London-based medical device maker Smith & Nephew agreed last week to pay $11.3 million to resolve a False Claims Act whistleblower lawsuit.

The settlement, filed Sept. 4, resolves a whistleblower complaint, USA v. Smith & Nephew, filed in 2008 in the U.S. District Court for the Western District of Tennessee by Samuel Cox, a former Smith & Nephew employee. Cox filed the lawsuit under the FCA’s whistleblower provisions, which permit individuals who discover fraud to file claims on behalf of the government and to share in any recovery.

Cox will receive $2.3 million for the tips he provided. The government will receive $6 million, and $3 million will go toward attorneys’ fees.

According to the complaint, Smith & Nephew violated the Trade Agreements Act (TAA), which requires government contractors to certify that they will only sell products to the government that originate in the United States, or a country that has signed a trade agreement with the United States. Cox claimed Smith & Nephew violated the TAA by selling products to the United States that were manufactured in Malaysia—a country that does not have a trade agreement with the United States.

In the complaint, Cox claimed he was wrongfully terminated in September 2008 after he repeatedly notified several senior-level officials that he believed Smith & Nephew had violated the TAA. He further reported his concerns to the whistleblower hotline.

Sanford Heisler, the law firm that represented Cox, said in a statement that the case is believed to be the “first TAA settlement involving a medical-device company.”  

In resolving the case, Smith & Nephew said it doesn’t admit any wrongdoing. It also means the government will release Smith & Nephew from all claims in the case.

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