U.S. ex rel. Berge v. Board of Trustees of the University of Alabama

• Decision Date: 22 January 1997
• Docket Number: No. 95-2811,95-2811
• Citation: 41 USPQ2d 1481,104 F.3d 1453
• Parties: , 115 Ed. Law Rep. 344, 41 U.S.P.Q.2d 1481 UNITED STATES of America, ex rel. Pamela A. BERGE, Plaintiff-Appellee, and United States of America, Intervenor, v. The BOARD OF TRUSTEES OF THE UNIVERSITY OF ALABAMA; Robert F. Pass, Professor of Pediatrics; Sergio B. Stagno, Professor and Chairman, Department of Pediatrics; Charles A. Alford, Professor of Pediatrics; Karen B. Fowler, Defendants-Appellants. American Council on Education; The American Association of State Colleges & Universities; The National Association of State Universities and Land-Grant Colleges; American Association of Community Colleges; Council of Graduate Schools; The Regents of the University of Minnesota; The University of Texas System; The University of Colorado; The Regents of the University of California; The Regents of the University of Michigan; Association of American Medical Colleges; Eugene Dong, M.D., J.D.; Robert L. Sprague, M.D., Ph.D.; Jeffrey F. Williams, B.V.Sc., M.R.C.V.S., Ph.D.; Taxpayers Against Fraud, The False Claims Act Legal Center, Amici Curiae.
• Court: U.S. Court of Appeals — Fourth Circuit

Page 1453

104 F.3d 1453

65 USLW 2515, 115 Ed. Law Rep. 344,

41 U.S.P.Q.2d 1481

UNITED STATES of America, ex rel. Pamela A. BERGE, Plaintiff-Appellee and United States of America, Intervenor, v. The BOARD OF TRUSTEES OF THE UNIVERSITY OF ALABAMA; Robert F. Pass, Professor of Pediatrics; Sergio B. Stagno Professor and Chairman, Department of Pediatrics; Charles A. Alford, Professor of Pediatrics; Karen B. Fowler Defendants-Appellants American Council on Education; The American Association of State Colleges & Universities; The National Association of State Universities and Land-Grant Colleges; American Association of Community Colleges; Council of Graduate Schools; The Regents of the University of Minnesota; The University of Texas System; The University of Colorado; The Regents of the University of California; The Regents of the University of Michigan; Association of American Medical Colleges; Eugene Dong, M.D., J.D.; Robert L. Sprague, M.D., Ph.D.; Jeffrey F. Williams, B.V.Sc., M.R.C.V.S., Ph.D.; Taxpayers Against Fraud, The False Claims Act Legal Center, Amici Curiae.

No. 95-2811.

United States Court of Appeals, Fourth Circuit.

Argued Dec. 4, 1996.

Decided Jan. 22, 1997.

ARGUED: William Allen Bradford, Jr., Hogan & Hartson, L.L.P., Washington, D.C., for Defendants-Appellants. David Jonathan Fine, Dangel, Donlan & Fine, L.L.P., Boston, MA, for Plaintiff-Appellee. Michael Eugene Robinson, Appellate Staff, Civil Division, United States Department of Justice, Washington, D.C., for Intervenor. ON BRIEF: Barbara F. Mishkin, Sarah E. Mitchell, Hogan & Hartson, L.L.P., Washington, D.C., for Defendants-Appellants. Edward T. Dangel, III, Alexander T. Bok, Dangel, Donlan & Fine, L.L.P., Boston, MA, for Plaintiff-Appellee. Frank W. Hunger, Assistant Attorney General, Lynne A. Battaglia, United States Attorney, Douglas N. Letter, Appellate Litigation Counsel, Appellate Staff, Civil Division, United States Department of Justice, Washington, D.C., for Intervenor. Richard O. Duvall, John Thorpe Richards, Jr., Holland & Knight, Washington, D.C.; Sheldon Elliot Steinbach, American Council on Education, Washington, D.C., for Amici Curiae American Council, et al. Mark B. Rotenberg, General Counsel, Mark A. Bohnhorst, Office of the General Counsel, Minneapolis, MN; Elsa K. Cole, General Counsel, University of Michigan, Ann Arbor, MI; James E. Holst, General Counsel, John F. Lundberg, Christopher M. Patti, University of California, Oakland, CA; Charles V. Sweet, University Counsel, Daniel J. Wilkerson, University of Colorado Health Sciences Center, Denver, CO, Ray Farabee, Vice Chancellor and General Counsel, Dudley R. Dobie, Jr., Office of the General Counsel, The University of Texas, Austin, TX; C. Peter McGrath, President, National Association of State Universities and Land-Grant Colleges, Washington, DC, for Amici Curiae Regents of the University of Minnesota, et al. Robert A. Burgoyne, Cristina C. Chou, Fulbright & Jaworski, L.L.P., Washington, D.C.; Joseph A. Keyes, Jr., Association of American Medical Colleges, Washington, D.C., for Amicus Curiae Association. Eugene Dong, Palo Alto, CA, for Amici Curiae Dong, et al. Priscilla R. Budeiri, Gary W. Thompson, Lisa R. Hovelson, Taxpayers Against Fraud, The False Claims Legal Center, Washington, D.C., for Amicus Curiae Taxpayers.

Before ERVIN and WILKINS, Circuit Judges, and MICHAEL, Senior United States District Judge for the Western District of Virginia, sitting by designation.

Reversed by published opinion. Judge ERVIN wrote the opinion, in which Judge WILKINS and Senior Judge MICHAEL joined.

OPINION

ERVIN, Circuit Judge:

Defendants-Appellants appeal from a denial of their motion for judgment as a matter of law following a jury verdict awarding the United States, after trebling and the imposition of a civil penalty, $1.66 million, 30% of which ($498,000) is to be awarded to Relator-Appellee Pamela A. Berge (Berge), on a False Claims Act claim, and awarding Berge $265,000 in compensatory and punitive damages on a pendent state law claim for conversion of intellectual property. We reverse.

I.

At the time the events at issue occurred, Pamela Berge was a doctoral candidate in nutritional sciences at Cornell University. The individual Defendants-Appellants Sergio Stagno, Charles Alford, and Robert Pass were medical researchers and professors at Defendant-Appellant The University of Alabama at Birmingham (UAB). Defendant-Appellant Karen Fowler was a doctoral candidate at UAB supervised by Pass.

Scientists at UAB have been studying cytomegalovirus (CMV), the most common infectious cause of birth defects, since 1971, and over the years have accumulated the leading database on maternal and congenital CMV in the world. A significant part of the funding for this research has been provided by grants from the National Institutes of Health (NIH), in particular grant HD-10699, "Perinatal Infections, Immunity and Maldevelopment Research Program Project," administered by NIH's National Institute of Child Health and Human Development (NICHD). This grant is renewable every five years, with years 11 to 15 relevant to this case. Alford was the principal investigator for this project, although Stagno and Pass were closely associated with it. All three are internationally recognized as leading authorities on CMV.

Berge decided to do her dissertation on CMV as a possible cause of low birth weight. She arranged access to and extensive assistance with UAB's database through Stagno, and she worked closely with Stagno and his colleagues while she was in residence as a visiting graduate student at UAB from February to August 1987. After Berge returned to Cornell, she resisted others' attempts to use the collected data and began to complain about Cornell faculty members, including her thesis chairman. She made three further trips to Birmingham during which she made presentations of her work. She completed her thesis in May 1989 and received her Ph.D. Berge thereafter attempted to publish papers based on her thesis, but she was rejected repeatedly by Journal of the American Medical Association, Epidemiology, and Journal of Infectious Diseases.

In the meantime, Defendant-Appellant Fowler decided in June 1988 to do her dissertation on the relationship between CMV and sexually-transmitted diseases and began working with Pass. After Fowler had begun her data analysis, based in part on UAB's existing database and in part on original medical records, she consulted completed theses, including Berge's, to choose a format. She defended her dissertation in May 1990. The following month, Fowler presented her research at a meeting of the Society of Epidemiological Research. Berge was in the audience and became shocked at what she considered to be plagiarism of her own work by Fowler.

Berge brought her allegations to Stagno's attention but did so in such a way that ultimately Stagno and his colleagues determined they could no longer collaborate with her. Two investigations of the allegations were conducted at UAB, but the allegations were found to be baseless. Unsatisfied with these results, as well as those produced from the other avenues she pursued, Berge next obtained copies of UAB's grant applications through a Freedom of Information Act (FOIA) request and then brought this litigation.

As the basis for her qui tam action under the False Claims Act, 31 U.S.C. §§ 3729-3733, Berge alleged that UAB had made false statements to NIH in its annual progress reports under its grant. In particular, these false statements were that (1) UAB misled NIH in year 11 about the amount of data that had been computerized; (2) UAB had included an abstract of Berge's work in year 12 without mentioning her name, thereby overstating UAB's competence and progress in epidemiology; (3) UAB, although including Berge's name on the abstracts in years 13 and 14, had "submerged" her research so that serious questions about one of UAB's central theses would not be noticed; and (4) UAB misled NIH in year 15 by including abstracts of Fowler's work which plagiarized Berge's. Although Berge also alleged a number of pendent state law claims, only the conversion of intellectual property is at issue on this appeal.

After this action was filed, the government naturally investigated to determine whether it would choose to prosecute the matter on its own behalf. The Office of the Inspector General (OIG) of the Department of Health and Human Services conducted such an investigation and recommended that no action be taken. Its report stated:

This investigation, which has involved the interview of NICHD grant officials, interview of University officials, and the examination of documents of relator, NICHD and the University of Alabama, has found no evidence that the subjects committed a criminal violation in connection with grant applications or progress reports submitted to the Government. Information has been obtained however, which shows many of the assumptions behind the relator's allegations to be in error or exaggerations of the truth .

J.A. at 179 (emphasis added). The government accordingly declined to become involved in the litigation below pursuant to 31 U.S.C. § 3730. This OIG report was never submitted into evidence at trial. The parties make various contentions as to why this is so and whether the district court abused its discretion in failing to allow it. Given our disposition of this case, we do not reach this issue.

After a ten-day jury trial, the jury returned a verdict in favor of Berge, finding False Claims Act liability against all defendants except Fowler but assessing damages only against UAB in the amount of $550,000. Pursuant to 31 U.S.C. § 3729(a), this amount was trebled to $1.65 million, and the district court imposed a civil fine of $10,000 against all the defendants, jointly and severally, except Fowler. Pursuant to § 3730(d)(2), the district court awarded Berge as relator 30% of the United States'...