Quest Diagnostics 2013 Annual Report Download - page 115

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employed by the defendants from February 17, 2010 to the present. The amended complaint alleges that the defendants
discriminate against these female sales representatives on account of their gender, in violation of the federal civil rights and
equal pay acts, and seeks, among other things, injunctive relief and monetary damages. The Company's motion to compel
arbitration was granted and the case was dismissed. In the arbitration, the plaintiffs requested to proceed on a class basis. The
Company objected to the plaintiffs' request.
In September 2009, the Company received a subpoena from the Michigan Attorney General's Office seeking
documents relating to the Company's pricing and billing practices as they relate to Michigan's Medicaid program. The
Company cooperated with the requests. In January 2012, the State of Michigan intervened as a plaintiff in a civil lawsuit,
Michigan ex rel. Hunter Laboratories LLC v. Quest Diagnostics Incorporated, et al., filed in Michigan Superior Court. The
suit, originally filed by a competitor laboratory, alleges that the Company overcharged Michigan's Medicaid program. The
Company's motion to dismiss the complaint was denied.
In June 2010, the Company received a subpoena from the Florida Attorney General's Office seeking documents
relating to the Company's pricing and billing practices as they relate to Florida’s Medicaid program. The Company cooperated
with the requests. In November 2013, the State of Florida intervened as a plaintiff in a civil lawsuit, Florida ex rel. Hunter
Laboratories LLC v. Quest Diagnostics Incorporated, et al., filed in Florida Circuit Court. The suit, originally filed by a
competitor laboratory, alleges that the Company overcharged Florida’s Medicaid program. Hunter Laboratories LLC filed
similar lawsuits in Georgia, Massachusetts, Nevada and Virginia; in each of those lawsuits, the state attorney general’s office
has not intervened.
In July 2013, Biotechnology Value Fund, L.P. and others filed a lawsuit in the United States District Court for the
Northern District of California against the Company, Celera, former directors of Celera and Credit Suisse Securities (USA)
LLC (“Credit Suisse”) alleging, among other things, federal securities laws violations and breach of fiduciary duty claims
against Celera, its directors and Credit Suisse. The defendants’ motion to dismiss the complaint was granted. The plaintiffs
are seeking leave to file an amended complaint.
In October 2013, the Company commenced a lawsuit in the U.S. District Court for the Central District of California
seeking a declaration that the Company’s BRCA1 and 2 tests do not infringe several patents of Myriad Genetics, Inc., or that
the patents are invalid. Later that month, Myriad and its partners commenced a lawsuit in the U.S. District Court for the
Central District of Utah against the Company alleging that the Company’s BRCA 1 and 2 tests infringed Myriad’s patents.
Myriad moved to dismiss the Company’s lawsuit and to transfer all cases involving its BRCA 1 and 2 patents to the federal
court in Utah. The Company opposes Myriad’s motions and has filed motions to dismiss, stay or transfer to the federal court in
California Myriad’s lawsuit.
In addition, the Company and certain of its subsidiaries have received a subpoena from the Department of Health and
Human Services Office of Inspector General and is cooperating with its request.
The federal or state governments may bring claims based on the Company's current practices, which it believes are
lawful. In addition, certain federal and state statutes, including the qui tam provisions of the federal False Claims Act, allow
private individuals to bring lawsuits against healthcare companies on behalf of government or private payers. The Company is
aware of certain pending individual or class action lawsuits, and has received several subpoenas, related to billing practices
filed under the qui tam provisions of the Civil False Claims Act and/or other federal and state statutes, regulations or other
laws. The Company understands that there may be other pending qui tam claims brought by former employees or other "whistle
blowers" as to which the Company cannot determine the extent of any potential liability.
Management cannot predict the outcome of such matters. Although management does not anticipate that the ultimate
outcome of such matters will have a material adverse effect on the Company's financial condition, given the high degree of
judgment involved in establishing loss estimates related to these types of matters, the outcome of such matters may be material
to the Company's results of operations or cash flows in the period in which the impact of such matters is determined or paid.
These matters are in different stages. Some of these matters are in their early stages. Matters may involve responding
to and cooperating with various government investigations and related subpoenas. As of December 31, 2013, the Company
does not believe that any losses related to the Legal Matters described above are probable. While the Company believes that a
reasonable possibility exists that losses may have been incurred related to the Legal Matters described above, based on the
nature and status of these matters, potential losses, if any, cannot be estimated.
QUEST DIAGNOSTICS INCORPORATED AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS – CONTINUED
(in millions unless otherwise indicated)