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In US v. Purdue Pharma L.P., No. 09-1202, the Fourth Circuit decided a plaintiff's qui tam action involving claims tha this former employer defrauded the government by marketing its pain-relief drug, OxyContin as a cheaper alternative to another drug made by the employer.
As stated in the decision: "When the government is unaware of potential FCA claims the public interest favoring the use of qui tam suits to supplement federal enforcement weighs against enforcing prefiling releases. But when the government is aware of the claims, prior to suit having been filed, public policies supporting the private settlement of suits heavily favor enforcement of a prefiling release."
Thus, the court held that the district court erred in its decision not to enforce the Release, signed by the plaintiff, as a bar to plaintiff's claims because the allegations of fraud were sufficiently disclosed to the government prior to the plaintiff's filing of the qui tam suit. The court nonetheless affirmed the dismissal of plaintiff's suit with prejudice in concluding that the result was correct.
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