Boston Scientific (NYSE:BSX) hopes to end a years-long whistleblower lawsuit by barring certain evidence from use, alleging that the former employees who exposed the documents breached their employee contracts by leaking confidential information.
The lawsuit claims that Boston Scientific committed multiple illegal acts in relation to its Precision Plus SCS spinal cord stimulation system, including submitting fraudulent Medicare and Medicaid billing claims, concealing defects and denying replacement devices, engaging in a kickback scheme and retaliating against employees who raised the red flag about such practices.
Whistleblowers Wendy Bahnsen and Carolina Fuentes found themselves on the defense after Boston Scientific filed a counter-suit claiming that the pair violated their private employment agreements by exposing private documents.
Boston Scientific asked the court to dismiss the lawsuit and to award the company legal fees and unspecified monetary damages. The device maker further asked for a permanent injunction barring any lawsuit, including the Bahnsen/Fuentes case, from using the information brought to court by the whistleblowers.
Bahnsen and Fuentes maintained, in their filed rebuttal, that they had handed the information to government authorities in compliance with federal anti-fraud laws, and that the medical device giant was seeking only to "immunize itself from this damning and damaging evidence" by attacking the whistleblowers.
"Defendant cannot, through the enforcement of a private contract, particularly the agreements here, which focus on preserving Proprietary trade secrets from competitors, escape responsibility for its public fraud on the Government, thereby avoiding liability for the millions of dollars of Medicare and Medicaid overpayments from which it has wrongly benefitted," according to the rebuttal. "The Counterclaims must be dismissed."
Boston Scientific has made previous attempts to have the lawsuit thrown out of court, but New Jersey Judge Susan Wigenton denied previous motions and ruled that the case may proceed. The lawsuit was filed in the U.S. District Court for New Jersey in March 2011 and revealed in Boston Scientific’s Q3 2012 regulatory filings.