Solis v. Millennium Pharmaceuticals, Inc. et al

Filing 164

ORDER signed by Chief Judge Morrison C. England, Jr. on 8/31/2015 ORDERING Defendant Schering's 159 Motion for Reconsideration or Alternatively to Dismiss is DENIED in part and GRANTED in part. To the extent it requests reconsideration of the Court's prior Memorandum and Order of 3/30/2015, it is DENIED, but the alternatively pled request that the action against Defendant Schering be dismissed for lack of subject matter jurisdiction is GRANTED without leave to amend. (Zignago, K.)

1
2
3
4
5
6
7
8

UNITED STATES DISTRICT COURT

9

EASTERN DISTRICT OF CALIFORNIA

10
11
12

UNITED STATES OFAMERICA, ex rel.
FRANK SOLIS,
Plaintiffs,

13
14
15
16
17

No. 2:09-cv-03010-MCE-EFB

ORDER
v.
MILLENNIUM PHARMACEUTICALS,
INC., SCHERING-PLOUGH CORP.,
and MERCK & CO.,
Defendants.

18
19

This lawsuit was originally filed under seal on November 4, 2009, pursuant to the

20

qui tam provisions of the Federal False Claims Act, 31 U.S.C. § 3729, et seq. (“FCA”).

21

Defendants, who are pharmaceutical companies, include Millennium Pharmaceuticals,

22

Inc., Schering-Plough Corp., and Merck and Co. (“Defendants” unless otherwise

23

indicated). The so-called “Relator” plaintiff, Frank Solis, a former sales employee who

24

worked at various points for all three Defendants (“Relator” or “Plaintiff”), claims that the

25

companies fraudulently marketed and/or promoted the use of two drugs, Integrilin and

26

Avelox, for so-called “off label” uses not approved by the Food and Drug Administration.

27

In so doing, according to Relator, Defendants “caused” physicians to improperly

28

prescribe the drugs and, consequently, to submit false claims for federal reimbursement
1

1

to Medicare, Medicaid and TRICARE (United States Military Healthcare). The

2

government allegedly paid those claims without knowing that they were ineligible for

3

reimbursement. Following a three-year investigation, the United States and all twenty-

4

four states named in the initial complaint chose not to intervene, and Relator’s Complaint

5

was subsequently unsealed on December 20, 2012.

6

In response to motions to dismiss filed on behalf of each of the Defendants,

7

Relator filed a First Amended Complaint (“FAC”) on June 27, 2013. Defendants

8

subsequently attacked the viability of Plaintiff’s FAC through three separate motions.

9

Defendants Schering-Plough Corp. and Merck & Co. (collectively “Schering”) filed a joint

10

Motion to Dismiss for lack of subject matter jurisdiction under Federal Rule of Civil

11

Procedure 12(b)(1)1 on grounds that Relator’s complaint was barred by the FCA’s

12

so-called “public disclosure” bar. Defendant Millenium Pharmaceuticals, Inc.

13

(“Millenium”) subsequently joined in that motion. Additionally, two other motions, one

14

filed jointly by Schering and the other by Millenium, argued that the various causes of

15

action pled in the FAC are substantively deficient in contravention of Rule 12(b)(6). By

16

Memorandum and Order filed March 26, 2014, this Court granted Defendants’ Rule

17

12(b)(1) motion on grounds that Relator’s “combination use” allegations were precluded

18

under the FCA’s so-called “public disclosure” bar precluding suits whose allegations

19

have already been disclosed. Because Relator’s FAC contained other allegations

20

beyond combination use, however, including assertions pertaining to a completely

21

different drug, Avelox, as well as allegations of fraud, improper billing, and impermissible

22

kickbacks, the Court permitted Relator to file a Second Amended Complaint (“SAC”)

23

omitting the combination use allegations.2

24
1

25
26
27
28

All further references to “Rule” or “Rules” are to the Federal Rules of Civil Procedure unless
noted otherwise.
2

Because the Rule 12(b)(6) motions challenged the sufficiency of the FAC’s allegations at a point
when the question of the Court’s jurisdiction over this qui tam action had not yet been determined, and
since the parameters of a SAC without the combination use allegations would likely be far different than its
predecessor, the Court denied those motions without prejudice to being renewed following submission of
the SAC.

2

1

Relator’s SAC was filed on April 5, 2014, and that amended pleading resulted in

2

the filing of yet another motion to dismiss challenging the court’s jurisdiction under Rule

3

12(b)(1), this time offered by Defendant Millenium alone. That Motion was granted by

4

Memorandum and Order filed March 30, 2015, on grounds that the allegations against

5

Millenium, which included violations of the Anti-Kickback Statute (“AKS”) and various

6

improper uses of Integrilin, had already been disclosed by five federal cases filed

7

between February 16, 2007, and May 10, 2007. Because the Court found that Relator

8

could not qualify as an “original source” of those prior disclosures, the Court ruled that

9

the “public disclosure” bar applied and granted the Motion as to Millenium. Moreover,

10

because the federal FCA claims were barred on that basis, even assuming the 28 state

11

FCA claims had any merit, the Court declined to exercise supplemental jurisdiction over

12

them.

13

On April 3, 2015, Defendants Schering filed the present Motion for

14

Reconsideration now before the Court, which alternatively seeks dismissal for lack of

15

subject matter jurisdiction under Rule 12(b)(1). As set forth below, while Schering’s

16

reconsideration request is DENIED, the alternatively pled Motion to Dismiss is

17

GRANTED.3

18

Defendants’ reconsideration request is made on grounds that the conclusion

19

section of Schering’s own Motion (ECF No. 113), contained a statement that apart from

20

the arguments advanced in that Rule 12(b)(6) motion, “Schering hereby adopts”

21

Millenium’s argument, as set forth in Millenium’s Rule 12(b)(1) motion, that “the Court

22

lacks subject matter jurisdiction to hear the claims asserted against Schering.” ECF No.

23

113-1, 20:21-23. On that basis, Schering argues that the Court committed clear error in

24

not adjudicating Millenium’s Rule 12(b)(1) motion as to Schering as well, despite the fact

25

that neither the notice of the motion nor argument section of the points and authorities

26

otherwise mentioned the 12(b)(1) request in any way.

27
28

3

Having determined that oral argument would not be of material assistance, the Court ordered
Defendants’ Motion submitted on the briefing in accordance with Local Rule 230(g).

3

1

A passing reference in the conclusion does not adequately put Relators on notice

2

the Schering was in fact mounting a jurisdictional challenge. The Court is unpersuaded

3

by Schering’s argument that since Millenium was able to join in one of Schering’s

4

motions by reference within the body of its motion, Schering should now be allowed to

5

do so as well. Unlike Schering in the present instance, Millenium made a statement

6

formally joining in Schering’s motion to dismiss for lack of jurisdiction. See ECF No. 80,

7

p. 12, n.5. The present passing reference by way of conclusion is simply not

8

comparable. Accordingly, Schering’s reconsideration request is DENIED.

9

As indicated above, however, aside from Schering’s argument that the Court

10

should already have ruled on Schering’s jurisdictional challenge, which the Court rejects,

11

Schering also alternatively brings its own freestanding motion to dismiss under Rule

12

12(b)(1). For the reasons outlined by Schering in its papers, which the Court finds

13

persuasive, the Court concludes that there is no appreciable difference between the

14

allegations made against Schering and Millenium in the SAC. The Court also finds that

15

the prior disclosures made within the five previously filed 2007 lawsuits is equally

16

applicable to both entities. Consequently, the reasoning already employed by the Court

17

in granting Millenium’s Motion to Dismiss based on lack of subject matter jurisdiction

18

(ECF No. 128) applies equally to Schering, is incorporated herein by reference, and

19

mandates that Schering’s jurisdictional motion also be granted.

20

///

21

///

22

///

23

///

24

///

25

///

26

///

27

///

28

///
4

1

In sum, then, Defendant Schering’s Motion for Reconsideration or Alternatively to

2

Dismiss (ECF No. 159) is DENIED in part and GRANTED in part. To the extent it

3

requests reconsideration of the Court’s prior Memorandum and Order of March 30, 2015,

4

it is DENIED, but the alternatively pled request that the action against Defendant

5

Schering be dismissed for lack of subject matter jurisdiction is GRANTED without leave

6

to amend.

7
8

IT IS SO ORDERED.
Dated: August 31, 2015

9
10
11
12
13
14
15
16
17
18
19
20
21
22
23
24
25
26
27
28
5