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Novartis Attacks $3M Fee Request in Whistleblower Case

July 5, 2019 | Posted in : Challenging Fees, Fee Award, Fee Dispute, Fee Entitlement, Fee Reduction / Fee Denial, Fee Request, Fee Shifting, Hourly Rates / Hourly Billing, Prevailing Party Issues

A recent Law 360 story by Bill Wichert, “Novartis Attacks $3M Atty Fees Bid in Whistleblower Case,” reports that counsel for Novartis told a New Jersey state court that an attorney fees award to a former company executive who prevailed on a whistleblower claim at trial should be cut in half because the pharmaceutical giant succeeded on its unjust enrichment counterclaim against her.  More than three months after jurors handed a roughly $1.8 million whistleblower award to Min Amy Guo, Novartis Pharmaceuticals Corp.'s attorneys said her lawyers' more than $3 million in proposed fees should be reduced for various reasons, including because the jury also awarded nearly $350,000 to Novartis on the counterclaim after concluding she violated company policy.

"There is nothing in New Jersey jurisprudence, there is nothing in American jurisprudence that supports a fee-shifting provision being applied to compensate plaintiff's counsel on a count that she was not successful in," Novartis attorney Patricia Prezioso told Superior Court Judge Louis S. Sceusi during oral arguments on the fees application.  Beyond the 50% "limited success" reduction, Novartis is seeking additional cuts in the proposed fees.

The judge acknowledged he "can't pay the plaintiff for losing the unjust enrichment claim," but questioned the company's proposed 50% reduction for Guo's limited success at trial.  "How do you come up with 50%?  How is that more justified than 20%, 30%?” Judge Sceusi asked Prezioso.

Prezioso pointed to the substantial amount of trial testimony that focused on Guo's policy violations, saying "unjust enrichment and the policy violations ... was far more than 50% of the case."  "It was more like 80% of the case," said Prezioso, adding that "asking for 50%, in light of the fact that we prevailed on that and there's no support for fee-shifting ... when they lost on a claim, is fair."

But Guo attorney James K. Webber countered that she is entitled to reasonable attorney fees as the prevailing party on her state Conscientious Employee Protection Act claim, and the award should not be cut because she lost on the unjust enrichment counterclaim.  Webber argued that the issues underlying both claims were the same, since Guo's purported policy violations constituted the company's defense to her whistleblower claim.  "There's certainly no support for defendant's position," Webber told the judge.

The former executive director of the health economics and outcomes research group at Novartis, Guo said she was fired in retaliation for objecting to a proposed study by pharmaceutical distribution company McKesson Corp. of Afinitor's use as a breast cancer drug. Novartis ultimately did not move forward with the study.  Among her claimed objections to the proposed McKesson study was that it appeared to be a kickback to the company to help sell Afinitor.

Guo said she believed the study would violate a corporate integrity agreement that Novartis entered into in 2010 as part of a settlement with the U.S. Department of Justice.  That agreement required Novartis to comply with federal health care program requirements, including a federal anti-kickback statute, court documents state.  Novartis claimed Guo was terminated for violating company policies.

At the end of the more than seven-week trial, the jury in a 7-1 vote on Feb. 26 awarded about $1.8 million to Guo on her CEPA claim.  The jurors then unanimously awarded nearly $350,000 to Novartis on its counterclaim for unjust enrichment.  On Feb. 27, the jury denied Guo's bid for punitive damages.

On March 26, Judge Sceusi rejected the company's bid to set aside the CEPA verdict and, about a month later, Guo's attorneys submitted their fees application.  During a hearing, however, the judge pushed back against the fees request.  For example, Judge Sceusi pointed to Novartis' criticism of Guo attorney Richard J. Murray's request of fees for more than 1,200 hours spent on the case over less than a year, whereas Webber is requesting fees for nearly 1,400 hours spent over five years on the suit.  In that regard, the company has called Murray's fees request "simply glutinous."