United States Ex Rel. Campie v. Gilead Sciences, Inc., 862 F.3d 890

Background

Relators Jeff and Sherilyn Campie (former Gilead employees) allege Gilead used active ingredient FTC manufactured at unregistered Chinese facilities in FDA‑approved HIV drugs (Atripla, Truvada, Emtriva), concealed the source, and falsified test data.
Alleged conduct: importing unapproved FTC labeled as from approved suppliers, altering labels/inventory records, substituting test batches, and submitting claims for payment/reimbursement to federal programs that rely on FDA approval.
Gilead allegedly sought retroactive FDA approval (PAS) for the Chinese site after using its FTC in finished drugs; FDA registration occurred later and recalls/inspections followed.
Relators assert three FCA theories: (1) factually false certification (nonconforming goods), (2) implied false certification (claims implied compliance with conditions of payment), and (3) promissory fraud (fraud inducing approvals/payments).
District court dismissed the second amended complaint under Rule 12(b)(6); Ninth Circuit reversed and remanded, holding relators plausibly pleaded falsity, scienter, and materiality at the pleading stage and that the retaliation claim (31 U.S.C. § 3730(h)) survives dismissal.

Issues

Issue	Plaintiff's Argument	Defendant's Argument	Held
Whether supplying drugs containing FTC from unapproved facilities can be a "factually false" claim under the FCA	Campie: selling drugs made with unapproved/adulterated FTC misbrands the goods and thus constitutes a factually false claim	Gilead: FDA approval of the drugs means reimbursement claims cannot be "false" solely because of later‑alleged manufacturing violations	Held: Nonconforming goods can support a factually false claim; relators plausibly plead misbranding/mislabeling that made claims false
Whether submission of claims for FDA‑approved drugs can give rise to implied false certification liability	Campie: claims for Truvada/Atripla/Emtriva implicitly certified compliance with payment‑related requirements (manufacturing/approval); omissions made representations misleading	Gilead: fraud was directed at FDA, not payor; continued payment/approval shows nonmateriality	Held: Implied certification viable post‑Escobar; relators alleged misleading half‑truths tying omissions to payment decisions, plausibly pleading falsity
Whether promissory‑fraud (fraud‑in‑the‑inducement) applies when fraud targeted a regulatory agency	Campie: initial fraudulent statements to obtain approvals made subsequent claims false	Gilead: FCA shouldn’t second‑guess FDA regulatory decisions; approvals foreclose FCA claims	Held: Promissory‑fraud is a recognized FCA theory; relators plausibly alleged original fraud induced eligibility for payments
Whether relator Campie stated a § 3730(h) retaliation claim	Campie: he investigated and protested the conduct, warned management and threatened to notify FDA; then was terminated	Gilead: his duties included quality oversight; reporting was internal/regulatory, not protected qui tam activity	Held: Campie plausibly engaged in protected activity, provided adequate employer notice, and alleged causation — retaliation claim survives dismissal

Key Cases Cited

Universal Health Servs., Inc. v. United States ex rel. Escobar, 136 S. Ct. 1989 (2016) (clarifies standards for implied‑certification and demanding materiality requirement under the FCA)
Hendow v. Univ. of Phoenix, 461 F.3d 1166 (9th Cir.) (broad construction of FCA elements and standards for pleading falsity)
United States v. Nat’l Wholesalers, 236 F.2d 944 (establishes liability for supplying misbranded/nonconforming goods)
Hopper v. Anton, 91 F.3d 1261 (9th Cir.) (distinguishing regulatory violations from FCA false claims absent false certification)
United States v. Aerodex, Inc., 469 F.2d 1003 (recognizes FCA liability for deliberate mislabeling/substitution even when substitutes function adequately)
United States ex rel. Wilkins v. United Health Group, 659 F.3d 295 (3d Cir.) (definition of factually false claim for goods/services)
Omnicare, Inc. v. United States ex rel. Conrad, 745 F.3d 694 (4th Cir.) (cautioning against treating FDA regulatory violations alone as FCA falsity)
Kelly v. Serco, Inc., 846 F.3d 325 (9th Cir.) (applies Escobar to implied certification context and materiality issues)
D’Agostino v. ev3, Inc., 845 F.3d 1 (1st Cir.) (discusses limits of fraud‑on‑FDA theory and practical proof problems)
Petratos v. Genentech Inc., 855 F.3d 481 (3d Cir.) (examines materiality where payor would reimburse despite reporting deficiencies)