LeClairRyan has been sued by the former CEO of the bankrupt Richmond, Virginia-based blood testing company Health Diagnostic Laboratory Inc., who claims that the law firm's advice led to a federal investigation into alleged kickback payments.

HDL co-founder and former CEO Tonya Mallory's suit in Virginia state court, first reported on Monday by the Richmond Times-Dispatch, alleges that LeClairRyan played a substantial role in a controversy that contributed to HDL's spiral into bankruptcy in 2015. The suit, which seeks damages of $150 million, comes as the U.S. Justice Department is set to put Mallory and others on trial this month in South Carolina as civil defendants in a False Claims Act lawsuit related to Mallory's time as HDL's CEO.

In a statement provided by LeClairRyan general counsel Lori Thompson on Tuesday, the firm references the timing of the false claims suit involving Mallory, saying she lodged her malpractice complaint “on the eve of a federal fraud trial in South Carolina in which the government has rejected her claims that she was ill-advised by LeClairRyan and other law firms and professional advisors.” The firm's statement also notes that it represented HDL, as opposed to the company's officers and directors individually, and that Mallory was informed about that distinction on numerous occasions.

“She alone is responsible for her decisions and actions, and we are disappointed that she elected to proceed in this fashion. We flatly reject the notion that our firm is responsible to Ms. Mallory for her decisions,” LeClairRyan said in the statement. “Our firm represented a company, HDL. We stand by the work we did for that client, and we have resolved all matters relating to HDL with the bankruptcy trustee who now represents its interests. … As professionals, we have not engaged in PR-driven pleadings that disparage individuals associated with HDL, a former client.”

At the center of the malpractice complaint is LeClairRyan's alleged advice to HDL regarding “processing and handling fees”—payments that HDL was making to doctors' offices purportedly to reimburse the costs of collecting blood samples that were then sent to HDL's labs. LeClairRyan allegedly advised HDL and Mallory that the payments met the legal requirements under anti-kickback laws, according to the lawsuit.

Those payments, however, eventually prompted a U.S. Department of Justice probe into whether HDL was effectively paying kickbacks to medical providers. In 2015, the company agreed to pay $47 million to resolve the DOJ probe without admitting any wrongdoing, and a few months later, the company wound up in a Chapter 11 proceeding in federal bankruptcy court in Richmond. The DOJ's settlement didn't cover allegations against Mallory, who remains a defendant in the government's false claims lawsuit regarding HDL's payment practices.

Prior to the DOJ action and HDL's bankruptcy, the company did have longstanding ties to LeClairRyan. The law firm's co-founder, Dennis Ryan, joined HDL as an executive vice president in 2012, although he reportedly left later that year.

Both the law firm and Ryan have subsequently reached settlements with HDL's bankruptcy estate. Ryan agreed in March to pay $5 million to resolve allegations related to his role in HDL's troubles. For its part, LeClairRyan agreed in September 2016 to pay more than $20 million to the HDL bankruptcy trustee to resolve legal malpractice claims related to the firm's advice.