VEZEAU, ET AL v. PFIZER, INC.
MEMORANDUM. SIGNED BY HONORABLE R. BARCLAY SURRICK ON 6/22/2017. 6/22/2017 ENTERED AND COPIES FAXED AND MAILED BY CHAMBERS; E-MAILED.(amas)
IN THE UNITED STATES DISTRICT COURT
FOR THE EASTERN DISTRICT OF PENNSYLVANIA
THE UNITED STATES OF AMERICA, et al.,
ex rel. CATHERINE A. BROWN and
BERNARD G. VEZEAU
JUNE 22 , 2017
Presently before the Court is Defendant’s Motion to Certify Questions for Interlocutory
Review And For Stay. (ECF No. 126.) For the following reasons, Defendant’s Motion will be
Eleven years ago, Relators filed this lawsuit against Defendant Pfizer under the False
Claims Act (“FCA”) based on allegations that Defendant submitted misleading information to
the Food and Drug Administration (“FDA”), and concealed critical information in order to gain
approval of its antifungal drug, Vfend. A full review of the facts in this matter appears in our
previous Memoranda addressing Defendant’s First and Second Motions to Dismiss, dated
February 29, 2016 and April 12, 2017, respectively. (ECF Nos. 94, 122.)
On December 29, 2005, Relators filed a qui tam Complaint on behalf of the United States
under seal, pursuant to the FCA, 31 U.S.C. § 3729 et seq. (ECF No. 1.) Nearly four years later,
on December 1, 2009, Relators filed an Amended Complaint. (ECF No. 19.) The case remained
under seal for six years while the United States decided whether to intervene. Ultimately, the
United States declined to intervene, and on November 28, 2011, the Amended Complaint was
unsealed. (ECF No. 32.) Defendant filed a motion to dismiss Relators’ Amended Complaint,
which we granted in part and denied in part. Relators then filed a Second Amended Complaint.
(SAC, ECF No. 98.) Defendant filed a motion to dismiss Relators’ SAC, which we denied.
Defendant now seeks interlocutory review of our April 12, 2017 Memorandum and Order.
Defendant seeks certification of the April 12th Order, which denied Defendant’s Second
Motion to Dismiss Relators’ SAC. Relators’ SAC alleges that Defendant knowingly caused to
be presented false or fraudulent claims for payments, and knowingly entered into conspiracies
with paid “speakers,” medical marketing firms, “experts,” and other third parties for the purpose
of defrauding the United States Government. (SAC ¶¶ 204-20.) Defendant made several
arguments in its Second Motion to Dismiss. Three of these arguments are relevant for the
purposes of addressing the instant Motion. They are: (1) that the Court lacked subject matter
jurisdiction over portions of Relators’ SAC; (2) that Defendant’s off-label use of Vfend on
neutropenic patients and for empiric therapy is covered by Medicare; and (3) that Relators have
failed to satisfy the materiality requirement of the FCA because the Government continued to
pay for Vfend despite Relators’ allegations in 2005. In the Memorandum and Order of April
12th, after a full analysis, we concluded that: (1) Relators were permitted to file an amended
complaint in order to cure a first-to-file defect; (2) 42 U.S.C. § 1395x(t)(2)(A) applied to Vfend,
an antifungal drug; and (3) the Government’s continued payments of Vfend were insufficient to
establish that Relators’ claims failed for lack of materiality.
Defendant’s instant Motion requests that this Court certify three questions for
Is it possible for allegations to satisfy the FCA’s demanding materiality
requirement when the government learned about the allegations more than a
decade ago, conducted a multi-year investigation, and continues to pay the
If a relator “brings a related action” in violation of the FCA’s first-to-file
rule, can the relator cure this defect merely by filing an amended complaint after
the earlier-filed lawsuit is no longer “pending?”
Does 42 U.S.C. § 1395x(t)(2)(B) apply to Vfend even though it is not
“used in any anticancer chemotherapeutic regimen?”
Generally, an order denying a motion to dismiss is not immediately appealable because it
is not a final judgment. See In re Chocolate Confectionary Antitrust Litig., 607 F. Supp. 2d 701,
704 (M.D. Pa. 2009) (“Denials of motions to dismiss are not final orders, and a losing party may
not ordinarily pursue an immediate appeal from them.”). However, district courts may certify a
non-final order for interlocutory appeal under 28 U.S.C. § 1292(b). Id. To certify a non-final
order for interlocutory appeal, “[t]he order must (1) involve a ‘controlling question of law,’
(2) offer ‘substantial ground for difference of opinion’ as to its correctness, and (3) if appealed
immediately, ‘materially advance the ultimate termination of the litigation.’” Katz v. Carte
Blanche Corp., 496 F.2d 747, 754 (3d Cir. 1974) (quoting 28 U.S.C. § 1292(b)). However,
“[t]he certification procedure is not mandatory; indeed, permission to appeal is wholly within the
discretion of the courts, even if the criteria are present.” Bachowski v. Usery, 545 F.2d 363, 368
(3d Cir. 1976).
The decision to certify an order for interlocutory review is only appropriate in
“exceptional circumstances and we should be mindful of the strong policy against piecemeal
appeals when exercising our discretion.” U.S. ex rel. Nevyas v. Allergan, Inc., No. 09-432, 2015
WL 4064629, at *2 (E.D. Pa. July 2, 2015) (citation and internal quotation marks omitted). “The
Third Circuit has held that certification is to be used in exceptional cases where an immediate
appeal would avoid protracted and expensive litigation.” Zygmuntowicz v. Hosp. Investments,
Inc., 828 F. Supp. 346, 353 (E.D. Pa. 1993) (internal citations omitted). “The party seeking
interlocutory review has the burden of persuading the district court that exceptional
circumstances exist that justify a departure from the basic policy of postponing appellate review
until after the entry of final judgment.” Premick v. Dick’s Sporting Goods, Inc., No. 06-0530,
2007 WL 588992, at *2 (W.D. Pa. Feb. 20, 2007) (citation omitted).
As noted above, a non-final order may be certified for interlocutory appeal if it:
(1) involves a “controlling question of law,” (2) for which there is “substantial ground for
difference of opinion,” and (3) which may “materially advance the ultimate termination of the
litigation” if appealed immediately. Katz, 496 F.2d at 754. “Before an order can be certified all
three of the factors identified in § 1292(b) must be met; the importance of a single factor,
standing alone, cannot be determinative.” Piazza v. Major League Baseball, 836 F. Supp. 269,
270 (E.D. Pa. 1993) (citing Katz, 496 F.2d at 754). We address each factor in turn.
Controlling Question of Law
In our April 12th Order, we denied Defendant’s Motion to Dismiss Relators’ SAC. “An
order involves a controlling question of law if either (1) an incorrect disposition would constitute
reversible error if presented on final appeal or (2) the question is ‘serious to the conduct of the
litigation either practically or legally.’” In re Chocolate Confectionary Antitrust Litig., 607 F.
Supp. 2d at 705 (quoting Katz, 496 F.2d at 755).
If the Third Circuit were to disagree with our determination that: (1) Relators were
permitted to file an amended complaint in order to cure a first-to-file defect; (2) 42 U.S.C. §
1395x(t)(2)(A) applied to Vfend, an antifungal drug; or (3) the Government’s continued
payments for Vfend were insufficient to establish that Relators’ claims failed for lack of
materiality, the Order denying Defendant’s Second Motion to Dismiss would be reversed.
Consequently, Relators’ prophylactic and pediatric claims would be barred by either the first-tofile rule or the statute of limitations; Relators’ empiric therapy claims would be dismissed; or
Relators’ claims would fail because they do not meet the materiality requirement necessary to
establish a claim under the FCA. Accordingly, our Order presents controlling questions of law.
Substantial Ground for Difference of Opinion
Defendant’s instant Motion requests that we certify three separate questions for
interlocutory appeal, each of which raises a different legal question. In order for a substantial
ground for difference of opinion to exist, Defendant must prove that “there is genuine doubt or
conflicting precedent as to the correct legal standard applied in the orders at issue.” Bush, 629 F.
Supp. 2d at 475 (citation omitted). “The difference of opinion must involve one or more difficult
and pivotal questions of law not settled by controlling authority and the party has the burden of
showing the different courts have issued conflicting and contradictory opinions when
interpreting a particular question of law.” Glover v. Udren, No. 08-990, 2013 WL 3072377, at
*3 (E.D. Pa. June 18, 2013) (internal quotation marks and citations omitted); see also In re
Chocolate Confectionary Antitrust Litig., 607 F. Supp. 2d at 706 (“The existence of conflicting
judicial opinions provides support for certification of an appeal, as does a lack of binding
precedent.”). However, a matter of first impression is not, in and of itself, sufficient to support
certification for interlocutory appeal. Cuttic v. Crozer-Chester Med. Ctr., 806 F. Supp. 2d 796,
805 (E.D. Pa. 2011); see also Shaup v. Frederickson, No. 97-7260, 1998 WL 800321, at *3 (E.D.
Pa. Nov. 17, 1998) (“If questions of first impression alone were sufficient to warrant certification
for an immediate appeal, our Court of Appeals would be besieged with piecemeal interlocutory
Defendant argues that courts have ruled that an amended complaint does not cure the
first-to-file bar under the FCA. As we noted in our Memorandum, we agree that some courts
have held that filing an amended complaint does not cure a first-to-file defect. See United States
ex rel. Brown v. Pfizer, Inc., No. 05-6795, 2017 WL 1344365, at *3 n.1 (E.D. Pa. Apr. 12, 2017).
While the First Circuit and several district courts have held that a relator may file an amended
complaint in order to cure a first-to-file defect, other district courts have reached the opposite
conclusion. See, e.g., United States v. Medco Health Sols., Inc., No. 11-684, 2017 WL 63006, at
*12 (D. Del. Jan. 5, 2017); U.S. ex rel. Carter v. Halliburton Co., 144 F. Supp. 3d 869, 880 (E.D.
Va. 2015). The lack of controlling authority from the Supreme Court or Third Circuit, combined
with the varying conclusions reached by the First Circuit and district courts, demonstrates that
there is substantial ground for a difference of opinion as to whether a relator can file an amended
complaint to cure a first-to-file defect.
Defendant argues that courts have ruled that a relator cannot satisfy the FCA’s materiality
requirement if the Government reimburses a defendant despite existing allegations of fraud. In
Universal Health Servs., Inc. v. United States, 136 S. Ct. 1989, 2003 (2016), the Supreme Court
held that “if the Government pays a particular claim in full despite its actual knowledge that
certain requirements were violated, that is very strong evidence that those requirements are not
material.” As we noted in our previous Memorandum, there are competing theories with regard
to what defines “actual knowledge.” The Supreme Court left open the question of what
constitutes “actual knowledge,” and lower courts have reached varying conclusions on the
matter. On remand from the Supreme Court, the First Circuit in Escobar stated that “mere
awareness of allegations concerning noncompliance with regulations is different from knowledge
of actual noncompliance.” Universal Health Servs., Inc. v. United States, 842 F.3d 103, 112 (1st
Cir. 2016). Conversely, only one month later, the First Circuit in D’Agostino v. ev3, Inc., 845
F.3d 1, 7 (1st Cir. 2016) noted that “the fact that CMS [did] not den[y] reimbursement for [the
defendant] in the wake of [the relator’s] allegations casts serious doubt on the materiality of the
fraudulent representations that [the relator] allege[d].” The lack of controlling authority from the
Supreme Court or Third Circuit, combined with the conflicting conclusions in the First Circuit,
demonstrates a substantial ground for difference of opinion as to whether allegations of
noncompliance demonstrates “actual knowledge” of the noncompliance.
Defendant argues that the statutory provision that we applied to Relators’ Medicare
claims—42 U.S.C. § 1395x(t)(2)(B)—does not apply to Vfend. In our prior Memoranda
addressing Defendant’s First and Second Motions to Dismiss, we held that the statutory
provision was not limited to anticancer drugs, and that it applied to antifungal drugs such as
Vfend. Defendant has not presented any controlling authority on this matter. However,
Defendant has cited two district court cases, both of which apply different statutory language.
See Broome v. Burwell, No. 14-01248, 2015 WL 1526532, at *4 (D. Or. Apr. 1, 2015); Nievod v.
Sebellius, No. 11-4134, 2013 WL 503089, at *2 (N.D. Cal. Feb. 8, 2013). In light of the lack of
binding precedent, we find that there exists a substantial ground for a difference of opinion.
Materially Advance Termination of the Litigation
In considering whether an appeal would materially advance the ultimate termination of
litigation, “courts have focused on whether an appeal would (1) eliminate the need for trial,
(2) eliminate complex issues so as to simplify the trial, or (3) eliminate issues to make discovery
easier and less costly.” United States v. Exide Corp., No. 00-cv-3057, 2002 WL 992817, at *2
(E.D. Pa. May 15, 2002); see also Knipe v. SmithKline Beecham, 583 F. Supp. 2d 553, 600 (E.D.
Pa. 2008) (considering “whether the need for trial would be eliminated [and] whether the trial
would be simplified by the elimination of complex issues”).
In determining whether certification would materially advance the termination of the
litigation, courts often consider whether the parties have initiated discovery. “Certification is
more likely to materially advance the litigation where the appeal occurs early in the litigation,
before extensive discovery has taken place and a trial date has been set.” Katz v. Live Nation,
Inc., No. 09-3740, 2010 WL 3522792, at *3 (D.N.J. Sept. 2, 2010); see also UnitedHealth Grp.
Inc. v. MacElree Harvey, Ltd., No. 16-1026, 2016 WL 5239675, at *3 (E.D. Pa. Sept. 21, 2016)
(holding that immediate appeal would materially advance termination of the litigation because
the case was “early in its life-cycle” and “[s]ubstantial discovery ha[d] not yet occurred”); In re
Chocolate Confectionary Antitrust Litig., 607 F. Supp. 2d at 707 (“Cases in which discovery has
closed are generally inappropriate for interlocutory appeal because they are rapidly approaching
conclusion under their own momentum.”) (citation omitted); Aluminium Bahrain B.S.C. v.
Dahdaleh, No. 08-299, 2012 WL 5305169, at *3 (W.D. Pa. Oct. 25, 2012) (holding that
immediate appeal would materially advance termination of the litigation because discovery
“promise[d] to be lengthy and complex”). Here, discovery has not yet commenced, and a trial
date has not been set. Given the complexity of this case, we anticipate that discovery will be
extensive. “Appellate review of the motions to dismiss could eliminate the need for this period
of prolonged and costly discovery,” or alternatively, it could “validate these significant
expenditures.” In re Chocolate Confectionary Antitrust Litig., 607 F. Supp. 2d at 708. If the
Third Circuit rules in Defendant’s favor with regard to all three issues, we could avoid wasting
significant time and resources on what may be needless discovery in this eleven year-old case.
In considering whether an appeal would materially advance the ultimate termination of
litigation, “[i]t is not required that a reversal of the Court’s Order would end the litigation.”
Domestic Drywall, No. 13-2437, 2016 WL 2941114, at *4 (E.D. Pa. May 20, 2016) (citing Katz,
496 F.2d at 755). Courts have ruled that if “resolution of the issue could clarify at least one
complex issue,” then the moving party has satisfied their burden of proving that certification
would materially advance the ultimate termination of the litigation. Id.; see also UnitedHealth
Grp., 2016 WL 5239675, at *3 (certifying the case for interlocutory appeal because “the vast
majority of this case [could] necessarily be dismissed”); Patrick v. Dell Fin. Servs., 366 B.R.
378, 387 (M.D. Pa. 2007) (certifying the case for interlocutory review because “[w]hile a
reversal of [the order] does not, by itself, terminate th[e] litigation, it would resolve a large
portion of the litigation without wasting the scarce resources of [the court] and the parties”);
Courtney v. La Salle Univ., No. 92-3838, 1996 WL 363910, at *2 (E.D. Pa. June 28, 1996)
(finding that certification could materially advance the ultimate termination of the litigation
because it could “eliminate a key issue” for trial); Nationwide Life Ins. Co. v. Commonwealth
Land Title Ins. Co., No. 05-281, 2011 WL 1044864, at *4 (E.D. Pa. Mar. 23, 2011) (same).
Here, if the Third Circuit finds that: (1) Relators’ SAC does not cure the first-to-file defect; (2)
Relators’ SAC does not satisfy the FCA’s materiality requirement; or (3) 42 U.S.C. §
1395(t)(2)(B) does not apply to Vfend, then—based on Relators’ Complaint—the vast majority
of Relators’ claims will be eliminated, potentially leaving only Relators’ kickback claims.
Accordingly, we conclude that a brief delay for appellate review of the April 12th Memorandum
and Order could clarify the law in this area, and materially advance the ultimate termination of
Notwithstanding the fact that this case is eleven years old, because the April 12th
Memorandum and Order involve controlling questions of law for which there is “substantial
ground for difference of opinion,” and “an immediate appeal from the [O]rder may materially
advance the ultimate termination of the litigation,” we are compelled to conclude that it is
appropriate to certify Defendant’s proposed questions for interlocutory review. 28 U.S.C. §
Defendant also requests that we stay the proceedings pending the resolution of the
interlocutory appeal. “Each court has the inherent power to control its own docket to promote
fair and efficient adjudication.” New Jersey Prot. & Advocacy, Inc. v. New Jersey Dep’t of
Educ., No. 07-2978, 2008 WL 4692345, at *5 (D.N.J. Oct. 8, 2008) (citing Landis v. N. Am. Co.,
299 U.S. 248, 254 (1936)). Here, we certify our April 12th Order for appellate review since
resolution of the three issues may eliminate complex issues and make discovery easier and less
costly for the parties. A stay is appropriate in this action in order to facilitate these objectives.
Accordingly, we will stay this action pending resolution of the interlocutory appeal of the
April 12th Order.
For the foregoing reasons, Defendant’s Motion to Certify Questions for Interlocutory
Review and for Stay will be granted.
An appropriate Order follows.
BY THE COURT:
R. BARCLAY SURRICK, J.
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