United States Ex Rel. Ibanez v. Bristol-Myers Squibb Co., 874 F.3d 905

Background

Relators (former BMS sales reps Joseph Ibanez and Jennifer Edwards) sued BMS and Otsuka under the False Claims Act (FCA) and state analogues, alleging a nationwide scheme to promote the antipsychotic Abilify off‑label and to induce prescriptions via kickbacks, causing government reimbursement claims to be submitted.
Relators relied on prior corporate‑integrity agreements and earlier enforcement actions for similar alleged misconduct, but claimed the improper promotion continued or restarted after those agreements.
The government declined to intervene; relators filed a qui tam action. The district court dismissed the FCA claims under Rule 12(b)(6) for failure to meet Rule 9(b) particularity and denied leave to file a proposed third amended complaint as futile, leaving only retaliation claims.
On appeal the Sixth Circuit reviewed (1) whether the second amended complaint satisfied Rule 9(b) as to § 3729(a)(1)(A) (presentment) and related provisions (§§ 3729(a)(1)(B),(C),(G)); and (2) whether the proposed third amended complaint was barred by the FCA public‑disclosure bar or would nonetheless survive Rule 12(b)(6).
The court held relators failed to plead a representative false claim or adequate personal billing knowledge (the narrow Prather exception), and that the other FCA claims were too attenuated or inadequately alleged; it also found the proposed amendments would be futile and affirmed dismissal.

Issues

Issue	Plaintiff's Argument	Defendant's Argument	Held
Whether § 3729(a)(1)(A) presentment was pleaded with Rule 9(b) particularity (representative false claim)	Relators: scheme allegations + exhibits (state Medicaid reimbursements, example prescriptions, sales rep knowledge) suffice to identify representative claims or create strong inference that claims were submitted	Defendants: relators lacked any specific claim tied both to an allegedly tainted prescription and to a government reimbursement; relators lack billing knowledge required for relaxed standard	Court: dismissal affirmed — no adequately pleaded representative claim and Prather personal‑knowledge exception does not apply here
Whether Prather personal‑knowledge exception (relaxed 9(b)) applies	Relators: their inside sales rep knowledge + statistical evidence creates strong inference claims were submitted	Defendants: relators were not involved in billing or claim submission; personal knowledge limited to promotion	Court: exception limited to plaintiffs with direct billing documentation/knowledge (Prather); relators did not plead such billing knowledge; exception not met
Whether related claims under §§ 3729(a)(1)(B),(C),(G) survive	Relators: false statements, conspiracy, and reverse‑false‑claim theories tied to enforcement data and Corporate Integrity Agreements support claims	Defendants: connections between statements and government payment are too attenuated; conspiracy lacks agreement to defraud government; corporate‑integrity penalties are contingent (no present obligation)	Court: all three claims dismissed — (B) too attenuated, (C) insufficient conspiratorial agreement to get false claims paid, (G) obligations were contingent and not the type that create reverse false‑claim liability
Whether public‑disclosure bar precludes proposed third amended complaint	Relators: new post‑agreement misconduct allegations are not publicly disclosed and relators are original source of post‑agreement facts	Defendants: prior enforcement and CIAs publicly disclosed similar misconduct, barring claims	Court: partial concurrence — public‑disclosure bar does not automatically apply to post‑agreement allegations that the scheme continued or restarted; majority agrees public disclosure did not bar post‑agreement promotional allegations
Whether leave to amend should be denied as futile	Relators: proposed amendments cure earlier deficiencies and add representative examples and exhibits	Defendants: proposed third amended complaint still fails Rule 9(b) and public‑disclosure issues persist	Court: denial affirmed — proposed third amended complaint remains deficient under Rule 9(b) and related grounds; amendment would be futile

Key Cases Cited

United States ex rel. Prather v. Brookdale Senior Living Cmtys., Inc., 838 F.3d 750 (6th Cir. 2016) (personal‑knowledge exception to Rule 9(b) where relator had direct billing‑related knowledge)
Chesbrough v. VPA, P.C., 655 F.3d 461 (6th Cir. 2011) (FCA fraud must meet Rule 9(b); mere scheme allegations insufficient without link to claims)
United States ex rel. Bledsoe v. Cmty. Health Sys., Inc., 501 F.3d 493 (6th Cir. 2007) (representative false‑claim requirement under heightened pleading standards)
United States ex rel. Marlar v. BWXT Y‑12, LLC, 525 F.3d 439 (6th Cir. 2008) (presentment element requires actual submission of a claim)
Bell Atl. Corp. v. Twombly, 550 U.S. 544 (2007) (complaints must state plausible claim; bare legal conclusions insufficient)
Allison Engine Co. v. United States ex rel. Sanders, 553 U.S. 662 (2008) (connection between false statement and government payment must be non‑attenuated)
Am. Textile Mfrs. Inst., Inc. v. The Ltd., Inc., 190 F.3d 729 (6th Cir. 1999) (reverse false claim requires a present obligation—contingent penalties typically do not qualify)
United States ex rel. Polansky v. Pfizer, Inc., 822 F.3d 613 (2d Cir. 2016) (discussing practical difficulties of linking off‑label promotion to submission of knowingly false claims)