United States Ex Rel. Simpson v. Bayer Healthcare
2017 U.S. App. LEXIS 17371
| 8th Cir. | 2017Background
- Simpson, a qui tam relator, sued Bayer under the False Claims Act alleging Baycol marketing concealed safety risks, misrepresented efficacy, paid physician kickbacks, and fraudulently induced DoD to enter two Baycol contracts.
- The district court initially dismissed for failure to plead fraud with particularity; the Eighth Circuit affirmed in part and reversed as to the DoD fraudulent-inducement claim in In re Baycol Products Litigation, 732 F.3d 869 (8th Cir. 2013).
- On remand, Bayer moved to dismiss for lack of subject-matter jurisdiction under the FCA’s public-disclosure bar, arguing Simpson’s allegations were publicly disclosed and she was not an "original source."
- The district court concluded the underlying information had been publicly disclosed and held that to be an original source Simpson needed direct and independent knowledge that Bayer sent false communications to DoD; finding she lacked that knowledge, it dismissed the suit.
- The Eighth Circuit majority reversed, holding the district court misapplied circuit precedent about the meaning of "original source," and remanded for further proceedings (leaving other defenses—e.g., limitations—open to the district court).
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether public disclosure of allegations precludes jurisdiction under 31 U.S.C. § 3730(e)(4) without an original-source relator | Simpson argued she qualifies as an original source under the Act and Eighth Circuit precedent, so jurisdiction exists despite public disclosures | Bayer argued prior public disclosures of the allegations trigger the public-disclosure bar and Simpson is not an original source, so court lacks jurisdiction | The court treated the case as subject to the public-disclosure framework and reviewed original-source status; it reversed the district court’s narrow view on original-source requirements and remanded for further proceedings |
| What "original source" requires: must a relator have direct knowledge of communications to the government (DoD) that allegedly induced contracts? | Simpson contended original-source status requires direct and independent knowledge of the information (true state of facts) underlying the allegations, not firsthand knowledge of every communication | Bayer contended Simpson must show direct knowledge that Bayer actually sent false/misleading communications to DoD to prove fraudulent inducement | The court held the district court erred: precedent (Allina and Springfield Terminal) requires direct and independent knowledge of the information or any essential element of the fraud, not firsthand knowledge of every communication to the government |
Key Cases Cited
- Minnesota Ass'n of Nurse Anesthetists v. Allina Health Sys. Corp., 276 F.3d 1032 (8th Cir. 2002) (relator need not have personal knowledge of every element; direct knowledge of the true facts can suffice for original-source status)
- United States ex rel. Newell v. City of St. Paul, 728 F.3d 791 (8th Cir. 2013) (citing and applying Allina on original-source principles)
- In re Baycol Prods. Litig., 732 F.3d 869 (8th Cir. 2013) (prior appellate decision addressing pleading and scope of Simpson’s claims)
- Springfield Terminal Ry. Co. v. Quinn, 14 F.3d 645 (D.C. Cir. 1994) (textual analysis distinguishing "information" from "transaction," holding direct knowledge of any essential element of fraud suffices for original-source status)