive Board of the Qui Tam Section. The FBA Sections provide networking opportunities where lawyers can discuss current issues in their particular area of law. 

Jay Holland is chair of Joseph, Greenwald & Laake’s Qui Tam Whistleblower and Labor & Employment practices. He is a well respected qui tam litigator, known for taking on tough cases and achieving exceptional results.

Former Employee’s Qui Tam Lawsuit Leads to Convictions and Jail for Individuals who Created Sham Companies, and Recovery For Taxpayers Against PAE, Inc. and R.M. Asia for Allegedly Falsely Billing U.S. for Vehicle Parts for Afghanistan

ALEXANDRIA, Va. – Sept. 15, 2015 – PAE Government Services, Inc. and R.M. Asia Ltd. have settled a whistleblower lawsuit for $1.45 million, resolving allegations that company employees created fictitious entities and set up a bid-rigging scheme to falsely bill the United States for supplies intended for the Afghan National Army. Steven Walker, a former project manager for PAE in Afghanistan, brought forward the complaint after he discovered the scheme and reported it to government investigators. 
 
The lawsuit, United States ex rel. Walker v. PAE, et al., was filed in federal court in Alexandria, Va., by attorneys Jay P. Holland and Brian J. Markovitz, partners at the Greenbelt, Md.-based law firm Joseph, Greenwald & Laake, P.A., and Scott Oswald and David Scher of The Employment Law Group in Washington, DC
 
“Mr. Walker’s acts in ferreting out the fraud in this case were extensive and brave,” said Holland, who served as lead counsel in the case. “Kick-backs and collusive bidding can be very difficult to uncover in a war zone, like in Afghanistan, and the wrong-doers would never have gone to jail, and the companies would not have been held responsible, if it were not for Mr. Walker’s sense of duty and loyalty to his country.” 
 
The U.S. Army awarded a contract to PAE on Dec. 19, 2007. The contract required PAE to provide the Afghanistan National Army with vehicle-fleet maintenance and an apprenticeship/training program. The contract also required PAE to order vehicle parts and perform supply-chain management. PAE then awarded a subcontract to R.M. Asia to provide warehousing services for vehicle parts and to perform supply-chain management. 
 
In his complaint, Walker contended that PAE and R.M. Asia submitted false claims under the contract as a result of a bid-rigging scheme to steer subcontracts to companies owned by a PAE manager and his relatives, as well as an R.M. Asia manager and his relatives from May 2007 through June 2010. The complaint also alleged that defendants PAE and R.M. Asia either knew or should have known of the fraud and failed to take appropriate measures to stop it or report it. Walker’s complaint led to an intensive criminal investigation against the individuals responsible for the bid-rigging and kickbacks, and ultimately to guilty pleas, conviction and prison sentences for the schemers.  
 
The following individuals pled guilty in the bid-rigging scheme: Keith Johnson (United States v. Keith Ashley Johnson, No. 1:13cr-305 [EDVA]); John Eisner (United States v. John E. Eisner, No. 1:13-cr-344 [EDVA]); Angela Johnson (United States v. Angela Gregory Johnson, No. 1:13-cr-305 [EDVA]); and Jerry Kieffer (United States v. Jerry Kieffer, No. 1:13-cr-343 [EDVA]). All received prison sentences.   
 
Prior to accepting a position with PAE in Afghanistan, Walker was a professor at Oklahoma State University in engineering and diesel mechanics. He initially was hired as a training manager, and then quickly promoted to program manager. Walker learned of the fraud both while he was employed, and after he came back to the United States. Walker traveled throughout the most dangerous areas of Afghanistan without military escorts to inspect warehouses at forward military bases to confirm his suspicions, and when he returned to the United States he drove to Nashville, Tenn., from his Oklahoma home to inspect marriage records to confirm the family relationship between Keith Johnson and Angela Johnson, and the companies they controlled.  
 
“The Anti-Kickback Act and conflict of interest rules are in place to prevent this type of fraud,” said co-counsel Markovitz. “The complaint alleged that the defendants formed a conspiracy which they called ‘The Network,’ where they set up the bid process to assure that one of their own companies would bid against an unqualified company, and therefore made sure the bids were awarded to themselves.”
 
The False Claims Act is “a powerful tool to protect the taxpayer from this type of fraud,” Holland added. “The False Claims Act complaint clearly got the attention of the federal authorities and enabled the criminal and civil prosecution of this case.”

 

In my October blog post, I discussed the recent rash of class actions by former unpaid interns in New York state against high-profile employers like Saturday Night Live, Conde Nast Publications, Viacom Inc., and many others. While many employers choose to settle rather than risk litigation (like Sirius XM which recently agreed to a settlement to pay $1.3M to some 1,800 former interns),[1] Fox Searchlight Pictures, Inc. continued to litigate its case and gamble a potentially large, and very public, loss. At first it looked bad for Fox and other big employers. On June 11, 2013, the lower court in the Fox case sided with the interns,[2] who argued that they were unlawfully denied payment since they were “employees” under the Fair Labor Standards Act (“FLSA”). Fox appealed, hoping to reverse not only the lower court, but also the tide of unpaid intern class action lawsuits. Fox’s bet seems to have paid off.

In what has to be seen as a big win for employers and a blow to interns, the Second Circuit issued its opinion in Glatt et al. v. Fox Searchlight Pictures, Inc. et al. last month, reversing the lower court and issuing a new test for employment status in that Circuit.[3] In doing so, the appeals court sent the case back to the lower court to apply a new, “primary beneficiary test.” This test minimizes, if not largely rejects, the Department of Labor’s published and widely followed guidance on this topic.

This issue was new for the Second Circuit. It had never before grappled with the question of when an unpaid intern is entitled to compensation as an employee under the FLSA. The Supreme Court has also never squarely delineated the difference between unpaid interns and paid employees under the FLSA and has never issued a cohesive test for determining employment under that statute. However, the parties and the Fox Court all had to reconcile their positions with the only Supreme Court case discussing interns and the FLSA at all – Walling v. Portland Terminal Co., 330 U.S. 148 (1947). Without providing a test, the Portland Terminal Court held that unpaid railroad brakemen trainees should not be treated as employees under the FLSA. This opinion – 68 years ago – is the last time the Supreme Court spoke on this topic.

From the Portland Terminal opinion, the Department of Labor developed its own interpretation and guidance of when an unpaid intern is an employee for FLSA purposes. It published DOL Fact Sheet #71, providing the agency’s guidance on the definition of “employee” under the FLSA. The interns relied heavily on the six factors in the DOL Fact Sheet, but argued that not all need be satisfied. They pushed the Second Circuit to adopt a less rigid test whereby interns would be deemed employees whenever the employer receives an immediate advantage from an intern’s work.[4] The DOL, itself,[5] advocated that its factors lay out the proper test and its agency opinion is worthy of judicial deference.

The court rejected both of these approaches, siding instead with the employers.

It first refused to grant deference to the DOL’s guidance, stating that it was merely the agency’s interpretation of case law, and not of a statute or regulation. “Because the DOL test attempts to fit Portland Terminal’s particular facts to all workplaces, and because the test is too rigid for our precedent to withstand,” the Court said, “we do not find it persuasive, and we will not defer to it.”[6]

It then rejected the tests advanced by both the interns and DOL, instead agreeing with the employers that “the proper question is whether the intern or the employer is the primary beneficiary of the relationship.”[7] This primary beneficiary test, the court explained, has two “salient features.” First, in a nod to Portland Terminal, it “focuses on what the intern receives in exchange for his work.”[8] Second, in an apparent attempt to modernize the analysis, the primary beneficiary test “accords courts the flexibility to examine the economic reality as it exists between the intern and the employer.”[9]

While the primary beneficiary test is necessarily fact specific and has to be taken on a case-by-case basis, the Second Circuit did provide a roadmap of sorts in the form of the following seven, non-exhaustive considerations:

1. The extent to which the intern and the employer clearly understand that there is no expectation of compensation. Any promise of compensation, express or implied, suggests that the intern is an employee—and vice versa.
2. The extent to which the internship provides training that would be similar to that which would be given in an educational environment, including the clinical and other hands-on training provided by educational institutions.
3. The extent to which the internship is tied to the intern’s formal education program by integrated coursework or the receipt of academic credit.
4. The extent to which the internship accommodates the intern’s academic commitments by corresponding to the academic calendar.
5. The extent to which the internship’s duration is limited to the period in which the internship provides the intern with beneficial learning.
6. The extent to which the intern’s work complements, rather than displaces, the work of paid employees while providing significant educational benefits to the intern.
7. The extent to which the intern and the employer understand that the internship is conducted without entitlement to a paid job at the conclusion of the internship.[10]

In explaining its “flexible approach,” the court refused to set hard parameters. It said, “applying these considerations requires weighing and balancing all of the circumstances. No one factor is dispositive and every factor need not point in the same direction for the court to conclude that the intern is not an employee entitled to the minimum wage. In addition, the factors we specify are non-exhaustive—courts may consider relevant evidence beyond the specified factors in appropriate cases.”[11]

However, despite the court’s insistence that no one factor was dispositive, it is clear that the court afforded great weight to the fact that all of the interns in the Fox case were students. Appearing to want to break from the antiquated test borne by the Portland Terminal paradigm of the 1940’s intern, the Fox Court noted that its new approach “reflects a central feature of the modern internship—the relationship between the internship and the intern’s formal education.”[12] The court contrasted the student interns in the Fox case to the non-student brakeman in Portland Terminal. It said, “by focusing on the educational aspects of the internship, our approach better reflects the role of internships in today’s economy than the DOL factors, which were derived from a 68–year old Supreme Court decision that dealt with a single training course offered to prospective railroad brakemen.”[13] While perhaps not a dispositive factor, the fact that the Fox interns were students was obviously an important one.

This case should be studied by employers and employment lawyers not only in the Second Circuit, but also in Maryland and the rest of the Fourth Circuit in which Maryland resides.[14] In a recent case that did not garner national attention like the Fox case, the federal court in Maryland quietly reiterated that the Fourth Circuit unequivocally applies a “primary beneficiary” test[15] for interns, like that discussed in Fox. This Circuit also refuses to defer to the DOL Fact Sheet, preferring instead to rely on the “clear precedent” and “principles stated in” its own 1964 opinion in Wirtz v. Wardlaw.[16] In the Fourth Circuit, the test focuses on “the nature of the training experience”—what interns do, what they learn, and what guidance they receive.[17]

Observers of the Supreme Court might see it tackle this issue in the not-so-distant future. There are now varying tests out there depending on the circuit,[18] a different test advanced by the Department of Labor, and 68-year-old Supreme Court precedent lacking clarity. This issue might be ripe for resolution by the High Court soon.

Until there is a definitive ruling covering all states, consult with an employment lawyer in your state if you use interns or other non-traditional classes of employees to make sure you are not running afoul of the Fair Labor Standards Act or similar state acts.

Two days before his 15th birthday, Samuel Metler visited a radiologist, who diagnosed him with walking pneumonia. After receiving treatment, Samuel still experienced symptoms, which grew so severe that he was rushed to the emergency room. After examination, the doctors determined that Samuel was actually suffering from heart failure.

Yet, despite the diagnosis of heart failure, the doctors continued to administer fluids to Samuel that allegedly exacerbated the issue and, within a day, he was airlifted to Baltimore’s “XYZ” Medical Center. While doctors there further altered his diagnosis, they did not discontinue administering fluids, which Samuel’s parents now allege caused his heart to swell, resulting in irreversible damage that required a heart transplant.

Although Samuel is fortunately alive, his parents allege that he will likely need additional heart transplants in the future. They also believe that, if the various medical professionals attending to Samuel had acted properly and discontinued administering fluids, the extent of damage to his heart could have been avoided.

In May 2015, Samuel’s parents filed suit against his medical providers, alleging medical malpractice caused by the providers’ negligence. Joseph Greenwald & Laake is not involved with Samuel’s lawsuit and does not represent any parties in the matter.

There is no question that Samuel’s case is tragic – a teenage boy at the pinnacle of health suddenly faces a life-threatening health crisis. However, a question that remains to be determined as the case winds its way through the legal system is whether Samuel’s physicians were actually negligent in providing medical care.

What is Medical Negligence in Maryland?

The act of proving negligence in Maryland medial malpractice lawsuits rests at the center of every case. That is because proving negligence is one of the key components required to win medical malpractice cases. However, while proving negligence in personal injury cases outside the medical field can be fairly straightforward, it often presents a great challenge in the context of medical malpractice claims.

The reason proving negligence in Maryland medical malpractice lawsuits is difficult is because medicine is not an exact science. This might sound surprising, but the fact is that the law allows for imperfection in the diagnosis and treatment of patients. Doctors are not expected to act flawlessly.

That said, there are still parameters that all medical professionals in Maryland must meet to avoid performing what would be deemed negligent care. This is what Courts refer as the “standard of care.”

What is the Standard of Care in Maryland?

“Standard of care” is the legal term used to refer to the threshold for what constitutes negligence in medical malpractice claims. If a Court or Jury determines that a medical provider breaches the standard of care, then his or her actions were negligent.

What exactly is the standard of care? That is a difficult question that does not have a simple answer. The answer depends on a many factors, including:

• The medical condition in question
• The patient’s age
• The patient’s overall health history
• The health care provider’s specialty,

The point is that what is considered an appropriate standard of care for a 15-year-old with a heart condition might be drastically different for a 60-year-old with an identical heart condition. That is because the standard of care is defined as that which a reasonable medical practitioner would do under the same or similar circumstances.

Proving Standard of Care in Maryland

Proving the appropriate standard of care that should have been observed when treating a patient is one of the most important factors that can affect the outcome of a medical malpractice claim. This is also one of the greatest challenges and requires the testimony of medical experts.

In Maryland, expert witnesses whose testimony is used to determine the standard of care in a particular case must have the same or similar training and experience as the defendant in the case. This expert provides testimony that is intended to establish the standard of care that the defendant – the medical provider – should have used. It is then up to the attorney for the plaintiff – the injured party who filed the lawsuit – to prove the following:

• What the standard of care in in the particular setting
• The ways in which the medical provider breached the standard of care
• How the breach caused injury to the patient
• The extent of the patient’s injuries

For Samuel and his family, this means they will first have to establish what the standard of care should be for medical providers who treat similar patients who also suffer from the same condition. They will then have to show how his medical providers failed to adhere to this standard, which his parents claim was the continued administration of fluids under  circumstances in which no fluid should have been given so as to avoid damage to his heart. They then will have to prove that it was the administration of fluids that caused Samuel’s condition to worsen. Finally, they will have to prove the extent of the damage to Samuel’s health.

Proving medical malpractice cases is not easy. That is why it requires the knowledge of experienced medical malpractice lawyers who are familiar with the nuances of Maryland law. If you have any questions about Maryland medical malpractice law, the standard of care in Maryland or the Maryland medical malpractice claims process, contact Burt M. Kahn at bkahn@jgllaw.com. 

Law 360 recently reported on a False Claims Act (FCA) case that has reached the U.S. Supreme Court.

Erlanger Medical Center, a Tennessee hospital accused of knowingly submitting fraudulent claims for reimbursement to Medicaid, Medicare and other federal healthcare programs, has asked the U.S. Supreme Court to reverse a Sixth Circuit ruling on a False Claims Act case. Last year, the Sixth Circuit rejected the argument that the FCA complaint filed by a whistleblower, Robert Whipple, was invalid because disclosures made to government auditors and consultants did not constitute public disclosures – a condition that would have killed a False Claims Act suit. 

The Second and Seventh circuit courts would have ruled in the defendant’s favor, but the Sixth Circuit refused to reconsider the case en banc, citing a Ninth Circuit precedent. The Supreme Court has been petitioned to resolve the circuit, split which is critical to litigating FCA cases. 

JGL’s Jay Holland and Brian Markovitz represent Whipple. Commenting on the petition to the high court, Markovitz said, “We believe that the Sixth Circuit en banc got the decision right, and we’re hopeful that the Supreme Court will see the matter as we do, which is that this is something that should now be handled by the trial court on the merits.” 

The case is Chattanooga-Hamilton County Hospital Authority v. USA ex rel. Robert Whipple, case number 15-96 in the U.S. Supreme Court.

Lawsuit Accused NuVasive of Marketing Spinal Device for Uses Not Approved by the FDA and Paying Unlawful Kickbacks to Physicians to Induce the Use of NuVasive Devices

GREENBELT, MD – July 30, 2015 – Spinal device company NuVasive, Inc. has agreed to pay the federal government and state governments $13.5 million to settle a whistleblower lawsuit brought under the federal and numerous state False Claims Acts. The lawsuit alleged off-label marketing of NuVasive’s CoRoent™ spinal device and payment by NuVasive of prohibited kickbacks to induce doctors to use that device. 

The lawsuit, filed by Greenbelt, Md.-based law firm Joseph, Greenwald & Laake, P.A., alleged that NuVasive marketed the CoRoent device to physicians for uses not approved by the Federal Drug Administration (FDA). The FDA approved the device for limited use in only one spinal level in the lumbar and thoracic regions of the spine and for specific, relatively mild, spinal conditions. According to the Amended Complaint filed in the United States District Court for the District of Maryland, NuVasive knowingly marketed the CoRoent device from 2008 to 2013 for non-approved uses, including for use in more than one spinal level, for use in the thoracic region of the spine, and to treat more serious spinal conditions like scoliosis.

“A medical device company cannot market its products for uses that have not been approved by the FDA. Doing so can put patients at risk of harm,” said Jay P. Holland, a partner at Joseph, Greenwald & Laake and one of the attorneys representing the whistleblower in the case.  

The lawsuit alleged that marketing the CoRoent device for these non-approved uses could lead to patient harm, and that these uses marketed by the company were not reasonable or not medically necessary for the treatment of these conditions. Under these circumstances, the lawsuit claimed, the device should not have been covered by Medicare, Medicaid and other government insurance programs.   

Allegations also focused on the NuVasive-created organization known as the Society of Lateral Access Surgery (SOLAS). NuVasive was accused of using SOLAS, thinly veiled as a physician association, to offer and illegally pay physicians to induce them to use the CoRoent device in violation of the Federal Anti-Kickback Act. NuVasive paid physicians to author CoRoent-friendly articles and it paid speaker fees, entertainment, expenses and honoraria to doctors to attend events sponsored by SOLAS, according to the lawsuit. In addition, the lawsuit alleged that NuVasive created an outward appearance of independence for SOLAS, despite the fact that SOLAS was created, funded and operated solely by NuVasive.

The whistleblower lawsuit alleged that, as a result of off-label marketing and kickback schemes, physicians and hospitals were misled or induced into wrongly billing Medicare, Medicaid and other health care programs, resulting in millions of dollars improperly paid from the coffers of the federal and state governments.  

“The Anti-Kickback Act was enacted to avoid conflicts of interests for physicians,” explained Veronica B. Nannis, partner at Joseph, Greenwald & Laake who also represented the whistleblower in this case. “Physician independence is critical. Physicians should use medical devices because they are the best option for their patient, not because the physician has an economic incentive to choose one device over all others.” 

Holland and Nannis worked closely with the U.S. Attorney’s Office in Baltimore, led by Assistant U.S. Attorneys Thomas Barnard and Jason Medinger, who investigated the claims and resolved the case before litigation. The National Association of Medicaid Fraud Control Units participated by advancing the states’ interests. In addition, Colin M. Huntley, senior trial counsel in the U.S. Department of Justice Civil Division, played a key role in the early resolution.

“Participation from the private bar, the federal government and the states made this case an exemplar of the kind of private-public partnership the False Claims Act is meant to foster,” Holland said. “We are grateful for the hard work put in by all of the government attorneys and agents who brought about this resolution,” Nannis added.