Friday, October 4, 2019

Falck Ambulance settles unfair competitive practices claims

Posted By on Fri, Oct 4, 2019 at 12:40 PM

click to enlarge COURTESY FALCK AMBULANCE
  • Courtesy Falck Ambulance
This blog has been updated to report that Falck has also sued SG Collaborative.

Falck Rocky Mountain is negotiating with the city of Colorado Springs for a five-year emergency ambulance contract, and adverse news keeps creeping out about the Denmark-based company.

The latest revelation outlines claims by the Danish Competition Council against Falck alleging unfair competitive practices, which led to a settlement this year in which Falck acknowledged its actions, agreed to pay the equivalent of $22.4 million to a competitor as compensation after it went bankrupt, and vowed not to repeat the actions it took that led to the council's action.

Locally, after Falck was chosen by the city, American Medical Response (AMR) protested the selection on Aug. 23. AMR, of Greenwood Village, and its predecessor company has provided emergency ambulance service locally for some 40 years and was the first to contract directly with the city starting in 2014. (AMR also protested the city's choice last year of Priority Ambulance. The city eventually broke off talks and extended AMR's contract temporarily until a new round of proposals could be considered, which resulted in the selection of Falck.)

The city rejected AMR's protest and reportedly is hammering out a deal with Falck. But speed bumps keep arising. First, Falck said it planned to hire AMR personnel to work under the Colorado Springs contract, but AMR countered by saying the company expected to keep most of its workers employed on other contracts. If that plays out as AMR predicts, Falck could have a hard time hiring, because there's a national shortage of emergency medical technicians and paramedics.

Other issues:

• Alameda County Health Care Services Agency, San Leandro, California, wrote a letter Sept. 23 to Falck saying the company is failing to meet performance standards. (An agency official told the Independent in early September there had been "a successful transition" to Falck from Paramedics Plus and that "all partners worked well together during the transition.") However, the Sept. 23 letter advised Falck of a $372,500 penalty the agency would impose after Falck failed to meet the 90 percent performance expectations in July and August, meaning the responses were too slow. The letter also gave Falck until Oct. 8 to submit a "corrective action plan."

• On Sept. 26, Scott Griffith Collaborative Solutions LLC (SGC), Westlake, Texas, filed a federal lawsuit in the Northern District of California against Falck NorCal, its subsidiary Care Ambulance Service and Falck USA. The suit alleges copyright and trademark infringement and unfair competition under federal and California laws. SGC alleges Falck borrowed its intellectual property developed to assist aviation, health care and transportation industries operate at a higher level of safety and reliability through specific methods and techniques it calls "revolutionary." In 2015, SGC granted Care Ambulance a onetime use of the materials. In September 2019, the lawsuit alleges, Falck NorCal used SGC's products in its proposal for the Alameda County contract. The lawsuit seeks to bar Falck from using SGC's materials and monetary damages as proven at trial.

On that same day, in the Northern District of U.S. District Court in Texas, Falck sued SGC, claiming breach of contract, business disparagement, libel and interference.

Falck contends SGC gave permission to Care Ambulance to use its materials in a 2016 agreement and later claimed it hadn't given permission. After SGC issued a letter demanding the Falck stop using the materials, "Falck promptly responded to the demand letter by explaining that Care was included as a respondent on the subject request for proposal response bid, and that the
material was accordingly used in accordance with the Agreement and the May 20, 2016
Written Consent," the lawsuit says.

From Falck's suit:
However, before Falck could even respond to the demand letter, Defendant shared the letter with one or more competitors of Falck and Care, and the letter was reported by various media outlets, published in its entirety by at least one outlet, which broadcast it under the following headline: “Falck Ambulance, the city’s choice for a 5‐year contract, accused of lying in a proposal in California.” 
Moreover, Falck accuses SGC of "making statements "maliciously and with an intentional disregard of their accuracy, and in complete disregard of what is actually provided for in the Agreement and written consents." Falck seeks damages to be proven at trial.
   
Falck Rocky Mountain CEO David Patterson tells the Indy via email the Alameda contract represents a transition from a provider that wasn't complying with response times and was "severely understaffed." Falck has hired 66 EMTs and paramedics there since July 1, growing the workforce more than 15 percent. Those employees are being trained, he said, adding, "While not yet where we want them to be, response times improved in the first two months following Falck’s assumption of the contract from the previous provider." Patterson predicted "significant improvement" in compliance due to changes Falck has made.

Regarding the copyright infringement suit, Patterson says Care Ambulance Service Inc., "has a valid contract" with SGC "to use copyrighted material and intellectual property of SG Collaborative in 911 bids." He adds that Falck possesses emails in which SGC expresses interest in Falck sharing the SGC strategies in 911 service bids. In a Sept. 13 statement to the Indy, Falck said it was "prepared to pursue further legal action to remedy the situation." He also noted the SGC materials were not used in its Colorado Springs bid.

Falck is contrite about the unfair competition case.
click to enlarge SHUTTERSTOCK.COM
  • Shutterstock.com
"Falck acted in a way that was unacceptable and which we will never repeat," Falck President and CEO Jakob Riis said in a statement. "We have accepted the ruling by the authorities. We have worked to create a joint solution for both large and small creditors. We are happy that we have reached a settlement and will now pay the parties’ losses."

Falck said in a news release in response to the ruling earlier this year, "Around 500 minor creditors will be covered by the bankruptcy estate with an amount, which as matters stand, is considered sufficient to ensure payment of the known claims against the [BIOS] bankruptcy estate."

A question also has arisen about Falck's business ventures in Russia and its data storage of personal customer information. Its website states the company "may transfer some of your data to recipients in countries outside the EU/EEA [European Union/European Economic Area] as we may use external suppliers to host/store some of our data and personal information."

Asked about that, Patterson calls Falck's data security program "robust" and says Falck "follows a layered approach to the international data transfers considering first whether the third country provides an adequate level of protection, as recognized by the European Commission, and ensuring that the exported data will be safeguarded in that country."

Although one Indy reader pointed out that Falck also provides fire service to government agencies worldwide, raising the idea that Falck might be eying a Colorado Springs Fire Department takeover, Patterson dismisses that concern.

Falck's focus is industrial firefighting, he says, adding, "There are no plans for this in the U.S. Interestingly, AMR, through their acquisition of Rural/Metro, provides privatized fire service in the United States today."

As for AMR's record: It's faced criticism locally for failing to meet response times without the help of firefighters. It also racked up more than $1 million in fines in Georgia last year due to slow response times.
 
Scott Lenn, vice president of operations for AMR, says the contract issue was resolved.

"In the EMS industry, there may be disagreements over response time penalties due to causes that are out of the provider's control such as weather, traffic accidents or system problems," he says.

The city wants the ambulance provider to pay $1.4 million a year to reimburse the city for firefighter support in responding to medical calls. The contract in place today requires a payment of $1.17 million annually. The new five-year contract, to take effect in January, contains five one-year options for renewal.

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