United States District Court, D. New Jersey
UNITED STATES OF AMERICA, ex rel. WENDY A. BAHNSEN et al, Plaintiffs,
BOSTON SCEINTIFIC NEUORMODULATION CORPORATION, Defendant.
MICHAEL VAZQUEZ, U.S.D. JUDGE.
matter comes before the Court on a Motion for Summary
Judgment filed by Plaintiffs Wendy Bahnsen and Carolina
Fuentes (collectively "Plaintiffs"). D.E. 296.
Defendant Boston Scientific Neuromodulation Corporation
("BSNC" or "Defendant") filed a brief in
opposition, D.E. 309, to which Plaintiff replied. D.E.
The Court reviewed the submissions made in support and in
opposition of the motion and considered the motion without
oral argument pursuant to Fed.R.Civ.P. 78(b) and L. Civ. R.
78.1(b). For the reasons that follow, Plaintiffs' motion
for summary judgment is GRANTED in part and
DENIED in part.
FACTS AND PROCEDURAL HISTORY
BSNC is a wholly owned subsidiary of Boston Scientific
Corporation. Plaintiffs' Amended Complaint ("Am.
Compl.") ¶ 16; D.E. 19. During the relevant time
period, BSNC "marketed, sold, supplied and submitted
claims for a range of medical devices and related equipment,
including the Precision Plus™ SCS[Spinal Cord
Simulation] System." Id. As a government
supplier of medical equipment, BSNC was responsible for
responding to requests to replace external equipment. Its
Billing and Collections Department was responsible for
processing the necessary documentation. Id. ¶
employed Plaintiff Bahnsen in its Valencia, California office
from March 2008 through October 2009. Plaintiffs'
Statement of Material Facts Not In Dispute
("PSOMF") ¶ 1; D.E. 296-2. From March 2008
through January 2009, Ms. Bahnsen worked in BSNC's
Customer Service Department. Am. Compl. ¶ 8. In January
2009, BSNC transferred Ms. Bahnsen to its Billings and
Collections Department to work as a Reimbursement and Claims
Management Specialist. Id.
March 2009, Ms. Bahnsen entered into an "Agreement
Concerning Employment for U.S. Employees" ("Bahnsen
Agreement") with Boston Scientific Corporation. PSOMF
¶ 3. Massachusetts law governs the contract. Def. Opp.
at 8. The agreement contains a clause whereby Ms. Bahnsen
promised that if BSNC terminated her employment, she would
"immediately deliver to Boston Scientific all property
owned by Boston Scientific, and all documents and materials
of any nature containing any Proprietary Information, without
retaining any copies." Defendant's Counterclaims
("Def. CC") ¶ 10; D.E. 84. The agreement also
has a "Remedies for Breach" provision that states,
"[a]ny breach of this Agreement is likely to cause
Boston Scientific substantial and irrevocable damage[.]"
Id. ¶ 12. BSNC terminated Ms. Bahnsen's
employment on October 15, 2009. Id. ¶ 14.
employed Plaintiff Fuentes in its Valencia office from May
2005 through June 2010. PSOMF¶2. From her hiring through
March 2008, Ms. Fuentes worked as the Administrative
Assistant to BSNC's Vice President of Health Economics
and Reimbursement. Am. Compl. ¶ 13. In February 2009,
after Ms. Fuentes returned to work from medical leave, BSNC
transferred her to its Billing and Collection Department.
Defendant's Supplemental Statement of Material Facts Not
In Dispute ("DSSOMF") ¶ 1; D.E. 309-1.
August 2005, Ms. Fuentes entered into an "Employee
Invention and Confidential Information Agreement Policy
Letter 2" ("Fuentes Agreement") with Advanced
Bionics (a predecessor to BSNC). PSOMF ¶¶ 2, 4, 7.
California law governs the Fuentes Agreement. Def. Opp. at 8.
The agreement includes a clause requiring Ms. Fuentes
"during the term of [her] employment and thereafter,
[to] keep confidential and refrain from using or disclosing
to others all confidential information .. . which Employee
develops or learns about during the course of [her]
employment." Def. CC. ¶ 7. BSNC terminated Ms.
Fuentes' employment on October 15, 2009. Id.
early 2008, Ms. Fuentes copied the contents of her work
laptop onto a thumb drive. At the time, Ms. Fuentes position
was an Administrative Assistant. The parties dispute why Ms.
Fuentes took this action. Plaintiffs claim that Ms. Fuentes
acted from concern that "her supervisor was out to get
her, and [because she] wanted to protect herself against
retaliation." PSOMF ¶ 7. Defendant claims Ms.
Fuentes acted "to defend her work performance as an
Administrative Assistant." DSSOMF ¶ 7(a).
the course of their employment in BSNC's Billing and
Collections Department, Plaintiffs allege that they became
aware of BSNC's illegal billing practices. PI. MSJ at 2.
This led Plaintiffs to speak with Dr. Joseph Piacentile,
former False Claims Act ("FCA") whistleblower and
whistleblower consultant, at some time between September and
October 2009. Dr. Piacentile advised Plaintiffs to obtain
copies of documents that evidenced BSNC's illegal billing
practices. PSOMF ¶ 8; DSSOMF ¶ 16. Plaintiffs then
consulted attorneys about bringing a False Claims Act
("FCA") suit against BSNC for its illegal billing
practices. PSOMF ¶ 10. Thereafter, Plaintiffs took
"from BSNC's offices copies of CMS-1500 forms,
reports from the Zirmed system, and medical documentation
like written orders from physicians, pertaining to claims
that had already been submitted to Medicare." PSOMF
March 2011, Plaintiffs filed a qui tarn Complaint
alleging that BSNC submitted false claims to the Government
in violation of the FCA, 31 U.S.C. § 3729 et.
seq. Def. CC. ¶ 16. Plaintiffs then filed an
Amended Complaint in September 2012. D.E. 19. Plaintiffs
allege that Defendant became aware that they had removed BSNC
documents years before they filed their suit. PSOMF ¶
11. Defendant, however, claims that although in October 2009
Ms. Bahnsen's husband told BSNC that Ms. Bahnsen
"had stolen company documents, " BSNC "did not
have actual knowledge of the misappropriation until it
received the Amended Complaint." DSSOMF ¶ 11(a).
Defendant claims that one week after receiving the Amended
Complaint it hired the law firm of Norton Rose Fulbright U.S.
LLP ("Norton Rose") to investigate BSNC's
potential regulatory exposure from Plaintiffs' actions
and suggest mitigation tactics. BSNC paid Norton Rose $30,
834 for this work. DSSOMF ¶¶ 19-20.
December 2013, after Plaintiff began producing the copied
documents to BSNC, Defendant also hired a forensic
investigative firm, Computer Forensic Services, Inc.
("CSF"). Id. ¶¶ 23-25. BSNC
asked CSF to determine what documents and information
Plaintiff might have taken from BSNC. Defendant paid CSF $37,
381.25 for its services. Id. ¶¶ 25-26.
January 2014, Defendant filed amended counterclaims against
Plaintiffs. In its counterclaims, Defendant alleges that
Plaintiffs' copying and sharing of BSNC documents
breached the terms of both their agreements with BSNC. Def
CC. ¶¶ 25-34; PSOMF ¶¶ 3-4.
filed the aforementioned Complaint and Amended Complaint. In
response, Defendant filed motions to strike, to dismiss the
Amended Complaint, and to disqualify Plaintiffs' counsel.
D.E. 28-30. Of note, Defendant moved to strike
"Confidential and Protected Information" from the
Amended Complaint, alleging that Plaintiffs' use of
BSNC's information violated the Health Insurance
Portability and Affordability Act ("HIPPA"). D.E.
28. Judge Wigenton denied all three of Defendant's
motions, including Defendant's motion concerning HIPPA
information. D.E. 49.
28, 2013 Defendant filed an Answer to the Amended Complaint
and raised counterclaims against Plaintiffs. D.E. 54. On
January 23, 2014, Defendant amended its counterclaims. D.E.
84. In response, Plaintiffs moved to dismiss the amended
counterclaims. D.E. 85. Judge Wigenton denied
Plaintiffs'motion. D.E. 132.
December 22, 2014 the case was reassigned from Judge Wigenton
to Judge Arleo. D.E. 149. Then, on March 1, 2016, the case
was again reassigned from Judge Arleo to the undersigned.
D.E. 226. The Court thereafter granted the parties'
stipulated voluntary partial dismissal. D.E. 293. Plaintiffs
moved for summary judgment on January 27, 2017. D.E. 296.
Defendant filed a brief in opposition, D.E. 309, to which
Plaintiff replied. D.E. 336.
SUMMARY JUDGMENT STANDARD
moving party is entitled to summary judgment where "the
movant shows 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). A fact in dispute is
material when it "might affect the outcome of the suit
under the governing law" and is genuine "if the
evidence is such that a reasonable jury could return a
verdict for the nonmoving party." Anderson v.
Liberty Lobby, Inc., 477 U.S. 242, 248 (1986). Disputes
over irrelevant or unnecessary facts will not preclude
granting a motion for summary judgment. Id. "In
considering a motion for summary judgment, a district court
may not make credibility determinations or engage in any
weighing of the evidence; instead, the nonmoving party's
evidence 'is to be believed and all justifiable
inferences are to be drawn in his favor.'"
Marino v. Indus. Crating Co., 358 F.3d 241, 247 (3d
Cir. 2004) (quoting Anderson, 477 U.S. at 255)). A
court's role in deciding a motion for summary judgment is
not to evaluate the evidence and decide the truth of the
matter but rather "to determine whether there is a
genuine issue for trial." Anderson, 477 U.S. at
moving for summary judgment has the initial burden of showing
the basis for its motion and must demonstrate that there is
an absence of a genuine issue of material fact. Celotex
Corp. v. Catrett,477 U.S. 317, 323 (1986). After the
moving party adequately supports its motion, the burden
shifts to the nonmoving party to "go beyond the
pleadings and by her own affidavits, or by the depositions,
answers to interrogatories, and admissions on file, designate
specific facts showing that there is a genuine issue for
trial." Id. at 324 (internal quotation marks
omitted). To withstand a properly supported motion for
summary judgment, the nonmoving party must identify specific
facts and affirmative evidence that contradict the moving
party. Anderson, 477 U.S. at 250. "[I]f the
non-movant's evidence is merely 'colorable' or ...