United States Ex Rel. Schumann v. Astrazeneca Pharmaceuticals L.P.
2014 U.S. App. LEXIS 20116
| 3rd Cir. | 2014Background
- Schumann, a qui tam relator under the FCA, sues BMS and AZ for allegedly false best-price reporting and related kickbacks to Medco.
- The District Court dismissed the CFAC for lack of subject matter jurisdiction under the FCA's public disclosure bar, finding Schumann not an original source.
- Schumann alleged that he learned of the schemes through his Medco position, reviewing confidential agreements and discussing them with company officials.
- BMS allegedly paid data fees and rebates to Medco to secure Coumadin exclusive distribution and to influence Medco’s pricing and best-price reporting.
- AZ allegedly paid rebates and other payments to Medco and plans managed by Medco to favor Prilosec and Nexium, while omitting those payments from best-price reports.
- The court later denied Schumann’s motions to reconsider and to amend, but concluded amendments would be futile and dismissed with prejudice.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether Schumann is an original source for BMS claims | Schumann asserts direct, independent knowledge from Medco documents and dealings. | Knowledge derived from others’ documents is not direct or independent. | Schumann not an original source for BMS claims. |
| Whether Schumann is an original source for AZ claims | Schumann relies on Medco/AZ documents and discussions to show direct knowledge. | Knowledge from documents and others’ discussions is not direct or independent. | Schumann not an original source for AZ claims. |
| Whether the district court properly dismissed for lack of subject matter jurisdiction | Original source exception preserves jurisdiction despite public disclosures. | Public disclosures bar jurisdiction absent an original source. | District Court correct; lack of original source bars jurisdiction. |
| Whether the district court properly denied reconsideration and leave to amend | Supplemental declarations show new facts to support original-source status. | New evidence cannot be used to create original-source status after dismissal; futile to amend. | Court did not abuse discretion; amendments futile and reconsideration denied. |
Key Cases Cited
- Paranich v. Sorgnard, 396 F.3d 326 (3d Cir. 2005) (public disclosure bar and original-source framework for FCA)
- Stinson, Lyons, Gerlin & Bustamante, P.A. v. Prudential Ins. Co., 944 F.2d 1149 (3d Cir. 1991) (definition of direct and independent knowledge under original-source rule)
- Dunleavy v. Cnty. of Del., 123 F.3d 734 (3d Cir. 1997) (original-source framework and FCA context)
- Atkinson v. Pa. Shipbuilding Co., 473 F.3d 506 (3d Cir. 2007) (explication of direct and independent knowledge under § 3730(e)(4)(B))
- Springfield Terminal Ry. Co. v. Quinn, 14 F.3d 645 (D.C. Cir. 1994) (fraud disclosure inference structure for original-source analysis)
- Mistick PBT v. Housing Auth. of City of Pitt., 186 F.3d 376 (3d Cir. 1999) (limits on relator knowledge when derived from public disclosures)
- Zizic v. Q2Administrators, LLC, 728 F.3d 228 (3d Cir. 2013) (relevant standards for independent knowledge in original-source analysis)
- Rockwell Int’l Corp. v. United States, 549 U.S. 457 (S. Ct. 2007) (relation of original-source requirement to jurisdiction under FCA)
- Vuyyuru v. Jadhav, 555 F.3d 337 (4th Cir. 2009) (limits on relator’s independent knowledge theory)