345 F. Supp. 3d 456
S.D. Ill.2018Background
- Dr. Susan Vierczhalek, a pediatrician and qui tam relator, originally sued MedImmune (maker of Synagis) and two specialty pharmacies alleging off-label promotion and improper prescriptions; later amended to allege a kickback/PHI-leads scheme with MedImmune and Trinity that generated Medicaid claims.
- New York intervened and filed a Complaint-in-Intervention alleging MedImmune obtained NICU patient PHI and passed leads to Trinity; New York later settled with Trinity and OptionCare for $22.4 million (Vierczhalek received about $4.04 million).
- Vierczhalek’s Amended Complaint (filed after New York’s pleading) largely tracks New York’s theory and expands it nationwide; it alleges MedImmune provided services to hospitals to obtain NICU logbook PHI and funnel leads to specialty pharmacies, producing Medicaid-paid Synagis claims.
- MedImmune moved to dismiss under Rules 12(b)(1), 12(b)(6), and 9(b), principally arguing the FCA claim is barred by the FCA public-disclosure bar and that Vierczhalek is not an original source.
- The court found New York’s Complaint-in-Intervention was a prior public disclosure that substantially duplicated the Amended Complaint and concluded Vierczhalek was not an "original source" for the kickback/PHI allegations because her original complaint advanced a different fraud theory (off-label promotion) and did not independently provide the key who/what/how facts.
- The federal FCA claim was dismissed under the public-disclosure bar; the court declined supplemental jurisdiction over state-law FCA claims and dismissed them without prejudice.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether the Amended Complaint is barred by the FCA public-disclosure bar | Vierczhalek argued she was the original source and had provided material information to the government before filing | MedImmune argued New York's Complaint-in-Intervention was a prior public disclosure substantially similar to the Amended Complaint, barring the suit unless relator is an original source | The Amended Complaint is substantially similar to New York's filing and is barred because Vierczhalek is not an original source |
| Whether Vierczhalek qualified as an "original source" under 31 U.S.C. § 3730(e)(4)(B) | Vierczhalek claimed prior disclosures and independent knowledge (and cited her Original Complaint) | MedImmune argued her Original Complaint advanced a different theory (off-label promotion) and did not supply the who/what/how of the kickback/PHI scheme | Court held her Original Complaint did not supply independent, material information about MedImmune's role; she failed original-source test |
| Whether the Amended Complaint adequately pleaded FCA and anti‑kickback violations | Vierczhalek alleged detailed conduct showing MedImmune gave hospitals services, obtained PHI, and caused false Medicaid claims | MedImmune challenged sufficiency and particularity (Rule 9(b)) and asserted public-disclosure bar as dispositive | Court dismissed on public-disclosure grounds; it also noted original Complaint did not allege the same kickback scheme and some off‑label allegations lacked particularity |
| Whether the court should retain supplemental jurisdiction over state-law FCA claims if federal claim dismissed | Vierczhalek sought to proceed on state-law claims | MedImmune argued federal dismissal warranted dismissal of state claims too | Court declined supplemental jurisdiction and dismissed state claims without prejudice |
Key Cases Cited
- Schindler Elevator Corp. v. United States ex rel. Kirk, 563 U.S. 401 (discusses FCA history and public-disclosure principles)
- Graham Cty. Soil & Water Conservation Dist. v. United States ex rel. Wilson, 559 U.S. 280 (describes development and purpose of FCA public-disclosure bar)
- Rockwell Int'l Corp. v. United States, 549 U.S. 457 (addresses original-source doctrine under the FCA)
- Bell Atl. Corp. v. Twombly, 550 U.S. 544 (pleading must be plausible)
- Ashcroft v. Iqbal, 556 U.S. 662 (legal conclusions not entitled to assumption of truth)
- United States ex rel. Winkelman v. CVS Caremark Corp., 827 F.3d 201 (explains that showing the fraud existed in other states does not necessarily make relator an original source)
- United States ex rel. Moore & Co. P.A. v. Majestic Blue Fisheries, LLC, 812 F.3d 294 (original-source analysis requires material additions to public disclosure)