United States Ex Rel. Ambrosecchia v. Paddock Laboratories, LLC
855 F.3d 949
8th Cir.2017Background
- Relator Shara Ambrosecchia, a former employee of Paddock Laboratories and Perrigo, sued under the False Claims Act (FCA) alleging Defendants submitted reimbursement-eligible codes for DESI-LTE drugs, causing improper Medicare/Medicaid payments.
- The district court dismissed the FCA claims under the FCA’s public disclosure bar, 31 U.S.C. § 3730(e)(4), concluding the allegations had been publicly disclosed and Ambrosecchia was not an original source. State-law claims were dismissed without prejudice.
- Defendants moved under Rule 12(b)(6); Ambrosecchia argued the public disclosure bar cannot be resolved on a dismissal motion because the 2010 amendment made it non-jurisdictional and therefore a factual question.
- The district court relied on published federal reports (Q2 2012 or earlier) and a prior complaint (Conrad v. Abbott) as public disclosures; Ambrosecchia only challenged Conrad on appeal and thus waived challenge to the federal reports.
- The court found Ambrosecchia did not qualify as an original source because (1) she disclosed information to the government only after the public reports, and (2) her complaint alleged only conclusory or non-specific independent knowledge that did not materially add to public disclosures.
- The court also denied leave to amend (Relator’s request lacked proposed substance) and affirmed the district court’s allowance of Perrigo PLC’s joinder in Paddock’s motion to dismiss.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether the public disclosure bar can be resolved on a motion to dismiss | Ambrosecchia: post-2010 amendment is non-jurisdictional; thus factual and not resolvable at dismissal | Defendants: dismissal appropriate under Rule 12(b)(6); courts may consider public records on such motions | Held: Court may resolve the issue on Rule 12(b)(6) dismissal and consider public records (Paulos, Kraxberger guidance) |
| Whether the complaint was barred by public disclosure | Ambrosecchia: her allegations were not publicly disclosed or she is an original source | Defendants: federal reports (and Conrad) publicly disclosed substantially the same allegations | Held: Public reports publicly disclosed the claims; Ambrosecchia waived most challenges and bar applies |
| Whether Ambrosecchia qualifies as an original source | Ambrosecchia: she had independent, materially additive knowledge and voluntarily informed Government before filing | Defendants: she provided information after public disclosures and pleaded only conclusory or insufficient specifics | Held: Not an original source — disclosure to Government occurred after public reports and complaint lacked specific independent material additions |
| Whether district court abused discretion in denying leave to amend or entering default against Perrigo PLC | Ambrosecchia: should have leave to amend; Perrigo PLC should not have joined motion (default) | Defendants: Relator never specified proposed amendments; joinder was permitted and Relator had notice | Held: Denial of leave not an abuse (no proposed amendment substance); joinder appropriate and no due process violation |
Key Cases Cited
- U.S. ex rel. Newell v. City of St. Paul, Minn., 728 F.3d 791 (8th Cir.) (explains public disclosure/original source framework)
- U.S. ex rel. Paulos v. Stryker Corp., 762 F.3d 688 (8th Cir.) (courts may consider matters integral to claim and public records on Rule 12(b)(6))
- U.S. ex rel. Kraxberger v. Kan. City Power & Light Co., 756 F.3d 1075 (8th Cir.) (courts must consider alleged public documents when assessing public disclosure bar)
- U.S. ex rel. Moore & Co. v. Majestic Blue Fisheries, LLC, 812 F.3d 294 (3d Cir.) (2010 amendment made public disclosure bar non-jurisdictional)
- Bell Atl. Corp. v. Twombly, 550 U.S. 544 (2007) (plausibility standard for Rule 12(b)(6))
- Ashcroft v. Iqbal, 556 U.S. 662 (2009) (pleading must contain more than conclusory statements)