United States ex rel. Booker v. Pfizer, Inc.
| Citation | 847 F.3d 52 |
| Decision Date | 30 January 2017 |
| Docket Number | No. 16-1805,16-1805 |
| Parties | UNITED STATES EX REL. Alex BOOKER and Edmund Hebron, Relators, Appellants, State of California; State of Colorado; State of Connecticut; State of Delaware; State of Florida; State of Georgia; State of Hawaii; State of Illinois; State of Indiana; State of Louisiana; State of Maryland; State of Michigan; State of Minnesota; State of Montana; State of New Hampshire; State of New Jersey; State of New Mexico; State of New York; State of North Carolina; State of Oklahoma; State of Rhode Island; State of Tennessee; State of Texas; State of Wisconsin; Commonwealth of Massachusetts; Commonwealth of Virginia; District of Columbia, Plaintiffs, v. PFIZER, INC., Defendant, Appellee. |
| Court | United States Courts of Appeals. United States Court of Appeals (1st Circuit) |
Kevin J. Darken , Tampa, FL, with whom The Barry A. Cohen Legal Team , Thomas N. Burnham , Ann Arbor, MI, and Burnham International Law Office were on brief, for appellants.
Kirsten V. Mayer , with whom Brien T. O'Connor , Emily J. Derr , Nicholas S. Bradley , and Ropes & Gray LLP , Boston, MA, were on brief, for appellee.
Before Lynch, Stahl, and Barron, Circuit Judges.
On August 31, 2009, the pharmaceutical company Pfizer, Inc. settled various claims that it had violated the False Claims Act ("FCA"), 31 U.S.C. §§ 3729 et seq., with the U.S. Department of Justice ("DOJ"). As part of that settlement, Pfizer entered into a Corporate Integrity Agreement ("CIA") with the U.S. Department of Health and Human Services ("HHS").
Less than a year after that settlement, relators Alex Booker and Edmund Hebron, two former Pfizer sales representatives, brought this qui tam action against Pfizer in federal district court, alleging it was on behalf of the United States, more than two dozen individual states, and the District of Columbia, and asserting that despite the settlement, Pfizer had continued to engage in conduct prohibited by the FCA and state analogues. None of the sovereigns elected to intervene.
Relators filed their original complaint on July 13, 2010 and amended it several times before the district court denied their motion for leave to file a sixth amended complaint. Primarily, they alleged that Pfizer had continued to knowingly induce third parties to file false claims for payment for Pfizer drugs with government programs like Medicaid by (1) marketing the drug Geodon for off-label uses, in violation of sections 331 and 355 of the Food, Drug, and Cosmetic Act ("FDCA"), 21 U.S.C. §§ 301 et seq. ; and (2) paying kickbacks to doctors to compensate them for prescribing the drugs Geodon and Pristiq, in violation of the Anti-Kickback Statute ("AKS"), 42 U.S.C. § 1320a-7b(b), (g).1 Relators also alleged that Pfizer had violated the "reverse false claims" provision of the FCA, see 31 U.S.C. § 3729(a)(1)(G), by failing to pay the government money owed it under Pfizer's CIA with HHS. Finally, relators alleged that Pfizer had violated the FCA's anti-retaliation provision, see id.§ 3730(h), by terminating Booker's employment on January 6, 2010, purportedly in response to his alleged whistleblowing activities.
All of these claims were resolved against relators, one on a motion to dismiss and the rest on summary judgment. On March 26, 2014, the district court granted Pfizer's motion to dismiss the claim under the reverse false claims provision (the "reverse FCA claim") but allowed relators to proceed to discovery (with limits) on the other claims. See U.S. ex rel. Booker v. Pfizer, Inc.("Booker I"), 9 F.Supp.3d 34, 50, 60–61 (D. Mass. 2014). On May 23, 2016, the district court granted Pfizer's motion for summary judgment on the remaining claims. See U.S. ex rel. Booker v. Pfizer, Inc.("Booker II"), 188 F.Supp.3d 122, 140 (D. Mass. 2016). Relators appeal the dismissal, the grant of summary judgment, and certain of the district court's intervening discovery rulings. We affirm the district court's merits decisions and find no error in its management of discovery.
We rely on the district court's two thorough opinions for a basic recounting of the case. See Booker I, 9 F.Supp.3d 34 ; Booker II, 188 F.Supp.3d 122. We give only that background information needed for this appeal.
Pfizer wrongly suggests that we have no jurisdiction to review the district court's March 26, 2014 order dismissing relators' reverse FCA claim due to defects in relators' notice of appeal. See Fed. R. App. P. 3(c)(1)(B) (). Specifically, we reject the contention that there is no jurisdiction because relators' notice of appeal did not explicitly mention the dismissal order. While the notice did specify certain other orders issued by the district court, it also specified the court's May 26, 2016 final judgment disposing of the case, and "it has been uniformly held that a notice of appeal that designates the final judgment encompasses not only that judgment, but also all earlier interlocutory orders that merge in the judgment." John's Insulation, Inc. v. L. Addison & Assocs., Inc., 156 F.3d 101, 105 (1st Cir. 1998) ; see also Ocasio – Hernández v. Fortuño – Burset, 777 F.3d 1, 6 n.12 (1st Cir. 2015).
We affirm the district court's dismissal of relators' reverse FCA claim on de novo review, albeit on grounds different from those relied on by the district court.2 SeeOtero v. Commonwealth of P.R. Indus. Comm'n, 441 F.3d 18, 20 (1st Cir. 2006). We take no position on whether the district court's reasoning was correct.
The reverse false claims provision of the FCA imposes liability on anyone who "knowingly conceals or knowingly and improperly avoids or decreases an obligation to pay ... money ... to the Government." 31 U.S.C. § 3729(a)(1)(G). The term "obligation" is defined by the statute as "an established duty, whether or not fixed, arising from an express or implied contractual ... relationship." Id.§ 3729(b)(3).
Relators' reverse FCA claim was predicated on Pfizer's alleged breach of its obligations under its August 31, 2009 CIA with HHS. The CIA imposed on Pfizer an ongoing duty to report its "probable" violations of the FCA to HHS. Specifically, the CIA defined as a "Reportable Event," inter alia, "a matter that a reasonable person would consider a probable violation of ... laws applicable to any FDA requirements relating to the promotion of Government Reimbursed Products." And the CIA provided that "[i]f Pfizer determines (after a reasonable opportunity to conduct an appropriate review or investigation of the allegations) ... that there is a Reportable Event, Pfizer shall notify [HHS] ... within 30 days after making the determination."3 Elsewhere, the CIA stated that Pfizer's failure to meet the "obligations ... set forth [above] may lead to the imposition of ... [a] Stipulated Penalty of $2,500 ... for each day Pfizer" is in breach. The CIA explained that, if HHS finds "that Pfizer has failed to comply with [the aforementioned] obligations," and if HHS thereafter "determin[es] that Stipulated Penalties are appropriate, [HHS] shall notify Pfizer of ... [HHS's] exercise of its contractual right to demand payment of the Stipulated Penalties."
In their complaint, relators allege that a January 5, 2010 email sent by Booker to Pfizer's Corporate Compliance Department, purportedly claiming that Booker's manager was instructing his subordinates to engage in off-label promotion, constituted a "Reportable Event" under the CIA. Because Pfizer did not report this email to HHS, relators allege, Pfizer illegally avoided its "obligation" to pay the CIA's "stipulated penalt[y]" of $2,500 per day for failure to report a "Reportable Event."
Pfizer argues—as it did before the district court—that relators fail to state a claim for reverse FCA liability because Booker's email to the Corporate Compliance Department did not constitute a "Reportable Event." Pfizer points out that the "CIA does not require Pfizer to report all complaints" it receives. Under the CIA, conduct becomes a "Reportable Event" only "if Pfizer determines," after a chance to investigate, that the conduct is a "probable violation" of a specific class of laws. As Pfizer explains, nowhere in their much amended complaint do relators allege that Pfizer ever determined Booker's complaint to be in any way credible and therefore a "Reportable Event."4
On the record in this case we affirm. We do not decide if, under the CIA, Pfizer's authority to determine whether a "Reportable Event" occurred is subject to an implicit reasonableness limitation that prevents Pfizer from shutting its eyes to conduct that it abides but that a "reasonable person" would think is a "probable violation" of relevant law. Relators did not assert before the district court, nor do they assert on appeal, that the agreement should be construed that way and that Pfizer acted unreasonably in not determining that Booker's complaint constituted a "Reportable Event," so the point is waived. As relators fail to allege that Pfizer determined that a "Reportable Event" occurred, their complaint fails to state a claim for relief. We affirm the dismissal on that basis.
Relators next appeal the district court's grant of summary judgment for Pfizer on their off-label promotion and retaliation claims under the FCA.5 After reviewing those decisions de novo, "drawing all reasonable inferences in [relators'] favor," Feliciano de la Cruz v. El Conquistador Resort & Country Club, 218 F.3d 1, 5 (1st Cir. 2000), we affirm both.
Relators sought to prove that after Pfizer resolved its FCA liability with the DOJ in 2009 for, inter alia, knowingly inducing false claims through off-label promotion in violation of 31 U.S.C. § 3729(a)(1)(A), Pfizer continued to induce false claims by promoting Geodon
for...
To continue reading
Request your trial
-
United States ex rel. Gardner v. Vanda Pharm., Inc.
...any states chose to deny reimbursements for off-label prescriptions, but declining to decide the issue); United States ex rel. Booker v. Pfizer, 847 F.3d 52, 58 n.7 (1st Cir. 2017) ("[W]hether state Medicaid programs actually have the discretion to reimburse for off-label uses of a drug und......
-
United States ex rel. Reed v. Keypoint Gov't Solutions
...qui tam action, but "they must still have a nexus to a[ ] [False Claims Act] violation"); United States ex rel. Booker v. Pfizer, Inc. , 847 F.3d 52, 59 n.8 (1st Cir. 2017) (explaining that relator's "activities must pertain to violations" of the Act). After all, the text of the amendment s......
-
Miniex v. Hous. Hous. Auth.
...that an employee's actions are protected only if the actions "reasonably could lead" to an FCA action.139 See U.S. ex rel. Booker v. Pfizer, Inc. , 847 F.3d 52, 59 (1st Cir. 2017) ; O'Hara v. Nika Techs., Inc. , 878 F.3d 470, 476 (4th Cir. 2017) ; Campie , 862 F.3d at 907 ; U.S. ex rel. Rus......
-
United States v. Gen. Hosp. Corp.
...Co., 737 F.3d 116, 124 (1st Cir. 2013) (emphasis in original) (quoting Rost, 507 F.3d at 732–33 ); see United States ex rel. Booker v. Pfizer, Inc., 847 F.3d 52, 57 (1st Cir. 2017) ("That is, even when a relator can prove that a defendant engaged in ‘fraudulent conduct affecting the governm......
-
CHAPTER § 8.04 Whistleblower Protection Under the False Claims Act
...in furtherance of a False Claims Act lawsuit." Id. (quoting Smith, 796 F.3d at 434) (citing United States ex rel. Booker v. Pfizer, Inc., 847 F.3d 52, 59 n.8 (1st Cir. 2017) ; Halasa v. ITT Educ. Servs., Inc., 690 F.3d 844, 847-48 (7th Cir. 2012)).[185] First Circuit: Fauci v. Genentech, In......