44 F. Supp. 3d 581
E.D. Pa.2014Background
- Relators allege Merck fraudulently misrepresented Mumps Vaccine efficacy and concealed inferior testing results under the FCA (case 10-4374).
- U.S. declined to intervene; Relators filed Amended Complaint, Merck movant on 12(b)(6) and 9(b) grounds.
- Chatom case (12-3555) alleges Sherman Act monopoly and state-law claims; Merck moves to dismiss under 12(b)(6) and 9(b).
- The court treats the Relators’ Amended Complaints as true for purposes of dismissal, reviewing both cases together.
- Relators allege two FCA claims: (A) false payment claims to CDC; (B) falsified, abandoned, and manipulated testing data related to vaccine efficacy.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| FCA liability based on false claims theory | Relators allege fraudulent claims and false records to the government. | Relators’ claims rely on FDA labeling; Buckman preemption argued. | FCA claim survives 12(b)(6) and 9(b) at this stage. |
| Standing and jurisdiction for state-law claims | Named plaintiffs have standing for home-state claims; broader state claims may be class-related. | Named plaintiffs lack standing for states where they do not reside. | Dismisses non-resident-state claims for lack of standing; NY and NJ claims survive. |
| Preemption of state-law claims by FDCA/Buckman | Claims are not entirely premised on fraud-on-the-FDA; not preempted. | Buckman bars fraud-on-the-FDA state claims. | Preemption does not bar the non-federal state-law claims. |
| New York Deceptive Acts and Practices Act viability | Deceptive marketing affecting public interest supports NYDAPA claim. | Claims insufficient to show consumer-oriented deception. | NYDAPA claim viable; adequately alleged material deception and injury. |
| Breach of contract and unjust enrichment viability | Contract and enrichment claims flow from misrepresentation. | Pleadings insufficient to establish contract terms or jurisdictional basis for unjust enrichment. | Dismisses breach-of-contract and unjust-enrichment claims without prejudice. |
Key Cases Cited
- United States ex rel. Wilkins v. United Health Group, Inc., 659 F.3d 295 (3d Cir. 2011) (two FCA claim categories: factually false and legally false)
- Buckman Co. v. Plaintiffs’ Legal Comm., 531 U.S. 341 (U.S. 2001) (fraud-on-the-FDA claims preemption discussed)
- Wyeth v. Levine, 555 U.S. 555 (U.S. 2009) (FDCA preemption and federal remedies discussed)
- LePage’s Inc. v. 3M, 324 F.3d 141 (3d Cir. 2003) (antitrust exclusionary conduct can violate §2)
- Broadcom Corp. v. Qualcomm Inc., 501 F.3d 297 (3d Cir. 2007) (FRAND promises and antitrust implications)
- Santana Prods., Inc. v. Bobrick Washroom Equip., Inc., 401 F.3d 123 (3d Cir. 2005) (fraud in bidding/competition context Noted for context on fraud claims)
- In re Bayer Corp. Combination Aspirin Prods. Mktg. & Sales Practices Litig., 701 F. Supp. 2d 356 (E.D.N.Y. 2010) (fraud-on-the-market-like considerations in CFA context)