SIMPSON v. BAYER PHARMACEUTICAL CORP. et al

Filing 153

OPINION. Signed by Judge Jose L. Linares on 5/20/14. (jd, )

NOT FOR PUBLICATION

UNITED STATES DISTRICT COURT
DISTRICT OF NEW JERSEY

IJNITED STATES of AMERICA, ex rel
LAURIE SIMPSON, et al,

Civil Action No 05-3 895 (JLL) (JAD)

Plaintiff! Relator,
OPINION

v.
BAYERCORP.,etal.,
Defendants
LINARES, District Judge.

This matter comes before the Court by way of Relator Laurie Simpson (“Simpson”)’s
motion for reconsideration of this Court’s April 11, 2014 Opinion and Order. The Court has
considered the parties’ submissions in support of and in opposition to the instant motion and
decides this matter without oral argument pursuant to Federal Rule of Civil Procedure 78. For
the reasons set forth below, the Court DENIES Simpson’s motion.
I.

BACKGROUND’

The Food, Drug, and Cosmetic Act (the “FDCA”) generally prohibits “misbranded”
drugs from entering interstate commerce. 21 U.S.C.

§ 33l(a)-(b).

As is relevant here, a drug is

misbranded when its manufacturer promotes it for off-label uses, i.e., uses that the Food and
Drug Administration did not approve. Ironworkers Local Union 68 v. AstraZeneca Pharm.., LP,
634 F.3d 1352, 1357 n.5 (11th Cir. 2011) (citations omitted). According to Simpson’s Eighth
l

The Court declines to set forth the facts of this case at length since it has already done so and writes only for
the
parties. The Court, instead, recounts the portions of its April 11, 2014 Opinion that are relevant to Simpson’s
motion for reconsideration.

1

Amended Complaint, Bayer misbranded one of its prescription drugs, Trasylol, by promoting
23
off-label uses of the drug. (Compi.

¶J 134, 136-37, 143,

145, 148, 15 1-52, 157, 164).

The first six counts of Simpson’s Complaint, which this Court dismissed in its April 11,
2014 Opinion and Order, allege that Bayer violated sections 3729(a)(1) and (2) of the False
Claims Act (the “FCA”), 31 U.S.C.

§ 3729(a)(l)-(2).

(Id. at ¶J 318-52(II)). To state a claim

under either section, a plaintiff must allege, among other things, the existence of a false or
fraudulent claim for payment. U.S. ex rel. Schmidt v. Zimmer, Inc., 386 F.3d 235, 242 (3d Cir.
2004) (citation omitted). Each of the first six counts of Simpson’s Complaint alleges that each
claim for payment for Trasylol was “false or fraudulent in implying that the drug was not
misbranded and was permitted in interstate commerce.” (Compl.

¶J 324, 334, 342, 352(I),

360(1), 35 1(11)). Based on this common allegation, the Court previously concluded that the first
six counts of Simpson’s Complaint rely on an implied false certification theory. U.S. ex rel.
Simpson v. Bayer Corp., No. 05-3895, 2014 WL 1418293, *4 (D.N.J. Apr. 11, 2014). The Court

then held that the first six counts of Simpson’s Complaint had failed to state a claim under that
theory. Id. at *5..7• Simpson now moves the Court to reconsider its holding on two bases: (1)
the Court overlooked controlling Third Circuit law; and (2) the Court incorrectly characterized a
factual allegation as a legal conclusion.
IL

LEGAL STANDARD

In this District, motions for reconsideration are governed by Local Civil Rule 7.1(i), and
“[rjeconsideration is an extraordinary remedy, that is granted ‘very sparingly.” Brackett v.
2

All further references to Simpson’s Complaint refer to the Eighth Amended Complaint.
All further references to Bayer refer to Defendants Bayer Corporation, Bayer Healthcare Pharmaceutic
als, Inc., and
Bayer Healthcare, LLC.
Simpson’s Complaint uses the numbers 346 through 365 twice when numbering paragraphs.
When this Court cites
to the first instance in which a number is used for a paragraph, the Court follows that number
with a (I). When this
Court cites to the second instance in which a number is used for a paragraph, the Court follows
that number with
(II).

2

Ashcrofl, No. 03-3988, 2003 WL 22303078, *2 (D.N.J. Oct. 7, 2003) (quoting Interfaith Cmty.
Org. v. Honeywell Int’l Inc., 215 F. Supp. 2d 482, 507 (D.N.J. 2002)). The purpose of such a
motion “is to correct manifest errors of law or fact or to present newly discovered evidence.”
Jill Pharm. USA, Inc. v. Chertoff, 447 F.3d 196, 199 n.4 (3d Cir. 2006) (quoting Harsco Corp. v.
Ziotnicki, 779 F.2d 906, 909 (3d Cir. 1985)). As such, a movant may not use a motion for
reconsideration to relitigate old matters or to raise new matters that could have been raised
before the court reached its original decision. P. Schoenfeld Asset Mgmt. LLC v. Cendant Corp.,
161 F. Supp. 2d 349, 352 (D.N.J. 2001) (citation omitted). To prevail on a motion for
reconsideration, the movant “must satisfy a high burden, and must ‘rely on one of three major
grounds: (1) an intervening change in controlling law; (2) the availability of new evidence not
available previously; or (3) the need to correct clear error of law or prevent manifest injustice.”
Leja v. Schmidt Mfg., Inc., 743 F. Supp. 2d 444, 456 (D.N.J. 2010) (quoting N. River Ins. Co. v.
CIGNA Reins. Co., 52 F.3d 1194, 1218 (3d Cir. 1995)).
III.

DLSCUSSION

A.

Whether the Court Overlooked Controlling Precedent

Simpson contends that this Court overlooked controlling Third Circuit law when it held
that the first six counts of her Complaint failed to state a claim under the implied false
certification theory. (Pl.’s Br. 1-2, ECF No. 149-1). To state such a claim, the Third Circuit
has
explained that “a plaintiff must show that compliance with the regulation which the defendant
allegedly violated was a condition of payment from the Government.” US. ex ret. Wilkins v.
United Health Grp. Inc., 659 F.3d 295, 309 (3d Cir. 2011) (citations omitted). Such conditions
“are those which, if the government knew they were not being followed, might cause it to
actually refuse payment.” Id. (quoting US. ex rd. Conner v. Sauna Reg’l Heath Ctr., Inc.,
543
3

F.3d 1211, 1220 (10th Cir. 2008)). Simpson argues, in essence, that the Court misapplied this
standard when it dismissed the first six counts of her Complaint. (Pl.’s Br. 1-2). The Court
briefly considers Simpson’s argument since, given the opportunity that the Court has provided
Simpson to amend her Complaint, doing so will likely hasten the resolution of this case. See
Arista Records, Inc. v. Flea World, Inc., 356 F. Supp. 2d 411, 417 (D.N.J. 2005) (court briefly
addressed movant’ s arguments in favor of reconsideration for the sake of hastening the ultima
te
resolution of the case)
The theory underpinning the first six counts of Simpson’s Complaint is that Bayer’s
compliance with the FDCA’s misbranding provisions is, in and of itself, a condition of payme
nt.
The Court again rejects this theory. Cf US. ex rel. Booker v. Pfizer, Inc.,

---

F. Supp. 2d

---,

No.

10-11166, 2014 WL 1271766, *14 (D. Mass. Mar. 26, 2014) (rejecting relator’s theory that
a
claim is false or fraudulent because it was induced by misbranding alone). “Under an implie
d
false certification theory,

.

.

.

‘the analysis focuses on the underlying contracts, statutes, or

regulations themselves to ascertain whether they make compliance a prerequisite to the
government’s payment.” Wilkins, 659 F.3d at 313 (quoting Conner, 543 F.3d at 1218).
Here,
the underlying statute—the FDCA—explicitly prohibits (a) “the introduction or deliver
y for
introduction into interstate commerce of any.. drug.
.

“misbranding of any.

.

.

drug.

.

.

.

.

that is.

.

.

misbranded,” and (b) the

in interstate commerce.” 21 U.S.C.

5
§ 331(a)-(b). It is clear

from the quoted language that a drug manufacturer’s compliance with the FDCA’s misbra
nding
provisions is a condition for a drug’s legality in interstate commerce. However, is
it unclear
from the quoted language that a drug manufacturer’s compliance with the FDCA
’s misbranding
provisions is a condition for receiving payment from the Government under CHAM
PVA, the
The first six counts of Simpson’s Complaint specifically cite 21 U.S.C.
that section of the FDCA. (Compl. ¶ 320, 329, 338, 347, 356, 346(11)).

4

§ 331 (a)-(b), and thus the Court focuses on

FEHBP, Medicaid, Medicare, or TRICARE. Stated otherwise, while compliance with the
FDCA’s misbranding provisions is a condition, it is not a condition impacting whether the
Government might actually refuse payment for a drug. Thus, the first six counts of Simps
on’s
Complaint do not allege the existence of a condition of payment.
Simpson attempts to correct this deficiency by pointing to her Complaint’s allegations
that the Department of Justice (“DOJ”) has pursued and obtained a number of crimin
al and FCA
settlements against companies that misbranded drugs. (Pl.’s Br. 2). Simpson conten
ds that these
allegations “easily support the plausibility of the conclusion that the Government might
refuse
payment based on misbranding.” (Id. (emphasis in the original)). Simpson’s conten
tion is
unpersuasive for at least two reasons. First, it ignores that whether the Government “migh
t” do
something depends on whether the Government can do that thing. Critically, Simpson
has not
pointed the Court to any language in the FDCA’s misbranding provisions that allows
the
Government to refuse to pay for a drug under the aforementioned healthcare progra
ms because
the drug’s manufacturer failed to comply with the FDCA’s misbranding provisions.
See Wilkins,
659 F.3d at 309 (“the fundamental flaw in appellants’ allegations is that the amend
ed complaint
does not cite to any regulation demonstrating that a participant’s compliance with
Medicare
marketing regulations is a condition for its receipt of payment from the Govern
ment.”).
Second, Simpson’s contention improperly conflates the DOJ’s ability to bring
and settle
misbranding claims against pharmaceutical companies with the Government’s
ability to refuse to
pay for drugs under a number of Government healthcare programs. Accordingly,
the first six
counts of Simpson’s Complaint do not adequately allege that compliance with
FDCA’s
misbranding provisions is a condition of payment under any of the healthc
are programs
discussed in those counts, and her motion for reconsideration on this ground
is denied.
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B.

Whether the Court improperly Characterized a Factual Allegation as a Legal
Conclusion

Simpson next argues that the Court erred when it characterized her allegation that “[i]f
the United States had known that Trasylol was misbranded and prohibited from interstate
commerce, it would not have paid for it” as a legal conclusion. The Court disagrees. At bottom
,
this allegation simply restates in a conclusory fashion one version of the legal standard for
stating a claim under the implied false certification theory set forth in Wilkins: “a plaintiff must
show that if the Government had been aware of the defendant’s violations of the.

.

.

laws and

regulations that are the bases of [her] FCA claims, it would not have paid the defendant’s
claims.” Id. at 307 (citing Conner, 543 F.3d at 1219-20). Accordingly, the Court finds
Simpson’s argument unavailing and declines to reconsider this aspect of its prior Opinion.
IV.

CONCLUSION

For the reasons discussed herein, the Court DENIES Simpson’s motion for
reconsideration.
An appropriate Order accompanies this Opinion

DATED:

of May, 2014.

JOSE L. LINARES
U.S. DISTRICT JUDGE

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