Laurie Simpson v. Bayer Healthcare
2013 U.S. App. LEXIS 20768
| 8th Cir. | 2013Background
- Simpson, a Bayer employee (1998–2004) turned relator, filed a qui tam FCA action alleging Bayer's marketing of Baycol misrepresented efficacy and risks to government programs.
- The DoD contracted with Bayer to supply Baycol in 1999 and extended the contract in 2001, with a separate 0.8 mg BPA agreed in February 2001; Simpson alleged these were fraudulently induced by Bayer's statements about rhabdomyolysis risk and efficacy.
- Simpson alleged Bayer made false statements that Baycol did not pose greater rhabdomyolysis risk and that a dose–response relationship did not exist, knowledge Bayer purportedly withheld.
- Simpson also alleged that Bayer’s misleading marketing caused federal health-insurance reimbursements (Medicare, Medicaid, FEHBP) to be paid for Baycol prescriptions.
- The district court dismissed the SAC under Rules 9(b) and 12(b)(6) for failure to plead with particularity and, regarding reimbursement claims, for lack of specific, representative false claims.
- The Eighth Circuit affirmed dismissal of the reimbursement claims but reversed and remanded on the DoD fraud-in-the-inducement claims, applying Rule 9(b) to identify who, what, where, when, and how the fraud occurred.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Does the DoD fraud-in-the-inducement theory state a claim under the FCA? | Simpson argues the DoD contracts were fraudulently induced by Bayer's false statements about Baycol’s safety and efficacy. | Bayer contends the allegations fail Rule 9(b) specificity or do not tie to payment claims. | Yes; claims survive 9(b) and can proceed. |
| Do federal health insurance reimbursement claims require specific representative false claims? | Simpson contends Bayer's misleading marketing caused others to submit false claims to government programs. | Bayer argues no representative false claims are pleaded and no direct false claim is identified. | No; dismissal affirmed for lack of representative examples. |
| Should the district court’s reasoning be affirmed or reversed as to DoD and reimbursement theories? | Simpson asserts the DoD theory should survive, given proper 9(b) detailing. | Bayer argues both theories fail for Rule 9(b) or causation issues. | DoD claims reversed and remanded; reimbursement claims affirmed for dismissal. |
Key Cases Cited
- United States ex rel. Vigil v. Nelnet, Inc., 639 F.3d 791 (8th Cir. 2011) (Rule 9(b) requires materially false claims and specificity of claims)
- United States ex rel. Joshi v. St. Luke’s Hospital, 441 F.3d 552 (8th Cir. 2006) (requires representative false claims within the limitations period)
- United States ex rel. Roop v. Hypoguard USA, Inc., 559 F.3d 818 (8th Cir. 2009) (fraud scheme must be tied to specific false reimbursement claims)
- United States ex rel. Marcus v. Hess, 317 U.S. 537 (1943) (fraud-in-the-inducement theory as a viable FCA theory)
- United States v. Hawley, 619 F.3d 886 (8th Cir. 2010) (claims need not be directly to government; can flow through contractors)