Michigan Law School and STPP alum William H. Ellerbe is Whistleblower Lawyer and Qui Tam Shareholder at Berger Montague. He practices in the Firm’s Whistleblower, Qui Tam & False Claims Act group, which has collectively recovered more than $3 billion for federal and state governments, as well as over $500 million for the firm’s whistleblower clients. Mr. Ellerbe represents whistleblowers in litigation across the country and also actively assists in investigating and evaluating potential whistleblower claims before a lawsuit is filed. He is frequently recognized for his accomplishments, having recently won the The Anti-Fraud Coalition’s Whistleblower Lawyer of the Year Award. Mr. Ellerbe recently obtained one of the largest judgments in a False Claims Act Case.
STPP caught up with him recently to find out more.
1) Can you describe your career path to your current role? How has your work been influenced by your experience at STPP?
I came to the University of Michigan to attend law school primarily (though I was very happy to find the STPP program across Monroe Street at the Ford School). After graduating, I worked at two law firms and clerked for a federal judge before finding my current position in the Whistleblower, Qui Tam & False Claims Act Group at Berger Montague in Philadelphia. In my practice, I represent whistleblowers who bring forward information about fraud schemes involving programs, grants, or contracts paid for by the government. Most of my work involves healthcare fraud. My clients are usually insiders at companies where some sort of fraud is being perpetrated on Medicare or Medicaid. Under the federal False Claims Act (the "FCA") and the analog versions in the states, a whistleblower files a case laying out the fraud scheme under seal, meaning it is totally secret. The government then has a chance to investigate the allegations, and it can take over the case. If the government declines to take over, the whistleblower and her lawyers can stand in the shoes of the government and continue to prosecute the case. At that point, the accused fraudster is made aware of the case and has a chance to defend itself in court, and the case proceeds like a normal civil fraud case, though the damages can be much higher, especially if there is a nation-wide scheme involved. The FCA mandates triple damages if there is a jury verdict achieved and also stiff statutory penalties for each false claim. At the end of the day, if the government ends up recovering money from the case, either through settlement, or more rarely, a judgment, the whistleblower is entitled to 15-30% of the government's recovery.
The FCA is itself a public policy tool. By guaranteeing that the whistleblower is awarded a portion of the proceeds of the fraud investigation, the law incentivizes insiders who are aware of fraud to come forward with that information. Additionally, a lot of important rules and laws concerning innovations in many STEM-related sectors—like regulations on pharmaceutical marketing and FDA approval of medical devices—are enforced through the FCA. Understanding these topics through the lens of public policy has been tremendously valuable to me in my practice.
2) Can you tell us about the case your firm won in June that was one of the largest jury cases in the history of the False Claim Act?
My firm has worked on the United States ex rel. Penelow v. Janssen Products, LP case since 2012, before I was even at the firm. Our clients are two former Janssen sales representatives who sold Prezista and Intelence, two antiretrovirals for HIV/AIDS patients, that were brought to the market in 2006 and 2008, respectively. Both drugs entered a very competitive market for their drug classes, and both had limitations and warnings in their labels. At trial, we were able to present evidence to the jury that, when the sales of these drugs turned out to be very disappointing, Janssen's management instituted a top-down scheme to use off-label studies using small populations followed for short durations to try to combat negative perceptions about their drugs in the marketplace and that management. Management required their sales reps—including our two clients—to use the off-label studies and off-label messages to increase their sales. Since these drugs were very expensive, and since so many patients were covered by Medicare, Medicaid, and other government-funded programs, the damages were huge. The jury found that the federal government alone was defrauded of approximately $120M and that Janssen had caused nearly 160,000 false claims to be submitted to the federal government. Under the FCA, the $120M figure is tripled, and penalties of between $5,500 and $11,000 per false claim are imposed. Just recently, the trial judge in our case ruled that the penalty amount in our case would be $8,000 per claim. Altogether, the total amount of the judgment is over $1.6 billion. The defendant has now appealed this judgment, so the fight goes on into its 13th year!
I have to give credit to my fellow team members at Berger Montague, and the firm Reese Marketos who helped us prepare for and present the case to the jury at trial. In particular, my Berger Montague colleagues Sherrie Savett and Joy Clairmont deserve plaudits for having worked on this case since its inception in 2012!
3) Are there other examples of particularly interesting science and technology based work you've done?
I have worked on grant fraud cases, too, and those involve scientific research. Those cases involve things like principal investigators making misrepresentations about their time and effort spent on particular grants, or institutions improperly moving costs like salary and benefits for researchers from one grant with a deficit to another with a surplus. Since federal grants are so competitive, when one institution breaks the rules to either get the grant in the first place, or to keep more grant money than it is entitled to, the researchers at other institutions are cheated of the chance to use those limited funds to do research and the government is deprived of the full value of research it had bargained for when it awarded the grant. Such behavior impairs public confidence, and the whole system is undermined.
4) What advice do you have for students interested in science, technology, policy, and law?
If you are a law student, you should definitely look for opportunities to take classes outside of the law school. You'll meet students and professors who come at topics from completely different perspectives, which is excellent practice for your career when you'll need to understand how non-lawyers come at different problems. And for anyone studying in public policy or STEM fields who think they may be interested in the law, I would definitely encourage you to look into taking a course at the law school if possible! One day you may need to interact with a lawyer and having some background on how lawyers think about topics will undoubtedly be helpful.
5) Anything else you'd like to share?
I'd like to praise my very brave clients in the Janssen case. They did not start working at Janssen looking to be whistleblowers, but when they found themselves forced by management to do things they had been trained were illegal, they did the very hard and very brave thing and blew the whistle. The 12+ years they have been working on this case has been very challenging for them personally, and we expect that, despite the victory at trial and the judgment from the court, that Janssen will appeal the case and we'll still be fighting this case for a while. In many fields that STPP students may find themselves working—especially fields that touch on healthcare—there is the dark possibility of being forced by employers to do things that cross certain legal and ethical boundaries. Anyone who finds themselves in such a situation should know that there are avenues like being a whistleblower under the FCA to try to end that wrongdoing and, hopefully, to be rewarded for doing so.