December 12, 2013 4th Circuit published opinions

United States ex rel May and Radcliffe v Purdue Pharma, L.P.

Radcliffe’s husband brought a qui tam suit against Purdue which was dismissed based on a release he had signed with Purdue. Maya and Radcliffe brought a qui tam suit based on the same facts as the dismissed suit. The district court dismissed their case on res judicata grounds and ruled the case in any event was barred under the False Claims Act under the public disclosure bar. The panel vacated and remanded. It held the new suit was not prohibited by res judicata as the first case was dismissed based on a release which is construed according to its terms. The panel held the terms of the release were entirely personal to Radcliffe’s husband and the opinion upholding the dismissal even noted that another qui tam suit would be permissible if other brought such a claim. As to the disclosure bar, the panel firs held that the pre 2010 version applied as the 201 amendments changed the substantive rights of both relators and defendants in qui tam suits, applying those changes here would give the amendments retroactive effect which is improper under United States Supreme Court precedent. As may and Radcliffe allege they learned of the underlying facts through private means and Purdue alleges they learned about the facts through the first lawsuit, remand was necessary to allow the district court to resolve this factual dispute. The panel finally held that Maya and Radcliffe should be allowed to amend their complaint to cure any Rule 9 pleading problems and the current suit qualifies as first to file because it was filed when no other qui tam suit was pending.

McAffe v Boczar

Boczar lied in an arrest warrant application. After McAffe was arrested and acquitted, she sued Boczar under 42 USC 1983. Boczar moved for dismissal based on qualified immunity which was the trail judge denied. The jury returned a verdict for McAfee for actual damages and the trail judge awarded over $300,000 in attorney fees. The panel affirmed the judgment but reduced the fee award. It held that lying on the warrant application placed Boczar outside the protection of qualified immunity. It held that the lies on the application plus evidence that McAfee was actually innocent of the crime demonstrated there was no probable cause to arrest and the verdict was therefore proper. The panel held that the trial judge properly calculated the loadstar amount by receiving evidence of prevailing fees, reducing hours spent on failed claims and otherwise considering and applying the correct factors. However, because McAfee sought substantial special and punitive damages, and the jury did not award them, the fee award (which was over 100 times the amount of damages) was clearly excessive given the lack of results obtained. To avoid additional litigation, the panel reduced the fee to $100,000 and remanded for entry of judgment.

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