United States v. Solvay Pharmaceuticals, Inc.
871 F.3d 318
5th Cir.2017Background
- Relators John King and Tammy Drummond, former Solvay sales/marketing employees, sued Solvay under the False Claims Act (FCA) alleging nationwide off‑label marketing and kickbacks caused false Medicaid claims for Luvox, Aceon, and AndroGel; they also asserted FCA retaliation for internal complaints.
- District court granted summary judgment to Solvay on all claims; AndroGel claims dismissed for lack of jurisdiction under the FCA public‑disclosure bar; other claims dismissed for failure to prove causation, materiality, or AKS intent; retaliation claims dismissed for lack of but‑for causation/pretext evidence.
- After final judgment Solvay sought ~$961k in taxable costs; district court awarded $232,809.92; Relators appealed both merits and costs rulings.
- Key evidentiary failures: Relators’ pre‑suit disclosure to the government did not connect alleged misconduct to false government claims; expert and circumstantial evidence was deemed speculative on causation; call notes and other proffered proof did not establish that marketing or payments caused Medicaid reimbursements.
- On costs, district court allowed portions of deposition, photocopying, and limited e‑discovery/formatting expenses under 28 U.S.C. § 1920; appellate court reviewed for abuse of discretion and affirmed.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Applicability of FCA public‑disclosure bar / original‑source status for AndroGel | Relators: pre‑suit disclosure to FDA/A.G. sufficed as voluntary original‑source disclosure | Solvay: pre‑suit disclosure did not disclose information underlying FCA allegations or link conduct to false claims | Court: Relators failed to show disclosure connected conduct to false government claims; no original‑source status; jurisdiction lacking for AndroGel claims (affirmed) |
| Off‑label marketing → causation of Medicaid false claims (Luvox, Aceon) | Relators: circumstantial evidence and expert opinion show nationwide marketing increased off‑label prescriptions reimbursed by Medicaid | Solvay: evidence is speculative; no proof marketing caused Medicaid‑reimbursed prescriptions | Court: circumstantial/expert evidence speculative; call notes insufficient to prove causation; summary judgment for Solvay (affirmed) |
| Lobbying P&T committees and DrugDex compendium → FCA liability | Relators: Solvay influenced state P&T decisions and DrugDex listings to obtain reimbursement eligibility | Solvay: no evidence undue influence or that any lobbying caused false claims or that DrugDex was misled | Court: no evidence linking lobbying or DrugDex communications to submission of false Medicaid claims; summary judgment for Solvay (affirmed) |
| Anti‑kickback Statute theory (kickbacks induced Medicaid prescriptions) | Relators: paid physicians inducements that led to prescriptions reimbursed by Medicaid | Solvay: payments were lawful compensation; no evidence payments were intended to induce Medicaid‑reimbursed prescriptions or satisfy AKS scienter | Court: Relators failed to show causation or willful intent required by AKS; summary judgment for Solvay (affirmed) |
| FCA retaliation (terminations) | Relators: terminations followed protected complaints; temporal proximity and performance reviews show pretext | Solvay: terminations for marketing policy violations; Relators admitted policy breaches | Court: temporal proximity and reviews insufficient to show but‑for causation or pretext; other pretext arguments waived; summary judgment for Solvay (affirmed) |
Key Cases Cited
- Cooley v. Housing Auth. of City of Slidell, 747 F.3d 295 (5th Cir.) (standard of review for summary judgment)
- Anderson v. Liberty Lobby, 477 U.S. 242 (U.S.) (summary judgment genuine‑issue/materiality standard)
- Rockwell Int’l Corp. v. United States, 549 U.S. 457 (U.S.) (original‑source public‑disclosure analysis)
- Longhi v. United States, 575 F.3d 458 (5th Cir.) (FCA elements, claim causation framing)
- Grubbs v. Kanneganti, 565 F.3d 180 (5th Cir.) (false‑claim as sine qua non; causation discussion)
- Jamison v. McKesson Corp., 649 F.3d 322 (5th Cir.) (treating jurisdictional public‑disclosure challenge as summary‑judgment‑type inquiry)
- United States ex rel. Booker v. Pfizer, Inc., 847 F.3d 52 (1st Cir.) (off‑label marketing and Medicaid reimbursement causation)
- Universal Health Servs., Inc. v. United States ex rel. Escobar, 136 S. Ct. 1989 (U.S.) (materiality in FCA claims)