Smith & Nephew Settles Whistleblower Lawsuit for $8.3 Million

Smith & Nephew agreed to pay the U.S. government just over $8.3 million to settle a whistleblower's lawsuit that accused the devicemaker of selling products manufactured in Malaysia to the Veterans Administration and passing them off as U.S.-made.

Of the $8.3 million, roughly $2.3 million will be funneled to the former employee who brought the case, Samuel Cox, III. He is due another $5,000 from Smith & Nephew to settle his retaliation claim, and the company owes $3 million to Cox’s lawyers to cover his legal fees, court documents show.

Cox, a former IT director at Smith & Nephew’s Memphis, Tenn., facility, filed the lawsuit in December 2008 in the U.S. District Court for the Western District of Tennessee. The suit accused the company of breaking the Trade Agreements Act and False Claims Act by selling medical devices to the federal government that were manufactured in nondesignated countries.

While the devicemaker agreed to the settlement, it admitted no liability for the charges, court records show.

Cox worked at the company from December 2007 to September 2008, when he was fired after repeatedly attempting to bring the questionable practices to the attention of superiors. — Kellen Owings

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