LabCorp 2014 Annual Report Download - page 46

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Plaintiffs were granted the right to seek relief to replead their complaint. An amended complaint was filed and the Company's
Motion to Dismiss was granted in March of 2014. 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 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., a lawsuit that was settled in 2011,
and documents reviewed and relied upon by the Board in connection with the settlement. The Company responded 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 requested 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 Company owned 50% of Tri-State Clinical Laboratory Services,
LLC, which was dissolved in June 2011 pursuant to a voluntary petition under Chapter 7 of Title 11 of the United States Code.
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 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.
On August 24, 2012, the Company was served with a putative class action lawsuit, Sandusky Wellness Center, LLC, et al. v.
MEDTOX Scientific, Inc., et al., filed in the United States District Court for the District of Minnesota. The complaint alleges that
on or about February 21, 2012, the defendants violated the federal Telephone Consumer Protection Act ("TCPA") by sending
unsolicited facsimiles to Plaintiff and more than 39 other recipients without the recipients' prior express permission or invitation.
The lawsuit seeks the greater of actual damages or the sum of $0.0005 for each violation, subject to trebling under the TCPA, and
injunctive relief. In September of 2014, Plaintiff’s Motion for Class Certification was denied. In January of 2015, the Company’s
Motion for Summary Judgment on the remaining individual claim was granted. Plaintiff has filed a notice of appeal. The Company
will vigorously defend the lawsuit.
The Company was a defendant in two separate putative class action lawsuits, Christine Bohlander v. Laboratory Corporation
of America, et al., and Jemuel Andres, et al. v. Laboratory Corporation of America Holdings, et. al., related to overtime pay. After
the filing of the two lawsuits on July 8, 2013, the Bohlander lawsuit was consolidated into the Andres lawsuit, and the consolidated
lawsuit is now pending in the Superior Court of California for the County of Los Angeles. In the consolidated lawsuit, the Plaintiffs
allege on behalf of similarly situated phlebotomists and couriers that the Company failed to pay overtime, failed to provide meal
and rest breaks, and committed other violations of the California Labor Code. Plaintiffs have subsequently filed an amended
complaint. The complaint seeks monetary damages, civil penalties, costs, injunctive relief, and attorney's fees. The parties have
reached a tentative class settlement, which is subject to Court approval. The Court will hold a hearing on the merits of the settlement
terms on February 26, 2015. If the settlement is not approved by the Court, the Company intends to vigorously defend the lawsuit.