GlaxoSmithKline has worked hard to put 2013’s China bribery scandal behind it. And a U.S. judge just gave it an assist in that department.
U.S. District Judge Nitza Quiñones Alejandro in Philadelphia tossed out a lawsuit from a husband-and-wife team of former private eyes, Reuters reports. Peter Humphrey, of the U.K., and Yu Yingzeng, of the U.S., claimed the British pharma giant had misled them into probing a whistleblower in China, an investigation that led to their arrest.
The reason Judge Quinones Alejandro threw out the case? Humphrey and Yingzeng sued over injuries that occurred entirely outside the U.S., meaning they “lack standing” to assert civil claims under the federal Racketeer Influenced and Corrupt Organizations Act (RICO), Judge Quinones Alejandro wrote.
GSK, for its part, is “pleased that the Court agreed with our view that this case should be dismissed,” a spokeswoman said in an emailed statement.
The suit came years after Humphrey and Yingzeng were first implicated in the GSK scandal, which sparked marketing reforms across the company and chilled Chinese sales for many multinational drugmakers. In the suit, they said Glaxo had hired them to gather information on Vivian Shi, then the drugmaker's government relations head in China; GSK believed she was the source of the bribery allegations. But the pair of sleuths also said they were hired with the understanding that the bribery allegations were false.
Instead, they wound up with an assignment to pinpoint the source of a clandestine sex tape involving former GSK China head Mark Reilly, which executives received alongside a whistleblower’s corruption allegations. And they claimed in the suit that GSK had hired them to create a "dossier" on Shi to "frame her as a vindictive former employee." Ultimately, they were arrested in 2013 for illegally obtaining and selling personal information about Chinese citizens, and through the lawsuit they sought to collect damages for the lost business and physical and emotional stress their prison sentence brought.
Glaxo, meanwhile, is hoping the saga won’t rear its ugly head again. Last fall, the company agreed to pay $20 million to wrap up SEC charges that it violated the Foreign Corrupt Practices Act by using travel agencies to funnel $489 million in bribes to local doctors and healthcare professionals.