On May 28, 2009 Judge Virginia Hernandez Covington of the U.S. District Court for the Middle District of Florida, Tampa Division, accepted arguments put forth by a team of False Claims Act litigators from Latham & Watkins LLP and dismissed, with prejudice, a federal lawsuit alleging false claims against Axiom Worldwide, Inc and two of its senior executives. Filed under the federal False Claims Act, the case was a "qui tam" suit, in which plaintiffs act as "whistleblowers" to claim fraudulent activity on behalf of the United States.

The qui tam case was filed by a former Axiom employee who alleged that officers of Axiom devised a fraudulent sales scheme to promote the sale of the company's DRX spinal decompression devices. The former employee claimed that Axiom misrepresented the billing requirements for the DRX decompression device, inducing physicians to purchase the devices and subsequently submit claims for inflated reimbursements due to the misrepresented billing codes.

The Latham litigators argued, among other points, that the plaintiffs' complaint lacked the requisite indicia of reliability because it failed to allege what services were actually rendered by the physicians who purchased the devices in connection with their various claims for reimbursement. U.S. District Judge Hernandez Covington agreed with this view, noting that the plaintiffs have tried and failed three times to demonstrate legitimate grounds for a claim. Based on this view, the judge dismissed the case with prejudice.

Latham & Watkins LLP was hired to defend Nicholas Exharos, the Vice President of Axiom, with a litigation team led by partner Roger Goldman in the firm's Washington, D.C. office.