United States of America v. DePuy Orthopaedics, Inc. et al

Filing 184

Judge F. Dennis Saylor, IV: ORDER entered. MEMORANDUM AND ORDER ON MOTION TO DISMISS. (Pezzarossi, Lisa)

UNITED STATES DISTRICT COURT
DISTRICT OF MASSACHUSETTS
_______________________________________
)
UNITED STATES OF AMERICA et al. ex )
rel. ANTONI NARGOL and
)
DAVID LANGTON,
)
)
Plaintiffs,
)
)
v.
)
)
DEPUY ORTHOPAEDICS, INC.,
)
DEPUY, INC., and
)
JOHNSON & JOHNSON SERVICES, INC., )
)
Defendants.
)
_______________________________________)

Civil Action No.
12-10896-FDS

MEMORANDUM AND ORDER ON MOTION TO DISMISS
SAYLOR, J.
This is a qui tam action alleging the submission of false claims to government health-care
programs for a defective hip-replacement device. Relators Dr. Antoni Nargol and Dr. David
Langton, who are expert witnesses in a related products-liability case involving the same device,
have brought suit against defendants DePuy Orthopaedics, Inc., DePuy, Inc., and Johnson &
Johnson Services, Inc.1 DePuy manufactured and sold, among other hip-replacement devices,
the Pinnacle metal-on-metal total hip-replacement device (“Pinnacle MoM”). The second
amended complaint alleges that DePuy directly submitted and indirectly caused third parties to
submit false claims for payments to government health-care programs for the Pinnacle MoM.
According to the second amended complaint, the claims were false because DePuy made

1

For clarity, the defendants will be referred to collectively as “DePuy.”

numerous misrepresentations to the FDA and surgeons concerning, among other things, the
Pinnacle MoM’s failure rates.
The relators filed the original complaint in this action under seal on May 18, 2012. On
December 2, 2013, the relators filed a first amended complaint. The government declined to
intervene on July 29, 2014. On June 5, 2015, the Court granted the relators’ request to file a
second amended complaint (“SAC”). Although the 168-page SAC alleges that DePuy made
numerous misrepresentations about two of their devices––the ASR device and the Pinnacle MoM
device––the specific counts in the SAC seek damages only as to the latter device. The SAC
alleges claims of (1) causing false or fraudulent claims for payment to be presented to the United
States in violation of 31 U.S.C. § 3729(a)(1)(A) (Count One); (2) knowingly making, using, or
causing to be made or used false records or statements material to a false or fraudulent claim
paid by the United States in violation of 31 U.S.C. § 3729(a)(1)(B) (Count Two); (3) conspiracy
to violate the FCA in violation of 31 U.S.C. § 3729(a)(1)(C) (Count Three); and (4) violations of
various state and municipal analogues to the Federal FCA (Counts Four through Thirty-Seven).
DePuy has moved to dismiss the SAC under Fed. R. Civ. P. 12(b)(6) for failure to state a
claim upon which relief can be granted and under Fed. R. Civ. P. 9(b) for failure to satisfy the
heightened pleading requirements for fraud. The relators have since moved to unseal the SAC,
and DePuy has assented to that motion while requesting that documents concerning the motion to
dismiss also be unsealed. Finally, while they have not formally filed a motion to amend the
SAC, the relators contend in the conclusion of their opposition memorandum, sur-reply, and a
post-hearing supplemental filing that they should be granted leave to amend and file a third
amended complaint.

2

The essence of a False Claims Act violation is making, or causing the making, of one or
more false claims—that is, claims for payment—against the United States. The statute provides
large awards to qui tam relators as an incentive to bring such cases. The prospect of such an
award may also, however, provide an incentive for individuals to try to convert virtually any set
of allegations arising out of a defective product or faulty service into an FCA case. That is
particularly true in the medical field, where the government purchases medical supplies and
services on a large scale through Medicare, Medicaid, the VA, and other health-care programs.
Normally, it requires no great leap of logic to conclude that if a medical device or a
pharmaceutical is defective, the government must have purchased that product in great
quantities, and therefore the manufacturer must have caused, directly or indirectly, the
submission of false claims.
In order to avoid so-called “parasitic” claims, and to try to guard against misuse of the
FCA, the First Circuit has construed the statute fairly strictly. In doing so, the court has
emphasized that the statute “attaches liability, not to the underlying fraudulent activity or to the
government’s wrongful payment, but to the claim for payment.” United States v. Rivera, 55 F.3d
703, 709 (1st Cir. 1995). Among other things, FCA complaints must satisfy the particularity
requirements of Fed. R. Civ. P. 9(b). The law requires relatively specific allegations of false
claims, rather than generalized allegations based on supposition and logic; the relator must set
forth with particularity the “who, what, when, where, and how” of actual claims that are alleged
to be false. United States ex rel. Ge v. Takeda Pharm. Co., 737 F.3d 116, 123 (1st Cir. 2013).
Here, the SAC includes hundreds of paragraphs of allegations, covering dozens of pages,
of claimed fraudulent activity by DePuy. That satisfies one of the components of an FCA claim,
but it does not satisfy them all. As set forth below, the allegations as to specific claims for

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payment for the specific device actually at issue in this case are sparse indeed. For that reason,
and the other reasons set forth below, DePuy’s motion to dismiss will be granted.
The relators’ request for leave to amend the SAC and file a third amended complaint will
be denied. The present case is nearly four years old, has had three iterations of the complaint,
and has seen the desks of three judges in this district. The relators have had ample opportunity to
file a complaint that complies with the requirements of Rule 9(b), and have failed to do so.
Finally, the parties’ motions to unseal the SAC and other filings related to the motion to dismiss
will be granted.
I.

Background
The facts summarized below are set forth in the SAC unless otherwise noted.
A.

Factual Background
1.

The Parties

Relator Dr. Antoni Nargol is an orthopedic surgeon residing in the United Kingdom.
(SAC ¶ 63). In 2003 he became one of the earliest British adopters of the Pinnacle MoM device,
and DePuy invited him to be on its “Pinnacle user group team.” (SAC ¶ 66). Dr. Nargol served
as a testifying expert for the plaintiffs in Strum v. DePuy Orthopaedics, Inc. and Premier
Orthopaedic Sales, Inc., No. 2011 L 009352 2404 (Cook Cty., Ill., Cir. Ct.) (“Strum litigation”).
(SAC ¶ 68). Dr. Nargol also provided expert assistance to the plaintiffs’ executive committee in
Kransky v. DePuy, Inc., No. BC 456086 (Cal. Sup. Ct.), in which the plaintiffs’ allegations
focused on perceived design defects in the “ASR,” a device that is similar to the one at issue in
this case, the Pinnacle MoM. (SAC ¶ 68). Dr. Nargol also served as a fact witness in HerlihyPaoli v. DePuy Orthopaedics, Inc., No. 3:11-CV-04975-K (N.D. Tex.) (“Herlihy-Paoli
litigation”). (SAC ¶ 68).

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Relator Dr. David Langton is an orthopedic surgeon residing in the United Kingdom.
(SAC ¶ 69). Dr. Langton has performed research on failed hip-replacement surgeries and
devices, including the Pinnacle MoM device. (SAC ¶ 70). The United States Food and Drug
Administration (“FDA”) has retained Dr. Langton as a consultant regarding “failure rates and
dimensions of MoM products sold in the United States, including the Pinnacle.” (SAC ¶ 72).
Dr. Langton served as an expert witness in the Strum litigation and as a fact witness in the
Herlihy-Paoli litigation. (SAC ¶ 72). According to the SAC, both the relators had personal
experience in implanting the Pinnacle MoM device in their patients and began to alert defendants
of the device’s defects in 2009. (SAC ¶ 24).
Defendant DePuy Orthopaedics, Inc. is a designer, manufacturer, and distributor of
orthopedic products that is based in Warsaw, Indiana. (SAC ¶ 73). DePuy Orthopaedics
manufactured the Pinnacle MoM device. (SAC ¶ 73). DePuy Orthopaedics is a wholly-owned
subsidiary of Delaware-based DePuy, Inc., which in turn is a subsidiary of New Jersey-based
Johnson & Johnson Services, Inc. (SAC ¶¶ 75-77).
2.

Government Health-Care Programs

Medicare is a health-insurance program administered by the United States Department of
Health and Human Services (“HHS”). (SAC ¶ 85). Medicare provides payment for, among
other things, medical services and equipment to persons over 65 years of age and those who are
18 years of age or older and are eligible for disability benefits. (SAC ¶ 82). For inpatient
treatment, Medicare reimburses hospitals and other treating facilities through Medicare Part A.
(SAC ¶ 83). For outpatient treatment, Medicare reimburses physicians and health-care providers
through Medicare Part B. (SAC ¶ 83).
Under the Medicare program, “no payment may be made under Part A or Part B for any

5

expenses incurred for items or services which . . . are not reasonable and necessary for the
diagnosis or treatment of illness or injury or to improve the functioning of the malformed body
member.” (SAC ¶ 84) (citing 42 U.S.C. § 1395y(a)(l)(A)). To satisfy that standard, providers
must provide, among other things, economical medical services, along with evidence that the
service will be of a quality that meets professionally recognized standards of healthcare and will
be supported by evidence of medical necessity and quality. (SAC ¶ 84) (citing 42 U.S.C.
§ 1320c-5(a)(1-3)). The SAC alleges that Medicare reimbursed qualified individuals for the
purchase of the Pinnacle MoM device and the surgical procedures necessary to implant the
device. (SAC ¶ 99).
Medicaid is a health-insurance program administered by HHS jointly with agencies in
each state. (SAC ¶ 100). It is designed to assist states in providing medical services, medical
equipment, and prescription drugs for low-income persons who qualify for the program. (SAC
¶ 100). The SAC alleges that Medicaid, like Medicare, reimbursed qualified individuals for the
purchases of the Pinnacle MoM device and the surgical procedures necessary to implant the
device. (SAC ¶ 104).
The United States Department of Veterans Affairs (“VA”) provides medical assistance,
including comprehensive coverage for hip replacement, to military veterans. (SAC ¶ 105). The
SAC alleges that DePuy “sold its Pinnacle hip implants directly to the VA.” (SAC ¶ 106). The
National Contract Service (“NCS)” provides the VA with acquisition support for medical
equipment and pharmaceuticals. (SAC ¶ 112). According to the SAC, “NCS is also responsible
for national committed-use contracts and standardized blanket purchase agreements established
against the Federal Supply Schedule Program.” (SAC ¶ 112). Medical equipment and supplies
contracts are governed by the Federal Supply Schedule Group 65 Part II Section A. (SAC

6

¶ 115). That contract states that a “[c]ontractor warrants and implies that the items delivered
hereunder are merchantable and fit for use of the particular purpose described in this contract,”
and that “[a]ll offerors must be in compliance with Section 510(k) of the Federal Food, Drug,
and Cosmetic Act for those medical device products intended to be delivered to the
Government.” (SAC ¶¶ 116-17).2 The 65 II A contract also requires the contractor to notify the
Assistant Director of the National Acquisition Center and various other officials if it sells a VA
facility a product that “(1) requires modification, (2) is removed or recalled by the contractor or
manufacturer due to defects in the product or potential dangers to patients, or (3) is subject to a
suggested or mandatory modification, removal, or recall by a regulatory or official agency.”
(SAC ¶ 120).
The Civilian Health and Medical Program of the United States, now known as
TRICARE, provides benefits for health-care services furnished to members of the U.S. military
and their family members. (SAC ¶ 124). TRICARE pays for medical devices and surgeries for
its beneficiaries, including total hip-replacement devices like the Pinnacle MoM. (SAC ¶ 125).
3.

FDA Regulations Governing Medical Devices

The SAC contains significant detail concerning the FDA regulations governing medical
devices that need not be fully detailed here. (See generally SAC ¶¶ 127-66). The FDA, which
protects and promotes the public health through regulation of medical devices and
pharmaceuticals, has three risk-based regulatory classifications for medical devices. (SAC
¶¶ 127-28). The Pinnacle MoM device was a Class III device and subject to the most stringent
level of regulation imposed by the FDA. (SAC ¶¶ 129-30). There are only two ways by which a

2

The 65 II A contract further states that the general controls of the FD&C Act controlling medical devices
“are the baseline requirements that apply to all medical devices necessary for marketing, proper labeling and
monitoring [ ] performance once the device is on the market.” (SAC ¶ 119).

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manufacturer can seek FDA approval for a new Class III medical device: the premarket
approval (“PMA”) process and the “510(k)” clearance process. (SAC ¶ 131). The “more
onerous” PMA process requires, among other things, a full report of all information known to the
manufacturer concerning investigations into the device’s safety. (SAC ¶ 131). In contrast, under
the 510(k) process, the manufacturer is required to demonstrate only that the device is
“substantially equivalent in terms of safety and effectiveness to an existing FDA-approved
device.” (SAC ¶ 131) (citing 21 C.F.R. § 807.92(a)(3)). A device is substantially equivalent if,
when comparing it to the predicate, it has both the same intended use and the same technological
characteristics as the predicate. (SAC ¶ 133). A device with different technological
characteristics can be considered substantially equivalent only if the information submitted to the
FDA does not raise new questions of safety and demonstrates that the device is at least as safe
and effective as the predicate device. (SAC ¶ 133).
4.

The Pinnacle MoM Device

Before the alleged defects in DePuy’s Pinnacle MoM device came to light, another
DePuy hip-replacement device, the ASR, suffered from alleged defects and was the subject of
many products-liability lawsuits. (SAC ¶¶ 56-57). Those actions were ultimately the subject of
an MDL proceeding in the Northern District of Ohio. (SAC ¶¶ 56-57). The SAC includes
numerous references to ASR defects and allegedly fraudulent behavior by DePuy in connection
with that device. (See, e.g., SAC ¶¶ 15, 24, 31-33, 35, 37-39, 42, 45, 47, 54-58, 64-66, 68, 7172, 130, 184, 189, 190-91, 199, 238, 246, 262, 327). Those allegations, however, are not
particularly relevant to the relators’ claims in this case, which is solely focused on the Pinnacle

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device––and more specifically, the Pinnacle MoM device comprised of a metal head and metal
liner, as explained below.
Hip-replacement devices replace the bone components of a hip joint, including the ball
(femoral head) and socket (acetabulum). (SAC ¶¶ 167-69). A hip-replacement device generally
includes four components: (1) a femoral stem; (2) a femoral head; (3) an acetabular cup; and
(4) a liner that fits inside the cup and interacts with the head. (SAC ¶ 170). In metal-on-metal
hip-replacement devices, the head, cup, and liner are all metal; MoM devices are expected to last
longer than devices comprised of ceramic or polyethylene. (SAC ¶ 169). The space between the
head and cup is referred to as “diametrical clearance.” (SAC ¶ 179). Bodily fluid fills in the
diametrical clearance between the head and cup to prevent friction and wear caused by the two
pieces rubbing together. (SAC ¶ 180).
Under the brand of “DePuy Orthopaedics Pinnacle Hip Solutions,” DePuy marketed three
head-on-liner categories of Pinnacle devices: “metal-on-metal, ceramic-on-polyethylene, and
metal-on-polyethylene.” (SAC ¶ 176; Def. Mem. Ex. C at 5).3 DePuy offered three types of
Pinnacle heads: (1) aSphere M-Spec and M-Spec (both metal); (2) Standard Metal (metal); and
(3) BIOLOX delta (ceramic). (Def. Mem. Ex. C at 3). DePuy offered three types of Pinnacle

3

The Court will consider two sets of DePuy marketing materials along with the facts as alleged in the SAC.
First, it will consider Exhibit C attached to DePuy’s motion to dismiss: the 2011 “Pinnacle Hip Solutions
Compatibility Guide,” a marketing document that DePuy provided to health-care providers. Second, the Court will
consider Exhibit D attached to DePuy’s motion to dismiss: the 2008 “Design Rationale” for Pinnacle products. On
motions to dismiss, courts can properly take into account (1) documents the authenticity of which are not disputed
by the parties; (2) documents that are official public records; (3) documents central to plaintiffs’ claim; or
(4) documents sufficiently referred to in the complaint. Watterson v. Page, 987 F.2d 1, 3 (1st Cir. 1993); see also
Romani v. Shearson Lehman Hutton, 929 F.2d 875, 879 n.3 (1st Cir. 1991) (considering securities-offering
documents submitted by defendants with motion to dismiss for claim of securities fraud); Fudge v. Penthouse Int’l,
Ltd., 840 F.2d 1012, 1014-15 (1st Cir. 1988) (considering allegedly libelous article submitted by defendants with
motion to dismiss).
Here, the SAC refers to DePuy’s “marketing materials” and other documents that it provided to health-care
providers numerous times. (See, e.g., SAC ¶¶ 9, 165, 183, 232, 252, 419). Moreover, the documents were publiclydistributed marketing materials. Accordingly, Exhibits C and D are documents whose authenticity is not disputed,
are central to the relators’ claims, and are sufficiently referred to in the SAC.

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liners: (1) Ultamet and Ultamet XL (both metal); (2) Marathon (polyethylene); and (3) AltrX
(polyethylene). (Def. Mem. Ex. C at 3). The Standard Metal head was not compatible with
Pinnacle metal liners; it could be used only with polyethylene liners. (Compare Def. Mem. Ex.
C at 8, with Def. Mem. Ex. C at 10, 16). Thus, there was one combination of Pinnacle
components that combined to create a Pinnacle MoM device: an aSphere M-Spec or M-Spec
metal head with an Ultamet or Ultamet XL metal liner. (SAC ¶ 176; Def. Mem. Ex. C at 3). The
Pinnacle device––consisting of a head, cup, and liner––could be used with a variety of separate
DePuy femoral stems, including the CORAIL stem, the SUMMIT stem, the AML stem, the TRILOCK stem, and the S-ROM stem. (See Def. Mem. Ex. D at 29). But those stems were not part
of the Pinnacle MoM device, as they could be used with other DePuy hip-replacement devices,
such as the ASR. (Id.).
As alleged in Counts One through Thirty-Seven of the SAC, the relators seek recovery
under 31 U.S.C. § 3729(a)(1)(A)-(C) for claims involving only DePuy’s Pinnacle MoM device
(which must use an M-Spec head and an Ultamet liner).
On December 13, 2000, the FDA approved the Pinnacle Ultamet 36mm metal liner as
part of the 510(k) approval process, based on “substantial equivalence with the DePuy Ultima
Unipolar Adapter Sleeves (“Ultima”), cited as the Ultamet’s predicate device.” (SAC ¶ 177).
The diametrical clearance set forth in the Ultamet’s 510(k) application was in the “40-80 micron
tolerance band.” (SAC ¶ 181).4 According to the SAC, DePuy purposely manufactured the
Pinnacle MoM device with a lower diametrical clearance than other devices. (SAC ¶ 183). It

4
DePuy manufactured liners and heads at a specified “nominal” size. (SAC ¶ 182). Along with a nominal
size, each component was assigned an upper and lower tolerance, representing the “permissible diametrical
clearance measurements of the manufactured component.” (SAC ¶ 182). The acceptable range of diameter
measurements for each component is plus or minus 10 microns (0.010 millimeters) from the nominal size;
accordingly, “the complete range of acceptable deviation [for a device] is 20 microns for each component.” (SAC
¶ 182).

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marketed the Pinnacle MoM’s lower diametrical clearance under the theory that as diametrical
clearance decreases, the volume of fluid lubricating the joint increases. (SAC ¶ 183). The SAC
alleges that when diametrical clearance is small, “the consequences of any deformation of the
cup, even if slight, are dire for the patient.” (SAC ¶ 183). When DePuy added the 36mm
Ultamet liner to its Pinnacle product line in 2005, DePuy advised the FDA that the diametrical
clearance dimension was not 40-80 microns, but was in fact 80-120 microns. (SAC ¶ 186). The
SAC alleges that the FDA, upon learning of the inaccuracy, “specifically advised DePuy that,
had it known that the 36mm liner’s dimensions were not as DePuy had represented, the device
would not have been granted a ‘substantial equivalence’ waiver . . . . Instead, DePuy would have
had to make a full application for PMA.” (SAC ¶ 187).
5.

DePuy’s Allegedly Fraudulent Acts Involving the Pinnacle Device

The relators allegedly learned of the defects in the ASR and Pinnacle MoM devices
through their own work with the hip implants. (SAC ¶¶ 24, 47). They began reporting those
defects to DePuy in 2007, and continued to do so through 2011. (SAC ¶¶ 24, 47). Those defects
included (1) surface wear resulting in metal ion exposure causing patient necrosis (tissue death),
metallosis (metallic staining of tissues), and osteolysis (degradation of the bone) (SAC ¶ 29);
(2) “diametrical clearance” and “taper trunnion” defects causing high device-failure rates (SAC
¶ 42); and (3) femoral neck fractures at high rates. (SAC ¶ 45).
The SAC includes nearly fifty pages detailing DePuy’s allegedly fraudulent actions in
concealing those defects while pursuing FDA approval for the Pinnacle MoM device, marketing
the device to surgeons, and selling the device to government health-care programs. (See
generally SAC ¶¶ 201-412). The Court will not detail every allegation of DePuy’s claimed
improper conduct, many of which are irrelevant to the Pinnacle MoM device and the present

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FCA claims. The Court will, however, attempt to summarize the allegations, which fall into two
broad categories.
First, the SAC alleges that DePuy knowingly made material false statements and
omissions to the FDA and to medical providers about the “specifications, manufacturing process,
safety, and failure rates” of its Pinnacle MoM device. (SAC ¶ 201). Those false statements,
according to the SAC, “armed and induced surgeons to make similar certifications when seeking
reimbursement from the [g]overnment” and “had a natural tendency to influence the
[g]overnment’s payment for the Pinnacle devices.” (SAC ¶ 203). The SAC identifies nine subcategories of materially false statements that DePuy made to the FDA and surgeons. The SAC
alleges that but for those false statements, the FDA would not have approved the device and
“surgeons would not have utilized Pinnacle hip replacements or certified them to government
health programs as reasonable and medically necessary.” (SAC ¶ 256).
1. The SAC alleges that “in official communications with the FDA, DePuy falsely
represented that Pinnacle implants had a 96 percent to 96.5 percent success rate.”
(SAC ¶ 204). Specifically, it alleges that on June 27, 2012, a DePuy director gave
a presentation to the FDA’s Orthopedic and Rehabilitation Devices Panel of the
Medical Devices Advisory Committee. (SAC ¶ 205). The purpose of that
meeting was to “seek expert scientific and clinical opinion on the risks and
benefits of these types of devices based on available scientific data.” (SAC
¶ 205). At the meeting, the DePuy director told the panel that “Ultamet metal-onmetal articulation is performing consistent with or better than other metal-onmetal products: 4 to 4.5 percent cumulative revision rate at five years, regardless
of head size.” (SAC ¶ 206). According to the SAC, as of February 29, 2012,

12

DePuy’s own internal database showed that “metal Pinnacle hips” had a
cumulative revision rate of 15 percent after five years of use. (SAC ¶ 207). The
SAC alleges that “had DePuy truthfully stated its internal results indicating a 15
percent revision rate at five years, the FDA would likely not have continued to
clear the product for the market . . . [and] the government would likely have
discontinued use of the Pinnacle device for government health-care recipients.”
(SAC ¶ 210). When the FDA approved the Pinnacle for implantation in patients,
the FDA stated “[i]t is, however, [DePuy’s] responsibility to determine if the
change [or] modification to the device or its labeling could significantly affect the
device’s safety or effectiveness and thus require submission of a new 510(k).”
(SAC ¶ 211).
2. The SAC alleges that “DePuy made false statements to surgeons claiming that
Pinnacle boasted a 99.9 percent success rate” and that those statements caused
surgeons to submit false claims to the government. (SAC ¶ 212). Specifically, it
alleges that DePuy began circulating marketing materials in 2007 that touted a
99.9 percent success rate for “Pinnacle products” based on data and research that
was “conducted and written up by DePuy itself and funneled to a third-party
author to create the appearance of impartiality.” (SAC ¶¶ 212-13). It alleges that
DePuy continued to advertise this false figure until 2013, even though its internal
data showed a 15 percent cumulative revision rate as early as February 29, 2012.
(SAC ¶¶ 228-29).
3.

The SAC alleges that DePuy made false statements to surgeons “claim[ing] that
the Pinnacle device’s low diametrical clearances created a benefit to patients that

13

distinguished the devices from competing products.” (SAC ¶ 233). Beginning in
early 2010, the relators conducted research on a “large volume of failed
Pinnacle . . . implants” and concluded that the device suffered from a “diametrical
clearance defect” such that “the diametrical clearance of the [ ] device was
considerably lower than the specification required by the FDA.” (SAC ¶ 238).
After the research, the relators repeatedly alerted DePuy executives about the
improper clearances. (SAC ¶¶ 245-48). DePuy, in apparently undated marketing
materials to surgeons, touted that the Pinnacle’s “cup-to-head bearing clearance,
enhances the potential for fluid lubrication and minimizes wear to maximize
survivorship.” (SAC ¶ 250). According to the SAC, “DePuy knew that patients
were not obtaining the purported benefits of Pinnacle’s low diametrical
clearances” and “was fully aware that many patients and surgeons––most notably
Dr. Nargol––were complaining of high ion rates and high failure rates.” (SAC
¶ 255).
4. The SAC alleges that even though “DePuy knew that its devices were responsible
for dangerous concentrations of metal ions in the bloodstreams of patients,” it told
the FDA that “metal ions were not a source of concern for metal-on-metal
patients.” (SAC ¶ 257). In the June 2012 presentation to the FDA, the DePuy
director said that the Pinnacle generated “metal wear debris” in patients’
bloodstreams in “low amounts.” (SAC ¶ 258). The SAC alleges that surgeons
began notifying DePuy “as early as 2001 that metal ions generated by metal-onmetal implants were a cause for concern.” (SAC ¶ 260).

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5. The SAC alleges that DePuy made false statements to surgeons about the causes
of the Pinnacle MoM’s high failure rates. Specifically, “[b]eginning in 2009, Dr.
Nargol repeatedly contacted DePuy to warn it of explosive growth in the number
of Pinnacle hip revision surgeries he was performing.” (SAC ¶ 269). According
to the SAC, DePuy told Dr. Nargol that the “problems resulted from his
implantation technique.” (SAC ¶ 270). At the time, “DePuy knew . . . that the
problems in Dr. Nargol’s patients stemmed from device defects, not from [his]
surgical methods” because, in part, other surgeons were “experiencing and
notifying DePuy of widespread failures with the Pinnacle implant.” (SAC ¶¶ 27172).
6. The SAC alleges that DePuy made false statements to surgeons about the Pinnacle
MoM’s angle of inclination in its use instructions. (SAC ¶ 276). It cites an
internal DePuy e-mail written by an engineer expressing confusion about the
proper angle of inclination for the Pinnacle’s cup positioning. (SAC ¶ 277).
Accordingly, the SAC alleges, “DePuy did not know the proper angle of
implantation for Pinnacle hips, and [ ] any recommendation it made in its manuals
disseminated to hospitals and surgeons was therefore false.” (SAC ¶ 278).
7. The SAC alleges that DePuy “intentionally withheld disclosure of the Pinnacle’s
diametrical clearance manufacturing defects to [the] FDA, contrary to its FDAmandated obligation to report them in an updated 510(k) application.” (SAC
¶ 280). In 2000, DePuy submitted its 510(k) application along with various
certifications that it “conducted a reasonable search of all information known or
otherwise available about the types and causes of safety and effectiveness

15

problems that have been reported for metal-on-metal hip systems.” (SAC ¶ 282).
On July 26, 2005, a DePuy regulatory-affairs associate wrote to the FDA
attaching a chart “replac[ing] the chart originally included as Exhibit 4 of the
submission, which contained a miscalculation.” (SAC ¶ 286). The SAC alleges
“[o]n information and belief, the ‘corrected’ 2005 table contained measurements
or analysis of measurements of DePuy’s devices that DePuy learned were not
accurate.” (SAC ¶ 287).5 On August 5, 2005, a member of the FDA cautioned
DePuy that it would be the company’s “responsibility to determine if the change
or modification to the device or its labeling could significantly affect the device’s
safety or effectiveness and thus require submission of a new 510(k).” (SAC
¶ 291). According to the SAC, that notification “imposed an affirmative
obligation on DePuy to provide the FDA with updated information,” and even
when the relators notified DePuy of the Pinnacle diametrical clearance issues
beginning in 2008, “[o]n information and belief, DePuy never corrected its July
26, 2005 submissions to reflect Relator Langton’s measurements.” (SAC ¶¶ 29296).
8. The SAC alleges that DePuy “intentionally withheld disclosures of the Pinnacle
device’s taper trunnion and surface roughness defects in presentations to the
FDA.” (SAC ¶ 300). The alleged “taper trunnion” defect concerns the area
where the end of the femoral stem (the trunnion) is inserted into the area of the

5
Also in 2005, DePuy’s director of regulatory affairs wrote an e-mail to DePuy’s global vice president of
clinical research, indicating that the regulatory submission “stretch[ed] the 510(k) idea to its limits” and further
elaborated, “I can see how the FDA looked at it. They want clinical data for metal-on-metal, and we changed the
material, the size and ‘diametrical clearance,’ then tested a device that is different than the subject of the 510(k).”
(SAC ¶ 288).

16

head (the taper); that taper trunnion “is not meant to move and thus should not
generate any wear.” (SAC ¶¶ 188-89). However, the SAC alleges that the
relators discovered a defect in the Pinnacle device where, due in part to the large
head size of the Pinnacle, the “taper toggles against the trunnion, causing the
release of metal debris.” (SAC ¶ 190). The alleged “surface roughness” defect
also concerns the taper trunnion area of the device, but involves friction between
the trunnion, which is designed to be rough, and the taper, which is designed to be
smooth. (SAC ¶ 195). The SAC alleges that the relators discovered a defect in
many Pinnacle devices where the surface of the taper was rough and created
friction with the trunnion, which in turn caused friction and release of metal
debris. (SAC ¶ 197). The relators allege that they notified DePuy of the two
defects beginning in 2011 and continued to do so into 2012. (SAC ¶¶ 305-06).
The SAC alleges that DePuy willfully omitted any discussion of the reported taper
trunnion and surface roughness defects during the June 2012 meeting with the
FDA. (SAC ¶¶ 307-10).
9. The SAC alleges that “DePuy intentionally failed to disclose adverse events to the
FDA.” (SAC ¶ 312). On June 7, 2011, following an Establishment Inspection of
DePuy’s Indiana facility, the FDA issued a report concluding that DePuy had
“delayed reporting adverse [Pinnacle] MoM events by five months to three-and-ahalf years, well beyond the acceptable timeframe under FDA regulations.” (SAC
¶ 314). The report also noted that DePuy failed to investigate complaints
involving the possible failure of its device to meet production specifications; a
DePuy employee stated that the company received approximately 450 complaints

17

per month about hip-replacement devices but that DePuy assigned only one
employee to investigate them. (SAC ¶ 315).
Second, the SAC alleges that DePuy knowingly caused the submission of direct claims
for “medical devices with dimensions materially different than those the government bargained
for.” (SAC ¶ 201). The SAC identifies three sub-categories of DePuy’s allegedly materially
false statements or omissions that caused the government to pay for “nonconforming,
nonfunctioning, and unsafe devices that would not have been purchased but for DePuy’s
fraudulent conduct.” (SAC ¶ 325).
1. As detailed above, the SAC alleges that DePuy knowingly or recklessly
disregarded evidence, allegedly first provided to it by the relators, that the
Pinnacle MoM’s nonconforming diametrical clearances were causing device
failures. (SAC ¶¶ 327-32). It alleges that DePuy was on notice of the Pinnacle
MoM’s improper measurement testing procedures as early as 2009, when it
acquired a competitor and began to use its own “state-of-the-art measuring
equipment.” (SAC ¶ 335). In June 2010, after the relators notified DePuy of the
Pinnacle’s improper clearance measurements, a DePuy employee e-mailed Dr.
Langton, stating that if DePuy concluded from the relators’ research that its MoM
parts “were out of specification,” the company would “need to notify patients if
[DePuy] had made a serious manufacturing error.” (SAC ¶ 338). In its 2011
report, the FDA found that “33 Pinnacle metal liners were out of conformance”
because they “fell below the lower specification limit” for diametrical clearance.
(SAC ¶ 342). The FDA report notified DePuy that “[t]he production capabilities
for the Pinnacle MoM liners and MoM femoral heads at the Leeds facility should

18

be reviewed.” (SAC ¶ 343). According to the SAC, “DePuy continued to
manufacture Pinnacle components with full knowledge that the manufacturing
process was producing yet more parts with the same conformance issues.” (SAC
¶ 343). The SAC also alleges “on information and belief” that DePuy provided
the FDA with statistical analyses about the failure rates of its Pinnacle device that
excluded “critical analyses [that] relators provided to DePuy.” (SAC ¶ 345).
After the FDA expanded the scope of its request to include data back to January
2007, the SAC alleges that DePuy “responded by producing very little data.”
(SAC ¶ 348). According to the SAC, “DePuy’s failure to conduct and report such
statistical analyses violated 21 C.F.R. § 820.250, which requires statistical
analysis to assess trending.” (SAC ¶ 350). It also alleges that because DePuy
employed only one person to “review and analyze the approximately 450
complaints received per month,” it “willfully ignored and mischaracterized the
causes of the[ ] complaints in order to avoid its obligation to adequately verify
and validate its manufacturing processes.” (SAC ¶¶ 355-56). It alleges that
DePuy’s “failure to respond to relators’ complaints regarding the clearance
deformities” violated 21 C.F.R. § 820.198(a), which establishes a duty to
“maintain adequate procedures for receiving, reviewing, and evaluating
complaints.” (SAC ¶ 357).
2. The SAC alleges that beginning in 2005, DePuy “knowingly or recklessly failed
to adopt adequate process validation methods” that were “necessary to
consistently manufacture [ ] Pinnacle devices within specification.” (SAC ¶ 358).
It alleges that the “relators, with additional expert assistance, have determined that

19

DePuy’s inspection and testing procedures were unable to verify whether DePuy’s
Pinnacle devices [were] manufactured within their required specifications,” both
for diametrical clearance and surface roughness. (SAC ¶¶ 359-60). It alleges that
DePuy, by failing to ensure that its manufacturing process was capable of
producing devices within required specifications, “produced, marketed, and
sold . . . a device that [was] different than the subject of the 510(k)” and caused
the government to purchase devices that it would not have otherwise purchased
without 510(k) approval. (SAC ¶¶ 363-65).
3. The SAC alleges that “DePuy’s failure to implement validation procedures
necessary to ensure consistent manufacture of products confirming to their
specifications was material to the government’s purchase of DePuy’s Pinnacle
devices.” (SAC ¶ 397). Specifically, it alleges that the “FDA premised its postmarket approval of the Pinnacle’s diametrical clearance dimensions upon
DePuy’s representation that the Pinnacle’s failure rates were comparable to those
of its competitors,” and without that approval, the government would not have
approved the device for reimbursement. (SAC ¶ 397). When the FDA learned in
2005 that DePuy’s 510(k) application in 2000 for the Ultamet 36mm liner
contained incorrect diametrical clearance dimensions, it stated that “given this
new information, the Pinnacle 36mm system would not have been cleared in
2000.” (SAC ¶¶ 399-400). According to the SAC, the FDA “nevertheless did not
require DePuy to file a supplemental 510(k), much less obtain PMA, expressly
because DePuy represented that the device’s failure rates were within industry
standards.” (SAC ¶ 401). But the SAC alleges that DePuy “was aware [at that

20

time] that the Pinnacle substantially deviated from specifications and had
disproportionately high failure rates,” and “[i]n order to maintain FDA approval
and continue to sell the Pinnacle, DePuy obscured this information from the FDA,
medical providers, and the public for several years.” (SAC ¶ 403).
In May 2013, DePuy announced that it would stop selling the Pinnacle MoM device as of
August 2013. (SAC ¶ 55). More than 5,000 personal injury lawsuits involving the Pinnacle
MoM device were eventually transferred to an MDL proceeding in the Northern District of
Texas. (SAC ¶ 58).
The SAC alleges that “all claims made to the government for costs associated with the
Pinnacle device at any time from DePuy’s 510(k) application to the date the Pinnacle was
withdrawn from the market constitute false claims under the FDA.” (SAC ¶ 412).
Finally, the SAC twice refers to 42 U.S.C. § 1395y(a)(1)(A), which prohibits Medicare
payments for treatments that are not “reasonable and necessary.” The SAC alleges:
Hospital certifications involving claims for Pinnacle hip implants were false
because claim reimbursements for these products constituted payment for services
which were “not reasonable and necessary for the diagnosis and treatment of
illness or injury,” in violation of 42 U.S.C. § 1395y(a)(l)(A). By marketing these
products as safe, effective, and medically appropriate, and concealing
overwhelming evidence to the contrary, DePuy willfully caused hospitals to file
such false certifications when seeking Medicare reimbursement.
....
DePuy caused physicians, hospitals and other providers to submit false
certifications on all these forms concerning claims for Pinnacle hip surgery
procedures. Surgeries to implant these irredeemably faulty devices were not
“reasonable and necessary for the diagnosis and treatment of illness or injury,”
within the meaning of 42 U.S.C. § 1395y(a)(l )(A).
(SAC ¶¶ 88, 99).

21

6.

Alleged False Claims

The SAC alleges that “the government directly purchased or reimbursed hundreds of
thousands of Pinnacle products.” (SAC ¶ 7). It alleges that DePuy made false statements that
caused health-care providers to submit indirect false claims for the Pinnacle MoM to Medicare
and Medicaid, and that DePuy itself also submitted direct false claims to the VA.
a.

Alleged Indirect False Claims

The SAC alleges one representative indirect false claim and then supports that claim with
statistical evidence of the Pinnacle sales to Medicare and Medicaid patients. (See SAC ¶¶ 41372). As to the indirect claim, the SAC alleges:
One such device was implanted into patient “F.I.”. On or about November 12,
2007, patient F.I. was implanted with a DePuy Pinnacle hip implant by a surgeon
at Stony Brook University Medical Center, 10 I Nicolls Road, Stony Brook, New
York 11794. The surgeon was, upon information and belief, Dr. “J.N.”. In
November 2007, Mr. F.I. received Medicaid insurance through HealthFirst, a
managed care organization that provides government-sponsored health insurance
plans in New York.
On information and belief, DePuy’s surgical instructions and materials provided
to Dr. J.N. regarding implantation of F.I. with the Pinnacle device represented that
the device was a safe and effective hip implant device when implanted in
accordance with such instructions.
DePuy’s product label accompanying the Pinnacle device stated that the product
was indicated for use as the acetabular component in total hip-replacement
procedures. On information and belief, under the heading “Information for Use,”
the product label stated that an “instrumentation system, as well as a system of
trial components, is available to assure proper fit and alignment of the prosthesis”
and that physicians should refer to the surgical technique manual on their use.
Within the Pinnacle’s packaging, DePuy provided surgeons with Instructions for
Use (“IFU”) of the product. The IFU contained numerous false statements
regarding the safety and efficacy of the Pinnacle MoM. The IFU stated, “An
instrument system, as well as system of trial components, is available to assure
proper fit and alignment of the prosthesis.” The IFU also instructed the surgeon
to “refer to the appropriate surgical technique manual on the use of the instrument
system.” In reality, surgeons could not achieve a proper fit and alignment of the
prosthesis by using DePuy’s tools and instructions.
22

Around the time of Mr. F. I.’s surgery, DePuy widely distributed the Ultamet
Technical Monograph, a Pinnacle marketing material, throughout the United
States. This pamphlet falsely stated that the Pinnacle MoM implants experienced
reduced wear as compared to competing devices because of the purported benefit
of their low diametrical clearances.
At the time of Mr. F.I.’s surgery, other safe and effective alternatives were widely
available on the market. As alleged above, DePuy’s marketing materials and
device operating instructions claimed that the ASR and Pinnacle’s lower failure
rates and diametrical clearance specifications were superior to those competing
products[.]
On information and belief, but for DePuy’s false statements, Dr. J.N. would have
chosen a different available device for the hip-replacement surgery he performed
on Mr. F.I.
....
As with Mr. F.I.’s ASR XL hip prosthesis, Mr. F.I’s Pinnacle device quickly
failed, as a result of manufacturing defects in the device, including
nonconforming diametrical clearance dimensions. The failures resulted in great
pain and suffering to F.I. and posed the possibility of additional revision surgery.
Mr. F.I’s implantation with a Pinnacle device was neither medically reasonable
nor medically necessary, because of the unreasonably high possibility that the
device would fail and release metal ions into Mr. F.I.’s blood stream. No
reasonable physician would implant a hip-replacement device with a failure rate
of 15 percent at five years.
....
In order to obtain Government reimbursement in connection with the procedure,
Stony Brook University Medical Center and Dr. J.N. certified that Mr. F.I.’s
Pinnacle device was reasonable and medically necessary for his treatment under
42 U.S.C. § 1395y(a)(l)(A). This certification was false as the implantation of a
defective device is not a medically reasonable treatment.
Upon information and belief, on or about November 2007, Stony Brook
University Medical Center submitted a claim to Medicaid for Mr. F.I.’s Pinnacle
hip device and implant surgery. Medicaid paid for Stony Brook’s hip device and
implant surgery.
New York Medicaid reimbursed approximately $34,000 in costs for the
implantation of Mr. F.I.’s Pinnacle device.

23

....
Without DePuy’s false representations and warranties, Mr. F.I. would not have
received a DePuy implant and the Government would not have expended funds on
the device. If Dr. J.N. had been provided appropriate information showing the
truth about the Pinnacle, Dr. J.N. would not have selected the Pinnacle implant for
F.I’s procedure. Similarly, had DePuy divulged what it knew about the Pinnacle,
the Government would not have approved any claim for reimbursement for the
costs of the system.
(SAC ¶¶ 414-20, 423-24, 426-28, 432).
According to the SAC, “over one million MoM hips were sold worldwide” during the
times relevant to the complaint. (SAC ¶ 434). “Amongst the models manufactured at DePuy
plants, the Pinnacle MoM Hip was one of the most widely used hip-replacement systems that
remained in the international market place.” (SAC ¶ 434). The SAC alleges that the United
States “constitutes almost two-thirds of the world’s orthopedic device market.” (SAC ¶ 435).
Over 300,000 hip-replacement surgeries were performed in the United States in 2010. (SAC
¶ 436). The SAC alleges that, “[a]ccordingly, it follows that hundreds of thousands of Pinnacle
products were implanted in government health-care recipients and reimbursed by the government
during the lifespan of the product.” (SAC ¶ 437).
The SAC alleges that between 2005 and 2010, New York Medicaid paid for an average
of approximately 1,280 claims each year for total hip-replacement devices. (SAC ¶ 438). New
York State Medicaid paid approximately $52 million to cover its total cost for inpatient visits for
those 1,280 claims, or $40,625 per claim. (SAC ¶ 439). In 2010, New York State’s Federal
Medical Assistance Percentage (“FMAP”) was approximately 50 percent. (SAC ¶ 440). The
SAC alleges that “[t]herefore, the United States paid an additional $52 million to cover its total
cost for each inpatient visit for those 1,280 claims, or $40,625 per claim.” (SAC ¶ 441). New
York State Medicaid covers approximately 8 percent of all Medicaid beneficiaries in the United

24

States; therefore, according to the SAC, “thousands more Medicaid patients received total hipreplacement devices in 2010, at a cost of hundreds of millions of dollars to the Plaintiff States
and the United States.” (SAC ¶ 442).
The SAC alleges that “[a]lthough the proportion of MoM hip-replacement devices on the
United States market had begun to decline by 2010, according to the FDA, in 2010, a full 27
percent of all total hip-replacement surgeries were MoM device surgeries.” (SAC ¶ 443).
“During relevant periods, DePuy’s two MoM hip implant products (the Pinnacle and the ASR
XL) had captured 75 percent of the Metal on Metal hip-replacements market. Prior to 2010, the
Pinnacle constituted roughly 50 percent of DePuy’s MoM hip-replacement sales.” (SAC ¶ 444).
The SAC alleges that “[g]iven the August 2010 recall of the ASR, the Pinnacle would have
constituted at least 70 percent of DePuy’s Metal on Metal hip-replacement sales.” (SAC ¶ 445).
Therefore, according to the SAC, “between 2005 and 2010, nearly 850 Pinnacle devices were
purchased by New York State Medicaid.” (SAC ¶ 446). The relators estimate that the
diametrical clearance defect affected 14.93 percent of “explant head[s]” and 50.41 percent of
“explant liner[s].” (SAC ¶ 447). Thus, “relators estimate that nearly 425 Pinnacle devices
bearing the diametrical clearance manufacturing defect would have been paid for by New York
State Medicaid between 2005 and 2010.” (SAC ¶ 448). Based on the alleged 14 percent fiveyear failure rate in Pinnacle’s internal system, the relators allege that between 2005 and 2010,
“nearly 130 Pinnacle devices paid for by New York State Medicaid would have failed in patients
at [five] years.” (SAC ¶ 451).
b.

Alleged Direct False Claims

The SAC alleges that the VA entered into two contracts with DePuy “that include the sale
of the Pinnacle hip implants.” (SAC ¶ 474). The SAC alleges:

25

On February 21, 2006, DePuy was awarded an Orthopaedics Implant contract
worth $8,042,500 by the VA National Acquisition Center with the Procurement
Instrument Identifier V797P-9 l 88. The VA Point of Contact for the contract was
Deborah Koval.
On April 29, 2011 DePuy entered into another Indefinite Delivery contract with
the VA National Acquisition Center with the Procurement Instrument Identifier
VA-797P-0263. The VA NAC Point of Contact was Timothy Richards and the
DePuy Contract Point of Contact was Michelle Roberts. Since 2011, this contract
has involved payment for dozens of Pinnacle components.
(SAC ¶¶ 476-77).
The SAC then alleges that the following twelve “purchases” by the VA are
“representative claims” for purposes of the False Claims Act. (SAC ¶¶ 479-90).
479. [O]n January 18, 2011, VA employee Aryeh Lax from Los Angeles,
California ordered a “SUMMIT FEMORAL STEM” and “ARTICUL/EZE
METAL ON MET AL FEMORAL HEAD” from DePuy. This order obligated
the VA to pay $3,358.38.
480. On January 30, 2011, Lax ordered a “SUMMIT FEMORAL STEM” and
“ARTICUL/EZE METAL ON METAL FEMORAL HEAD” from DePuy. This
order obligated the VA to pay $3,358.38.
481. On February 27, 2011, Lax ordered a Pinnacle product from DePuy. This
order obligated the VA to pay $4,779.50.
482. On June 1, 2012, VA employee Scott Delancey from Grand Junction
ordered a Pinnacle product from DePuy. This order obligated the VA to pay
$3,967.00.
483. On September 29, 2011, VA employee Loretta Henry McLain from Los
Angeles ordered a Pinnacle product from DePuy. This order obligated the VA to
pay $8,712.14.
484. On September 27, 2012, VA employee Kami Wiggins from Martinsburg
ordered a Pinnacle product from DePuy. This order obligated the VA to pay
$15,228.50.
485. On September 28, 2007, Naval Medical Center employee Jojie Urrete from
San Diego, California ordered a “Pinnacle metal on metal” device from DePuy.
This order obligated the Navy to pay $8,000.00.
486. On February 22, 2008, Urrete ordered a “Summitt (sic) Pinnacle metal on
26

metal” device from DePuy. This order obligated the Navy to pay $13,000.00.
487. On June 18, 2007, Department of the Army employee Ann Slagle from
Tacoma, Washington ordered a “SUMMIT METAL ON METAL” device from
DePuy. The Summit stem is one of the parts of the Pinnacle Hip replacement
system. This order obligated the Army to pay $9,000.00.
488. On February 7, 2008, Naval Medical Center employee C. Johnson from San
Diego, California ordered a “Srom Metal on Metal” device form DePuy. The SRom is a metal head used as a part of the Pinnacle Hip replacement system. This
order obligated the Navy to pay $9,000.00.
489. On July 5, 2007, Department of the Army employee Amparo Hall from
Tacoma, Washington ordered “SUMMIT METAL ON METAL SYS.” The
Summit stem is one of the parts of the Pinnacle Hip replacement system. This
order obligated the Army to pay $10,000.00.
490. On July 12, 2007, Department of the Army employee Amparo Hall from
Tacoma, Washington ordered “SUMMIT METAL ON METAL SYSTEM.” The
Summit stem is one of the parts of the Pinnacle Hip replacement system. This
order obligated the Army to pay $10,000.00.
B.

Procedural Background

On May 18, 2012, the relators filed the original complaint in this case under seal.6 The
complaint alleged, among other things, violations of the False Claims Act. The FCA claims
were pursued by the relators on behalf of the United States as a qui tam action. The Court
granted the relators’ motion to file an amended complaint on December 2, 2013. On July 29,
2014, the government filed a notice declining to intervene in this case. On August 13, 2014, the
case was partially unsealed. On May 4, 2015, the relators filed under seal a motion to file a
second amended complaint. DePuy opposed that motion on May 26, 2015. On June 5, 2015, the
Court granted the relators’ motion to amend the complaint and deemed the SAC, effectively the
relators’ third complaint, as the operative complaint.

The case was initially assigned to Judge O’Toole, then was reassigned to this judge on August 10, 2012,
then was reassigned to Judge Talwani on June 26, 2014, and finally reassigned back to this judge on October 8,
2014.
6

27

The SAC, which remains sealed, alleges claims of (1) causing false or fraudulent claims
for payment to be presented to the United States in violation of 31 U.S.C. § 3729(a)(1)(A)
(Count One); (2) knowingly making, using, or causing to be made or used false records or
statements material to a false of fraudulent claim paid by the United States in violation of 31
U.S.C. § 3729(a)(1)(B) (Count Two); (3) conspiracy to violate the FCA in violation of 31 U.S.C.
§ 3729(a)(1)(C) (Count Three); and (4) violations of various state analogues to the FCA (Counts
Four through Thirty-Seven).
On June 29, 2015, DePuy filed a motion to dismiss. DePuy contends that the relators’
FCA claims fail to state a claim for which relief can be granted under Fed. R. Civ. P. 12(b)(6),
and that they also fail to satisfy the pleading requirements of Fed. R. Civ. P. 9(b). DePuy also
contends that the conspiracy and state-law FCA claims should be dismissed for the same reasons.
On August 24, 2015, the relators moved to unseal the SAC. DePuy assented to that
motion on September 2, 2015, but requested that other documents also be unsealed, including
(1) the relators’ motion to unseal the SAC, their accompanying memorandum of law and
exhibits, and DePuy’s response and accompanying exhibits; and (2) all documents and filings
related to DePuy’s motion to dismiss.
II.

Legal Standard
On a motion to dismiss, the Court “must assume the truth of all well-plead[ed] facts and

give . . . plaintiff the benefit of all reasonable inferences therefrom.” Ruiz v. Bally Total Fitness
Holding Corp., 496 F.3d 1, 5 (1st Cir. 2007) (citing Rogan v. Menino, 175 F.3d 75, 77 (1st Cir.
1999)). To survive a motion to dismiss, the complaint must state a claim that is plausible on its
face. Bell Atl. Corp. v. Twombly, 550 U.S. 544, 570 (2007). That is, “[f]actual allegations must
be enough to raise a right to relief above the speculative level, . . . on the assumption that all the

28

allegations in the complaint are true (even if doubtful in fact).” Id. at 555 (citations omitted).
“The plausibility standard is not akin to a ‘probability requirement,’ but it asks for more than a
sheer possibility that a defendant has acted unlawfully.” Ashcroft v. Iqbal, 556 U.S. 662, 678
(2009) (quoting Twombly, 550 U.S. at 556). Dismissal is appropriate if the facts as alleged do
not “possess enough heft to show that plaintiff is entitled to relief.” Ruiz Rivera v. Pfizer
Pharm., LLC, 521 F.3d 76, 84 (1st Cir. 2008) (alterations omitted) (internal quotation marks
omitted).
III.

Analysis
A.

Counts One and Two: Federal FCA Claims

Counts One and Two of the SAC allege violations of the FCA. Under the FCA, it is
unlawful for a person or entity to (1) knowingly present, or cause to be presented, a false or
fraudulent claim for payment or approval to the United States, (2) knowingly make, use, or cause
to be made or used, a false record or statement material to a false or fraudulent claim; or
(3) conspire to commit a violation of the statute. 31 U.S.C. §§ 3729(a)(1)(A)-(C). To be
actionable under the FCA, a false statement must be material to a false claim––that is, the false
statement must “hav[e] a natural tendency to influence, or be capable of influencing, the payment
or receipt of money or property.” United States ex rel. Loughren v. Unum Grp., 613 F.3d 300,
307 (1st Cir. 2010) (quoting 31 U.S.C. § 3729(b)(4)).
Private persons, known as relators, can file civil qui tam actions on behalf of the United
States against persons or entities who violate the act. 31 U.S.C. § 3730(b). The government can
intervene in a qui tam action and assume primary responsibility over it. Id. §§ 3730(b)(2), (b)(4),
(c)(1). The relator is eligible to collect a portion of any damages awarded in a qui tam action,
whether or not the government intervenes. Id. § 3730(d).

29

1.

Rule 9(b)

DePuy contends that the FCA claims should be dismissed because the SAC does not
satisfy the pleading requirements of Fed. R. Civ. P. 9(b). That rule requires that “[i]n alleging
fraud or mistake, a party must state with particularity the circumstances constituting fraud or
mistake.” Fed. R. Civ. P. 9(b). The heightened pleading requirements of Rule 9(b) apply to
claims brought under all three subsections of the FCA. United States ex rel. Ge v. Takeda
Pharm. Co., 737 F.3d 116, 123-24 (1st Cir. 2013).7 The First Circuit explained the reasoning for
applying those requirements to FCA claims in United States ex rel. Duxbury v. Ortho Biotech
Products, L.P. (“Duxbury II”): “Although [the FCA’s] financial incentive encourages would-be
relators to expose fraud, it also attracts parasitic relators who bring FCA damages claims based
on information within the public domain or that the relator did not otherwise discover.” 719 F.3d
31, 33 (1st Cir. 2013) (citations and internal quotation marks omitted). “For those reasons, there
are a number of limitations on qui tam actions, including the particularity requirements of Rule
9(b).” Ge, 737 F.3d at 123 (citing Duxbury II, 719 F.3d at 33).
a.

Direct Claims

For allegations of direct false claims under 31 U.S.C. § 3729(a)(1)(A), “[r]elators are
required to set forth with particularity the ‘who, what, when, where, and how’ of the alleged
fraud.” Ge, 737 F.3d at 123 (quoting United States ex rel. Walsh v. Eastman Kodak Co., 98 F.
Supp. 2d 141, 147 (D. Mass. 2000)). “Because FCA liability attaches only to false claims,
merely alleging facts related to a defendant’s alleged misconduct is not enough. Rather, a
complaint based on § 3729(a)(1)(A) must ‘sufficiently establish that false claims were submitted

“We recognize that . . . the ‘presentment’ requirement applies only to . . . subsection (a)(1)(A) claims and
not . . . subsection (a)(1)(B) or subsection (a)(1)(C) claims. However, Rule 9(b)’s particularity requirement applies
with full force to all three subsections [of the FCA].” Ge, 737 F.3d at 124-25 n.5.
7

30

for government payment’ as a result of the defendant’s alleged misconduct.” Id. at 124
(emphasis in original) (quoting United States ex rel. Rost v. Pfizer, Inc., 507 F.3d 720, 733 (1st
Cir. 2007)). Indeed, “[e]vidence of an actual false claim is the sine qua non of a False Claims
Act violation.” United States ex rel. Karvelas v. Melrose-Wakefield Hosp., 360 F.3d 220, 225
(1st Cir. 2004) (internal citations omitted), abrogated on other grounds by Claudio-De Leon v.
Sistema Universitario Ana G. Mendez, 775 F.3d 41 (1st Cir. 2014); see also United States v.
Rivera, 55 F.3d 703, 709 (1st Cir. 1995) (“[T]he [FCA] statute attaches liability, not to the
underlying fraudulent activity or to the government’s wrongful payment, but to the claim for
payment.”).
As the First Circuit explained in Ge concerning the particularity requirement for pleading
false claims:
A relator must provide details that identify particular false claims for payment that
were submitted to the government. In a case such as this, details concerning the
dates of the claims, the content of the forms or bills submitted, their identification
numbers, the amount of money charged to the government, the particular goods or
services for which the government was billed, the individuals involved in the
billing, and the length of time between the alleged fraudulent practices and the
submission of claims based on those practices are the types of information that
may help a relator to state his or her claims with particularity. These details do
not constitute a checklist of mandatory requirements that must be satisfied by
each allegations included in a complaint. However, we believe that some of this
information for at least some of the claims must be pleaded in order to satisfy
Rule 9(b).
737 F.3d at 124 (internal quotation marks and alterations omitted) (quoting Karvelas, 360 F.3d at
232-33); see also United States ex rel. Escobar v. Universal Health Servs., 780 F.3d 504, 515
(1st Cir. 2015) (noting that while there was no “mandatory checklist” to satisfy the particularity
requirement, relators “succeeded in linking their allegations of fraud to specific claims for
payment” because the complaint “allege[d] twenty-seven separate dates on which claims were
submitted in connection with Yarushka’s care, each time including the relevant billing codes,
31

amount invoiced, and the name of the [ ] staff member who provided the treatment for which
reimbursement was sought”), cert. granted, 136 S. Ct. 582 (2015).
Here, the SAC alleges that the VA purchased twelve hip devices directly from DePuy
pursuant to two procurement contracts. (SAC ¶¶ 473-90). Those alleged false claims, however,
do not satisfy Rule 9(b)’s heightened pleading requirements.
First, ten of the twelve alleged claims do not allege with sufficient particularity that the
VA purchased the specific DePuy product that is the sole focus of this action: the Pinnacle MoM
hip-implant device. (See SAC ¶¶ 494, 500). As described above, DePuy manufactured Pinnacle
devices that had various combinations of head, liner, and cup materials, including “metal-onmetal, ceramic-on-polyethylene, or metal-on-polyethylene.” (SAC ¶¶ 176-77; Def. Mem. Ex. C
at 5). The alleged defects concern the interaction of a metal head with a metal liner in a Pinnacle
device. There was only one head and liner combination of Pinnacle parts that produced a
Pinnacle metal-on-metal, or MoM, device: a M-Spec or aSphere M-Spec head with an Ultamet
or Ultamet XL liner. (SAC ¶¶ 176-77; Def. Mem. Ex. C at 3).
Before turning to the specific alleged false claims, the Court notes that the SAC uses the
terms “Pinnacle” and “MoM” inconsistently. In paragraph 6, the SAC states that “Relators
Antoni Nargol and David Langton––world-renowned experts on hip-implant products––allege
that DePuy submitted false claims for payment for one of DePuy’s MoM devices: the Pinnacle
Acetabular Hip System (‘Pinnacle’).” (SAC ¶ 6). It is unclear whether the relators intended to
define “Pinnacle” to mean “the Pinnacle Acetabular Hip System” (which comprises metal,
ceramic, and polyethylene products) or to mean the metal-on-metal subset of Pinnacle devices.
Seven paragraphs later, relators use the specific term “MoM.” (See SAC ¶ 13) (“In one June
2010 email, a top DePuy executive admitted to Dr. Langton that, were DePuy to conclude from

32

Relators’ research that its MoM parts ‘were out of specification,’ the Company would ‘need to
notify patients if we have made a serious manufacturing error.’”). And in the 200-paragraph
section detailing the alleged DePuy misrepresentations, relators use the term “MoM”
consistently. (See, e.g., SAC ¶¶ 201, 248, 259, 273, 277, 279, 307, 310-11, 314, 316, 319-20,
334, 338, 340, 343-44, 348-49, 351-52, 361, 379, 395-96). The complaint thus seems to make
clear that the only relevant fraudulent activity involved Pinnacle metal-on-metal devices. But in
the section that alleges the proposed false claims, the relators use vague terms such as “Pinnacle
products” or refer to products that are not a part of the Pinnacle system at all.
i.

Paragraphs 479-480

479. [O]n January 18, 2011, VA employee Aryeh Lax from Los Angeles,
California ordered a “SUMMIT FEMORAL STEM” and “ARTICUL/EZE
METAL ON METAL FEMORAL HEAD” from DePuy. This order obligated the
VA to pay $3,358.38.
480. On January 30, 2011, Lax ordered a “SUMMIT FEMORAL STEM” and
“ARTICUL/EZE METAL ON METAL FEMORAL HEAD” from DePuy. This
order obligated the VA to pay $3,358.38.
Depuy’s marketing materials demonstrate that the “Summit femoral stem” is not a
Pinnacle product, and even the relators appear to concede that it is not part of the Pinnacle MoM
device. (See SAC ¶ 396) (“[T]he surface roughness manufacturing defect also affects devices
other than the Pinnacle MoM . . . . These affected devices include DePuy’s S-ROM, SUMMIT,
CORAIL, and AML hip replacement products.” (emphasis added)). The “Articul/eze metal-onmetal femoral head” does not appear to be a Pinnacle component because the only Pinnacle
metal heads were the “aSphere M-Spec,” the “M-Spec,” and the “Standard Metal.” (Compare
SAC ¶¶ 176-77, and Def. Mem. Ex. C at 3, with SAC ¶¶ 479-80). Furthermore, neither
paragraph mentions a DePuy Pinnacle liner, much less an Ultamet metal liner. Thus, even
assuming the Articul/eze head is metal and part of the Pinnacle device––which it is not––those
33

paragraphs allege only part of a MoM device and ignore the liner. Finally, paragraphs 479 and
480 allege only “orders.” They do not allege that those orders formed the basis of any actual
claims that were presented to the VA.
ii.

Paragraphs 481-484

481. On February 27, 2011, Lax ordered a Pinnacle product from DePuy. This
order obligated the VA to pay $4,779.50.
482. On June 1, 2012, VA employee Scott Delancey from Grand Junction ordered
a Pinnacle product from DePuy. This order obligated the VA to pay $3,967.00.
483. On September 29, 2011, VA employee Loretta Henry McLain from Los
Angeles ordered a Pinnacle product from DePuy. This order obligated the VA to
pay $8,712.14.
484. On September 27, 2012, VA employee Kami Wiggins from Martinsburg
ordered a Pinnacle product from DePuy. This order obligated the VA to pay
$15,228.50.
A “Pinnacle product” could refer to any combination of DePuy’s three Pinnacle heads
and three Pinnacle liners. (Def. Mem. Ex. C at 3). Only a “M-Spec” head and “Ultamet” liner
combined to create the Pinnacle MoM device. It is therefore unclear whether any of the products
in question are even metal-on-metal devices. Also, the prices alleged in paragraphs 481 through
484 vary significantly. If those four “Pinnacle products” were all Pinnacle MoM devices, one
would expect the prices to be at least somewhat similar. And as noted above, paragraphs 481
through 484 allege only “orders,” not claims.
iii.

Paragraphs 487-490

487. On June 18, 2007, Department of the Army employee Ann Slagle from
Tacoma, Washington ordered a “SUMMIT METAL ON METAL” device from
DePuy. The Summit stem is one of the parts of the Pinnacle Hip replacement
system. This order obligated the Army to pay $9,000.00.
488. On February 7, 2008, Naval Medical Center employee C. Johnson from San

34

Diego, California ordered a “Srom Metal on Metal” device form DePuy. The SRom is a metal head used as a part of the Pinnacle Hip replacement system. This
order obligated the Navy to pay $9,000.00.
489. On July 5, 2007, Department of the Army employee Amparo Hall from
Tacoma, Washington ordered “SUMMIT METAL ON METAL SYS.” The Summit
stem is one of the parts of the Pinnacle Hip replacement system. This order
obligated the Army to pay $10,000.00.
490. On July 12, 2007, Department of the Army employee Amparo Hall from
Tacoma, Washington ordered “SUMMIT METAL ON METAL SYSTEM.” The
Summit stem is one of the parts of the Pinnacle Hip replacement system. This
order obligated the Army to pay $10,000.00.
Confusingly, paragraphs 487, 489, and 490 allege that the Summit femoral stem is part
of the “Pinnacle Hip replacement system.” But as noted above, even the relators allege
elsewhere in the SAC that the Summit stem is a different product from the Pinnacle MoM
device. (See SAC ¶ 396). In fact, Summit stems could be used with entirely different hipreplacement systems, such as the ASR. (Def. Mem. Ex. D at 29). Paragraph 488 alleges an
order of a S-Rom metal femoral head and alleges that the S-Rom was part of the “Pinnacle Hip
replacement system.” But DePuy’s marketing materials, which the SAC incorporates, show that
S-Rom heads were not part of the Pinnacle system. (Def. Mem. Ex. C at 3).
Thus, paragraphs 479 through 484 and 487 through 490 do not even allege that DePuy
presented false claims to the VA for the only device relevant to this action, nor do they plead
those “orders” with sufficient particularity to satisfy Rule 9(b). Only two of the twelve direct
orders alleged in the SAC actually refer to a Pinnacle MoM device—the two alleged in
paragraphs 485 and 486. (SAC ¶¶ 485-86).
iv.

Paragraphs 485-486

485. On September 28, 2007, Naval Medical Center employee Jojie Urrete from
San Diego, California ordered a “Pinnacle metal on metal” device from DePuy.
This order obligated the Navy to pay $8,000.00.

35

486. On February 22, 2008, Urrete ordered a “Summitt (sic) Pinnacle metal on
metal” device from DePuy. This order obligated the Navy to pay $13,000.00.
To plead direct false claims pursuant to 31 U.S.C. § 3729(a)(1)(A), a complaint must
allege at least some hallmarks of particularity. The First Circuit has provided a non-exhaustive
list, including
details concerning the dates of the claims, the content of the forms or bills
submitted, their identification numbers, the amount of money charged to the
government, the particular goods or services for which the government was billed,
the individuals involved in the billing, and the length of time between the alleged
fraudulent practices and the submission of claims based on those practices . . . .
Karvelas, 360 F.3d at 228; see also Ge, 737 F.3d at 124. Following the decisions in Karvelas
and Ge, several judges in this district have held that “[i]n cases where the defendant directly
presents the claim to the government, the plaintiff must provide details identifying particular
false claims submitted, including who filed the claims, the content of the claims, when such
claims were submitted, where such claims were submitted, and how much it sought in payment.”
United States ex rel. Westmoreland v. Amgen, Inc., 738 F. Supp. 2d 267, 275 (D. Mass. 2010)
(citing Karvelas, 360 F.3d at 225); see also United States ex rel. Nowak v. Medtronic, Inc., 806
F. Supp. 2d 310, 352 (D. Mass. 2011) (noting that relators must plead “which [of defendant’s]
personnel engaged in [the] conduct, where such conduct took place, which VA personnel were
involved, [and] any specific fraudulent statements made to personnel at the Veterans
Administration”). The two descriptions of “orders” set forth in paragraphs 485 and 486 fail to
allege with sufficient particularity that DePuy presented false claims to the VA.
First, the allegations focus entirely on the actions of a Naval Medical Center employee
and do not specifically allege any actions by DePuy concerning the orders. The SAC lists orders
by the employee requesting a Pinnacle MoM product, but it does not include any details about
alleged claims or any actions by DePuy employees in relation to the orders. Paragraphs 485 and
36

486 do not even allege that DePuy in fact filled the orders and delivered the devices to the Naval
Medical Center. Nor are there any allegations that DePuy invoiced the VA for the ordered
products or requested payment, other than the broad allegation that the orders “obligated the
Navy to pay” certain amounts. The paragraphs do not allege an order number or any other
source-identifying information about any particular claim. There is no indication that any DePuy
employee solicited, processed, or even knew about those alleged orders.
Second, the allegations fail to allege any details about the products themselves and how
they caused the claim in question (if there was a claim) to be false. There is no allegation, for
example, that those two specific products actually failed, had to be replaced, or were otherwise
defective. Indeed, paragraphs 485 and 486 do not even allege that the ordered products were in
fact implanted in a patient, or when, where, and by which doctor. In short, the SAC pleads no
specific details that would suggest that the two orders resulted in false claims.
The relators rely on United States ex rel. Rodwell v. Excelitas Technologies, Corp., 2015
WL 3766866 (D. Mass. June 16, 2015), in support of their contention that the complaint is
sufficient. In Rodwell, the court denied the defendant’s motion to dismiss on Rule 9(b) grounds
even though the relator “d[id] not identify any particular claim or invoice submitted to the
government.” Id. at *6. But in Rodwell, the relator identified specific contracts that the
defendant had with the government, the specific terms of those contracts, and three batches of
product orders that the government placed pursuant to those contracts, including the specific
models of products ordered, specific quantities of each model ordered (more than one thousand
in total), and the specific costs to the government. Id.
Here, however, the relators’ allegations about DePuy’s two alleged contracts are vague as
to what products they covered, what their terms were, and whether DePuy presented the VA with

37

any false claims for Pinnacle MoM devices pursuant to those contracts. Notably, the SAC does
not connect the two contracts to any of the twelve alleged orders in paragraphs 479 through 490.
The SAC generally describes the Federal Supply Schedule Service (“FSS”) and Federal Supply
Schedule Group 65 Part II Section A (“65 II A contract”). (SAC ¶¶ 114-15). But although the
SAC describes the two VA contracts, it never actually alleges that DePuy had an FSS contract
with the VA. (SAC ¶ 474). The SAC does not allege that either the 2006 “Orthopaedics Implant
contract” (SAC ¶ 476) or the 2011 “Indefinite Delivery contract” (SAC ¶ 477) were FSS 65 II A
contracts that would be governed by FDA regulations. Nor does the SAC include the contracts
as attachments or quote relevant content from their terms. In fact, the SAC does not cite any
terms of those specific alleged contracts at all. And finally, unlike in Rodwell, the SAC here
contains no allegations about the specific products purchased pursuant to the contracts. In
Rodwell, the relators included specific product models and quantities. Here, the SAC vaguely
alleges that DePuy sold an unknown number of “Pinnacle Hip Implant products” under the
contracts, without alleging that the contracts covered the sale of the Pinnacle MoM device.
(SAC ¶ 478).
In sum, the SAC spends more than two hundred paragraphs detailing misrepresentations
and false statements that DePuy allegedly made to the FDA and surgeons, including the relators
themselves. (See SAC ¶¶ 201-412). It alleges in general terms that “the government directly
purchased . . . hundreds of thousands of Pinnacle products.” (SAC ¶ 7). But ten of the twelve
allegedly false claims do not even refer to the only product relevant to this suit: the Pinnacle
metal-on-metal device. For the two remaining “orders,” the SAC fails to plead with sufficient
particularity the who, what, when, where, and how of a single false claim that DePuy presented

38

to the VA. Accordingly, the relators’ claims pursuant to 31 U.S.C. § 3729(a)(1)(A) will be
dismissed for failure to meet the heightened pleading requirements of Rule 9(b).
b.

Indirect Claims

The SAC alleges that DePuy is liable under 31 U.S.C. § 3729(a)(1)(B) because it made
false statements and omissions that were material to the claims of third-party surgeons to
government health-care programs such as Medicare and Medicaid. DePuy contends that the
claim should be dismissed under Rule 9(b) because the SAC fails to allege any specific false
claims and because it fails to suggest an inference of fraud beyond a mere possibility.
The First Circuit has distinguished pleading standards for direct claims, or sales to the
government, which are governed by 31 U.S.C. § 3729(a)(1)(A), from indirect claims to the
government where a defendant causes third-parties to submit false claims, which are governed by
31 U.S.C. § 3729(a)(1)(B). See United States ex rel. Duxbury v. Ortho Biotech Prods., L.P., 579
F.3d 13, 29 (1st Cir. 2009) (“Duxbury I”). “In a qui tam action in which the defendant is alleged
to have induced third parties to file false claims with the government, a relator can satisfy this
requirement by ‘providing factual or statistical evidence to strengthen the inference of fraud
beyond possibility without necessarily providing details as to each false claim.’” Ge, 737 F.3d at
123-24 (quoting Duxbury I, 579 F.3d at 29). Thus, a qui tam complaint alleging that a defendant
induced a third party to submit false claims to the government for reimbursement must allege
two things to satisfy Rule 9(b): (1) particular details of a scheme to cause the submission of false
claims to the government; and (2) factual or statistical evidence that strengthens the inference of
fraud on the government beyond a mere possibility. Duxbury I, 579 F.3d at 29.
The SAC pleads a single representative indirect claim in paragraph 414. The relators
contend that, even standing alone without further support, the allegation is sufficient to defeat

39

DePuy’s motion to dismiss. Specifically, the SAC alleges that on November 12, 2007, patient
“‘F.I.’ was implanted with a DePuy Pinnacle hip implant” by a surgeon in New York. (SAC
¶ 414). For the reasons explained above, such a claim does not meet the requirements of Rule
9(b); it does not identify the specific Pinnacle MoM device that is the subject of the present
controversy. Put another way, the SAC does not allege that the surgeon presented a claim to
Medicaid for a Pinnacle MoM device, as opposed to a Pinnacle device with a ceramic head or a
polyethylene liner.
Accordingly, without alleging any details as to a specific false claim for the relevant
DePuy Pinnacle device, the relators must rely on the SAC’s other factual and statistical evidence
to strengthen the inference of fraud beyond a mere possibility. That evidence, however, fails to
satisfy the requirements of Rule 9(b) as described by the First Circuit in Ge and Duxbury I.
In Ge, the relator’s complaint alleged that the defendant pharmaceutical company had
failed to file accurate and timely adverse event reports with the FDA, and that if it had done so,
numerous claims for those pharmaceuticals would not have been submitted to the federal
government. 737 F.3d at 119-21. The FCA claim was dismissed because the relator “made no
attempt in her complaints to allege facts that would show that some subset of claims for
government payment for the four subject drugs was rendered false as a result of [defendant’s]
alleged misconduct.” Id. at 124 (emphasis in original). “What is missing are any supporting
allegations upon which her conclusion rests and any particulars.” Id.
In contrast, the court in Duxbury I found that the complaint sufficiently alleged factual
evidence to sustain an inference of fraud. 579 F.3d at 30. The relator alleged that kickbacks
provided by the defendant resulted in the submission of false claims by eight named health-care
providers in the state of Washington. Id. The court concluded that those eight specific

40

allegations were sufficient factual support to satisfy the requirements of Rule 9(b), although it
described the matter as “a close call.” Id.; see also Ge, 737 F.3d at 124 (referring to the
allegations in Duxbury I as “barely adequate”).
In Duxbury I, the First Circuit quoted one of the specific allegations the plaintiff made in
that case:
In 1997-98 Western Washington Treatment Center in Olympia, Washington,
received more than $5,000 of free commercially packaged ProCrit from
[defendant] under the direction of Robert Ashe so that Western Washington could
submit the free product for reimbursement to Medicare under the false and
fraudulent certification that the provider had paid for the product. [Defendant]
intended the free commercially packaged ProCrit to be a “cash equivalent”
“kickback” to Western Washington in order to induce the provider to purchase
ProCrit and to administer ProCrit at the “off-label” once a week dosing regiment.
Western Washington was reimbursed by Medicare for the free commercially
packaged ProCrit. As a result, [defendant] knowingly caused the presentation by
Western Washington of these false claims to the United States Government.
579 F.3d at 30. The court concluded that the complaint’s collection of eight specific examples of
similar specificity, along with other allegations of the defendant’s fraudulent scheme, were
adequate (if “barely” so) to satisfy the requirements of Rule 9(b). Id. As the court noted, the
plaintiff “identified, as to each of the eight medical providers (the who), the illegal kickbacks
(the what), the rough time periods and locations (the where and when), and the filing of the false
claims themselves.” Id.
This Court has recently addressed another FCA case that presented a close call and found
that the complaint satisfied the standards set forth in Duxbury I because the relator identified
“one of defendants’ sales representatives, the doctor, and the patient (the who), the specific
misrepresentations made by the defendants (the what), time periods and locations (the where and
when), and the filing of the false claims themselves.” See United States ex rel. Leysock v. Forest
Labs., Inc., 55 F. Supp. 3d 210, 219 (D. Mass. 2014).

41

Here—setting aside for the moment the SAC’s statistical allegations—the factual
allegations in the SAC more closely resemble those rejected in Ge than those that were
acceptable Duxbury I and Leysock. In Duxbury I, the relator alleged that specific employees of
the defendant received kickbacks from specific health-care providers and that the kickbacks
resulted in a false claim. In Leysock, the relator alleged that specific physicians were the targets
of defendants’ off-label marketing and relied on that marketing, and alleged the specific dates
that the physicians filled the prescriptions. The SAC here fails to connect the multiple
allegations of DePuy’s misrepresentations and omissions to any specific claims for payment.
Nor does the SAC appear to identify a single physician who was a target of allegedly false
DePuy marketing, identify a single physician who relied on that marketing, or identify a single
physician who filed a false claim for the DePuy MoM device. The closest that the SAC comes to
such specificity is “Dr. J.N.” and “patient F.I.”, but the SAC does not identify the specific
representations or materials that the doctor received and relied upon, nor does it allege the
specific DePuy device for which the doctor filed a claim. (See SAC ¶¶ 414-24).8
Furthermore, the SAC’s unfocused and imprecise statistical evidence adds little to
establish DePuy’s fraud beyond a mere possibility. The SAC alleges that more than one million
metal-on-metal devices were sold worldwide “[d]uring the times relevant to this complaint,” and
that in 2010, more than 300,000 “hip-replacement surgeries were performed in the United
States.” (SAC ¶¶ 434, 436). Therefore, according to the SAC, because “the Pinnacle MoM hip
was one of the most widely used hip-replacement systems that remained in the international
marketplace,” as a matter of logic “it follows that hundreds of thousands of Pinnacle products
were implanted in government healthcare recipients and reimbursed by the government during

It is also noteworthy that the allegations with regard to that order are based on mere “information and
belief.” (SAC ¶¶ 414-24).
8

42

the lifespan of the product.” (SAC ¶¶ 434, 437). Those statistical allegations are not sufficiently
precise or consistent as to the geographical scope, time period, or product type to maintain an
inference of fraud. The broad statistical claims made here could be made about virtually any
successful medical device or product.9
Finally, to the extent that the relators contend that every indirect claim for reimbursement
of the Pinnacle MoM device was false because the device’s defects made it “not reasonable and
necessary” under 42 U.S.C. § 1395y(a)(1)(A), such an argument must fail. Surely to survive a
motion to dismiss pursuant to Rule 9(b) and Rule 12(b)(6), the relators must do more than allege
that a product’s alleged defects automatically make it unreasonable and unnecessary. Such a
theory of liability, if allowed to proceed, would convert almost any product-liability suit into one
that also states a claim under the False Claims Act.
In short, the SAC is slightly more detailed than the complaint in Ge, which the First
Circuit found to be inadequate under Rule 9(b). It contains, however, almost no specific
allegations as to actual false claims in comparison to the detailed eight claims in Duxbury I,
which the First Circuit said was “barely adequate” and where dismissal was considered a “close
call.” Accordingly, DePuy’s motion to dismiss will be granted as to the federal FCA claims
(Counts One and Two) for failure to comply with the requirements of Rule 9(b).

9

If the rule were otherwise, virtually any claim of misrepresentation or a product defect involving medical
devices, pharmaceuticals, or other medical products could be brought as a qui tam action. Government health-care
programs such as Medicare and Medicaid represent a huge portion of health-care expenditures in the United States.
As a matter of logic, any scheme that causes unreasonable or unnecessary purchases of a product or service will
almost certainly result in the submission of some false claim, by someone, somewhere, to the federal government.
Rule 9(b), however, requires something more than conclusory allegations that false claims must have resulted from
the misconduct. See Ge, 737 F.3d at 124 (stating that the court “reject[s] [the] approach” sought by the relator,
which was “a per se rule that if sufficient allegations of misconduct are made, it necessarily follows that false claims
and/or material false information were filed”).

43

2.

Rule 12(b)(6)

DePuy also contends that the relators’ federal FCA claims pursuant to § 3729(a)(1)(A)(B) should be dismissed for failure to state a claim under Fed. R. Civ. P. 12(b)(6). Specifically,
DePuy contends that the SAC fails to state a claim because even if it made misstatements about
the Pinnacle MoM device, the relators fail to allege that those misstatements resulted in any
claims that were actually “false” as the First Circuit interpreted the meaning of the term in
United States ex rel. Escobar v. Universal Health Services, 780 F.3d 504, 512 (1st Cir. 2015).10
After the Court held a hearing on DePuy’s motion to dismiss, the Supreme Court, on
December 3, 2015, granted a petition for review of the First Circuit’s decision in Escobar. See
Universal Health Servs., Inc. v. United States, No. 15-7, 136 S. Ct. 582. As explained more fully
below, a complicated circuit split on the issues of (1) implied certification and (2) conditions of
participation versus conditions of payment will continue to affect FCA cases until the Supreme
Court issues its ruling in Universal Health Services. It does not appear that the Supreme Court
has set a briefing schedule or argument date, and the Court very well could resolve some issues
while reserving others for remand to the First Circuit. Thus, it appears unlikely that the FCA
issues presented by Escobar and related cases in other circuits––namely, what suffices as a
“false” claim––will be resolved within the next year. In any event, the Court has already reached
a resolution of the relators’ federal FCA claims on the independent grounds of Rule 9(b).
Accordingly, the Court will defer ruling on the Rule 12(b)(6) issues.

10

DePuy also contends that the SAC fails to allege that DePuy made any false statements in submitting or
causing third-parties to submit false claims that were “material” to the government’s decision to reimburse the
claim. In most cases, materiality issues are not appropriate for resolution on the pleadings because the element, as
defined by the First Circuit, is highly dependent on the facts. See, e.g., Loughren, 613 F.3d at 308 (noting that
“materiality in the FCA context involves a factual determination of the weight that the decisionmaker would have
given particular information”). Because the Court has resolved the present motion on the narrower issue of Rule
9(b)’s pleading requirements––along with the fact that Escobar would need to be resolved by the Supreme Court––
the Court will not address DePuy’s second argument.

44

As noted, the False Claims Act proscribes “knowingly present[ing], or caus[ing] to be
presented, a false or fraudulent claim for payment or approval” and “knowingly mak[ing],
us[ing], or caus[ing] 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). To be actionable, a false or fraudulent claim
or statement must also be material to the government’s decision to pay a claim. See Loughren,
613 F.3d at 307 (“We have long held that the FCA is subject to a judicially-imposed requirement
that the allegedly false claim or statement be material.”).
As one judge in this district has recently noted since the First Circuit’s decision in
Escobar, “[f]alse statements come in the full spectrum of shades of gray, and the False Claims
Act provides little help to courts attempting to separate actionable ones from permissible ones.”
United States ex rel. Bierman v. Orthofix Int’l, N.V., 2015 WL 4197551, at *3 (D. Mass. July 1,
2015) (Zobel, J.). Some circuits have announced fixed rules to determine whether a claim is
actionable by separating various types of false claims into categories. One such categorization
divides claims and statements that are factually false (such as when a contractor does not provide
the product for which reimbursement is sought) from those that are legally false (such as false
certifications of compliance with statutes or regulations). See, e.g., United States ex rel. Conner
v. Salina Reg’l Health Ctr., Inc., 543 F.3d 1211, 1217 (10th Cir. 2008); Mikes v. Straus, 274 F.3d
687, 696-97 (2d Cir. 2001).
But the disagreement among the circuits about the meaning of a false claim exists at two
further levels of categorization. First, one categorization divides legally false statements into
groups based on theories of “express” certification and “implied” certification. See United States
ex rel. Wilkins v. United Health Grp., Inc., 659 F.3d 295, 305-06 (3d Cir. 2011) (collecting
cases). Under the theory of express certification, a company faces liability under the FCA by

45

fraudulently and expressly certifying compliance with a statute, regulation, or contractual
provision when submitting a claim for payment. Id. Under the theory of implied certification, a
company may face liability even if it did not certify compliance with a statute or regulation when
submitting the claim, but instead made an earlier, more general certification. Id. The Seventh
Circuit has recently adopted only express certification and rejected all theories of implied
certification. See United States v. Sanford-Brown, Ltd., 2015 WL 3541422, at *12 (7th Cir. June
8, 2015) (“Although a number of other circuits have adopted the so-called doctrine of implied
false certification . . . we decline to join them . . . .”). Other circuits however, including the First
Circuit, have accepted, to varying degrees, the theory of implied certification.11
Second, the circuits that have accepted the implied certification theory are further
divided. Every circuit to accept implied certification requires that compliance with a statute,
regulation, or contractual provision that is allegedly violated must be a condition of payment by
the government payor. There is disagreement among the circuits, however, as to whether a
condition of payment must be expressly identified as such, or whether a statute, regulation, or
contractual provision can be a condition of payment if it does not state that payment is
conditioned on compliance. The Second and Sixth Circuits fall into the former category,
concluding that a company impliedly certifies compliance with a statute, regulation, or
contractual provision for purposes of FCA liability only if the government expressly conditions
payment on compliance. See Chesbrough v. VPA, P.C., 655 F.3d 461, 468 (6th Cir. 2011);
Strauss, 274 F.3d at 700-02. In other words, according to those circuits, the legal obligation in
question must be explicitly designated as a condition of payment. Conversely, the First, Fourth,

Although the First Circuit has “eschewed distinctions” used by other circuits in describing types of FCA
claims, as discussed below, it appears that the court in Escobar applied a theory of implied certification. 780 F.3d at
512.
11

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and D.C. Circuits do not require a legal obligation to be expressly identified as a condition of
payment; instead, those circuits have found “implied conditions of payment”––sometimes
referred to as conditions of participation––without explicit language in the relevant statute,
regulation, or contract. See Escobar, 780 F.3d at 513-14; United States v. Triple Canopy, Inc.,
775 F.3d 628, 636 (4th Cir. 2015); United States v. Science Apps. Int’l Corp., 626 F.3d 1257,
1269 (D.C. Cir. 2010) (“SAIC”).
In Escobar, the First Circuit declared that it had “eschewed distinctions between factually
and legally false claims, and those between implied and express certification theories, reasoning
that they ‘create artificial barriers that obscure and distort [the statute’s] requirements.’”
Escobar, 780 F.3d at 512 (quoting United States ex rel. Hutcheson v. Blackstone Med., Inc., 647
F.3d 377, 385 (1st Cir. 2011)). Instead, the court wrote that it takes “a broad view of what may
constitute a false or fraudulent statement to avoid ‘foreclos[ing] [False Claims Act] liability in
situations that Congress intended to fall within the Act’s scope,’” United States ex rel. Jones v.
Brigham & Women’s Hosp., 678 F.3d 72, 85 (1st Cir. 2012) (quoting Hutcheson, 647 F.3d at
387), “ask[ing] simply whether the defendant, in submitting a claim for reimbursement,
knowingly misrepresented compliance with a material precondition of payment.” Escobar, 780
F.3d at 512. As interpreted by the First Circuit, “preconditions of payment, which may be found
in sources such as statutes, regulations, and contracts, need not be ‘expressly designated.’” Id.
(quoting Hutcheson, 647 F.3d at 387-88). “Rather, the question whether a given requirement
constitutes a precondition to payment is a ‘fact-intensive and context-specific inquiry,’ involving
a close reading of the foundational documents, or statutes and regulations, at issue.” Id. at 51213 (quoting New York v. Amgen Inc., 652 F.3d 103, 110 (1st Cir. 2011)).
In Escobar, the relators’ daughter died while receiving treatment from unlicensed

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providers at a Massachusetts counseling center owned by Universal Health Services. Id. at 509.
The relators alleged that the treatment facility violated the FCA because it, in submitting claims
for payment, impliedly falsely represented that it had complied with various state regulations,
including regulations concerning the licensing and supervision of providers. Id. at 510-11. The
district court dismissed the complaint in its entirety for failure to plead the requisite element of
falsity. United States ex rel. Escobar v. Universal Health Servs., Inc., 2014 WL 1271757, at *7
(D. Mass. Mar. 26, 2014). The district court drew a distinction between requirements that
MassHealth imposed on providers as conditions of payment, and those imposed as conditions to
participation in the program in the first instance. Id. at *6 (“Violations of only a condition of
participation will not suffice.”). The district court concluded that only one of the regulations
cited by the relators was a condition of payment, and for that regulation, it concluded that the
relators had not plausibly alleged that the defendant had violated the provision. Id. at *11-12.
The First Circuit reversed, finding that a regulation that the district court did not address was a
condition of payment, and held that “[b]ecause [First Circuit] case law makes clear that a
healthcare provider’s noncompliance with conditions of payment is sufficient to establish the
falsity of a claim for reimbursement, we need not address here whether the False Claims Act
embraces a distinction between conditions of payment and conditions of participation.” Escobar,
780 F.3d at 517. Nonetheless, the court further stated that “express certification” of compliance
with a condition of payment is not required under the FCA. Id. at 514 n.14.
Thus, even though the First Circuit indicated that it would not entertain distinctions
between express and implied certification, the defendant filed a petition for a writ of certiorari
asking the Supreme Court to address issues of implied certification and conditions of payment.
The Supreme Court granted review on two questions:

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(1) Whether the “implied certification” theory of legal falsity under the FCA––
applied by the First Circuit below but recently rejected by the Seventh
Circuit––is viable; and
(2) Whether, if the “implied certification” theory is viable, a government
contractor’s reimbursement claim can be legally “false” under that theory if
the provider failed to comply with a statute, regulation, or contractual
provision that does not state that it is a condition of payment, as held by the
First, Fourth, and D.C. Circuits; or whether liability for a legally “false”
reimbursement claim requires that the statute, regulation, or contractual
provision expressly state that it is a condition of payment, as held by the
Second and Sixth Circuits.
Universal Health Services, Inc. v. United States, 136 S. Ct. 582 (2015).
Here, taking all of the SAC’s allegations as true, it appears that DePuy’s motion to
dismiss on Rule 12(b)(6) grounds depends on the resolution of those two issues by the Supreme
Court. Liberally construed, the SAC alleges that DePuy had two contracts to sell DePuy
Pinnacle devices to the VA; that the contracts at least implicitly certified that the devices were
sold pursuant to Federal Supply Schedule Group 65 Part II Section A, which requires that items
are “merchantable and fit for use of the particular purpose described in th[e] contract” and “in
compliance with Section 510(k) of the Federal Food, Drug, and Cosmetic Act”; and that the
MoM device did not comply with those implied certifications. (SAC ¶¶ 117, 281-99, 474-78).
Thus, it appears that in order to address DePuy’s motion to dismiss on Rule 12(b)(6)
grounds, the Court would need to await a decision from the Supreme Court about the viability of
the implied-certification theory––and in particular, the theory of implied certification adopted by
the First Circuit in Escobar. Accordingly, the Court will reserve judgment as to those issues.
B.

Count Three: FCA Conspiracy Claim

Count Three alleges that DePuy violated the FCA by conspiring with its own employees
to defraud government health-care programs. The SAC alleges that “[a]s set forth above, all
named defendants have conspired with its officers, agents, and employees to defraud the United
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States government by presenting false or fraudulent claims for payment in violation of 31 U.S.C.
§ 3729(a)(1)(C).” (SAC ¶ 506). The SAC further alleges that “defendants conspired with its
officers, agents, and employees authorizing them to take and conceal the actions set forth
above.” (SAC ¶ 507). DePuy contends that the conspiracy claim should be dismissed because a
corporation cannot conspire with its officers and employees to violate the FCA.
Pursuant to 31 U.S.C. § 3729, “any person who—(A) knowingly presents, or causes to be
presented, a false or fraudulent claim for payment or approval; (B) knowingly makes, uses, or
causes to be made or used, a false record or statement material to a false or fraudulent claim; [or]
(C) conspires to commit a violation of subparagraph (A) [or] (B) . . . is liable” for a violation of
the FCA.
Of course, a corporation can only violate the FCA through the actions of its agents and
employees. If DePuy is violating the FCA, there is no meaningful distinction between the
relators’ claims in Counts One and Two for false or fraudulent claims, statements, and records
and Count Three for conspiracy to defraud the government health-care programs.
It therefore does not make sense to permit a conspiracy claim under the FCA to proceed
on the theory that DePuy has conspired with its officers and employees. This concept has been
endorsed by the Supreme Court in antitrust law. See Copperweld Corp. v. Independence Tube
Corp., 467 U.S. 752, 769 (1984) (explaining that “officers of a single firm are not separate
economic actors pursuing separate economic interests, so agreements among them . . . do not
provide the plurality of actors imperative for a” conspiracy under section 1 of the Sherman Act).
Multiple courts have found that companies cannot conspire with their employees or agents in the
FCA context. See, e.g., United States ex rel. Ruhe v. Masimo Corp., 929 F. Supp. 2d 1033,
1037-38 (C.D. Cal. 2012) (holding that conspiracy claim failed to state a claim because a

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corporation cannot conspire with its own employees or agents); United States ex rel. Head v.
Kane & Co., 798 F. Supp. 2d 186, 201 (D.D.C. 2011) (finding that a company could not have
conspired with its employees to violate the FCA); United States ex rel. Loughren v.
Unumprovident Corp., 2008 WL 4280133, at *3 (D. Mass. Sept. 15, 2008) (dismissing FCA
conspiracy claims during periods when defendants were corporate affiliates because parent and
subsidiary corporation cannot conspire as a matter of law); United States ex rel. Brooks v.
Lockheed Martin Corp., 423 F. Supp. 2d 522, 528 (D. Md. 2006) (finding that parent company
and its two wholly-owned subsidiaries could not conspire among themselves to violate the FCA);
United States ex rel. Reagan v. East Tex. Med. Ctr. Reg’l Health-care Sys., 274 F. Supp. 2d 824,
856 (S.D. Tex. 2003) (finding that a parent corporation cannot conspire with various components
and subsidiaries to commit a conspiracy in violation of the FCA).
In short, although corporate employees could conspire with outside individuals, such as
physicians, the conspiracy cannot be between the corporations and their officers and employees.
Accordingly, DePuy’s motion to dismiss the conspiracy claim (Count Three) will be granted.
C.

Counts Four through Thirty-Seven: State FCA Claims

Counts Four through Thirty-Seven of the SAC allege violations of various state and
municipal analogues to the federal FCA.12 DePuy contends that those claims should be
dismissed for the same reasons the federal FCA claims should be dismissed.
The First Circuit has noted that “[g]iven the substantive similarity of the state
FCAs . . . and the federal FCA with respect to the provisions at issue in this litigation, the state
statutes may be construed consistently with the federal act.” Amgen, 652 F.3d at 109. Thus,
Rule 9(b)’s heightened pleading requirements apply equally to allegations made pursuant to

12

For these purposes, the District of Columbia will be considered a “state.”

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violations of a state FCA. See, e.g., Nowak, 806 F. Supp. 2d at 357 (“In order to satisfy Rule
9(b), [relator] must allege some specificity with respect to each asserted state and cannot rely
upon generalized pleadings.”).
Here, with two exceptions, the SAC’s state FCA allegations do not even come close to
satisfying the pleading requirements of Rule 9(b). For 33 of the state-law FCA counts, the SAC
contains identical language that “repeat[s] and reallage[s] each and every allegation contained in
the paragraphs above as though fully set forth herein.” (See, e.g., SAC ¶ 509). With the
exceptions of California13 and New York, the SAC contains no allegations of fraudulent conduct
or false claims for the Pinnacle MoM device beyond the repeated conclusory allegations found in
the specific counts.
Moreover, the SAC’s allegations concerning California are limited to a San Diego patient
who allegedly ordered a Pinnacle MoM device and a “Summitt Pinnacle metal on metal” device
through the VA on September 28, 2007. (SAC ¶¶ 485-86). For the reasons discussed above,
those allegations are insufficient to meet the requirements of Rule 9(b). Finally, the SAC’s
allegations about the one New York Medicaid patient who received a “Pinnacle hip implant”––
along with the related New York statistics––are insufficient to survive Rule 9(b) because they do
not refer to the Pinnacle MoM device that is the subject of this litigation and do not raise an
inference of fraud beyond mere possibility. (SAC ¶¶ 414-28, 438-55).
Accordingly, DePuy’s motion to dismiss will be granted as to the state and municipal
FCA claims (Counts Four through Thirty-Seven) for failure to comply with the requirements of
Rule 9(b).

13

California is the only state among the alleged false claims in paragraphs 479 through 490 where the SAC
alleges an order of a Pinnacle MoM device. (See SAC ¶¶ 479-90).

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D.

Motion to Unseal

On August 24, 2015, the relators moved under seal to unseal the SAC. DePuy assented
to that motion on September 2, 2015, but requested that certain other documents also be
unsealed: (1) the relators’ motion to unseal the SAC, the accompanying memorandum of law
and exhibits, and DePuy’s response and accompanying exhibits; and (2) all documents and
filings relating to DePuy’s motion to dismiss.
Under the FCA, a qui tam relator must comply with the following pre-suit requirements:
A copy of the complaint and written disclosure of substantially all material
evidence and information the person possesses shall be served on the
Government . . . . The complaint shall be filed in camera, shall remain under seal
for at least 60 days, and shall not be served on the defendant until the court so
orders. The Government may elect to intervene and proceed with the action
within 60 days after it receives both the complaint and the material evidence and
information.
31 U.S.C. § 3730(b)(2).
The relators filed the initial complaint under seal on May 18, 2012. Judge Talwani
partially unsealed the case on August 12, 2014, but the complaint remained under seal. This
Court denied a renewed motion to unseal the case on March 18, 2015, without prejudice. The
SAC and documents relating to DePuy’s motion to dismiss have remained under seal since.
The case has reached a point where unsealing the complaint and related documents is
appropriate. Accordingly, both parties’ motions to unseal certain documents will be granted and
the Court directs the clerk to unseal the following docket number entries, including exhibits:
Docket Nos. 145, 146, 152, 153, 159, 166, 172, and 177.
E.

Leave to Amend

The relators filed the initial complaint in this case on May 18, 2012. The relators filed an
amended complaint on December 2, 2013. On June 5, 2015, the Court granted, over the

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objection of DePuy, the relators’ motion to amend the first amended complaint and file a second
amended complaint. On June 29, 2015, DePuy filed its motion to dismiss. The relators have not
filed a formal motion for leave to amend the SAC. However, in the conclusion section of their
opposition to DePuy’s motion to dismiss, filed on July 13, 2015, the relators conclude: “For all
the foregoing reasons, defendants’ motion to dismiss the SAC should be denied. In the
alternative, relators should be granted leave to amend insofar as it may be necessary to plead
additional facts to meet the standards of Rule 12(b)(6) and/or 9(b).” (Relators’ Mem. Opp. 30).14
The SAC will be dismissed with prejudice and the relators’ request to file a fourth
complaint will be denied. Relators filed their original complaint in 2012, three years after
Duxbury I firmly established the FCA pleading requirements in the First Circuit. After
amending their complaint twice, relators opposed DePuy’s motion to dismiss instead of filing a
request to amend the complaint a third time. Hedging their bets, at the very end of their
opposition, relators requested leave to amend using boilerplate language. See Ge, 737 F.3d at
128 (“[W]here, as here, a request to file an amended complaint consists of nothing more than
‘boilerplate sentences stating the well-settled ‘freely given’ standard under which a request for
leave to amend is generally analyzed,’ a district court ‘acts well within its discretion when
completely disregarding the request.’” (quoting Silverstrand Invs. v. AMAG Pharm., Inc., 707
F.3d 95, 107-08 (1st Cir. 2013))). Moreover, as the First Circuit has held in the context of postjudgment requests to amend a complaint, allowing relators to file a fourth complaint here after
fully litigating the issues “would allow plaintiffs to pursue a case to judgment and then, if they

14
The relators made similar requests in their sur-reply brief and post-hearing supplemental filing. (Docket
Nos. 166, 179). The relators also contend that leave to amend should be granted because DePuy did not move to
dismiss the SAC with prejudice. But DePuy explicitly did so, as noted on the first page of its motion to dismiss,
filed on June 29, 2015. (Docket No. 145) (“Pursuant to Federal Rules of Civil Procedure 9(b) and 12(b)(6),
Defendants . . . respectfully move to dismiss the relators’ second amended complaint with prejudice.”).

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lose, to reopen the case by amending their complaint to take account of the court’s decision.
Such a practice would dramatically undermine the ordinary rules governing the finality of
judicial decisions, and should not be sanctioned in the absence of compelling circumstances.”
James v. Watt, 716 F.2d 71, 78 (1st Cir. 1983) (Breyer, J.).
Despite full awareness of Rule 9(b)’s pleading standards, the relators—who are expert
witnesses in related products-liability lawsuits against DePuy—have failed to plead with
requisite particularity even a single false claim for the Pinnacle MoM device in their 168-page
second amended complaint. The Federal Rules call for courts to “freely give leave [to amend]
when justice so requires.” Fed. R. Civ. P. 15(a)(2). Justice would not be served by granting
relators’ request to file a third amended complaint; rather, such a grant would prejudice the
defendants and incentivize future unfair amendment tactics.
Accordingly, relators’ request to file a third amended complaint is denied on the grounds
of undue delay. See Foman v. Davis, 371 U.S. 178, 182 (1962) (noting that amendments may be
denied on the basis of “undue delay, bad faith or dilatory motive on the part of the movant,
repeated failure to cure deficiencies by amendments previously allowed, undue prejudice to the
opposing party by virtue of allowance of the amendment, [and] futility of amendment”); United
States ex rel. D’Agostino v. EV3, Inc., 802 F.3d 188, 195 (1st Cir. 2015) (noting that, even
though the Rule 15 standard applied––instead of the Rule 16 good cause standard––to a relator’s
request to amend a qui tam complaint, “[l]et us be perfectly clear. We do not suggest that the
district court will be compelled to grant the motion to amend on remand. After all, there are
myriad reasons that might justify the denial of a motion for leave to amend, including undue
delay, repeated failure to cure deficiencies, or futility.” (citing Foman, 371 U.S. at 182)). “When
‘considerable time has elapsed between the filing of the complaint and the motion to amend, the

55

movant has [at the very least] the burden of showing some valid reason for his neglect and
delay.’” In re Lombardo, 755 F.3d 1, 3 (1st Cir. 2014) (internal quotation marks omitted)
(quoting Stephanischen v. Merchants Despatch Transp. Corp., 722 F.2d 922, 933 (1st Cir.
1983)). The First Circuit has “previously labeled as ‘considerable time’ warranting explanation,
periods of fourteen months, fifteen months, and seventeen months.” Id. (citations omitted)
(citing Grant v. News Grp. Bos., Inc., 55 F.3d 1, 6 (1st Cir. 1995) (fourteen months); AcostaMestre v. Hilton Int’l of P.R., Inc., 156 F.3d 49, 51-52 (1st Cir. 1998) (fifteen months);
Stepanischen, 722 F.2d at 933 (sixteen months)). The First Circuit has “also held that in
assessing whether delay is undue, a court will take account of what the movant ‘knew or should
have known and what he did or should have done.’” Id. at 3-4 (quoting Invest Almza v. TempleInland Forest Prods. Corp., 243 F.3d 57, 72 (1st Cir. 2001)). Delays for periods as short as
eleven months, four months, and less than three months have been found to constitute undue
delay. See Calderón-Serra v. Wilmington Trust Co., 715 F.3d 14, 19-20 (1st Cir. 2013) (elevenmonth delay); Villanueva v. United States, 662 F.3d 124, 127 (1st Cir. 2011) (four-month delay);
Kay v. N.H. Dem. Party, 821 F.2d 31, 34 (1st Cir. 1987) (less than three-month delay).
Here, the relators filed their original complaint in 2012, when they should have already
been aware of the First Circuit’s Rule 9(b) pleading standard in FCA cases. Since that time, they
have amended the complaint twice. At the very latest, they should have been aware of the
SAC’s deficiencies when DePuy filed its motion to dismiss in June 2015. Instead, the relators
vigorously litigated the motion, including the filing of a sur-reply and multiple post-argument
supplemental briefs. Now, they wish to amend the complaint a third time. Considerable time
has passed since the filing of the original complaint and since the relators were put on notice of
the defects in the complaint, and the relators have not demonstrated a legitimate reason for their

56

neglect and delay. Accordingly, the relators’ request for leave to amend the SAC and file a third
amended complaint will be denied.
IV.

Conclusion
For the foregoing reasons, DePuy’s motion to dismiss the second amended complaint

with prejudice is GRANTED, and the clerk is hereby directed to unseal the docket entries
indicated above. Relators’ request for leave to amend its second amended complaint is
DENIED.
So Ordered.

/s/ F. Dennis Saylor
F. Dennis Saylor IV
United States District Judge

Dated: February 2, 2016

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