Quest Diagnostics 2013 Annual Report Download - page 114

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without the required opt-out notice, and sought monetary damages and injunctive relief. The parties settled the matter and the
court approved the settlement.
Legal Matters
The Company is involved in various legal proceedings. Some of the proceedings against the Company involve claims
that could be substantial in amount.
In addition to the matters described below, in the normal course of business, we have been named, from time to time,
as a defendant in various legal actions, including arbitrations, class actions and other litigation, arising in connection with our
activities as a provider of diagnostic testing, information and services. These legal actions may include lawsuits alleging
negligence or other similar legal claims. These actions could involve claims for substantial compensatory and/or punitive
damages or claims for indeterminate amounts of damages, and could have an adverse impact on our client base and reputation.
We are also involved, from time to time, in other reviews, investigations and proceedings by governmental agencies
regarding our business, including, among other matters, operational matters, which may result in adverse judgments,
settlements, fines, penalties, injunctions or other relief. The number of these reviews, investigations and proceedings has
increased in recent years with regard to many firms in the healthcare services industry, including our Company.
In November 2009, the U.S. District Court for the Southern District of New York partially unsealed a civil complaint,
U.S. ex rel. Fair Laboratory Practices Associates v. Quest Diagnostics Incorporated, filed against the Company under the
whistleblower provisions of the federal False Claims Act. The complaint alleged, among other things, violations of the federal
Anti-Kickback Statute and the federal False Claims Act in connection with the Company's pricing of laboratory services. The
complaint seeks damages for alleged false claims associated with laboratory tests reimbursed by government payers, treble
damages and civil penalties. In March 2011, the district court granted the Company's motion to dismiss the relators' complaint
and disqualified the relators and their counsel from pursuing an action based on the facts alleged in the complaint; the relators
filed a notice of appeal. In July 2011, the government filed a notice declining to intervene in the action and the Court entered a
final judgment in the Company's favor. The relators appealed. The Second Circuit U.S. Court of Appeals affirmed the judgment
of the trial court.
In November 2010, a putative class action entitled Seibert v. Quest Diagnostics Incorporated, et al. was filed against
the Company and certain former officers of the Company in New Jersey state court, on behalf of the Company's sales people
nationwide who were over forty years old and who either resigned or were terminated after being placed on a performance
improvement plan. The complaint alleges that the defendants' conduct violates the New Jersey Law Against Discrimination
("NJLAD"), and seeks, among other things, unspecified damages. The defendants removed the complaint to the United States
District Court for the District of New Jersey. The plaintiffs filed an amended complaint that added claims under ERISA. The
Company filed a motion seeking to limit the application of the NJLAD to only those members of the purported class who
worked in New Jersey and to dismiss the individual defendants. The motion was granted. The only remaining NJLAD claim is
that of the named plaintiff. Both parties have filed summary judgment motions. The defendants' motion was granted in part, but
denied as to an ERISA claim, and the plaintiff's motion was denied. The plaintiff’s motion for class certification of the ERISA
claim is pending.
In 2010, a purported class action entitled In re Celera Corp. Securities Litigation was filed in the United States District
Court for the Northern District of California against Celera Corporation and certain of its directors and current and former
officers. An amended complaint filed in October 2010 alleges that from April 2008 through July 22, 2009, the defendants made
false and misleading statements regarding Celera's business and financial results with an intent to defraud investors. The
complaint was further amended in 2011 to add allegations regarding a financial restatement. The amended complaint seeks
unspecified damages on behalf of an alleged class of purchasers of Celera's stock during the period in which the alleged
misrepresentations were made. The Company's motion to dismiss the complaint was denied.
In August 2011, the Company received a subpoena from the U.S. Attorney for the Northern District of Georgia
seeking various business records, including records related to the Company's compliance program, certain marketing materials,
certain product offerings, and test ordering and other policies. The Company is cooperating with the request.
In January 2012, a putative class action entitled Beery v. Quest Diagnostics Incorporated was filed in the United States
District Court for the District of New Jersey against the Company and a subsidiary, on behalf of all female sales representatives
QUEST DIAGNOSTICS INCORPORATED AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS – CONTINUED
(in millions unless otherwise indicated)