Judge nixes claim against whistleblower

Counterclaim against company worker alleged confidentiality violation

By: Patricia Manson, Chicago Law Bulletin: May 10th, 2016

Citing the public’s interest in shielding whistleblowers from retaliation, a federal judge Monday threw out a counterclaim filed against a man who accused his employer of defrauding the government.

In a written opinion, U.S. Magistrate Judge Sidney I. Schenkier dismissed without prejudice the counterclaim LifeWatch Services Inc. brought against Matthew Cieszynski after he sued LifeWatch under the False Claims Act.

The counterclaim alleged Cieszynski violated a LifeWatch privacy policy and a confidentiality agreement he entered with the company by providing the government with client information protected by the Health Insurance Portability and Accountability Act.

Cieszynski submitted that information to the government in support of his contention that LifeWatch was violating Medicare regulations by seeking reimbursement for heart-monitoring services performed by technicians located outside the United States.

In his opinion, Schenkier conceded an employer is entitled to expect that its confidential information will be kept confidential.

But both federal and Illinois law have a public policy that protects whistleblowers from retaliation for reporting fraud to the government, Schenkier wrote.

Therefore, he wrote, “we must balance the need to protect whistleblowers and prevent chilling their attempts to uncover fraud against the government against an employer’s legitimate expectations that its confidential information will be protected.”

In deciding whether to dismiss a counterclaim filed in a False Claims Act suit, courts consider whether the defendant could recover damages even if it is found liable on the plaintiff’s claim, Schenkier wrote.

In deciding whether to dismiss a breach-of-contract counterclaim in a false claims suit, he wrote, citing United States ex rel. Wildhirt v. AARS Forever Inc., No. 09 C 1215, 2013 WL 5304092 (N.D. Ill. Sept. 19, 2013), some courts examine whether the plaintiff, or relator, disclosed more information than necessary to support his or her allegations.

LifeWatch failed to make that showing, Schenkier held.

In its counterclaim, he wrote, LifeWatch does not allege Cieszynski took company documents for any reason other than to support his False Claims Act claim.

Also, LifeWatch failed to show Cieszynski took many more documents than necessary, Schenkier wrote.

He conceded that a spreadsheet taken by Cieszynski included information about patients covered by private insurers as well as those covered by Medicare or other government insurers.

But it would “gut the strength and purpose of the public policy exception” to hold a relator liable for taking more than the bear minimum of documents, Schenkier wrote.

“It is unrealistic to impose on a relator the burden of knowing precisely how much information to provide the government when reporting a claim of fraud,” he wrote, “with the penalty for providing what in hindsight the defendant views as more than was needed to be exposure to a claim for damages.”

An attorney for Cieszynski, Scott R. Rauscher of Loevy & Loevy, said he’s pleased with the opinion.

“We think it’s a strong opinion that sends a message to employers that they’re not allowed to retaliate against employees who are trying to do the right thing and expose fraud,” he said.

The lead attorney for LifeWatch is Steven P. Blonder of Much, Shelist P.C. He could not be reached for comment.

Cieszynski is a technician who has worked for Rosemont-based LifeWatch since 2003.

He sued the company in 2013, alleging it routinely violated Medicare law and regulations by using technicians in India — many of whom were not certified — to perform tests.

LifeWatch falsely asserted the tests were performed by certified technicians located in this country, Cieszynski alleges.

The case is United States ex rel. Matthew Cieszynski, et al. v. LifeWatch Services Inc., No. 13 C 4052.



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