United States District Court, S.D. New York
UNITED STATES OF AMERICA ex rel. MATTHEW CESTRA, and on behalf of the STATES of CALIFORNIA, COLORADO, CONNECTICUT, DELAWARE, FLORIDA, GEORGIA, HAWAII, ILLINOIS, INDIANA, IOWA, LOUISIANA, MARYLAND, the COMMONWEALTH OF MASSACHUSETTS, MICHIGAN, MINNESOTA, MONTANA, NEVADA, NEW JERSEY, NEW MEXICO, NEW YORK, NORTH CAROLINA, OKLAHOMA, RHODE ISLAND, TENNESSEE, TEXAS, the COMMONWEALTH OF VIRGINIA, WASHINGTON, WISCONSIN and the DISTRICT OF COLUMBIA, Plaintiffs,
CEPHALON, INC. and JOHN DOES #1-100, FICTITIOUS NAMES, Defendants.
OPINION & ORDER
SIDNEY H. STEIN, District Judge.
When relator Matthew Cestra filed this qui tam action on August 30, 2010, a substantively similar action had already been pending in the U.S. District Court for the Eastern District of Pennsylvania. Yet the complaint in the Eastern District of Pennsylvania remained under seal until September 12, 2013, keeping that action hidden from the public's - and Cestra's - view. Upon the unsealing of the Eastern District complaint and Cestra's learning of its existence, Cestra moved to transfer this action to the Eastern District of Pennsylvania. Cestra bases his motion on the "first-filed" rule, which presumes that where two lawsuits are "competing lawsuits, " N.Y. Marine & Gen. Ins. Co. v. LaFarge N. Am., Inc., 599 F.3d 102, 112 (2d Cir. 2010) (quoting D.H. Blair & Co. v. Gottdiener, 462 F.3d 95, 106 (2d Cir. 2006)), the later-filed action should be transferred to the district where the earlier-filed action is pending.
Because the above-captioned action overlaps substantially with the first-filed Eastern District of Pennsylvania action, this Court agrees with Cestra that the first-filed rule establishes a presumption in favor of transfer. There are no special circumstances present to rebut that presumption, and the Court views the Eastern District of Pennsylvania as an eminently convenient forum for the litigation of this action. The Court therefore grants Cestra's motion to transfer.
A. This Litigation by Cestra
On August 30, 2010, Cestra filed this action pursuant to the qui tam provisions of the Federal False Claims Act ("FCA"), 31 U.S.C. §§ 3729 et seq., and analogous state laws. Since that time, he has filed a First Amended Complaint as well as a Second Amended Complaint, and the United States has declined to intervene in the action. ( See Dkt. Nos. 19, 33.)
Cestra alleges that Cephalon illegally promoted two of the drugs it sells: the opioid Fentora ( see Corrected Second Am. Compl., Dkt. No. 45 ("Cestra SAC" or "SAC") ¶ 261) and the chemotherapy drug Treanda ( see id. ¶ 3). According to Cestra, Cephalon promoted Fentora and Treanda "off-label" - that is, for uses not approved by the FDA. ( Id. ¶¶ 57-58, 378-379.) He alleges that this promotion led to false claims to the government, because off-label treatments are ineligible for reimbursement under federal and state health care programs. ( Id. )
In regard to Fentora, Cestra explains that the drug is such a potent pain reliever - and is so susceptible to abuse "even relative to other opioids" - that the FDA has approved it only for breakthrough cancer pain, meaning extreme spikes in cancer-related pain that ordinary pain treatments cannot control. ( Id. ¶¶ 8, 261.) Yet, Cestra alleges, instead of marketing Fentora to the doctors who treat breakthrough cancer pain, Cephalon opted instead to improperly market Fentora to physicians who treat principally non-cancer pain. ( Id. ¶¶ 314-316.) Cestra claims that this marketing strategy purposefully promoted Fentora's off-label use. ( Id. ¶ 317.)
As for Treanda, Cestra states that the FDA approved the drug only for specific cancer treatment, namely as a second-line treatment for patients with indolent non-Hodgkin lymphoma. ( Id. ¶¶ 3-4.) Nonetheless, alleges Cestra, Cephalon induced physicians improperly to prescribe Treanda as a front-line treatment. ( E.g., id. ¶¶ 4-6, 81-114.) Cestra alleges two methods by which Cephalon promoted Treanda for front-line use: first, by misrepresenting Treanda's effectiveness ( e.g., id. ¶ 115), and second, by providing "kickbacks to induce prescribing of Treanda" ( e.g., id. at 64).
B. The Eastern District of Pennsylvania Litigation by Boise
On January 3, 2008, more than two-and-one-half years before Cestra filed his complaint in the Southern District of New York, Bruce Boise filed a complaint under seal in the Eastern District of Pennsylvania, entitled United States et al. ex rel. Boise v. Cephalon, Inc., et al., No. 08-287. Boise subsequently filed an amended complaint ( see Simmer Decl. Exh. B, Sept. 12, 2013 ("Boise AC")) and, in 2013, the United States declined to intervene in the Boise action ( see Simmer Decl. Exh. A at 4, Sept. 12, 2013). Having been hidden from the public view due to the seal, the action was unsealed on September 12, 2013. ( See id. at 4-5.)
That action was brought against two defendants: Cephalon, Inc., and Tekada Pharmaceuticals North America, Inc. ( See Boise AC ¶¶ 11-12.) It alleges that off-label promotion of four drugs - including Fentora but not including Treanda - resulted in false claims to federal and state health care reimbursement programs. ( Id. ¶ 4.) According to that complaint, Cephalon marketed Fentora toward doctors who predominantly treat non-cancer pain, in an effort to promote Fentora for off-label pain treatment. ( Id. ¶¶ 83-84.) Contending that this off-label promotion led to false claims to federal and state health care reimbursement programs, Boise alleges causes of action under the qui tam provisions of the FCA and various states' analogous laws. ( Id. ¶¶ 27, 31, 34, 265.)
C. The Motion to Transfer
On the same day as the Boise action was unsealed, Cestra moved to transfer this action to the Eastern District of Pennsylvania "so that it may be adjudicated in the same court in which an earlier filed case alleging similar fraud by the same defendant, and involving one of the two drugs at issue, already is pending." (Mem. in Support of Pf./Relator's Mot. to Transfer, Dkt. No. 65 ("Cestra Mem.") at 1.) Cestra contends that the ...