United States ex rel. D'Agostino v. EV3, Inc.
153 F. Supp. 3d 519
D. Mass.2015Background
- Relator Jeffrey D’Agostino, a former EV3 territory sales manager, filed a qui tam FCA action alleging EV3, MTI, and two executives (Hardin, Wall) caused false claims by marketing two devices (Onyx and Axium) and concealing safety problems and marketing plans from the FDA.
- Procedural history: complaint filed 2010; multiple amendments while case was sealed; unsealed in 2013 after government declined intervention; district court denied leave to file a fifth amended complaint and dismissed with prejudice; First Circuit remanded to reconsider the denial under Rule 15(a).
- Proposed Fifth Amended Complaint alleges: fraud on the FDA during Onyx approval (failure to disclose Enteryx safety problems, misrepresenting training program, intended off-label marketing); Axium was defectively designed and evoked adverse events that went underreported to the FDA.
- Defendants opposed amendment primarily on futility grounds and also alleged undue delay, prejudice, repeated failure to cure, and public-disclosure bar problems.
- District court analyzed public-disclosure bar, Rule 9(b) particularity, materiality/Rule 12(b)(6) plausibility, undue prejudice, and undue delay and concluded the proposed amendment would be denied as futile and for other reasons.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Standard for granting leave to amend (Rule 15(a)) | D’Agostino sought leave to amend under Rule 15; urged liberal amendment policy after remand. | Defendants argued denial is proper under Rule 15 based on futility, delay, prejudice, and repeated failures to cure. | Denied: court exercised Foman factors and found amendment would be denied (futility and other grounds). |
| Public Disclosure Bar (31 U.S.C. § 3730(e)(4)) | D’Agostino: key allegations (off‑label marketing, training failures, Enteryx link) required adjudication and he is an original source for some facts. | Defendants: many alleged bases (Enteryx issues; promised training program) were publicly disclosed in FDA records before suit and relator is not an original source. | Enteryx and training‑promise claims barred by public disclosure; off‑label marketing allegations based on relator’s insider experience survive the bar analysis. |
| Rule 9(b) particularity for FCA claims | D’Agostino: aggregated examples, expert statement (Dr. Pryor), FDA advisory, and additional adverse events supply specificity. | Defendants: complaint lacks who/what/when/where/amount for false claims and only offers legal conclusions and aggregate statistics. | Denied: proposed complaint fails Rule 9(b) — does not identify specific false claims or sufficiently particularized facts tying alleged fraud to submitted government claims. |
| Rule 12(b)(6) materiality and scope (including role of FDA decisions) | D’Agostino: fraudulent FDA approval tainted all claims; certain uses were not medically reasonable/necessary so claims were false. | Defendants: relator asks court to second‑guess FDA risk/benefit decisions and fails to plead materiality or that FDA would have withheld approval based on alleged omissions. | Denied: inadequately pleaded materiality/plausibility; courts will not substitute FCA for FDA’s regulatory judgments and relator’s “total falsity” theory is unsupported. |
Key Cases Cited
- United States ex rel. D’Agostino v. EV3, Inc., 802 F.3d 188 (1st Cir. 2015) (appellate remand instructing district court to reconsider leave to amend under Rule 15)
- Foman v. Davis, 371 U.S. 178 (1962) (factors permitting denial of leave to amend)
- Allison Engine Co. v. United States ex rel. Sanders, 553 U.S. 662 (2008) (materiality requirement under the FCA)
- United States ex rel. Karvelas v. Melrose‑Wakefield Hosp., 360 F.3d 220 (1st Cir. 2004) (Rule 9(b) particularity in qui tam cases)
- United States ex rel. Ge v. Takeda Pharm. Co. Ltd., 737 F.3d 116 (1st Cir. 2013) (limits on inferring falsity from generalized misconduct allegations)
- Rost v. Pfizer, Inc., 507 F.3d 720 (1st Cir. 2007) (public‑disclosure bar test for FCA jurisdiction)
- Buckman Co. v. Plaintiffs’ Legal Comm., 581 U.S. 341 (2001) (preemption and the role of federal oversight in FDA decisions)
- Ashcroft v. Iqbal, 556 U.S. 662 (2009) (plausibility standard for pleadings)
- Bell Atlantic Corp. v. Twombly, 550 U.S. 544 (2007) (pleading must state plausible claim)