159 F. Supp. 3d 226
D. Mass.2016Background
- Relators (Drs. Nargol and Langton) filed a qui tam False Claims Act (FCA) suit alleging DePuy sold and caused reimbursement for defective Pinnacle metal-on-metal (MoM) hip implants by concealing defects and making false statements to FDA and surgeons.
- The operative pleading was a 168‑page second amended complaint (SAC) alleging federal FCA claims (31 U.S.C. § 3729(a)(1)(A)–(C)) and parallel state FCA claims; the government declined to intervene.
- SAC alleges extensive misrepresentations to FDA and surgeons (failure rates, diametrical clearance, metal ion risk, reporting of adverse events) and identifies a handful of representative direct VA purchases and one representative Medicaid patient implantation as alleged false claims.
- DePuy moved to dismiss under Fed. R. Civ. P. 12(b)(6) and 9(b); relators sought leave to amend but had already filed multiple complaints over several years.
- The court found the SAC detailed on misconduct but failed to plead particular false claims for the Pinnacle MoM device with the specificity Rule 9(b) requires, dismissed federal and state FCA counts and conspiracy count, denied leave to amend, and ordered certain filings unsealed.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether SAC satisfies Rule 9(b) for direct FCA claims (31 U.S.C. § 3729(a)(1)(A)) | SAC alleges representative VA orders and statistical evidence to show government purchases and thus false claims | Orders are too vague, often not for the specific Pinnacle MoM components, and lack who/what/when/where/how of submitted claims | Dismissed: majority of alleged direct claims fail Rule 9(b); only two orders arguably reference MoM but lack requisite detail |
| Whether SAC satisfies Rule 9(b) for indirect FCA claims (causing providers to submit false claims, § 3729(a)(1)(B)) | Detailed scheme + statistical allegations (sales, market share, one representative Medicaid implantation) suffice to infer claims beyond possibility | Statistical and representative allegations are too broad and fail to tie specific false claims to DePuy’s alleged misconduct | Dismissed: indirect‑claim pleading inadequate under Ge/Duxbury standards |
| Whether conspiracy claim viable where conspiracy is alleged between corporation and its employees (Count Three) | Relators allege DePuy conspired with officers/agents to hide defects and cause false claims | A corporation cannot conspire with its own employees/agents as a matter of law | Dismissed: corporate/entity cannot conspire with its own officers/employees on FCA theory |
| Whether relators should get leave to amend after repeated opportunities | Relators request leave to cure pleading defects | DePuy argues undue delay, repeated failures to meet Rule 9(b), and prejudice | Denied: amendment denied as undue delay and repeated failures; SAC dismissed with prejudice |
Key Cases Cited
- United States v. Rivera, 55 F.3d 703 (1st Cir. 1995) (FCA liability attaches to the claim for payment, not merely underlying wrongdoing)
- United States ex rel. Ge v. Takeda Pharm. Co., 737 F.3d 116 (1st Cir. 2013) (Rule 9(b) requires particularized allegations linking fraud to specific false claims; broad misconduct + statistics insufficient)
- United States ex rel. Duxbury v. Ortho Biotech Prods., L.P., 579 F.3d 13 (1st Cir. 2009) (a qui tam may use exemplar claims plus factual/statistical evidence to satisfy Rule 9(b) for induced claims)
- United States ex rel. Duxbury v. Ortho Biotech Prods., L.P., 719 F.3d 31 (1st Cir. 2013) (reaffirming limits on parasitic FCA suits and the need for particularity)
- United States ex rel. Karvelas v. Melrose‑Wakefield Hosp., 360 F.3d 220 (1st Cir. 2004) (actual false claim evidence is the sine qua non of an FCA violation)
- United States ex rel. Escobar v. Universal Health Servs., 780 F.3d 504 (1st Cir. 2015) (First Circuit’s broad treatment of implied certification and materiality under the FCA)
- Bell Atlantic Corp. v. Twombly, 550 U.S. 544 (2007) (plausibility standard for Rule 12(b)(6))
- Ashcroft v. Iqbal, 556 U.S. 662 (2009) (application of Twombly plausibility standard)
- Copperweld Corp. v. Independence Tube Corp., 467 U.S. 752 (1984) (a corporation cannot conspire with its own agents/employees)