Whistleblower Lawsuit Can’t Start Until Criminal Investigation Ends

Case: Two former MedComp Laboratory Sciences employees filed a whistleblower lawsuit accusing the lab of concocting an elaborate scheme to pay kickbacks to a group of 61 physicians in exchange for sending Medicare patient urine samples to a sham reference lab for testing. As it happened, MedComp’s alleged scheme was also the subject of a federal criminal investigation. So, MedComp asked the Louisiana federal court to “stay,” i.e., delay the whistleblower case until the criminal matter resolved. And that’s just what the court did. Significance: Courts can but don’t have to stay civil proceedings when the defendant faces criminal charges involving the same conduct. The court cited the following factors in deciding to exercise that discretion in this case: The whistleblower suit and criminal investigation involved the same issues; Even though nobody had been indicted, the investigation was still active; and Sure, the whistleblowers wanted a quick resolution, but letting the case proceed could force the defendants to invoke their fifth amendment rights against self-incrimination, which would serve only to delay the case. [United States ex rel. Bruno v. Schaeffer, 2020 U.S. Dist. LEXIS 72603]