Rasvinder Dhaliwal v. Salix Pharmaceuticals, Ltd.
OPINION & ORDER.....Salixs June 16, 2017 motion for summary judgment is granted. The Clerk of Court shall close the case. (Signed by Judge Denise L. Cote on 9/14/2017) (gr)
UNITED STATES DISTRICT COURT
SOUTHERN DISTRICT OF NEW YORK
SALIX PHARMACEUTICALS, LTD.,
OPINION & ORDER
For Rasvinder Dhaliwal:
William R. Fried
Janice I. Goldberg
Herrick, Feinstein LLP
2 Park Avenue
New York, New York 10016
For Salix Pharmaceuticals, Ltd.:
Benjamin J. Razi
Patrick M. Phelan
Covington & Burling LLP
850 Tenth Street NW
Washington, DC 20001-4956
DENISE COTE, District Judge:
Defendant Salix Pharmaceuticals, Ltd. (“Salix”) has moved
for summary judgment on the remaining claims in this action,
retaliation claims brought under the federal False Claims Act
(“FCA”), 31 U.S.C. § 3730(h), and the New York False Claim Act
(“NYFCA”), N.Y. Fin. Law § 191.
For the following reasons, the
motion is granted.
The following facts are undisputed or taken in the light
most favorable to the plaintiff, unless otherwise noted.
was a pharmaceutical company that sold prescription drugs and
devices to treat gastrointestinal disorders.
It was acquired by
another pharmaceutical company in 2015.
Salix hired Rasvinder Dhaliwal (“Dhaliwal”) in 2005, and
she was employed by Salix until 2013.
allegations largely concern events that transpired during 2012
Salix hired Dhaliwal to work as a Territory Manager for the
New York City area and promote Salix’s products to physicians
Dhaliwal became a Senior Territory Manager in
2007, and a National Accounts Manager (“NAM”) in the Managed
Markets department in 2008.
NAMs promoted Salix’s products
through a broader customer base than physicians and hospitals.
Dhaliwal’s customers included Managed Care Organizations,
Pharmacy Benefits Managers, Group Purchasing Organizations
(“GPOs”), state Medicaid plan administrators, Medicare carriers,
hospitals, and medical societies.
As a NAM, Dhaliwal reported
to Salix Senior Vice President of Managed Markets John Temperato
Dhaliwal was promoted again to Senior Manager,
National Accounts in 2010.
Salix hired Philippe Adams (“Adams”) as Director of Managed
Markets in 2010.
Adams reported to Temperato and was one of
Adams gave Dhaliwal generally positive
performance reviews in 2010 and 2011.
Dhaliwal reports that she
had difficulty working with Adams.
Beginning in 2012, Dhaliwal observed what she describes as
improper sales and marketing practices at Salix.
practices fall into four categories.
I. Promotion of Solesta
Salix acquired a product known as Solesta through its
acquisition of Oceana Therapeutics, Inc. around December 2011.
Solesta is used to treat fecal incontinence in adults.
In the spring of 2012, Dhaliwal participated in preparing a
slide deck on Solesta that would be used in Salix’s
presentations to payers.
In an April 2, 2012 email to
Temperato, she suggested dozens of changes to a draft of the
Dhaliwal warned that the deck “does not set us up
Some of her suggested changes were grammatical or
stylistic in nature -- for instance, correcting spelling errors
or suggesting new titles for certain slides.
substantive errors in the deck and questioned Salix’s support
for certain statements.1
Temperato responded to Dhaliwal’s edits
with the comment, “[a]ll good stuff.”
Second, Dhaliwal told Salix’s Chief Development Officer
around May 2012 that Salix was endangering patient safety by
distributing injection needles for Solesta without markings that
would assist doctors in knowing when they had inserted the
needles to the recommended length.
According to Dhaliwal, Salix
did not act on Dhaliwal’s suggestion for adding markings to the
Third, on August 13, 2012, Dhaliwal sent Adams and others
an email suggesting changes to a Solesta product brief.
product brief includes citations to clinical evidence and other
supporting documentation to encourage favorable coverage
policies for Solesta.
The next day, Adams commended Dhaliwal’s
work on the brief.
Finally, around October of 2012, Dhaliwal advised Temperato
and Salix’s Director of Key Account Managers of a physician’s
concerns with a Solesta training video.
In none of these
instances concerning Solesta did Dhaliwal assert that Salix’s
For instance, with reference to the tenth slide, the email
states “Cost of FI was estimated at $19.5 billion Bullet needs
to be removed THIS IS WRONG-$19.5 billion figure refers to cost
of URINARY incontinence and overactive bladder . . . . not FECAL
incontinence . . . .”
practices would result in the submission of false claims to the
Dhaliwal attended an April 2012 gathering that Salix
characterized as an educational program, but that Dhaliwal
considered to be little more than a social event.
event, Dhaliwal learned that an employee of the Food and Drug
Administration (“FDA”) was in attendance.
Temperato to report her concern that the FDA employee would see
that the event was simply a “fun evening” for medical faculty.
According to Dhaliwal, when she reiterated that she would like
to speak of her concerns to a Salix legal compliance officer,
Temperato indicated that he would speak to the officer himself
the following Monday.
Dhaliwal does not assert that she
expressed any concern that Salix’s behavior would lead to false
claims being submitted to the Government.
III. Disparities in Discounts
In August 2012, Dhaliwal learned that Salix was effectively
offering certain GPOs deeper discounts than other GPOs on one of
Dhaliwal shared this information with Adams,
who explained in an August 29 email that the apparent disparity
in pricing among GPOs would be a “temporary situation.”
In September 2012, Dhaliwal again told Adams of her concern
that certain GPOs were receiving better pricing on that product
According to Dhaliwal, she explained to Adams that
this appeared to act as an inducement to purchase the product
within a specified time frame from those GPOs that offered
better pricing, and that one customer of a GPO had shifted its
purchases to another GPO for that very reason.
At no point did
Dhaliwal suggest to Adams that this situation would lead to
false claims being submitted to the Government.
IV. Budgeting of Continuing Medical Education Programs
In October 2012, Dhaliwal objected to paying for an
upcoming January 2013 continuing medical education (“CME”)
program out of Salix promotional funds without going through
Salix’s grant committee.
Dhaliwal paid for a similar event held
around October 25, 2012, but refused to pay for the January 2013
event when the Regional Sales Manager asked her to do so.
Dhaliwal told him in substance that it was unlawful for Salix to
directly pay for a CME dinner and that the request had to go
through the grants process.
According to Dhaliwal, the Manager
was annoyed and stormed off.
Dhaliwal reported these events to a Salix Associate
Director the following day.
Dhaliwal asserts that the Director
told her that she had done the right thing by refusing the
request to pay for the January 2013 dinner.
He advised her to
put through the expense for the October 25 dinner, but not to
directly pay for CME dinners in the future.
Dhaliwal also told
the Director of Key Account Managers of these events, who
according to Dhaliwal, stated that “we can’t have this stuff
happening” and that he would “run on this quick.”
not assert that she ever claimed that the practice would result
in the submission of a false claim to the Government.
V. Dhaliwal Takes Leave in 2012
During 2012, the year in which these events occurred,
Dhaliwal experienced serious difficulties in her personal life.
In February 2012, chemical fumes entered Dhaliwal’s apartment.
Salix granted Dhaliwal’s request for time off to deal with this
Around October 29, 2012, Hurricane Sandy hit New York City
and Dhaliwal’s apartment lost power, heat, and hot water.
Dhaliwal took approximately a week of emergency leave during
this period to address her living situation.
During this time,
Dhaliwal communicated with Salix CEO Carolyn Logan (“Logan”),
who was supportive and offered assistance in finding her a hotel
In early November 2012, Salix and Dhaliwal had a dispute
about her failure to attend a four day training program.
November 12, Dhaliwal began an unscheduled medical leave of
Dhaliwal never returned to work at Salix.
third period of leave, Dhaliwal wrote to Logan, “its been really
the hurricane was the last thing i needed.
everyday to get better.”
Dhaliwal and Temperato spoke by
telephone in December 2012.
Dhaliwal recorded this
During the call, Temperato informed her that he
had created a new position for her.
Following the call,
Dhaliwal decided to retain counsel.
In none of her
communications with Salix during 2012 did Dhaliwal express
concerns about fraud on the Government.
A February 1, 2013 letter from Dhaliwal’s counsel to Salix
Ms. Dhaliwal also has certain concerns whether the
company and/or certain of its managers have treated
her fairly and in accordance with the company’s own
policies (i.e., the anti-retaliation provisions in
Salix’s Code of Conduct) and/or applicable employment
laws, which matters will also need to be addressed
prior to Ms. Dhaliwal returning to work.
The letter did not indicate any concern about a fraud on the
On March 14, Dhaliwal met with Logan and Salix’s Chief
Financial Officer (“CFO”) at a dinner arranged by counsel.
the dinner, Dhaliwal communicated the four categories of
concerns described above.
She also described the harassment and
retaliation she believed she suffered when she tried to raise
her concerns to her superiors.
According to Dhaliwal, Logan
assured her that she was a valued employee and that her concerns
would be investigated.
Dhaliwal submits no evidence that she
told Logan or Salix’s CFO at the dinner that Salix’s conduct
could result in fraud on the Government.
Resources department sent Dhaliwal a letter dated April 25
asking her to inform Salix if she would be returning to work by
May 3, 2013.
On May 2, Dhaliwal sent a “Resignation Letter” to
Dhaliwal believes her employment was constructively
terminated shortly after the March 14 dinner.
Around February 1, 2013, Salix received a subpoena from the
United States Attorney’s Office for the Southern District of New
York requesting documents related to Salix’s sales and
promotional practices for certain products, including the
product for which Dhaliwal had complained that Salix had given
some GPOs better prices.
Dhaliwal began cooperating with the
Government’s investigation into Salix’s business and marketing
practices in 2014.
Dhaliwal did not have any contact with the
Government regarding allegations of impropriety while she was
employed at Salix.
VI. Adverse Employment Actions
Dhaliwal describes numerous incidents beginning in 2012
which she believes demonstrate retaliation for raising the
concerns in the four areas discussed above.
include a denial of a promotion, verbal abuse and admonishment
by her supervisors, a refusal to accommodate her workload and
scheduling issues, a denial of earned compensation including
bonuses and merit salary increases, demotion to an isolated
position, and stripping of her earned stock awards.
asserts that her constructive discharge was retaliatory.
Dhaliwal filed this action on January 30, 2015 as a qui tam
action under the FCA and various state false claims laws.
the relator, Dhaliwal alleged, inter alia, that Salix provided
kickbacks to healthcare providers to prescribe Salix products.
The case was transferred to this Court on August 3, 2015.
On June 9, 2016, the Government elected to intervene, the
case was unsealed, and stipulations of settlement and dismissal
were filed between Dhaliwal, Salix, and the federal Government.
Thereafter, various state governments intervened, and on
December 2, a joint notice of dismissal was entered between the
state governments and the defendants.
In June and July 2016, prior counsel for Dhaliwal litigated
the extent of their entitlement to fees.
See United States v.
Salix Pharm., Ltd., 15-cv-706 (DLC), 2016 WL 4402044 (S.D.N.Y.
Aug. 18, 2016).
On December 7, Dhaliwal notified the Court of
her intent to pursue her individual surviving claims against
Following a conference on December 13, Dhaliwal and
Salix engaged in discovery.
On June 16, 2017, Salix moved for
summary judgment on Dhaliwal’s retaliation claims.
became fully submitted on July 21.
Summary judgment may not be granted unless all of the
submissions taken together “show that there is no genuine
dispute as to any material fact and the movant is entitled to
judgment as a matter of law.”
Fed. R. Civ. P. 56(a).
judgment is appropriate when the record taken as a whole could
not lead a rational trier of fact to find for the non-moving
Smith v. Cty. of Suffolk, 776 F.3d 114, 121 (2d Cir.
2015) (citation omitted).
The moving party bears the burden of
demonstrating the absence of a material factual question, and in
making this determination, the court must view all facts in the
light most favorable to the non-moving party.
See Eastman Kodak
Co. v. Image Technical Servs., Inc., 504 U.S. 451, 456 (1992);
Gemmink v. Jay Peak Inc., 807 F.3d. 46, 48 (2d Cir. 2015).
“[W]here the evidentiary matter in support of the motion does
not establish the absence of a genuine issue, summary judgment
must be denied even if no opposing evidentiary matter is
Sec. Ins. Co. of Hartford v. Old Dominion Freight
Line Inc., 391 F.3d 77, 83 (2d Cir. 2004) (citation omitted)
Once the moving party has asserted facts showing that the
non-movant’s claims cannot be sustained, “the party opposing
summary judgment may not merely rest on the allegations or
denials of his pleading; rather his response, by affidavits or
otherwise as provided in the Rule, must set forth specific facts
demonstrating that there is a genuine issue for trial.”
v. Goord, 554 F.3d 255, 266 (2d Cir. 2009) (citation omitted).
“[C]onclusory statements, conjecture, and inadmissible evidence
are insufficient to defeat summary judgment,” Ridinger v. Dow
Jones & Co. Inc., 651 F.3d 309, 317 (2d Cir. 2011) (citation
omitted), as is “mere speculation or conjecture as to the true
nature of the facts.”
Hicks v. Baines, 593 F.3d 159, 166 (2d
Cir. 2010) (citation omitted).
Only disputes over material
facts will properly preclude the entry of summary judgment.
Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 248 (1986).
issue of fact is genuine and material if the evidence is such
that a reasonable jury could return a verdict for the nonmoving
Cross Commerce Media, Inc. v. Collective, Inc., 841
F.3d 155, 162 (2d Cir. 2016).
The FCA is a statutory scheme designed to discourage fraud
against the federal Government.
See Universal Health Servs.,
Inc. v. United States, 136 S. Ct. 1989, 1996 (2016).
authorizes private citizens to sue on behalf of the
United States to recover treble damages from those who
knowingly make false claims for money or property upon
the Government or who knowingly submit false
statements in support of such claims or to avoid the
payment of money or property to the Government.
United States ex rel. Lissack v. Sakura Global Capital Mkts.,
Inc., 377 F.3d 145, 146 (2d Cir. 2004); 31 U.S.C.
The FCA’s whistleblower provision, 31 U.S.C. § 3730(h)(1)
(“Section 3730(h)(1)”), provides in relevant part:
Any employee . . . shall be entitled to all relief
necessary to make that employee . . . whole, if that
employee . . . is discharged, demoted, suspended,
threatened, harassed, or in any other manner
discriminated against in the terms and conditions of
employment because of lawful acts done by the employee
. . . in furtherance of an action under this section
or other efforts to stop 1 or more violations of this
“The New York False Claims Act follows the federal False Claims
Act and therefore it is appropriate to look toward federal law
when interpreting the New York act.”
State ex rel. Willcox v.
Credit Suisse Sec. (USA) LLC, 36 N.Y.S.3d 89, 90 n.2 (App. Div.
1st Dept. 2016) (citation omitted).
While the Second Circuit has not articulated a test for
establishing an FCA retaliation claim, other circuits and
district courts in this Circuit have generally required a
plaintiff to show that “(1) he engaged in activity protected
under the statute, (2) the employer was aware of such activity,
and (3) the employer took adverse action against him because he
engaged in the protected activity.”
United States ex rel.
Chorches for Bankr. Estate of Fabula v. American Med. Response,
Inc., 865 F.3d 71, 95 (2d Cir. 2017).
“[P]roving a violation of
§ 3729 is not an element of a § 3730(h) cause of action.”
Graham Cty. Soil & Water Conservation Dist. v. United States ex
rel. Wilson, 545 U.S. 409, 416 n.1 (2005).
3730(h) “protects an employee’s conduct even if the target of an
investigation or action to be filed was innocent.”
Id. at 416.
To determine whether an employee’s conduct was protected
under the FCA, courts must evaluate whether “(1) the employee in
good faith believes, and (2) a reasonable employee in the same
or similar circumstances might believe, that the employer is
committing fraud against the government.”
United States ex rel.
Uhlig v. Fluor Corp., 839 F.3d 628, 635 (7th Cir. 2016)
“[M]ere investigation of an employer’s non-
compliance with federal regulations is not enough” to constitute
protected activity under Section 3730(h)(1).
Fisch v. New
Heights Acad. Charter Sch., No. 12cv2033 (DLC), 2012 WL 4049959,
at *5 (S.D.N.Y. Sept. 13, 2012).
regulatory problems may be a laudable goal, those problems [are]
not actionable under the FCA in the absence of actual fraudulent
conduct, and so reporting them [falls] outside the purview of
the FCA’s anti-retaliation provision.”
United States ex rel.
Booker v. Pfizer, Inc., 847 F.3d 52, 60 (1st Cir. 2017)
In other words, “[m]erely grumbling to the
employer about job dissatisfaction or regulatory violations does
not . . . constitute protected activity.”
United States ex rel.
Yesudian v. Howard Univ., 153 F.3d 731, 743 (D.C. Cir. 1998).
Rather, the employee’s investigation “must be directed at
exposing a fraud upon the government.”
Fisch, 2012 WL 4049959,
at *5 (citation omitted).
With respect to the notice requirement, a plaintiff
claiming retaliation must establish that the employer had
knowledge of the employee’s protected activity.
for notice is “flexible”: “[T]he kind of knowledge the defendant
must have mirrors the kind of activity in which the plaintiff
must be engaged.”
United States ex rel. Williams v. Martin-
Baker Aircraft Co., Ltd., 389 F.3d 1251, 1260 (D.C. Cir. 2004)
“Unless the employer is aware that the
employee is investigating fraud, the employer [cannot] possess
the retaliatory intent necessary to establish a violation of §
Id. at 1260-61 (citation omitted).
An employee who
simply engages in behavior wholly consistent with his job
description will not, without more, provide notice that he is
engaging in protected activity.
Id. at 1261.
alleging that performance of their normal job responsibilities
constitutes protected activity must overcome the presumption
that they are merely acting in accordance with their employment
obligations to put their employers on notice.”
Thus, where an employee is tasked with investigating
fraud, he must go beyond the assigned task, for example, by
alerting a party outside the usual chain of command, id., or
“[c]haracterizing the employer’s conduct as illegal [and]
recommending that legal counsel become involved,” Fisch, 2012 WL
4049959, at *6 (citation omitted).
Finally, while the Second Circuit has not defined the
standard of causation for FCA retaliation claims, the Supreme
Court has clarified that the term “because of” typically
“imports, at a minimum, the traditional standard of but-for
EEOC v. Abercrombie & Fitch Stores, Inc., 135 S.
Ct. 2028, 2032 (2015) (Title VII); see also Univ. of Tex. Sw.
Med. Ctr. v. Nassar, 133 S. Ct. 2517, 2533 (2013) (holding that
Title VII retaliation claims “must be proved according to
traditional principles of but-for causation, not the lessened
[motivating-factor] causation test,” and describing but-for
causation as the background standard against which Congress
Temporal proximity between the protected activity
and the retaliatory action may strengthen the inference of a
See Gorman-Bakos v. Cornel Co-Op Extension
of Schenectady Cty., 252 F.3d 545, 554 (2d Cir. 2001).
Dhaliwal has failed to provide evidence that raises a
question of fact that she ever engaged in conduct protected by
As a consequence, she has also failed to provide
evidence that Salix understood her to be engaged in protected
conduct or that any of the actions it took regarding her
employment were taken “because of” that protected conduct.
of these issues is addressed in turn.
Dhaliwal has failed to supply evidence that her complaints
to her supervisors constituted protected conduct.
There is no
evidence from which one could reasonably infer that her
complaints to Salix regarding any of the four categories of
concerns she raised during 2012 or listed again at the March
2013 dinner with Salix executives were directed at exposing or
avoiding a fraud upon the Government.
Because Dhaliwal has failed to supply evidence that she was
engaged in protected activity, she also cannot supply evidence
that she gave Salix notice of any protected activity.
brief in opposition to this motion, she relies exclusively on
the March 2013 dinner with Salix’s executives as the occasion on
which she gave Salix notice of her protected activity.
declaration in opposition to this motion gives a very brief
description of that dinner conversation.
Of relevance here, it
simply lists the four categories of concerns she expressed about
Salix’s marketing and sales practices.
At no point does
Dhaliwal assert that she provided notice during the dinner of a
concern that Salix was engaged in conduct that would permit or
encourage a fraud upon the Government.
Reading her submissions in opposition to this motion
generously, Dhaliwal may be arguing that her complaints about
the quality of the Solesta slide deck and product brief should
have put Salix on notice of her concern that there was a risk of
a fraud on the Government, specifically, a risk of a false claim
being made to the Government for reimbursement, or in her words
for coverage, of Solesta.
Dhaliwal argues that “[i]f [Salix]
prevailed in obtaining favorable policies [regarding Solesta],
it would increase prescribing and purchasing of the Solesta
device, which would then lead to potential false claims and
potential harm to the government, among others, who would pay
for a medical device that it might not have agreed to pay for
Dhaliwal has not provided any evidence, however,
that she articulated such a concern in 2012 or 2013.
she provided evidence of any statement that she made in 2012 or
2013 that would have reasonably caused anyone who heard her
complaints to consider this chain of events and a likelihood of
a false claim being presented to the Government.
For similar reasons, Dhaliwal likewise fails to supply
evidence that she would not have been subjected to the
retaliatory acts she alleges but for her protected activity.
The record supplies no evidence to suggest that the adverse
employment actions that Dhaliwal alleges she suffered were
motivated by a desire to retaliate against her for conduct
protected by the FCA.
Salix’s June 16, 2017 motion for summary judgment is
The Clerk of Court shall close the case.
New York, New York
September 14, 2017
United States District Judge
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