CESTRA et al v. CEPHALON, INC. et al
MEMORANDUM AND/OR OPINION. SIGNED BY HONORABLE THOMAS N. ONEILL, JR ON 10/9/2014. 10/9/2014 ENTERED AND COPIES MAILED AND E-MAILED. (ems)
IN THE UNITED STATES DISTRICT COURT
FOR THE EASTERN DISTRICT OF PENNSYLVANIA
UNITED STATES OF AMERICA ex rel.
MATTHEW CESTRA, et al.
CEPHALON, INC., et al.
October 9, 2014
This matter comes before me on defendant Cephalon’s motion to dismiss plaintiff
Matthew Cestra’s Fentora claims contained in his second amended complaint for lack of subject
matter jurisdiction pursuant to Fed. R. Civ. P. 12(b)(1) (Dkt. Nos. 1-41) and plaintiff’s response
(Dkt. No. 1-49). Also before me are the parties’ supplemental briefing. In its motion, Cephalon
moves to dismiss plaintiff’s False Claims Act (FCA) claims with regard to the medication
Fentora. Cephalon contends that § 3730(b)(5) of the FCA, or the “first-to-file” rule, bars
plaintiff’s action due to the existence of previously filed Fentora claims pending before me in
Boise v. Cephalon, Inc., No. 08-287 (E.D. Pa.). For the reasons that follow, I will grant
Fentora is a powerful pain medication approved by the FDA for treatment of breakthrough pain in opioid-tolerant cancer patients. See Dkt. No. 1-2 at ¶ 4, No. 08-287, Dkt. No. 14
at ¶ 77. On August 30, 2010, plaintiff filed his original complaint in the Southern District of
New York alleging that Cephalon’s off-label marketing of Fentora caused prescribing physicians
to submit false claims for reimbursement from government programs in violation of the FCA.
See Dkt. No. 1-2. On March 11, 2011 Cestra filed his first amended complaint (Dkt. No. 1-25)
and on June 24, 2013 Cestra filed his second amended complaint (Dkt. No. 1-39), which both
include Fentora allegations. All of Cestra’s complaints have been unsealed and the government
declined to intervene in his action. See Dkt. No. 1. On March 19, 2014, this case was
transferred to me by Judge Stein of the Southern District of New York. See id.
However, on February 1, 2008 relator Boise filed his original complaint in a separate
action, Boise v. Cephalon, Inc., No. 08-287 (E.D. Pa.) also alleging that Cephalon’s off-label
marketing of Fentora caused prescribing physicians to submit claims for reimbursement from
government programs in violation of the FCA. See No. 08-287, Dkt. No. 1. On January 14,
2010 Boise filed a first amended complaint and on March 4, 2014 he filed a second amended
complaint, which both include Fentora allegations but which also add allegations related to other
medications and additional relators. See id., Dkt. Nos. 14, 69. All of Boise’s complaints have
been unsealed and the government declined to intervene in his action.
STANDARD OF REVIEW
Federal Rule of Civil Procedure 12(b)(1) authorizes dismissal of a complaint for lack of
subject matter jurisdiction. A motion under Rule 12(b)(1) may be treated as either a facial attack
on the complaint or a factual challenge to the court=s subject matter jurisdiction. Gould Elecs.,
Inc. v. United States, 220 F.3d 169, 176 (3d Cir. 2000). A court reviewing a facial attack may
consider only the allegations of the complaint and any documents referenced therein or attached
thereto in the light most favorable to the plaintiff. Id. In reviewing a factual attack, a court may
consider evidence outside the pleadings. Id.
A plaintiff bears the burden of persuasion when subject matter jurisdiction is challenged,
but the legal standard for surviving a Rule 12(b)(1) motion is a low one. Kehr Packages v.
Fidelcor, Inc., 926 F.2d 1406, 1409 (3d Cir. 1991). “A claim may be dismissed under Rule
12(b)(1) only if it ‘clearly appears to be immaterial and made solely for the purpose of obtaining
jurisdiction’ or is ‘wholly insubstantial and frivolous.’” Gould, 220 F.3d at 178. Nevertheless,
“dismissal for lack of jurisdiction is not appropriate merely because the legal theory alleged is
probably false, but only because the right claimed is ‘so insubstantial, implausible, foreclosed by
prior decisions of this Court, or otherwise completely devoid of merit as not to involve a federal
controversy.’” Kulick v. Pocono Downs Racing Ass’n, 816 F.2d 895, 899 (3d Cir. 1987),
quoting Oneida Indian Nation v. Cnty. of Oneida, 414 U.S. 661, 666 (1974).
The FCA’s first-to-file rule provides that: “[w]hen a person brings an action under this
subsection, no person other than the Government may intervene or bring a related action based
on the facts underlying the pending action.” 31 U.S.C. § 3730(b)(5). Cephalon contends that
plaintiff’s Fentora claims are barred by § 3730(b)(5) because complaints containing substantially
similar Fentora allegations were filed in the Boise action before Cestra filed his original
complaint on August 30, 2010 in this action. See Dkt. No. 1-41.
“[T]he phrase ‘related action based on the facts underlying the pending action,’ clearly
bars claims arising from events that are already the subject of existing suits.” U.S. ex rel.
LaCorte v. SmithKline Beecham Clinical Labs., Inc., 149 F.3d 227, 232 (3d Cir. 1998). As long
as “a later allegation states all the essential facts of a previously-filed claim, the two are related
and section 3730(b)(5) bars the later claim, even if that claim incorporates somewhat different
details.” Id. at 232-33. Stated differently, the first-to-file rule applies when an earlier complaint
“subsumes all the material elements” of a later claim or where a later claim merely “echo[e]s . . .
the broader allegation” of the earlier complaint. Id. at 238, 236.
In Lacorte, the Court of Appeals applied § 3730(b)(5) by conducting a claim-by-claim
analysis of the original and later-filed complaints and determining whether each discrete claim
was barred. Id. at 235-36. Thus, some claims contained in a later complaint might be barred by
the earlier complaint while others might survive. See, e.g., U.S. ex rel. Galmines v. Novartis
Pharm. Corp., No. 06-3213, 2013 WL 2649704, at *10 (E.D. Pa. June 13, 2013) (barring
complaint’s kickback claims under § 3730(b)(5) but declining to bar later complaint’s off-label
marketing claims because they involved different medical conditions) certificate of appealability
denied, 2013 WL 4511626 (E.D. Pa. Aug. 26, 2013) and on reconsideration in part, 2013 WL
5924962 (E.D. Pa. Nov. 5, 2013). “The first-to-file bar is designed to be quickly and easily
determinable, simply requiring a side-by-side comparison of the complaints.” In re Natural Gas
Royalties Qui Tam Litig. (CO2 Appeals), 566 F.3d 956, 964 (10th Cir. 2009).
Which Complaints Are Compared
As a threshold issue, the parties disagree over which versions of the Cestra and Boise
complaints are relevant to my analysis under § 3730(b)(5). Cephalon contends that I should
compare the complaints as they existed at the time Cestra brought his later action, which would
mean comparing the Boise first amended complaint and Cestra’s original complaint. See Dkt.
Nos. 1-41 at 5, 1-51 at 1-2, 8 at 5 n.6. Cestra contends that the relevant comparison is between
the Boise first amended complaint and his complaint as it exists today, which would mean his
second amended complaint. See Dkt. Nos. 1-49 at 2 n.2, 10 at 3 n.2.
The courts that have expressly considered this issue in the context of the first-to-file bar
agree with Cephalon. See Grynberg v. Koch Gateway Pipeline Co., 390 F.3d 1276, 1279 (10th
Cir. 2004) (noting that in determining which complaints to compare “we judge whether §
3730(b)(5) barred Grynberg’s qui tam action by looking at the facts as they existed at the time
that action was brought”); U.S. ex rel. Branch Consultants, L.L.C. v. Allstate Ins. Co., 782 F.
Supp. 2d 248, 259 (E.D. La. 2011) (agreeing with the Tenth Circuit and conducting a searching
inquiry into the basis of that interpretation); U.S. ex rel. Shea v. Verizon Bus. Network Servs.
Inc., 904 F. Supp. 2d 28, 35 (D.D.C. 2012) (agreeing with Branch), aff’d sub nom. U.S., ex rel.
Shea v. Cellco P’ship, 748 F.3d 338 (D.C. Cir. 2014). I find the reasoning of those courts
Under the first-to-file rule, a plaintiff cannot “bring a related action based on the facts
underlying the pending action.” 31 U.S.C. § 3730(b)(5). “One ‘brings’ an action by
commencing suit.” U.S. ex rel. Chovanec v. Apria Healthcare Grp. Inc., 606 F.3d 361, 362 (7th
Cir. 2010). “This interpretation of the statute is consistent with the fundamental rule that the
jurisdiction of the court depends upon the state of things at the time of the action brought.” Shea,
904 F. Supp. 2d at 35 (citations omitted). Thus, for the purposes of determining whether Boise’s
action bars Cestra’s Fentora claims under § 3730(b)(5) I will compare the Boise first amended
complaint (No. 08-287, Dkt. No. 14) and Cestra’s original complaint (Dkt. No. 1-2).
Application of the First-To-File Bar
The parties do not dispute that both complaints contain similar factual allegations
regarding Cephalon’s general off-label promotion of Fentora. See Dkt. Nos. 1-41 at 2, 1-49 at 8.
Both complaints allege that Cephalon engaged in a fraudulent scheme to promote Fentora offlabel for non-cancer pain, targeted non-oncologists and attempted to convert prescriptions of a
previous drug Actiq to off-label Fentora prescriptions. Compare Dkt. No. 1-2 at ¶¶ 23-26 and
No. 08-287, Dkt. No. 14 at ¶¶ 76-85. Instead, Cestra asserts that he has made three specific
Fentora claims that are sufficiently distinct from Boise’s earlier claims to avoid the first-to-file
First, Cestra contends that Boise only pled a cause of action under § 3729(a)(1)(A) of the
FCA, which requires that defendants caused a false claim to be presented to the government. In
contrast, Cestra argues that only he has pled that defendants made actually false statements about
Fentora thus giving rise to an additional cause of action under § 3729(a)(1)(B), which contains a
double falsity requirement of making a false statement in order to obtain the false claim. See
Dkt. No. 1-49 at 6-7.
Cestra is mistaken. Boise pled a violation of § 3729(a)(1)(B) as part of Count I of his
first amended complaint. 1 See No. 08-287, Dkt. No. 14 at ¶¶ 100-108. Boise pled specifically
that “defendants knowingly . . . used false records and statements . . . to induce the Government
to approve and pay such false and fraudulent claims.” Id. at ¶ 103. Furthermore, despite Cestra’s
contention that “the gravamen of [Cestra’s] Fentora claims is . . . the off-label promotion was
accomplished by intentionally supplying health care professionals with false, fraudulent, and
misleading information” Cephalon is correct that I did “not find any alleged false statement
regarding Fentora” in plaintiff’s original complaint. Dkt. Nos. 1-49 at 9, 1-51 at 3. Cestra’s
§ 3729(a)(1)(B) cause of action is a mere repetition of the Boise complaint and his claim is based
on the same essential elements contained in the Boise complaint. Thus, Cestra’s Fentora
allegations underlying his § 3729(a)(1)(B) claim are not distinct allegations under the first-to-file
Second, Cestra contends that only his complaint includes “specific kickback allegations
. . . regarding [Cephalon’s] use of financial inducements to affect physicians’ prescribing
behavior.” Dkt. No. 1-29 at 12. Cestra’s original complaint, however, did not include kickback
I must analyze each reasonably discrete claim of fraud for jurisdiction regardless
of how the complaint is formally structured. See U.S. ex rel. Galmines v. Novartis Pharm. Corp.,
No. 06-3213, 2013 WL 2649704, at *10 n.7 (E.D. Pa. June 13, 2013), citing United States ex rel.
Boothe v. Sun Healthcare Grp., Inc., 496 F.3d 1169, 1177 (10th Cir. 2007).
allegations. Furthermore, the Boise first amended complaint does generally allege kickbacks,
though it lacks specifics with regard to Fentora. See No. 08-287, Dkt. Nos. 14 at ¶¶ 3, 35-39.
Thus, Cestra’s complaint does not allege a different fraudulent scheme distinguishing it from the
earlier filed Boise complaint.
Lastly, Cestra correctly asserts that only he has pled that Cephalon violated its Corporate
Integrity Agreement. But Cestra does not allege any unique facts or a different illegal promotion
scheme that would give rise to this allegation. Rather, that violation is merely an inference based
upon facts already alleged and “echo[e]s . . . the broader allegation” of the earlier Boise
complaint. LaCorte, 149 F.3d at 236. Thus, even though Cestra makes this new allegation, his
original complaint still states all of the same essential facts as the earlier Boise first amended
This case is not analogous to Galmines, where the Court did not bar a later-filed claim
alleging that the same drug at issue in an earlier filed action was promoted off-label for a
separate set of conditions. 2013 WL 2649704, at *10. Here there is nothing in Cestra’s
complaint that “pertains to a different off-label promotion scheme” that would “government
notice of the need to investigate” that separate scheme. Id. Both Cestra and Boise’s complaints
allege that Cephalon sought to convert Actiq prescriptions to Fentora after Actiq lost its patent
protection. Compare No. 08-2987, Dkt. No. 14 at ¶¶ 76-79 with Dkt. No. 1-2 at ¶¶ 165-69, 17780. Both complaints allege that the significant majority of Cephalon’s Fentora sales force and
marketing is directed at the off-label use of Fentora and alleges the same methods of off-label
promotion such as the targeting of non-oncology physicians. Compare No. 08-2987, Dkt. No. 14
at ¶¶ 83-4 with Dkt. No. 1-2 at ¶¶ 192-96. The additional details in Cestra’s original complaint
primarily refer to Fentora’s FDA history and Cephalon’s market research studies detailing
statistics about Fentora prescriptions. See Dkt. No. 1-2 at ¶¶ 183-91, 193. Cestra has not
demonstrated how any of the allegations in his original complaint differ substantially from the
Boise first amended complaint much less how they differ so substantially as to constitute an
unrelated action evading the § 3730(b)(5) bar.
For the reasons set forth above, I will grant Cephalon’s motion to dismiss Cestra’s
An appropriate Order follows.
Disclaimer: Justia Dockets & Filings provides public litigation records from the federal appellate and district courts. These filings and docket sheets should not be considered findings of fact or liability, nor do they necessarily reflect the view of Justia.
Why Is My Information Online?