United States ex rel. Wood v. Allergan, Inc., 899 F.3d 163

Background

Relator John A. Wood (former Allergan employee) filed a qui tam FCA suit alleging Allergan paid kickbacks (free ‘customer care’/surgical/patient kits) to induce prescriptions reimbursed by Medicare/Medicaid (filed July 26, 2010, initially under seal).
Two earlier related qui tam suits (Lampkin in D.N.J., filed Oct. 2008; Caryatid in D.D.C., filed Jan. 2010) were pending when Wood filed; both were later dismissed for procedural defects.
The FCA’s “first-to-file bar” (31 U.S.C. § 3730(b)(5)) bars a private plaintiff from bringing a related action while another FCA action based on the same facts is pending.
District court held the earlier-filed Lampkin was a related pending action at the time Wood filed, but concluded Wood could cure the bar by filing the Third Amended Complaint after Lampkin’s dismissal and allowed the case to proceed.
On interlocutory appeal the Second Circuit addressed whether an initial filing that occurs while a related FCA suit is pending can be cured later by amendment or supplementation once the prior suit is dismissed.
The Second Circuit reversed: a violation of the first-to-file bar cannot be cured by later amending or supplementing the complaint; the case must be dismissed (without prejudice).

Issues

Issue	Plaintiff's Argument	Defendant's Argument	Held
Whether the first-to-file bar applies to Wood's suit	Wood: his allegations were broader/more detailed so not "related," and earlier complaints were deficient under Rule 9(b)	Allergan: Lampkin (and Caryatid) alleged the same essential fraud (free kits to induce prescriptions) and thus blocked Wood under § 3730(b)(5)	The court: Lampkin and Wood are related; first-to-file bar applied
Whether an earlier-filed but later-dismissed related action allows a later relator to cure a first-to-file defect by amending/supplementing after dismissal	Wood: once the earlier action is no longer pending, he may amend/supplement to cure the defect and proceed	Allergan: bringing an action while a related suit is pending is fatal; amendment cannot erase the fact the action was brought while another was pending	The court: "bring" means institute suit; amendment/supplement cannot cure the initial filing defect; dismissal required
Whether Rule 9(b) pleading sufficiency of the earlier complaint should be judged to avoid the bar	Wood: an earlier complaint that is legally infirm under Rule 9(b) should not block a later action	Allergan: § 3730(b)(5) does not incorporate Rule 9(b); sufficiency is irrelevant to the bar question	The court: declined to import Rule 9(b) sufficiency into § 3730(b)(5); doing so would create unworkable, inconsistent results
Whether equitable tolling or relation-back affects the disposition here	Wood: equitable tolling or relation-back might save his claims/statute of limitations concerns	Allergan: the first-to-file bar—not statute of limitations—is dispositive; amendments cannot change the timing of the original filing	The court: did not resolve equitable tolling; held first-to-file bar independently requires dismissal without prejudice

Key Cases Cited

United States ex rel. Shea v. Cellco P’ship, 863 F.3d 923 (D.C. Cir. 2017) (held later-filed action incurably barred where related action was pending at time of filing)
United States ex rel. Batiste v. SLM Corp., 659 F.3d 1204 (D.C. Cir. 2011) (first-to-file bar prevents related complaints while an earlier action is pending)
United States ex rel. Heath v. AT&T, Inc., 791 F.3d 112 (D.C. Cir. 2015) (related actions share the same material elements of fraud if Government would be equipped to investigate)
United States ex rel. Hampton v. Columbia/HCA Healthcare Corp., 318 F.3d 214 (D.C. Cir. 2003) (definition of related actions shares same essential facts)
United States ex rel. Wilson v. Bristol-Myers Squibb, Inc., 750 F.3d 111 (1st Cir. 2014) (cases are related when they rely on same essential facts)
United States ex rel. Chovanec v. Apria Healthcare Grp., Inc., 606 F.3d 361 (7th Cir. 2010) (first-to-file defects require dismissal; stays do not remedy the bar)
Walburn v. Lockheed Martin Corp., 431 F.3d 966 (6th Cir. 2005) (contrast: held Rule 9(b)-deficient earlier complaint does not bar later suit)
Hallstrom v. Tillamook County, 493 U.S. 20 (1989) (statutory bars generally require dismissal)
McNeil v. United States, 508 U.S. 106 (1993) (failure to meet statutory conditions precedent requires dismissal)
Bell Atlantic Corp. v. Twombly, 550 U.S. 544 (2007) (pleading standards for plausibility)
Ashcroft v. Iqbal, 556 U.S. 662 (2009) (pleading standard and review on motion to dismiss)