The Law Firm of Davis Wright Tremaine Announces That Richard Klein, Former CFO of Seattle Biopharmaceutical Company Omeros

  The Law Firm of Davis Wright Tremaine Announces That Richard Klein, Former
  CFO of Seattle Biopharmaceutical Company Omeros Corp., Receives $3.9 Million
  to Settle Whistleblower Suit

Business Wire

SEATTLE -- November 08, 2012

Davis Wright Tremaine LLP today announced that its client, Richard J. Klein,
former chief financial officer of the Seattle biopharmaceutical company Omeros
Corporation, has received a $3.94 million payment to settle his wrongful
termination and federal False Claims Act whistleblower lawsuit.

Mr. Klein’s lawsuit was filed three years ago, and the settlement was reached
three days before a trial was scheduled to begin in federal court. "Mr. Klein
did not invite the settlement discussions," said Tom Lemly, at Davis Wright
Tremaine, the lead attorney for Mr. Klein.

“The size and timing of the settlement tell you all you need to know about the
strength of our client’s case,” Lemly said.

In the lawsuit, Klein alleged that Omeros falsified timekeeping records on a
National Institutes of Health (NIH) research grant. Omeros terminated Klein
shortly after he alerted Omeros’ Audit Committee to the false timekeeping,
Lemly said. Klein’s lawsuit alleged wrongful termination and a violation of
the federal False Claims Act, which allows individuals to bring a claim that a
company or individual defrauded the federal government. The federal government
was not a party to the lawsuit or the settlement, and it may still take
additional action against Omeros, Lemly said.

Omeros has stated that it alerted the NIH to the company’s mistakes in
timekeeping, and that an internal company investigation concluded that it had
underbilled, rather than overbilled, the government. But in pretrial motions,
Omeros sought to exclude the testimony of certain NIH managers regularly
involved in the grant, who had testified in depositions that Omeros had not
properly informed the NIH of either the timekeeping mistakes or the true
nature of the work Omeros was doing under the grant. According to the NIH
witnesses, it was not reasonable for anyone at Omeros to think that what the
company was doing was appropriate under the grant and federal regulations, or
that the NIH approved of what Omeros had done.

In a ruling shortly before the case was scheduled for trial, U.S. District
Judge John C. Coughenour denied Omeros’ motion to exclude the NIH witness
testimony. In the ruling, Judge Coughenour wrote: “The NIH testimony is
evidence that the problems at Omeros involving false reports to the federal
government were more widespread than Klein knew at the time. It is thus
circumstantial evidence that [Omeros] fired Klein to prevent him from
discovering the extent of the problems.”

Although Davis Wright Tremaine usually represents employers in False Claims
Act cases and other employment litigation, this was an exceptional case, Lemly
said. “We felt that Mr. Klein had a strong legal and factual basis for his
claims, and we were pleased to be able to represent him in this matter in
order to obtain redress for the wrong done him.”

About Davis Wright Tremaine

Davis Wright Tremaine LLP is a national law firm with approximately 500
lawyers representing clients based throughout the United States and around the
world. For more information, visit


Davis Wright Tremaine LLP
Tom Lemly, 206-757-8085
Barrie K. Handy, APR, 206-757-8494
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