Ghosh v. Abbott Laboratories Inc.

Background

Krishnan Ghosh alleged that Cardiovascular Systems, Inc. terminated his employment on May 31, 2023, after he reported suspected violations of the federal Anti-Kickback Statute. Ghosh lived and worked in Hawaii, where he served as a senior district sales manager for CSI clients. He spent 12 total days in Minnesota during his employment for training and related activities, completed that training on May 23, 2023, and did not return to Minnesota before his termination.

Ghosh initially filed a Minnesota Whistleblower Act claim in a prior related proceeding. He voluntarily dismissed that case and filed this action two days later. In this case, he asserted claims under the Minnesota Whistleblower Act (MWA) and the Hawaii Whistleblowers’ Protection Act (HWPA). He later sought permission to file another amended complaint, which would have been his fifth pleading attempt in the matter. The proposed amendment added factual allegations but did not add new legal claims.

Motion to Amend

The court denied leave to amend because the proposed amendments were futile. An amendment is futile if the amended claims could not survive a motion to dismiss for failure to state a claim. The court did not find with certainty that Ghosh acted in bad faith, and although it found delay, it did not conclude that the delay was undue in the case as a whole. The court instead considered whether the proposed claims were legally viable and addressed that issue through the defendants’ motion to dismiss.

Minnesota Whistleblower Act Claim

The MWA protects an employee who, in good faith, reports an actual or suspected violation of law. The statute defines an employee as a person who performs services for hire in Minnesota for an employer.

The court held that Ghosh had not plausibly alleged that he performed services for hire in Minnesota. His Minnesota activities consisted of training, on-site sessions, hospital account visits, case observations, physician interactions, and related activities. The court reasoned that the statutory phrase “performs services for hire in Minnesota” requires commercial activity that earns money for the employer in Minnesota. Ghosh’s proposed allegation that he provided valuable expertise during training did not change the court’s conclusion that he was training rather than making sales in Minnesota.

The court also held that Ghosh lacked the ongoing physical presence required for coverage under the MWA. He spent 12 days in Minnesota, all for training, and was working in Hawaii when CSI terminated him. His allegation that sales representatives typically returned to Minnesota for yearly training and that he expected to do so was too speculative to establish the required ongoing presence. The court therefore concluded that Ghosh did not have a viable MWA claim and did not reach whether he sufficiently alleged a violation of the Anti-Kickback Statute.

Hawaii Whistleblowers’ Protection Act Claim

The employment agreement stated that the agreement and the parties’ rights would be governed by Minnesota law. The court held that this language covered Ghosh’s noncontractual HWPA claim because the right to bring an applicable whistleblower claim was one of the rights arising from the employment relationship.

The court further held that statutory claims, including whistleblower claims, may generally be waived by agreement. Because the Hawaii legislature had not prohibited waiver of the HWPA, the court concluded that Ghosh had agreed to proceed under Minnesota law and therefore did not have a tenable HWPA claim.

Disposition

The court ordered that Ghosh’s motion to amend the complaint was denied, the defendants’ motion to dismiss was granted, and the case was dismissed with prejudice. The court entered judgment accordingly.