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United States ex rel. Wood v. Allergan, Inc.

United States District Court, S.D. New York

March 31, 2017

UNITED STATES OF AMERICA ex rel. JOHN A. WOOD, et al., Plaintiffs,
v.
ALLERGAN, INC. and ALLERGAN plc, Defendants.

          OPINION AND ORDER

          JESSE M. FURMAN, United States District Judge:

         TABLE OF CONTENTS

         INTRODUCTION..........................................................................................................................3

         BACKGROUND............................................................................................................................4

         A. Relevant Statutes........................................................................................................4

         B. The Alleged Scheme...................................................................................................7

         C. Other Cases and Procedural History...........................................................................9

         LEGAL STANDARDS................................................................................................................11

         DISCUS SION...............................................................................................................................13

         A. The Public Disclosure Bar........................................................................................14

         B. The First-to-File Bar.................................................................................................16

         1. Related Actions...................................................................................................17

         2. Whether the First-to-File Bar Requires Dismissal..............................................20

         C. Statute of Limitations...............................................................................................32

         D. The Anti-Kickback Statute.......................................................................................41

         1. Drug Samples and Patient Care Kits...................................................................43

         2. Patient Instruction Sheets and Prescription Pads ................................................46

         E. The False Claims Act................................................................................................47

         1 The PP AC A.........................................................................................................52

         2. Express Certification...........................................................................................53

         3. Implied Certification ........................................................................................... 58

         4. Third-Party Claim Submissions .......................................................................... 62

         F. Rule 9(b) ................................................................................................................... 64

         1. FERA .................................................................................................................. 65

         2. Counts I and II: Subsections (a)(1)(A) and (a)(1)(B) ......................................... 66

         3. Count III: Subsection (a)(1)(C) ........................................................................... 74

         4. Count IV: Subsection (a)(1)(G) .......................................................................... 75

         5. The Scope of the Scheme and Scienter ............................................................... 76

         G. The Retaliation Claim .............................................................................................. 81

         H. State Law Claims ...................................................................................................... 84

         1. Wisconsin ............................................................................................................ 84

         2. Delaware, New Mexico, and Texas .................................................................... 85

         3. Retroactivity and Timeliness .............................................................................. 86

         CONCLUSION ............................................................................................................................. 88

         INTRODUCTION

         In this qui tam proceeding, Plaintiff-Relator John A. Wood brings claims under the False Claims Act (“FCA”), 31 U.S.C. § 3729 et seq., and state analogues against Defendant Allergan, Inc. (“Allergan”), a pharmaceutical company that develops and manufactures eye care prescription drugs.[1] Wood alleges, among other things, that Allergan violated the FCA and the Anti-Kickback Statute (“AKS”), 42 U.S.C. § 1320a-7b(b), by providing substantial quantities of free drugs and other goods to physicians in exchange for their prescribing to beneficiaries of Medicare, Medicaid, and other government programs the company's brand name drugs. (Docket No. 38 (“Third Am. Compl.”) ¶¶ 1-12). Wood also brings parallel claims under state law on behalf of twenty-five states (id. ¶¶ 291-473), and alleges that he was unlawfully terminated in retaliation for his whistleblowing actions. (Id. ¶¶ 258-274; 288-290). Now pending is Allergan's motion, pursuant to Rules 9(b) and 12(b) of the Federal Rules of Civil Procedure, to dismiss the Third Amended Complaint.

         Allergan's motion confirms that, when the Supreme Court observed last year that the FCA's “qui tam provisions present many interpretive challenges, ” it was, if anything, engaging in rhetorical understatement. Kellogg Brown & Root Servs., Inc. v. ex rel. Carter, 135 S.Ct. 1970, 1979 (2015). The motion presents several issues that neither the Supreme Court nor the Second Circuit has addressed and upon which other federal courts have divided, including whether the FCA's bar on actions brought while a related action is pending (the so-called “first-to-file” rule) is a jurisdictional or non-jurisdictional rule and, relatedly, whether a violation of the rule compels dismissal or can be cured through the filing of a new pleading; and whether a relator can rely on a subsection of the statute that permits claims to be brought up to ten years after they accrued where the relevant facts are not known to “the official of the United States charged with responsibility to act.” It also calls upon the Court to interpret and apply the Supreme Court's recent decision in Universal Health Servs., Inc. v. United States ex rel. Escobar, 136 S.Ct. 1989 (2016), which partially altered the FCA landscape.

         The issues are too complicated and the Court's holdings are too numerous to usefully summarize here. For now, it suffices to say that, for the lengthy reasons discussed below, Allergan's motion to dismiss is largely denied.

         BACKGROUND

         Generally, in considering a motion to dismiss, a court is limited to the facts alleged in the complaint and is required to accept those facts as true. See, e.g., LaFaro v. N.Y. Cardiothoracic Grp., PLLC, 570 F.3d 471, 475 (2d Cir. 2009). A court, however, may also consider documents attached to the complaint; statements or documents incorporated into the complaint by reference; and, more relevant here, matters of which judicial notice may be taken, such as public records. See, e.g., McBeth v. Porges, 171 F.Supp.3d 216, 221 (S.D.N.Y. 2016). Accordingly, the following facts are taken from the Third Amended Complaint, materials incorporated by reference therein, and documents of which the Court may take judicial notice.[2]

         A. Relevant Statutes

         The statutes at the heart of this case are discussed in more detail below, but a brief introduction to them is warranted at the outset. As noted, Wood brings claims under the FCA. To the extent relevant here, the FCA imposes significant penalties on any person who “knowingly presents, or causes to be presented, a false or fraudulent claim for payment or approval” or any person who “knowingly makes, uses, or causes to be made or used, a false record or statement material to a false or fraudulent claim.” 31 U.S.C. § 3729(a)(1)(A)-(B); see also Escobar, 136 S.Ct. 1989. Under Second Circuit law, a claim can be “factually” false or “legally” false. See Mikes v. Straus, 274 F.3d 687, 696 (2d Cir. 2001), abrogated in part by Escobar, 136 S.Ct. at 2001. Factually false claims involve “an incorrect description of goods or services provided or a requirement for goods or services never provided, ” Mikes, 274 F.3d at 697, whereas legally false claims are “predicated upon a false representation of compliance with a federal statute or regulation or a prescribed contractual term, ” id. at 696. An “expressly” false claim is one that “certifies compliance with a particular statute, regulation, or contractual term, where compliance is a prerequisite to payment.” Id. at 698. By contrast, “implied” false claims occur where a defendant makes or causes to be made “representations in submitting a claim but omits its violations of statutory, regulatory, or contractual requirements, ” so long as those omissions “render the defendant's representations misleading with respect to the goods or services provided.” Escobar, 136 S.Ct. at 1999.

         As a qui tam statute, the FCA permits private persons, known as “relators, ” to bring actions to recover damages on behalf of the United States. 31 U.S.C. § 3730(b). The statute includes other procedural quirks as well, several of which loom large in this case. First, the statute provides that a relator must file his or her complaint under seal so as to permit the government to decide whether it wants to intervene. See Id. § 3730(b)(2). At the Government's request, the seal can remain in effect indefinitely; moreover, even if the Government declines to intervene at the outset, it may do so at any point later in the litigation upon a showing of good cause. See Id. § 3730(b)(3). Second, certain provisions of the statute provide incentives for relators to file quickly, while balancing the Government's interest in notice with concerns about parasitic or opportunistic law suits. The “first-to-file” bar, for instance, states that once an action has been brought, “no person other than the Government may intervene or bring a related action based on the facts underlying the pending action.” Id. § 3730(b)(5). Relatedly, the “public disclosure” bar generally requires courts to “dismiss an action” if “substantially the same allegations or transactions as alleged in the action or claim were publicly disclosed” at an earlier date. Id. § 3730(e)(4)(A). In isolation, each of these requirements presents interpretive challenges; taken together, they create a veritable thicket of complexity.

         The gravamen of Wood's FCA claims, as discussed below, is that Allergan induced physicians to prescribe its drugs to recipients of federal benefits (such as Medicare and Medicaid) by providing unlawful remuneration - including free drug samples - in violation of the AKS, 42 U.S.C. § 1320a-7b(b). To the extent relevant here, the AKS imposes criminal liability on any person who “knowingly and willfully offers or pays any remuneration . . . to induce [any] person” to prescribe a drug “for which payment may be made in whole or in part under a Federal health care program.” Id. In 2010, Congress amended the AKS to make clear that “a claim that includes items or services resulting from a violation of [the AKS] constitutes a false or fraudulent claim” for purposes of the FCA. Patient Protection and Affordable Care Act (“PPACA”), Pub. L. No. 111-148, § 6402(f), 124 Stat. 119, 759 (2010). Complicating matters, however, another statute - the Prescription Drug Marketing Act of 1987 (“PDMA”), 21 U.S.C. § 301 et seq.- expressly authorizes drug manufacturers to provide samples of their drugs to licensed practitioners who request them, so long as certain recordkeeping requirements are met. 21 U.S.C. § 353(d). That provision - an exemption from the PDMA's prohibition on the sale, purchase, or trade of “any drug sample, ” defined as “a unit of drug . . . which is not intended to be sold and is intended to promote the sale of the drug, ” id. § 353(c)(1) - is intended to allow a manufacturer to “acquaint the practitioner with the therapeutic value of the medication and thus encourage the written prescription of the drug.” S. Rep. No. 100-303, at 2-3 (1988), reprinted in 1988 U.S.C.C.A.N. 57, 58-59.

         B. The Alleged Scheme

         Allergan is a pharmaceutical company that “has been a pioneer in the development of prescription eye care products, ” which it develops, manufactures, and markets for use in the cataract surgery setting. (Third Am. Compl. ¶ 22). Wood was employed by Allergan as a Senior Territory Manager from October 2008 to July 2010, during which time he discovered that Allergan was engaging in practices that allegedly violated the AKS and the FCA. (Id. ¶¶ 18-19). Specifically, Wood alleges that - from at least 2003 through 2011 - Allergan provided substantial numbers of free custom care kits, drug samples, customized patient instruction sheets, and customized, pre-printed prescription pads to induce physicians to prescribe Allergan drugs to their cataract patients, most of whom were Medicare or Medicaid recipients. (Id. ¶¶ 42, 100-101, 125). Allergan executives were purportedly aware of, and encouraged, the provision of these free goods in exchange for the prescription of Allergan drugs. (See ¶¶ 125-136). For the custom care kits, Allergan sales representatives worked with ophthalmologist offices nationwide to determine which of twelve different versions of the kit each office preferred to receive pursuant to a signed “Custom Care Kit Agreement.” (Id. ¶¶ 137, 141). Pursuant to these Custom Care Kit Agreements, Allergan provided well over 100 million dollars' worth of free drug samples to physicians. (See Id. ¶¶ 148-150 (detailing nearly 150 million dollars' worth of samples distributed during a single six-month period)). Notably, however, Allergan provided the free kits only to physicians who agreed to prescribe its drugs and, for physicians already doing so, those who agreed to prescribe large quantities of those drugs. (Id. ¶¶ 155-157). Allergan tracked the ratio of free drug samples provided to drugs prescribed by each doctor, and the company would stop providing free kits to physicians who were not prescribing sufficient quantities of its drugs. (Id. ¶¶ 155-160). In late 2008, Allergan stopped providing free custom care kits based on growing concerns over the program's legality. (Id. ¶¶ 161-163).

         After terminating its custom care kit program, Allergan continued to provide free drug samples to physicians, who would submit signed “Sample Shipment Agreements” to the company's sales representatives to order large, six-month supplies of free product samples. (Id. ¶¶ 167-173). These Agreements were provided only to physicians who already prescribed or agreed to prescribe Allergan drugs in sufficient quantities; physicians who failed to do so ceased to receive free product samples. (Id. ¶¶ 174, 176, 184). In June 2010, Allergan halted its practice of providing these shipments of drug samples, again due to legality concerns. (Id. ¶¶ 185-188). Wood alleges, however, that Allergan continued to provide cooperative physicians with office supplies, such as customized prescription pads with pre-printed prescriptions for Allergan drugs and customized patient instruction sheets. (Id. ¶ 208). Until December 2008, Allergan representatives worked with physicians to custom design these patient instruction sheets. (Id. ¶ 209-210). After 2008, however, the company purchased a subscription to a design website that allowed physicians to create their own instruction sheets, with Allergan covering all the costs of printing and shipping. (Id. ¶ 211). Through this website, physicians could also order customized, pre-printed prescription sheets, with all costs again covered by Allergan. (Id. ¶ 212, 214). These inducements were also provided only to physicians who prescribed, or agreed to prescribe, Allergan drugs in sufficient quantities. (Id. ¶ 215).

         Wood alleges that Allergan's provision of these free products - including the drug samples worth hundreds of millions of dollars - induced participating physicians to write hundreds of thousands of prescriptions for Allergan drugs in violation of the AKS. (Id. ¶¶ 219-220). Pharmacies then filled these prescriptions, unwittingly submitting “false” claims for reimbursement to federal and state healthcare programs, including Medicare, Medicaid, the Federal Employee Health Benefits Plan (“FEHBP”), and the Department of Defense TRICARE program (formerly known as CHAMPUS), and CHAMPVA. (Id. ¶ 101, 230). In doing so, Allergan caused physicians and pharmacies to falsely certify compliance with applicable federal and state laws. (Id. ¶¶ 239-244). For example, pharmacies affix their unique provider identification numbers to every electronic claim submitted for Medicaid reimbursement; these identification numbers “serve as electronic stamps” indicating the pharmacies “are in compliance with all applicable federal and state laws.” (Id. ¶ 227). Additionally, in the Medicare context, physician-providers must sign agreements certifying their compliance with federal law and their understanding that Medicare reimbursement is conditioned on compliance with, among other statutes, the AKS. (Id. ¶ 242 (discussing Centers for Medicare and Medicaid Services (“CMS”) Forms 855A and 855I)).[3] Finally, Wood alleges that he was fired by Allergan soon after, and in retaliation for, reporting the illegal sampling and kickback scheme to Allergan's Compliance and Human Resources Departments. (Id. ¶¶ 268-274).

         C. Other Cases and Procedural History

         Significantly, Wood was not the first person to bring FCA claims against Allergan along the lines of those alleged here. On October 29, 2008, a relator filed United States ex rel. Lampkin v. Johnson & Johnson, Inc., No. 08-CV-5362 (D.N.J.), alleging that Allergan, along with two other pharmaceutical companies, violated the AKS and thereby the FCA by shipping free surgical kits to physicians nationwide to induce them to prescribe a particular Allergan drug. (See Docket No. 68 (“Partridge Decl.”) Exs. 2, 3). And on January 11, 2010, another relator filed United States ex rel. Caryatid, LLC v. Allergan, Inc., No. 10-CV-46 (D.D.C.), alleging similar violations resulting from Allergan's provision of free surgical kits to physicians. (See Partridge Decl.. Exs. 1, 4). The United States declined to intervene in both actions, resulting in the complaints eventually being unsealed - in Caryatid, on July 27, 2011, and in Lampkin, on February 16, 2012. (See Id. Ex. 2 (“Lampkin Docket”) No. 26; id. Ex. 4 (“Caryatid Docket”) No. 15). On January 23, 2012, the Caryatid action was dismissed pursuant to the relator's unopposed motion to dismiss for failure to timely serve Allergan. (See Caryatid Docket No. 16). The Lampkin action was dismissed with respect to Allergan for failure to serve on December 14, 2012. (See Lampkin Docket No. 54). On May 13, 2013, the entire action was dismissed, when the court granted the remaining defendant's motion to dismiss. (See Id. Docket No. 59).

         On July 26, 2010 - during the time that the Lampkin and Caryatid actions were under seal, but before they were dismissed - Wood filed this action under seal on behalf of the United States, twenty-six states, and the District of Columbia. (Docket No. 1; Docket No. 61 (“Original Compl.”)). Nearly six years later, in March 2016, the United States and the states declined to intervene. (Docket Nos. 25, 26).[4] Thereafter, the Court unsealed Wood's original complaint and two amended complaints (which had been filed while the case was entirely under seal). (Docket Nos. 27, 59, 63). On May 23, 2016, Wood filed the operative complaint, the Third Amended Complaint, which expanded his allegations concerning the kickback scheme and dropped claims on behalf of Maryland and New Hampshire. (Third Am. Compl.; Docket No. 73 (“Wood Opp'n”), at 1 n.1 (acknowledging that the Third Amended Complaint does not include claims on behalf of New Hampshire even though it is included in the caption)).[5] Allergan moved to dismiss the Third Amended Complaint on August 4, 2016. (Docket No. 64). The United States did not change course and intervene, but it did file two Statements of Interest in connection with the motion to dismiss, primarily to address implications of the Supreme Court's 2016 decision in Escobar. (Docket No. 78 (“Gov't SOI”); Docket No. 91 (“Gov't Supp. SOI”)). In light of those Statements, and an amicus brief filed on behalf of Pharmaceutical Research and Manufacturers of America (Docket Nos. 83, 84), the motion did not become fully briefed until December 23, 2016, when Allergan filed its final reply. (Docket No. 99 (“Allergan Reply”)).[6] On March 20, 2017, the Court held oral argument, in which the parties and the United States participated. (See Transcript of Oral Argument on March 20, 2017 (“Tr.”)).

         LEGAL STANDARDS

         When reviewing a motion to dismiss pursuant to Rule 12(b)(6), the Court must “accept[ ] all factual allegations in the complaint and draw[ ] all reasonable inferences in the plaintiff's favor.” ATSI Commc'ns, Inc. v. Schaar Fund, Ltd., 493 F.3d 87, 98 (2d Cir. 2007). The Court will not dismiss any claims pursuant to Rule 12(b)(6) unless the plaintiff fails to plead sufficient facts to state a claim to relief that is facially plausible, see Bell Atl. Corp. v. Twombly, 550 U.S. 544, 570 (2007), that is, one that contains “factual content that allows the court to draw the reasonable inference that the defendant is liable for the misconduct alleged, ” Ashcroft v. Iqbal, 556 U.S. 662, 678 (2009). More specifically, a plaintiff must allege facts showing “more than a sheer possibility that a defendant has acted unlawfully.” Id. A complaint that offers only “labels and conclusions” or “a formulaic recitation of the elements of a cause of action will not do.” Twombly, 550 U.S. at 555. Further, if a plaintiff has not “nudged [its] claims across the line from conceivable to plausible, [those claims] must be dismissed.” Id. at 570.

         As the FCA is an anti-fraud statute, Wood's claims must also comply with Rule 9(b) of the Federal Rules of Civil Procedure, which requires a plaintiff to plead fraud claims “with particularity.” Fed.R.Civ.P. 9(b). To comply with Rule 9(b), a complaint “must: (1) specify the statements that the plaintiff contends were fraudulent, (2) identify the speaker, (3) state where and when the statements were made, and (4) explain why the statements were fraudulent.” Lerner v. Fleet Bank, N.A., 459 F.3d 273, 290 (2d Cir. 2006) (internal quotation marks omitted). “In other words, Rule 9(b) requires that a plaintiff set forth the who, what, when, where and how of the alleged fraud.” United States ex rel. Polansky v. Pfizer, Inc., No. 04-CV-704 (ERK), 2009 WL 145682, at *4 (E.D.N.Y. May 22, 2009) (internal quotation marks omitted). Whether a complaint complies with the Rule, however, depends “upon the nature of the case, the complexity or simplicity of the transaction or occurrence, the relationship of the parties and the determination of how much circumstantial detail is necessary to give notice to the adverse party and enable him to prepare a responsive pleading.” In re Cardiac Devices Qui Tam Litig., 221 F.R.D. 318, 333 (D. Conn. 2004) (internal quotation marks omitted).

         In particular, “where the alleged fraudulent scheme involved numerous transactions that occurred over a long period of time, courts have found it impractical to require the plaintiff to plead the specifics with respect to each and every instance of fraudulent conduct.” Id.; see United States v. Wells Fargo Bank, N.A., 972 F.Supp.2d 593, 615-16 (S.D.N.Y. 2013). Thus, “where a relator pleads a complex and far-reaching fraudulent scheme with particularity, and provides examples of specific false claims submitted to the government pursuant to that scheme, a relator may proceed to discovery on the entire fraudulent scheme.” United States ex rel. Bledsoe v. Cmty. Health Sys., Inc., 501 F.3d 493, 510 (6th Cir. 2007). Specific examples, however, “will support more generalized allegations of fraud only to the extent that [they] are representative samples of the broader class of claims.” Id. (emphasis omitted); see also Wells Fargo, 972 F.Supp.2d at 615-16. By contrast, Rule 9(b) permits scienter to be alleged “generally, ” Fed.R.Civ.P. 9(b), and requires only that a defendant have acted “knowingly” rather than “proof of [a] specific intent to defraud, ” 31 U.S.C. § 3729(b)(1).[7]

         DISCUSSION

         Allergan moves to dismiss the Third Amended Complaint on several grounds. First, Allergan contends that the Court lacks jurisdiction to hear this action under the FCA's “public disclosure” and “first-to-file” bars. Second, Allergan alleges that, even if neither of those bars applies, the majority of Wood's claims fall outside the FCA's statute of limitations, as measured from the Third Amended Complaint. Third, Allergan asserts that Wood fails to plead a predicate violation of the AKS, in part because the PDMA expressly authorizes drug manufacturers to provide free samples to physicians. Fourth, with respect to the FCA claims, Allergan contends both that Wood's theory of falsity (as to pre-PPACA claims) fails as a matter of law and that Wood fails to plead any false claim with the particularity required under Rule 9(b). Fifth, Allergan challenges several of Wood's state law claims on similar grounds. And finally, Allergan asserts that Wood fails to state a retaliation claim as a matter of law. The Court addresses each argument in turn, beginning with the two purportedly jurisdictional issues.

         A. The Public Disclosure Bar

         Allergan's first argument is that the Court lacks subject-matter jurisdiction because of the FCA's “public disclosure bar, ” which, as noted above, generally requires courts to dismiss an action or claim “if substantially the same allegations or transactions as alleged in the action or claim were publicly disclosed” in a judicial proceeding, a governmental report, hearing, audit, or investigation, or in the news media. 31 U.S.C. § 3730(e)(4)(A). Until 2010, the public disclosure bar was unambiguously jurisdictional: “No court shall have jurisdiction over an action under this section based upon the public disclosure of allegations or transactions . . . .” 31 U.S.C. § 3730(e)(4)(A) (2009). In the PPACA, however, Congress amended the provision to remove any reference to jurisdiction. See Pub. L. No. 111-148, § 10104(j)(2), 124 Stat. 119, 901-902 (2010). Thus, it now states only that “[t]he court shall dismiss an action or claim” that has been publicly disclosed. 31 U.S.C. § 3730(e)(4)(A) (2010). In the wake of that amendment, courts are divided over whether the public disclosure bar is jurisdictional or non-jurisdictional. Compare, e.g., United States ex rel. Kester v. Novartis Pharma. Corp. (Novartis V), 43 F.Supp.3d 332, 345-346 (S.D.N.Y. 2014) (jurisdictional), with Ping Chen ex rel. United States v. EMSL Analytical, Inc., 966, F.Supp.2d 282, 294 (S.D.N.Y. 2013) (non-jurisdictional). Either way, however, it does not apply here.

         Whether the public disclosure bar applies turns on whether the allegations in Wood's complaint were “publicly disclosed” prior to his filing of the initial complaint in July 2010. Significantly, nine courts of appeals have held that the bar applies only where there has been a disclosure outside of the government. See, e.g., United States ex rel. Chattanooga-Hamilton Cty. Hosp. Auth., 782 F.3d 260, 265-66 (6th Cir. 2015); United States ex rel. Little v. Shell Exploration Prod. Co., 602 F. App'x 959, 974 (5th Cir. 2015); United States ex rel. Wilson v. Graham Cnty. Soil & Water Conservation Dist., 777 F.3d 691, 696-98 (4th Cir. 2015); United States ex rel. Oliver v. Phillip Morris USA Inc., 763 F.3d 36, 42 (D.C. Cir. 2014); United States ex rel. Meter v. Horizon Health Corp., 565 F.3d 1195 (9th Cir. 2009); United States ex rel. Maxwell v. Kerr-McGee Oil & Gas Corp., 540 F.3d 1180, 1184 (10th Cir. 2008); United States ex rel. Rost v. Pfizer, Inc., 507 F.3d 720, 730-31 (1st Cir. 2007); United States ex rel. Cantekin v. Univ. of Pittsburgh, 192 F.3d 402, 408 (3d Cir. 1999); United States ex rel. Williams v. NEC Corp., 931 F.2d 1493, 1494 (11th Cir. 1991). These courts have reasoned that “the phrase ‘public disclosure' would be superfluous” if “providing information to the government were enough to trigger the bar.” Rost, 507 F.3d at 729. Equating the terms “government” and “public, ” they have opined, would also be inconsistent with language elsewhere in the FCA and with the purpose of the public disclosure bar, which “clearly contemplates that the information be in the public domain in some capacity[, ] and the Government is not the equivalent of the public domain.” Kennard v. Comstock Res., Inc., 363 F.3d 1039, 1043 (10th Cir. 2004).

         The Second Circuit has not yet opined on this issue. In light of that vacuum, Allergan invites the Court to follow the Seventh Circuit, the sole court of appeals to conclude that disclosure to a competent public figure, without more, satisfies the “public disclosure” requirement. See United States ex rel. Mathews v. Bank of Farmington, 166 F.3d 853, 861 (7th Cir. 1999) (holding that disclosure to a government official “authorized to act for or to represent the community on behalf of government can be understood as public disclosure”); see also Cause of Action v. Chi. Transit Auth., 815 F.3d 267, 275-77 (7th Cir. 2016) (declining to reconsider Bank of Farmington). The Court declines that invitation and chooses instead to follow the persuasive reasoning of the nine other Circuits to address the question. That dooms Allergan's public disclosure argument, as there is no suggestion that Wood's allegations were public in any form prior to his filing of the first complaint. Instead, Allergan's argument rests entirely on the proposition that the complaints in Lampkin and Caryatid, although under seal, had previously been disclosed to officials in the federal government. (Docket No. 65 (“Allergan Mem.”) 11; Allergan Reply 6). But a sealed complaint, by definition, does not disclose any information to the “public.” See, e.g., United States ex rel. LeBlanc v. Raytheon Co., 913 F.2d 17, 20 (1st Cir. 1990) (“[T]he district court further assumes that the filing of a qui tam action is itself a ‘public disclosure.' This cannot be. Such an action is filed under seal without service on anyone other than the United States and remains non-public until the district court enters an order lifting the seal. To hold otherwise would be to render each and every filing a ‘public disclosure, ' thus barring all qui tam actions.”). Accordingly, Allergan's reliance on the public disclosure bar is rejected.[8]

         B. The First-to-File Bar

         Allergan's next argument - that Wood's action must be dismissed pursuant to the FCA's “first-to-file” bar because, when it was filed, the Lampkin and Caryatid actions were both pending (albeit under seal) - requires a more extended discussion. The bar, codified in Section 3730(b)(5), provides: “When a person brings an action under this subsection, no person other than the Government may intervene or bring a related action based on the facts underlying the pending action.” 31 U.S.C. § 3730(b)(5). The core statutory “command is simple: as long as a first-filed complaint remains pending, no related complaint may be filed.” United States ex rel. Batiste v. SLM Corp., 659 F.3d 1204, 1210 (D.C. Cir. 2011). But that simplicity is deceptive. Determining whether the first-to-file bar requires dismissal in the circumstances presented here involves consideration of several complicated issues, at least two of which are the subject of Circuit splits upon which the Second Circuit has not yet opined: whether the first-to-file bar is jurisdictional or non-jurisdictional and (potentially relatedly) whether violation of the first-to-file bar requires dismissal or can be cured through an amended or supplemental pleading under Rule 15 of the Federal Rules of Civil Procedure.

         1. Related Actions

         Of course, the Court need not address those two thorny issues if, as Wood argues, the Lampkin and Caryatid actions were not “related” to this one within the meaning of Section 3730(b)(5), so the Court begins there. Although the Second Circuit has not yet weighed in, every court of appeals that has addressed the issue has held that “[a] second action is ‘related, ' within the meaning of the first-to-file bar, if the claims incorporate the same material elements of fraud as the earlier action, even if the allegations incorporate additional or somewhat different facts or information.” United States ex rel. Heath v. AT & T, Inc., 791 F.3d 112, 121 (D.C. Cir. 2015) (internal quotation marks omitted); see United States ex rel. Duxbury v. Ortho Biotech Prods., L.P., 579 F.3d 13, 32 (1st Cir. 2009) (citing cases); see also, e.g., United States ex rel. Lujan v. Hughes Aircraft Co., 243 F.3d 1181, 1189 (9th Cir. 2011) (“Limiting § 3730(b)(5) to only bar actions with identical facts would be contrary to the plain language [of the statute] and legislative intent . . . .”). “The first-to-file bar is designed to be quickly and easily determinably, simply requiring a side-by-side comparison” of the original complaints in the two actions. In re Natural Gas Royalties, 566 F.3d 956, 964 (10th Cir. 2009); see also United States ex rel. Jamison v. McKesson Corp., 649 F.3d 322, 328 (5th Cir. 2011) (noting that the inquiry turns on the original complaint, not an amended complaint). Relatedness turns on “whether the later complaint alleges a fraudulent scheme the government already would be equipped to investigate based on the first complaint.” Heath, 791 F.3d at 121 (internal quotation marks and alterations omitted); see also Heineman-Guta v. Guidant Corp., 718 F.3d 28, 37-38 (1st Cir. 2013) (“If the earlier-filed complaint contains enough material facts to alert the government to potential fraud, a later-filed complaint . . . containing the same essential facts . . . is nonetheless barred”).[9]

         Applying this “essential facts” standard, the Court concludes that Lampkin was indeed “related” to this action.[10] In Lampkin, the relator explicitly alleged that Allergan violated the AKS by “pa[ying] kickbacks to doctors nationwide in the form of . . . free surgical kits that ha[d] greater than nominal value”; that Allergan shipped those kits “nationwide on a monthly basis” as inducement for physicians to prescribe Zymar; and that “[c]ompliance with the [AKS] is a condition of payment under federal health care insurance programs, ” with which providers and suppliers certify their compliance on the CMS Provider/Supplier Enrollment Application Form 855. (See Partridge Decl., Ex. 3 (“Lampkin Compl.”), ¶¶ 14-16, 18). Wood's later complaint certainly included more detailed allegations, and some different particulars (for example, the time frame of the alleged fraud), but - by any reasonable measure - the claims alleged were based on the same essential facts and involved the same elements of fraud. See, e.g., United States ex rel. Wilson v. Bristol-Myers Squibb, Inc., 750 F.3d 111, 118 (1st Cir. 2014) (“The overlaps among the two complaints were considerable: the same defendants, the same drugs, the assertion of nationwide schemes, and the allegations of specific mechanisms of promotion common to both and leading to common patterns of submission of false claims under the federal Medicaid program.”). Notably, Wood effectively (but perhaps inadvertently) concedes as much, when arguing (in response to Allergan's contention that his claims are time barred, an issue addressed below) that Allergan “received actual notice of the claims in this case no later than the time that . . . [Lampkin was] unsealed in 2012.” (Wood Opp'n 27).

         Wood's strongest argument to the contrary is that the AKS and FCA allegations in Lampkin were limited to only one drug (Zymar), while the allegations here relate to additional drugs (Acular and, perhaps, Pred Forte). (Compare Lampkin Complaint ¶¶ 4-5, 19, with Third Am. Compl. ¶¶ 154, 210-213). In support of that argument, Wood cites cases holding that “the drug itself is an essential element of the fraudulent scheme alleged.” United States ex rel. Banignan v. Organon USA Inc., 883 F.Supp.2d 277, 291 (D. Mass. 2012); see also In re Pharm. Indus. Average Wholesale Price Litig., No. 01-CV-12257 (PBS), 2008 WL 2778808, at *3 (D. Mass. July 15, 2008) (finding that “the failure to specify the drug Erythromycin in the earlier action constitutes a failure to state all the essential facts under the ‘same material elements' standard”). (See Docket No. 109). But those cases did not announce a categorical rule; they merely applied the general proposition that, for purposes of the first-to-file bar, notice to the Government is key. See Banignan, 883 F.3d at 292 (“[T]he policy underlying the provision counsels that the bar should not apply if the government would uncover such fraud (if at all) only by exhausting its investigative resources.”). That proposition might call for allowing an FCA suit against a pharmaceutical company to proceed notwithstanding an earlier-filed FCA suit against the same company, but involving a completely unrelated drug. See In re Pharma, 2008 WL 2778808, at *3 (“The complaint in the [earlier case] involved different drugs marketed by a different division of Abbott. Significantly, Erythromycin is primarily a self-administered drug and the other drugs are generally administered by physicians. Notice of fraud in one drug's pricing is not notice of fraud in another drug's pricing . . . because drugs are often marketed, reimbursed, sold, and priced in different ways.”). But it does not defeat the first-to-file bar here, as the complaint in Lampkin was, like the original complaint here, based on the distribution of drugs through surgical care kits. (Lampkin Compl. ¶¶ 14, 16). Whether Allergan unlawfully distributed one drug or more than one drug through those customer care kits is of no moment; either way, the Lampkin Complaint contained “enough material facts to alert the government to [the] potential fraud” alleged here. Heineman-Guta, 718 F.3d at 37-38. Accordingly, as long as Lampkin was a “pending action, ” 31 U.S.C. § 3730(b)(5), as it was when Wood filed his original complaint (and first two amended complaints), the first-to-file bar applied.

         2. Whether the First-to-File Bar Requires Dismissal

         The fact that this case is “related” to Lampkin, however, does not end the analysis, because Lampkin was dismissed on December 14, 2012, and, thus, is no longer a “pending action” for purposes of Section 3730(b)(5). Notably, the Supreme Court recently confronted a remarkably similar scenario in Kellogg Brown & Root Services., Inc. v. ex rel. Carter. There, the district court had relied on the first-to-file bar to dismiss an FCA case with prejudice; while the case was on appeal, however, the earlier-filed cases were dismissed. See 135 S.Ct. at 1974-75. In light of that development, the Fourth Circuit reversed and remanded with instructions to dismiss without prejudice, reasoning that the first-to-file bar ceases to apply once the earlier-filed related action is dismissed. The Supreme Court, after addressing an unrelated statute of limitations question, affirmed that ruling. Relying on the “ordinary meaning” of the word “pending” in Section 3730(b)(5) and the slim chance that Congress would have wanted an abandoned suit “to bar a later potentially successful suit that might result in a large recovery for the Government, ” the Court held that “an earlier suit bars a later suit while the earlier suit remains undecided but ceases to bar that suit once it is dismissed.” 135 S.Ct. at 1978-79. It follows that the first-to-file bar poses no obstacle to Wood pursuing his claims today.

         Allergan concedes that point, but argues that dismissal without prejudice is nonetheless required because no amendment can change the fact that Wood initiated this action while at least one related case was “pending.” (Allergan Mem. 9). By contrast, Wood - perhaps notably, supported by the Government at oral argument - contends that dismissal is unnecessary because filing the Third Amended Complaint after Lampkin was dismissed “cured” the first-to-file defect in his original complaint. (Wood Opp'n 4-8; Tr. at 21-23). Given that any dismissal would be without prejudice to Wood filing a new action, see Carter, 135 S.Ct. at 1978, the parties' dispute would be academic, but for one critical fact: During the six years in which the Government investigated Wood's claims and the case remained under seal, the statute of limitations ran on most, if not all, of Wood's FCA claims, see 31 U.S.C. § 3731(b), so dismissal - even without prejudice - would, for all intents and purposes, largely immunize Allergan from Wood's claims.[11] Thus, the question of whether a violation of the first-to-file bar can be “cured” by amending or supplementing a complaint - a question left unanswered by the Supreme Court in Carter, see, e.g., United States ex rel. Boise v. ...


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