Substantial Factor, Not But-For Test, Applies In Suit Against Drug Company.

A former drug salesman filed a qui tam action [qui tam is short for the Latin phrase qui tam pro domino rege quam pro se ipso in hac parte sequitur which means “who pursues this action on our Lord the King’s behalf as well as his own.”] against his former employer, a drug company. The California Insurance Commissioner intervened. The suit alleges the drug company engaged in a course of illegal and fraudulent conduct aimed at doctors, health care providers, pharmacists and insurance companies who were recipients of lavish gifts such as tickets to sporting events and concerts, free rounds of golf, resort vacations, meals, gifts and other incentives, in order to induce physicians to prescribe its drugs and to reward them for doing so. The action was brought under Insurance Code section 1871.7, a portion of the Insurance Fraud Prevention Act [IFPA]. The parties submitted a stipulated motion for summary adjudication pursuant to Code of Civil Procedure section 437c, which permits summary adjudication of legal issues that the parties stipulate and the trial court agrees will reduce the time to be consumed in trial or will significantly increase the likelihood of settlement. After the trial court ruled in a way that benefited the drug company’s case, the Insurance Commissioner applied for a writ of mandate, contending the trial court was incorrect in its analysis of the proof required under Insurance Code section 1871.7. The appellate court granted the writ, stating: “We conclude that for the assessment of monetary penalties (but not the imposition of other available remedies), Insurance Code section 1871.7 requires proof of resulting claims that are in some manner deceitful, though not necessarily containing express misstatements of fact; and that causation may be established under the standard substantial factor test, not the but-for test.” (The State of California ex rel. Michael Wilson v. Sup. Ct. (Bristol-Myers Squibb Co.) (Cal. App. Second Dist., Div. 4; June 27, 2014) (As Mod. July 25, 2014) 227 Cal.App.4th 579, [174 Cal.Rptr.3d 317].)