Whistleblower sues HP

Friday, Feb. 25, 2005 | 9:20 a.m.

SAN FRANCISCO -- A former Hewlett-Packard Co. employee sued the computer giant Thursday, alleging that HP and its spinoff, Agilent Technologies Inc., tried to defraud customers by selling defective medical devices.

The lawsuit, filed in California Superior Court in San Francisco by Robert Hindin, seeks damages that could reach the tens of millions of dollars under the California False Claims Act. The suit claims HP engaged in a "scheme to defraud its customers by knowingly selling defective and potentially dangerous medical devices."

HP could not be reached for comment Thursday.

Hindin, who worked for HP as production manager and manufacturing engineer for eight years before being fired in 1997, alleges in court filings that he tried to alert HP executives of "improper practices and repeated life-threatening failures" of several products in 1996. Executives responded with "nothing but hostility and threats," then fired him after he reported the alleged breaches to the Food and Drug Administration, the lawsuit states.

Medical devices in question include anesthesia monitors that help sedate patients during surgery, pulse monitors used to measure blood oxygen levels, and ultrasound imaging transducers to produce internal organ images. It's unclear whether the devices lead to deaths or injuries.

Hindin's lawsuit is also known as a "qui tam" -- a type of suit often used to find fraud involving Medicare or defense contracts. Qui tams are a provision of the Federal Civil False Claims Act, and California and several other states have similar acts.

Individuals who file qui tams tip off the government to embezzlers or shoddy contractors -- and the whistleblowers get up to 30 percent of the reimbursement.

Qui tams are usually sealed for at least 60 days, and whistlerblowers cannot discuss them. California allows individuals to publicize details of cases, but whistleblowers can't mention the existence of the lawsuit.

Qui tam is an abbreviation from a Latin phrase meaning, "someone who sues on behalf of the king and on behalf of himself." The idea originated in 13th century England but wasn't used much until 1986, when rampant procurement fraud persuaded U.S. regulators to boost whistleblowers' share of payments. Whistleblowers filed 33 cases in 1987 and 326 cases in 2003.

In June 2003, pharmaceutical firm AstraZeneca agreed to pay $355 million after it set the average wholesale price for the drug Zoladex higher than prices physicians paid -- but failed to report discounts to Medicare. A vice president for sales at a rival filed the suit and received $47.6 million.