LabCorp 2014 Annual Report Download - page 111

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to Michigan Medicaid. In June 2010, the Company received a subpoena from the State of Florida Office of the Attorney General
requesting documents related to its billing to Florida Medicaid. In October 2013, the Company received a civil investigative
demand from the State of Texas Office of the Attorney General requesting documents related to its billing to Texas Medicaid. The
Company is cooperating with these requests.
On May 2, 2013, the Company was served with a False Claims Act lawsuit, State of Georgia ex rel. Hunter Laboratories, LLC
and Chris Riedel v. Quest Diagnostics Incorporated, et al., filed in the State Court of Fulton County, Georgia. The lawsuit, filed
by a competitor laboratory, alleges that the Company overcharged Georgia's Medicaid program. The case was removed to the
United States District Court for the Northern District of Georgia. The lawsuit seeks actual and treble damages and civil penalties
for each alleged false claim, as well as recovery of costs, attorney's fees, and legal expenses. The government filed a notice declining
to intervene in the case. On March 14, 2014, the Company's Motion to Dismiss was granted. The Plaintiffs' motion seeking leave
to replead their complaint was granted. The Company's Motion to Dismiss the First Amended Complaint is pending. The Company
will vigorously defend the lawsuit.
On August 19, 2013, the Company was served with a False Claims Act lawsuit, Commonwealth of Virginia ex rel. Hunter
Laboratories, LLC and Chris Riedel v. Quest Diagnostics Incorporated, et al., filed in the Circuit Court of Fairfax County, Virginia.
The lawsuit, filed by a competitor laboratory, alleged that the Company overcharged Virginia’s Medicaid program. The case was
removed to the United States District Court for the Eastern District of Virginia. The lawsuit sought actual and treble damages and
civil penalties for each alleged false claim, as well as recovery of costs, attorney's fees, and legal expenses. The government filed
a notice declining to intervene in the case. The Company's Motion to Dismiss was granted in March of 2015. The Plaintiffs filed
a notice of appeal. The parties resolved the lawsuit while it was pending an appeal.
In October 2011, a putative stockholder of the Company made a letter demand through his counsel for inspection of documents
related to policies and procedures concerning the Company's Board of Directors' oversight and monitoring of the Company's billing
and claim submission process. The letter also sought documents prepared for or by the Board regarding allegations from the
California ex rel. Hunter Laboratories, LLC et al. v. Quest Diagnostics Incorporated, et al., lawsuit and documents reviewed and
relied upon by the Board in connection with the settlement of that lawsuit. The Company is responding to the request pursuant to
Delaware law.
On November 18, 2011, the Company received a letter from U.S. Senators Baucus and Grassley requesting information
regarding the Company's relationships with its largest managed care customers. The letter requests information about the Company's
contracts and financial data regarding its managed care customers. Company representatives met with Senate Finance Committee
staff after receiving the request and subsequently produced documents in response. The Company will continue to cooperate with
any further requests for information.
On February 27, 2012, the Company was served with a False Claims Act lawsuit, United States ex rel. Margaret Brown v.
Laboratory Corporation of America Holdings and Tri-State Clinical Laboratory Services, LLC, filed in the United States District
Court for the Southern District of Ohio, Western Division. The lawsuit alleges that the defendants submitted false claims for
payment for laboratory testing services performed as a result of financial relationships that violated the federal Stark and anti-
kickback laws. The Company owned 50% of Tri-State Clinical Laboratory Services, LLC, which was dissolved in June of 2011.
The lawsuit seeks actual and treble damages and civil penalties for each alleged false claim, as well as recovery of costs, attorney's
fees, and legal expenses. The U.S. government has not intervened in the lawsuit. The parties have reached a settlement in principle,
but the Company will vigorously defend the lawsuit if the settlement is not finalized.
On June 7, 2012, the Company was served with a putative class action lawsuit, Yvonne Jansky v. Laboratory Corporation of
America, et al., filed in the Superior Court of the State of California, County of San Francisco. The lawsuit alleges that the defendants
committed unlawful and unfair business practices, and violated various other state laws by changing screening codes to diagnostic
codes on laboratory test orders, thereby resulting in customers being responsible for co-payments and other debts. The lawsuit
seeks injunctive relief, actual and punitive damages, as well as recovery of attorney's fees, and legal expenses. The Company will
vigorously defend the lawsuit.
On June 7, 2012, the Company was served with a putative class action lawsuit, Ann Baker Pepe v. Genzyme Corporation and
Laboratory Corporation of America Holdings, filed in the United States District Court for the District of Massachusetts. The
lawsuit alleged that the defendants failed to preserve DNA samples allegedly entrusted to the defendants and thereby breached a
written agreement with plaintiff and violated state laws. The lawsuit sought injunctive relief, actual, double and treble damages,
as well as recovery of attorney's fees and legal expenses. The lawsuit was resolved and a consent judgment was approved by the
Court in January 2015.
LABORATORY CORPORATION OF AMERICA HOLDINGS AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(Dollars and shares in millions, except per share data)