USA ex rel Elizabeth Kennedy v. Novo A/S
5f4th47
D.C. Cir.2021Background
- Relator Elizabeth Kennedy, a Novo Nordisk sales rep, alleged the company promoted Victoza off-label and downplayed an FDA-required thyroid-cancer warning and REMS safeguards.
- Kennedy filed a qui tam suit under the False Claims Act (FCA), alleging Novo’s conduct caused false claims to federal health programs; the government later intervened and the parties settled the FCA claims for $46.5 million.
- The government separately filed and settled a Food, Drug, and Cosmetic Act (FDCA) misbranding action against Novo for failing to comply with Victoza’s REMS, obtaining $12,150,000; Kennedy was not a party to the FDCA action or settlement.
- Kennedy received an 18% share of the FCA settlement (~$7.8 million) and sought a share of the FDCA recovery, arguing the FDCA settlement was an “alternate remedy” under 31 U.S.C. § 3730(c)(5).
- The district court denied entitlement to the FDCA proceeds; Kennedy appealed to the D.C. Circuit.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether the government’s FDCA settlement is an “alternate remedy” under 31 U.S.C. § 3730(c)(5) entitling the relator to a share | Kennedy: FDCA settlement arose from the same facts as her FCA suit, so § 3730(c)(5) entitles her to a relator’s share | Government: § 3730(c)(5) covers only alternate proceedings that vindicate the same type of claim that could have been brought under the FCA | Held: No. § 3730(c)(5) applies only when the government pursues an alternate remedy for the same type of false-or-fraud claim actionable under the FCA; FDCA misbranding is a different claim, so no share is due. |
| Whether the government’s decision to intervene affects relator’s entitlement to alternate-remedy proceeds | Kennedy: Intervention shouldn't preclude recovery from an alternate proceeding that arises from the same facts | Government: Entitlement depends on whether the alternate proceeding vindicates FCA-type claims, not on intervention | Held: The D.C. Circuit affirmed on the ground that the character of the government’s claim controls entitlement (not intervention); intervention is not dispositive. |
Key Cases Cited
- Vermont Agency of Nat. Res. v. United States ex rel. Stevens, 529 U.S. 765 (2000) (defines relator and qui tam framework under the FCA)
- United States ex rel. Totten v. Bombardier Corp., 286 F.3d 542 (D.C. Cir. 2002) (qui tam provision as an important enforcement tool)
- United States ex rel. Bledsoe v. Community Health Sys., Inc., 342 F.3d 634 (6th Cir. 2003) (discusses factual overlap and alternate remedies in FCA context)
- Rille v. PricewaterhouseCoopers LLP, 803 F.3d 368 (8th Cir. 2015) (en banc) (factual overlap may be necessary for alternate-remedy analysis)
- United States v. Rx Depot, Inc., 438 F.3d 1052 (10th Cir. 2006) (FDCA restitution differs from government damages under FCA)
- L-3 Communications EOTech, Inc., 921 F.3d 1 (2d Cir. 2019) (addressed intervention’s role in alternate-remedy recovery)
- United States ex rel. Heath v. AT&T, Inc., 719 F.3d 112 (D.C. Cir. 2015) (affirming on an alternative ground)
- Salinas v. United States R.R. Ret. Bd., 141 S. Ct. 691 (2021) (textual canon: differences in statutory language are significant)
- Russello v. United States, 464 U.S. 16 (1983) (presumption that Congress acts intentionally when it includes or omits language)