Ruling quickly, federal judge allows whistleblower lawsuit against Duke

A federal judge in Greensboro has rejected Duke University’s attempts to get a whistleblower lawsuit thrown out of court that accuses it of a massive research fraud.

The suit “has stated claims” that could expose Duke to damages, U.S. District Court Judge Catherine Eagles said in an order that sided with lab analyst Joseph Thomas in seeing the possibility that university medical researchers manipulated or falsified research findings to secure more federal grants for their work.

Eagles, ruling less than a month after getting the case, ordered the two sides to begin working on a trial-preparation schedule, to include the completion of preliminary evidence-gathering.

She was ruling in a case that, until March, had unfolded in a federal court in Roanoke, Virginia, and until last August, had proceeded in secret while U.S. prosecutors there looked into the alleged violations of the federal False Claims Act. But a judge there recently moved the case to Greensboro at Duke’s behest.

At issue, ultimately, are research grants worth $112.8 million to Duke and a further $120.9 million to other institutions, among them UNC-Chapel Hill and N.C. State University.

The alleged fraud, linked to former Duke lab tech Erin Potts-Kant, involved data that came from machines that researchers use to test the lung function of mice they use to study respiratory ailments. Thomas contends every project Potts-Kant worked on ultimately included bogus data, and that researchers used the resulting journal articles to secure more grants from the government.

Potts-Kant was accused of embezzling money from Duke in 2013, which triggered an internal review of her research findings at the university. She left Duke and was eventually convicted of embezzlement, but the lawsuit contends that the university and the lab’s boss, now-retired pulmonologist Michael Foster, had for years turned a blind eye to repeated warnings about suspected research misconduct by Potts-Kant.

The Potts-Kant incident affected many researchers at Duke and other Triangle institutions because hers and Foster’s lab was a “core” facility, with equipment others lacked and the authorization to hire itself out to do some of the grunt work other professors needed done.

The terms of the False Claims Act put Duke at risk of having to pay triple damages should it lose a trial and subsequent appeal.

Duke had argued the case should be dismissed because Thomas hadn’t shown the “data included in actual grant applications or progress reports submitted to the government were false.” Thomas’ lawyers countered that it’s intuitively obvious the phony data had to have been included in them.

Eagles didn’t explain her reasoning, but at this stage of a lawsuit, judges normally assume its claims are true and look at whether a target would be legally liable if the claims ultimately hold up. Her order also rejected dismissal motions from Foster and Potts-Kant.

In other cases, including some involving Duke, Eagles has filed a short, notification order when she’s decided an issue and come back a few weeks later with a longer memo to detail her findings and reasoning.

The False Claims Act allows whistleblowers who allege fraud involving federal funds to file lawsuits on behalf of the U.S. government, with federal prosecutors having the option of taking over the case themselves or letting the filer’s private-sector lawyers take the lead. In the Duke case, they waffled, but after a judge’s prodding agreed that Thomas’ lawyers could proceed.

They’ve said they continue to investigate, and court filings indicate they’ve been in settlement talks with Duke.

Ray Gronberg: 919-419-6648, @rcgronberg

Other alleged fraud

The alleged fraud linked to former Duke lab tech Erin Potts-Kant is not the first time Duke University has been tarnished by allegations of research misconduct.

Former Duke cancer researcher Dr. Anil Potti falsified results that were published in the most prestigious scientific journals, in a widely reported scandal a few years ago.

In 2015 in a deal with the federal government, Potti agreed not to do research for five years. Duke settled lawsuits with the families of eight cancer patients who had been in clinical trials based on the phony research.

Staff writer Jane Stancill