Duke University has been drawing a lot of attention in academia lately — not because of the stellar academics or solid basketball team, but because the university is at the heart of a potentially blockbuster lawsuit involving three of its scientists. The suit is the latest attempt to use a 19th-century law for relatively new purposes: putting universities on the hook for grant money that went to researchers found guilty of fraud.
The case, which is being brought under the False Claims Act (FCA), centers on allegations that researchers at Duke used faked data to win tens of millions of dollars in federal funding. Although the principal in the fraud, Erin Potts-Kant, has had 16 papers retracted and has admitted faking her data, and Duke has acknowledged that it knew Potts-Kant was cooking the books, what remains unclear is how much the university knew and when it knew it. So far, the suit — which is being brought by Joseph Thomas, a former colleague of Potts-Kant — has survived several motions to dismiss and is now in the discovery phase. (Thomas’s brother, John, is one of the attorneys representing him.)
The FCA, or “Lincoln Law,” is a federal statute with roots in the Civil War, as the Union tried to prevent materiel suppliers from bilking the government. To encourage whistleblowers, the law provides for a 30 percent payout to people who bring graft to the attention of prosecutors, as well as treble damages for the government — which means that cheating on a multimillion-dollar contract or grant can lead to serious penalties for the fraudster and riches for the whistleblower.
In this case, Joseph Thomas, the whistleblower, is asking for up to 30 percent of the settlement or judgment. That judgment could be up to three times the $200 million in grants that Thomas and his attorneys claim were poisoned by falsified data, plus $11,000 per false claim.
It’s rare for the government to claw back grant funds, partly because such cases have typically been a low priority for the Department of Justice — the potential returns are much lower than those on Wall Street or in Medicare fraud, for example. And the FCA has been only rarely applied in cases of research fraud until quite recently. Earlier this year, Brigham and Women’s Hospital and Partners HealthCare agreed to pay the government $10 million over allegations that three stem cell scientists at Brigham and Women’s, a Harvard teaching hospital, “knew or should have known that their laboratory promulgated and relied upon manipulated and falsified information.”
A particularly weak spot for universities under the FCA is the way they assess overhead, effectively a tax on the grants that their faculty and research staff receive. Columbia University found itself on the wrong side of a whistleblower suit a few years ago over rent costs it was building into grants from the National Institutes of Health. The university settled in 2016 for $9.5 million. And Weill Cornell Medical College, since renamed Weill Cornell Medicine, also lost a case for misused NIH grant funds.
But despite those instances, the odds of success in using legal measures to claw back misspent grant money aren’t great. The cases can take a long time and often fail, and winning (for whistleblowers, at least) often depends on whether the government agrees to join the litigation. Though the suit against Duke was first filed in 2015, the government has not yet said whether it will join.
And an attorney who has defended universities against such cases told Retraction Watch that demonstrating that a faculty member faked data is not enough to tip the scales against the institution. Duke would have had to know that the data were fake when the grants were submitted.
Still, if the potential costs of litigation, not to mention the chance of losing, will encourage some universities to clean house, that’s a pretty good outcome.