Suing the government is difficult. And because public universities often function as an arm of state governments, that makes them hard to sue, too, a fact reiterated in a whistleblower case decided earlier this year.
In January, Judge David Hale of the Western District of Kentucky dismissed a lawsuit filed by former employees of the University of Louisville alleging that the institution fraudulently secured millions in federal grants due to a biosafety program that had fallen out of compliance with federal regulations. The biosafety officers also alleged that they were wrongly terminated for pointing out the compliance issues to Louisville, the National Institutes of Health, and even the Federal Bureau of Investigation. But the judge’s order came before those issues would even be considered.
According to the suit, filed in 2015, plaintiffs Karen Brinkley and Carol Whetstone alleged that the university, seven principal investigators, and an administrator had worked to wrongly obtain as much as $165 million from the National Institutes of Health. Around 2008, according to the plaintiffs, the defendants began allowing persistent biosafety issues — improper training and biological material disposal methods, protocols with expired institutional biosafety committee approvals, performance of research tasks in labs with insufficient biosafety ratings — to taint their applications for multiple federal grants (the complaint didn’t specify how many). Brinkley and Whetstone filed suit under the False Claims Act (FCA), which allows individuals to recover money on behalf of the U.S. government; allegedly, the grants were improperly obtained because the defendants had certified that they were in compliance with NIH’s biosafety requirements, even though they knew that they were not.
In the opinion, Judge Hale was able to point to another recent lawsuit against a state school, the University of Kentucky, which was dismissed for the same reason:
courts have repeatedly held that state universities and university officials are not liable under the FCA.
John Thomas, an attorney at Roanoke, Va. firm Gentry Locke, who is pursuing a $200 million FCA case against Duke University, told Retraction Watch that the so-called “arm of the state” issue is important for how the arena of scientific research interacts with the FCA:
A lot of the biggest research universities are public or quasi-public. This kind of shields a lot of otherwise legitimate defendants from these cases.
Readers may recall that in 2014, a federal judge in Michigan dismissed a FCA lawsuit brought against Wayne State University in Detroit by former employee Christian Kreipke, citing “arm-of-the-state” immunity; however there are some limits to this idea. Though not related to an FCA case, in 2016 a DC district court judge declined to dismiss a lawsuit against George Washington University, where the school argued that it deserved immunity because it was acting on behalf of the state by investigating a researcher’s use of federal grant money.
While the judge’s decision to dismiss the suit against Louisville might not be surprising, considering the legal history, Thomas told us he saw a sliver of daylight in the judge’s decision, an opening through which the right FCA case against a public university could theoretically slip. He told us that the judge had to go through “a lot of facts” — like how Louisville’s research foundation functions and how the school was positioned within Kentucky’s state government — to determine it was an “arm of the state.” If the facts had been different:
It’s possible you could have a sufficiently independent public university — where the governor doesn’t appoint board members, one that has its own bank accounts — that does not meet the arm of the state test.
Potential for Precedent
When the complaint filed by Brinkley and Whetstone became public knowledge, as first reported by the Louisville Courier-Journal in December 2015, it caused a small ripple among research compliance and biosafety professionals.
At the inaugural Harvard Yale Symposium in February 2016, attorney Jeff Seo, at the time a compliance officer at Harvard Medical School and now at Northeastern University, gave an unscheduled lunchtime presentation on the Louisville lawsuit to dozens of the conference’s attendees. His message: keep on eye on this one.
In the 2000s, FCA lawsuits had become increasingly common in scientific research, he showed, but had not yet touched the area of biosafety, though that could change as a result of the Louisville case, he said. Later, in November, Seo published a review article in the journal Applied Biosafety with Keri Godin, Director of the Office of Research Integrity at Brown University, crystallizing his message:
depending on the outcome, the closure of this FCA claim may open the door for other civil FCA cases in the arena of biosafety or in other overlapping regulatory areas, such as animal research. This is not a trend to which we should turn a blind eye.
But Hale obviated the potential importance of the case when he dismissed allegations against all defendants, including the school, the University of Louisville Foundation, the University of Louisville Research Foundation, and the eight individuals. The decision was issued in response to a motion to dismiss, meaning the merits of the case were never heard, and with prejudice, meaning the plaintiffs cannot launch another federal suit.
Vanessa Cantley, an attorney at Louisville personal injury firm Bahe Cook Cantley & Nefzger representing the two plaintiffs, told Retraction Watch that while the federal case is over, she’s filed a suit in state court under the Kentucky Whistleblower Act.
An “uphill battle”
Brinkley and Whetstone’s suit became unsealed after the U.S. Department of Justice (DOJ) decided not to join the case and pursue damages (FCA suits stay under wraps until the DOJ makes a decision). The DOJ’s decision was not good for plaintiffs, Thomas told us, because they were already facing an uphill battle. They were still able to proceed without the government’s assistance, but it would have been particularly helpful to have it in this instance:
The arm of the state bar only works against the private whistleblower, not the federal government.
Thomas noted that the federal government could still pursue these claims if it wants to, but that’s unlikely.
Moreover, based on his review of the complaint, he said it’s unclear the plaintiffs would have been able to prove one of the key components in a FCA suit: materiality. Even if they could have proven the allegation that Louisville knew it was out of compliance with the biosafety requirements, they would’ve also had to prove that NIH wouldn’t have funded them without it. Thomas told us:
In order to get there under some of the more recent cases, you have to show that the false statement is material to the government’s funding decisions. Just because you’re out of compliance, doesn’t meant the government can use that to attack everything. When the DOJ decided not to join the case, maybe they didn’t view the violations as bad enough.
He told us that how the “victim” agency views the case could play a role. Here, that would have been NIH.
An NIH spokesperson told Retraction Watch that it “encourages sound biosafety policies” through peer review of grant applications:
Reviewers must specifically look at the Biohazards review criteria when scoring the application. Reviewers assess whether materials or procedures proposed are potentially hazardous to research personnel and/or the environment, and if needed, determine whether adequate protection is proposed.
NIH also has established policies in place to foster the conduct of sound biosafety practices. These include requiring adherence to the NIH Guidelines for Research Involving Recombinant or Synthetic Nucleic Acid Molecules as a term and condition of grant award. In addition, institutions conducting research with recombinant or synthetic nucleic acid molecules must establish an Institutional Biosafety Committee (IBC) charged with ensuring compliance with the NIH Guidelines.
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