D'Agostino v. EV3, Inc.
845 F.3d 1
| 1st Cir. | 2016Background
- Relator Jeffrey D'Agostino, a former ev3/MTI sales rep, sued under the False Claims Act alleging ev3/MTI caused false claims by marketing two FDA-approved neurovascular devices: Onyx and Axium.
- Onyx received FDA premarket approval in 2005 with a narrow indication and emphasized rigorous training and proctoring; Enteryx (a related molecule) had earlier adverse events and a recall.
- D'Agostino alleges defendants understated or omitted safety issues to the FDA, provided inadequate or misleading training, encouraged off-label uses, and set sales practices that put Onyx/Axium in untrained hands.
- For Axium, D'Agostino alleges repeated redesigns and certain defective manufacturing lots, with some intraoperative malfunctions; he did not allege Axium lacked FDA approval.
- The district court denied leave to file a fourth amended complaint as futile under Rule 15(a); this Court affirmed, holding the proposed amendments failed to plead FCA causation, materiality, or particularized false claims under Rules 9(b) and 12(b)(6).
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether alleged misrepresentations to FDA supporting Onyx approval can sustain FCA fraudulent-inducement claims | D'Agostino: FDA-facing fraud "could have" influenced approval, so payments tied to CMS reimbursement are FCA-liable | Defendants: FDA approval is separate; absent proof FDA actually relied on fraud, there is no causal link to CMS payments | Held: Fraudulent-inducement requires causation; absent official FDA action withdrawing/altering approval, relator cannot show the alleged FDA fraud caused government payments; claim futile |
| Whether alleged failure to provide training made Onyx uses "not reasonable and necessary" and thus produced false Medicare claims | D'Agostino: defendants induced untrained physicians to use Onyx; many patients insured by government → likely false claims submitted | Defendants: Label did not require training be provided by manufacturer; allegations do not show physicians lacked all training nor identify specific false claims | Held: Claims fail Rule 9(b); no particularized false claims or strong inference that government-paid false claims were submitted |
| Whether Axium manufacturing defects render all claims false ("complete falsity" theory) | D'Agostino: certain lots were defective; if every device were defective, individual false-claim identification unnecessary | Defendants: Allegations identify only some defective lots/incidents, not pervasive defectiveness or specific false claims | Held: Complaint does not plausibly allege all or most Axium devices were defective or that false claims were submitted; theory fails |
| Whether iterative design changes make earlier Axium versions per se false/defective for FCA purposes | D'Agostino: earlier versions were defective compared to later improved designs | Defendants: Product improvements do not render prior FDA-approved versions per se false; would distort FCA and product-liability bounds | Held: Design-improvement allegations do not establish falsity for FCA; claim fails |
Key Cases Cited
- Ashcroft v. Iqbal, 556 U.S. 662 (standards for pleading and plausibility)
- Universal Health Servs., Inc. v. United States, 136 S. Ct. 1989 (FCA materiality is demanding; government practice informs materiality)
- Buckman Co. v. Plaintiffs' Legal Comm., 531 U.S. 341 (courts should not substitute juries for FDA regulatory judgments)
- Glassman v. Computervision Corp., 90 F.3d 617 (futility standard under Rule 15)
- United States ex rel. Karvelas v. Melrose-Wakefield Hosp., 360 F.3d 220 (FCA attaches only to false claims; must link fraudulent scheme to claims)
- United States ex rel. Ge v. Takeda Pharm. Co., 737 F.3d 116 (Rule 9(b) particularity in FCA cases)
- United States ex rel. Rost v. Pfizer, Inc., 507 F.3d 720 (need to show false claims actually submitted; causation requirement)
- Allison Engine Co. v. United States ex rel. Sanders, 553 U.S. 662 (limits on FCA causation doctrines)
- United States ex rel. Kelly v. Novartis Pharm. Corp., 827 F.3d 5 (FCA false claims and materiality framework)