Lemons v. Meguerian
| Decision Date | 29 April 2022 |
| Docket Number | Civil Action 21-1737 |
| Parties | CHRISTINA LEMONS v. GAREN MEGUERIAN, ESQ. and STEFAN P. KRUSZEWSKI, M.D. |
| Court | U.S. District Court — Eastern District of Pennsylvania |
Plaintiff Christina Lemons brings this action against Defendants Garen Meguerian, Esq. and Dr. Stefan P. Kruszewski, M.D., alleging breach of contract and fraud in retaliation for her participation in a whistleblower qui tam lawsuit. Lemons claims Defendants (1) fraudulently induced her to file her own qui tam action by promising she would be well compensated for doing so, (2) fraudulently concealed the material existence of the other realtors and their lawsuits, and (3) negligently misrepresented material facts about the qui tam actions. She also claims Meguerian breached a fiduciary duty owed to her. Lemons also claims Kruszewski breached an unwritten contract and was unjustly enriched. Defendants now move to dismiss the Complaint pursuant to Federal Rule of Civil Procedure 12(b)(6). The Court will grant Defendants' motions with leave to amend because Lemons has failed to plead sufficient facts to state a claim for relief which is plausible on its face.
FACTS[1]
On January 25, 2010, Kruszewski filed a federal False Claims Act action against Reckitt Benckiser Pharmaceuticals, Inc. (“RB”) in the District of New Jersey and the case was sealed shortly thereafter. Compl., ¶¶ 20-21. Kruszewski was the first relator to file. Compl ¶¶ 22-24. Meguerian was representing Kruszewski in other litigation matters but was aware of Kruszews-ki's participation in the RB case and was also involved in drafting Kruszewski's complaint. Compl., ¶¶ 25-29. On October 15, 2012, Dr. Stuart Finkelstein filed the second qui tam action against RB and, on May 3, 2013, Ann Williams filed the third. Compl., ¶¶ 32-37. Both of these cases were sealed. Id.
On December 3, 2013, Gail Scott filed a fourth qui tam action against RB, which was also sealed. Compl., ¶¶ 38-39. That same day, while Lemons was still an RB employee federal law enforcement authorities conducted a raid of RB's offices in Midlothian, Virginia. Compl ¶¶ 40-41.
At that time, Lemons was still employed by RB, where she had worked since July 2012. Compl., ¶¶ 40-44. While working at RB, Lemons claims she “complained to company personnel about improper off-label marketing practices relating to Suboxone, ” which she argues “further constituted protected whistleblower activity.” Compl., ¶ 67. In late 2013, Lemons sat next to Susan Guerette, Garen Meguerian's wife, on a flight from Arizona to Philadelphia, and they spoke extensively about the harassment Lemons was facing at work. Compl., ¶¶ 67-71. Guerette told Lemons she knew an employment lawyer (Meguerian) who could help, and the two women exchanged contact information. Compl., ¶¶ 71-75. Lemons later reached out to Guerette, who set up a conference call. Compl., ¶¶ 76-78. On January 24, 2014, Meguerian sent Lemons an email asserting attorney-client privilege, and Lemons concluded from that email that they had an attorney-client relationship. Compl., ¶¶ 79-82. Lemons told Meguerian about both her harassment complaints and her concerns about RB's marketing practices. Compl., ¶ ¶ 81-83. Meguerian provided Lemons with advice about her employment and illegal marketing allegations against RB and said that pursuing the whistleblower claims would be “more lucrative.” Compl., ¶ 83.
Turning back to the raid of RB's offices, Lemons had reason to believe the authorities had failed to find a certain computer server that contained material evidence. Compl., ¶ 61. In November 2014, Lemons made copies of a population of documents on this server. Compl., ¶¶ 48-65, 84-87. The documents discussed RB's “Project Frost, ” which had sought to destroy the generic competition for several of its products. Id. She resigned from the company shortly thereafter and Meguerian helped her draft her constructive discharge forms and obtain employment counsel in Arizona, where Lemons lived. Compl., ¶¶ 44; 86-87. Meguerian recommended Attorney Eliot Isaac for her employment claims against RB. Compl., ¶ 88. Lemons retained Attorney Isaac, but Meguerian continued to provide other legal advice to Lemons. Compl., ¶ 89.
On December 16, 2014, Meguerian approached Lemons about officially filing the whistleblower lawsuit, and Lemons then shared with him photographs and other evidence supporting her claims. Compl., ¶¶ 91-93. Three days later, during an EEOC mediation for her employment claims, Lemons found out RB knew she had taken confidential company documents and was threatening to take legal action in response. Compl., ¶ 93. Lemons contacted Meguerian about the threats, and Meguerian recommended she proceed with filing the lawsuit. Compl., ¶¶ 94-95. Meguerian emphasized again that he was representing Kruszewski in a similar lawsuit and could not represent her, but he did offer to help her to find a lawyer and provide the documents to the Government. Compl., ¶¶ 95-99. Meguerian recommended Attorney John Leader. Compl., ¶¶ 100-103. Meguerian also told Kruszewski about the documents Lemons had in her possession. Compl., ¶¶ 101, 106. On or about December 20, 2014, Kruszewski called Leader- for whom Kruszewski had served as an expert in an earlier lawsuit-and told Leader he had a pending qui tam action against RB Pharmaceuticals but the investigation had stalled for lack of evidence. Compl., ¶ 101. Kruszewksi also told Leader there was a former employee who wished to file a related qui tam claim and this individual may have had new information that would revive the investigation. Compl., ¶ 101, 106-107.
Lemons met with Leader on December 23, 2014. Compl., ¶ 109. The next day, Lemons filed her False Claims Act action in the District of Arizona. Compl., ¶ 45. It was sealed shortly thereafter. Compl., ¶ 46. Lemons' information jump-started the pending whistleblower investigations. Compl., ¶¶ 60, 114-120. Two additional relators, Miller and Greene, filed after Lemons. Compl., ¶ 47.
Lemons meanwhile stayed in contact with Meguerian, who “assured [her] on multiple occasions that she would receive substantial compensation through the [her] action.” Compl., ¶ 104. Lemons asked for, and Meguerian provided, assistance with other matters, including (1) reviewing and providing language for a severance letter she planned to send to Precision Diagnostics, (2) reviewing the engagement agreement for Attorney Leader's co-counsel (Rabon) in Lemons' qui tam case, (3) obtaining local counsel for her EEOC proceedings against RB Phar- maceuticals, and (4) assessing the merits of her discrimination/retaliation complaint against RB Pharmaceuticals. Compl., ¶¶ 121-129.
In May 2017, the Government decided to allow contact between relators, and Lemons contacted Meguerian. Compl., ¶ 130. Meguerian told Lemons that Kruszewski's legal team was worried the Government might resolve the case through criminal proceedings only, and Lemons' counsel then spoke to Meguerian about this issue. Compl., ¶ 131-132. In August 2017, Leader told Kruszewski's counsel (Attorney Kenney) about Kruszewski's recruitment of Lemons and how Kruszewski had encouraged Attorney Leader to take the case. Compl., ¶¶ 133-135. Kenney had not heard this before but recommended Leader and Attorney Rabon (Lemons' counsel) write a letter to the other relators' counsel explaining why Lemons should be part of a relators' sharing agreement. Compl., ¶¶ 135-138; 140. Lemons also agreed, at Kenney and Kruszewski's request, to not disclose Kruszewski and Megeuerian's role in her recruitment and any early contact Kruszewski had with Leader. Compl., ¶¶ 139-140. Lemons' counsel sent a letter to the other relators on September 9, 2017, but no one responded. Compl., ¶¶ 140-141. In May 2018, Lemons' and Kruszewski's attorneys discussed entering into a sharing agreement, but no official agreement was offered or accepted. Compl., ¶ 142.
On July 11, 2019, a non-prosecution agreement allocated $700 million dollars to the False Claims Act claims (excluding the claims against Indivior). Compl., ¶ 144. The relators' share was more than $100 million dollars, and Kruszewski's share exceeded $40 million dollars. Compl., ¶¶ 145-146. Lemons sought to negotiate with Kruszeski and the other relators for a portion of the relators' share, and Kruszewski's counsel “pressured” Lemons' counsel to negotiate with the larger group of relators, instead of dealing solely with Kruszewski. Compl., ¶ 149.
Lemons also believed that Kruszewski, Williams, and Scott, all of whom filed cases before Lemons, had already reached a sharing agreement amongst themselves. Compl., ¶ 147. Lemons negotiated only a small fraction of the total Relators' share, despite having provided valuable information and kept Kruszewski's recruitment and violation of the seal order confidential. Compl., ¶¶ 150-160. Kruszewski's counsel stated Kruszewski owed Lemons additional monies, and Lemons entered into the Share Agreement based on Kruszewski's statement. Compl., ¶ 150.
The Court will grant Defendants' Rule 12(b)(6) motions and grant Lemons leave to amend. Lemons has failed to plead sufficient facts to state a claim for relief which is plausible on its face.
“A federal court sitting in diversity applies the choice of law rules of the forum state, ” which is Pennsylvania in this case. Pac. Employers Ins. Co. v. Global Reinsurance Corp. of Am., 693 F.3d 417, 432 (3d Cir. 2012); see also Klaxon v. Stentor Elec. Mfg. Co., 313 U.S. 467, 496 (1941). Generally speaking, “Pennsylvania applies a "flexible rule which permits analysis of the policies and interests underlying the particular issue before the court and directs courts to apply the law of the state with the most interest in the problem.” Teva...
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