MEMORANDUM OPINION
Jerome Palmieri, the relator, filed this qui tarn action on behalf of the United States of America and various individual states (collectively, the “Qui Tam States”)
This suit concerns defendants’ marketing of Flector Patch, a topical pain medication delivered by a transdermal patch, which was approved by the United States Food and Drug Administration (“FDA”)
The relator filed his Complaint (ECF 2) on April 20, 2010,
Defendants have moved to dismiss (ECF 70), arguing that a provision of the FCA known as the “first-to-file” rule precludes this Court from exercising subject matter jurisdiction. In the alternative, they contend that the Amended Complaint fails to state a claim on which relief can be granted, in light of the heightened pleading requirements applicable to fraud claims under Fed.R.Civ.P. 9(b). In their view, the Amended Complaint does not identify any specific instance in which a particular false claim was submitted to the government.
The relator has filed an Opposition (ECF 71), and defendants have filed a Reply (ECF 72). No hearing is necessary to resolve the issues. See Local Rule 105.6. For the reasons that follow, I will grant the Motion. In particular, I conclude that the Court possesses subject matter jurisdiction, but that the Amended Complaint fails to state a claim upon which relief can be granted under the Rule 9(b) standard, as articulated by the Fourth Circuit.
Background
Defendants manufacture and market Flector Patch, a transdermal patch that dеlivers, via absorption through the patient’s skin, a topical application of 1.3% diclofenac epolamine. See Amended Complaint ¶¶ 88-89. Diclofenac epolamine is a non-steroidal anti-inflammatory drug (“NSAID”), of the same family as ibuprofen and naproxen. See id. Flector Patch is the only prescription NSAID topical patch on the market. Id. ¶ 89.
Notably, Flector Patch is marketed in Europe under the name “Flector Tissugel,” and is apрroved in Europe for treatment of chronic pain and inflammatory conditions such as osteoarthritis, rheumatoid arthritis, menstrual pain, bursitis, ankylosing spondylitis, and tendonitis. Id. ¶ 99. However, defendants have not sought FDA approval in the United States for these indications. Id.
Mr. Palmieri, the relator, has been employed since 2001 as a sales representative for Alpharma (and later, King and Pfizer), to market defendants’ prescription pain medications, including Flector Patch, to physicians who treat chronic pain. Amended Complaint ¶ 28. He alleges that defendants engaged in a comprehensive scheme to promote the prescription of Flector Patch for off-label uses and in excessive dosages.
It is salient that federal law does not prohibit a physician from prescribing an approved drug for a non-approved, or “off-label,” use. See 21 U.S.C. § 396. However, “it is unlawful for a manufacturer to introduce a drug into interstate commerce with an intent that it be used for an offIabel purpose, and a manufacturer illеgally ‘misbrands’ a drug if the drug’s labeling includes information about its unapproved uses.” Washington Legal Found. v. Henney,
The alleged unlawful scheme had many facets, according to the relator. For one, defendants allegedly instructed their sales representatives to market Flector Patch aggressively to physicians, such as pain management specialists, rheumatologists, and neurologists, who by the nature of their specialties treated only chronic pain and not the acute, localized pain for which Fleсtor Patch was approved. See Amended Complaint ¶¶ 189-96. In addition, defendants promoted Flector Patch for continuous, rather than short-term use. See id. ¶ 201. Defendants specifically promoted a 60-patch/30-day prescription as the standard, appropriate prescription for Flector Patch, despite its FDA approval for usage for up to fourteen days. See id. ¶¶ 201-17. Defendants instructed their sales representatives to discourage shorter prescriptions as “subtherapeutic,” and to cease promotional efforts toward physicians, such as emergency room and urgent care physicians, who routinely treat patients for acute pain and who often resisted prescribing Flector Patch at the 60-patch level. See id. Defendants also marketed Flector Patch as an alternative to other prescription medications that are only FDA-approved for the treatment of chronic pain. See id. ¶¶ 228-43.
knowingly and willfully offer[ing] or payfing] any remuneration (including any kickback, bribe, or rebate) directly or indirectly, overtly or covertly, in cash or in kind to any person to induce such person ... to refer an individual to a person for the furnishing or arranging for the furnishing of any item or service for which payment may be made in whole or in part under a Federal health care program.
Id. § 1320a-7b(b)(2)(A).
Specifically, the relator avers that defendants distributed benefits to physicians who were high prescribers of Flector Patch through membership in a “Flector Patch Speakers’ Bureau” and “Flector Patch Speaker’s Training” program, by which the physicians received paid speaking engagements and access to lucrative referral networks. See Amended Complaint ¶¶ 137-60. Mr. Palmieri also contends that defendants provided samples of Flector Patch to physicians in such a manner as to qualify as “inducеments” under the Anti-Kickback Statute. See id. ¶¶ 161-81.
Although the relator contends that many of defendants’ activities, summarized above, were unlawful, the activities would not, by themselves, violate the False Claims Act or its state law analogs. However, Mr. Palmieri also alleges that, by engaging in the conduct described above, defendants knowingly caused false claims to be presented to federal and state government health care programs, in the form of reimbursement claims for prescriptions for off-label uses or excessive dosages of Flector Patch. The presentment of such false claims for payment to government programs constitutes the basis for qui tarn liability.
Government funded health care programs generally do not pay for drugs that are prescribed for off-label uses. For instance, the Medicaid program funds healthcare for low-income persons through a combination of federal and state funding. Federal reimbursement for a prescription drug under Medicaid is limited, with some exceptions, to a drug prescribed for a use for which the drug has been approved by the FDA. See 42 U.S.C. § 1396r-8(k)(2)-(3), (6). Moreover, the relator alleges that most states, including the Qui Tam States, that provide state funds for reimbursement for prescription drugs under Medicaid limit coverage in the same way. See Amended Complaint ¶ 53. And, the same limitation applies to coverage for prescription drugs for the elderly and disabled under the Medicare Part D program. See 42 U.S.C. § 1395w-102(e)(4)(A)(ii) (incorporating § 1396r-8(k)(6) by cross-reference). Ordinarily, other programs that provide federal funding for healthcare also limit prescription drug coverage to usages approved by the FDA. See Amended Complaint ¶¶ 65-68. The relator contends that defendants caused off-label prescriptions for Flector Patch to be submitted for reimbursement to these government health care programs, thereby causing the presentment of false claims.
In addition, Mr. Palmieri’s allegation that defendants violated the Anti-Kickback Statute constitutes another potential avenue to False Claims Act liability. In March 2010, as part of the Patient Protеction and Affordable Care Act of 2010 (“PPACA”), Pub. L. No. 111-148, 124 Stat. 119 (Mar. 23, 2010), the Anti-Kickback Statute was amended to provide expressly that “a claim that includes items or services resulting from a violation of [the
Nevertheless, of particular relevance to the Motion, the Amended Complaint does not identify any particular instance on which an off-label or excessive prescription for Flector Patch was submitted to a government health program for reimbursement. Nor does the Amended Complaint provide examples of any occasions on which any of the doctors to whom defendants allegedly gave illegal kickbacks prescribed Flector Patch to a patient covered by a government prescription coverage program. Instead, the relator’s charges rely on a crucial factual inference: the Amended Complaint recounts the total volume of Flector Patch prescriptions submitted to Medicaid and Medicare since 2008, and the amounts of money paid in reimbursements for those prescriptions, see Amended Complaint ¶¶ 268-71, tо suggest that at least some of these prescriptions must have been off-label, excessive, or illegally induced prescriptions resulting from defendants’ alleged scheme.
Additional facts will be presented in the Discussion.
Discussion
As noted, defendants challenge the Amended Complaint on two grounds: the “first-to-file” rule and the Rule 9(b) heightened pleading standard. I consider each contention in turn.
A. Firstr-to-File
As to the first-to-file rule, defendants argue that this case is barred because another qui tam suit alleging essentially the same fraudulent scheme, United States ex rel. Littlewood v. King Pharmaceuticals, Inc., Civ. No. ELH-10-973 (D.Md.), was filed four days before the original Complaint in this case.
The FCA’s “first-to-file” rule is codified in 31 U.S.C. § 3730(b)(5). It provides: “When a person brings [a false claims action], no person other than the Government may intervene or bring a related action based on the facts underlying the pending action.” The first-to-file rule was one of several amendments enacted in 1986 to the FCA that sought to achieve “the golden mean between adequate incentives for whistle-blowing insiders with genuinely valuable information and discouragement of opportunistic plaintiffs who have no signifiсant information to contribute of their own.” United States ex rel. Springfield Terminal Ry. v. Quinn, 14
The Fourth Circuit has not addressed § 3730(b)(5) in the context of a new FCA suit filed after a related FCA suit has already been filed.
The first-to-file rule creates “an incentive for relators with valuable information to file — and file quickly.” In re Nat. Gas Royalties Qui Tam Litig (C02 Appeals),
The federal courts consistently view the first-to-file rule as a jurisdictional bar. See, e.g., United States ex rel. Duxbury v. Ortho Biotech Prods., L.P.,
A test of subject matter jurisdiction under Rule 12(b)(1) may proceed “in one of two ways”: either a facial challenge, asserting that the allegations pleaded in the complaint are insufficient to establish subject matter jurisdiction, or a factual challenge, asserting “‘that the jurisdictional allegations of the complaint [are] not true,’ ” or that other facts, outside the four corners of the complaint, preclude the exercise of subject matter jurisdiction. Kerns v. United States,
In a factual challenge to subject matter jurisdiction, “the plaintiff bears the burden of proving” that subject matter jurisdiction is satisfied “by a preponderance of the evidence.” United States ex rel. Vuyyuru v. Jadhav,
Here, neither side has requested an evidentiary hearing, and no hearing is necessary. Whether the first-to-file rale bars this case depends on a comparison of the date and content of the pleadings in this case with the date and content of the pleadings in Littlewood. See, e.g., In re Nat. Gas Royalties, supra,
2. Littlewood and Palmieri
As noted, the original Complaint in this case was filed in the Eastern District of Pennsylvania on April 20, 2010. See ECF 5 at 2 (certified docket sheet from E.D. Pa.). The complaint in Littlewood was filed in this district four days earlier, on April 16, 2010, and so Littlewood was already “pending” when this case began.
Like Mr. Palmieri, the relator in Littlewood was a sales representative with Alpharma. And similarly, she alleged that Alpharma and its parent companies engaged in a scheme to market Flector Patch for off-label uses with the intent and effect of causing false claims to be submitted to governmental health care programs. In addition, all of the Qui Tam States in whose names M r. Palmieri brings this litigation were also plaintiffs in Littlewood.
“[Ejvery court of appeals to consider” the meaning of the statutory phrase “ ‘a related action based on the facts underlying [a] pending action’ ” in § 3730(b)(5) has construed it to mean an action based on the same “material facts” or the same “essential facts” as the pending action, rather than “identical facts.” Chovanec, supra,
Nevertheless, Mr. Palmieri contends that the first-to-file rule should not bar this suit because, although Littlewood was pending at the time this suit began, it is no longer pending.
Precedent uniformly supports the view that the subsequent dismissal of a first-filed qui tam action, without more, cannot cure the filing of a second qui tam action while the first action was pending. See, e.g., Walburn, supra,
However, a subsequent event of jurisdictional significance occurred: after the dismissal of Littlewood in August 2011, Mr. Palmieri filed his Amended Complaint on October 25, 2011. The first-to-file bar “applies only while the initial complaint is ‘pending.’ ” Chovanec, supra,
In Chovanec, the Seventh Circuit approved the district court’s dismissal of a qui tam suit on the basis of the first-to-file bar, but held that the dismissal should have been without prejudice. Writing for the appellate court, Chief Judge Easter-brook said that, because the first-filed qui tam action was “no longer pending ... [the relator] is entitled to file a new qui tam complaint — entitled, that is, as far as § 3730(b)(5) goes.... [B]ecause Chovanec may be able to frame a new complaint that would survive a motion to dismiss ... the current proceeding should have been dismissed without prejudice.” Id. at 365. Indeed, as Mr. Palmieri points out, on remand the district court in Chovanec permitted the relator-to file an amended complaint, in lieu of dismissal of the suit. See Ex.A to Opposition (ECF 71-1).
Similarly, in Batiste, supra,
The Tenth Circuit’s discussion in In re Natural Gas Royalties, supra,
If the first-to-file bar had been meant simply as a more draconian public disclosure bar, Congress would not have limited it to “pending” actions. While filing the complaint might put the government on notice, and while the government might remain on notice while the action is pending, the government does not cease to be on notice when a relator withdraws his claim or a court dismisses it. And yet, if that prior claim is no longer pending, the first-to-file bar no longеr applies. The “pending” requirement much more effectively vindicates the goal of encouraging relators to file; it protects the potential award of a relator while his claim remains viable, but, when he drops his action another relator who qualifies as an original source may pursue his own.
Defendants cite two district court decisions in support of their argument for dismissal. See United States ex rel. Carter v. Halliburton Co., No. 1:11cv602,
It is also noteworthy that the Supreme Court, in a False Claims Act case (although not in the context of the first-to-file rule), has indicated that an amended complaint is jurisdietionally relevant. In Rockwell International Corp. v. United States,
In sum, the relator here filed an Amended Complaint, at a time when the prior qui tam suit was no longer pending. If the Court were to dismiss the Amended Complaint, it would do so without prejudice, and the first-to-file rule would not preclude Mr. Palmieri from filing an identical pleading under a new case number tomorrow, as Chovanec and In re Natural Gas Royalties make clear.
B. Failure to Allege Fraud with Particularity
In defendants’ second challenge, they assert that the Amended Complaint fails to state a claim upon which relief can be granted. Their argument arises under Rule 12(b)(6) of the Federal Rules of Civil Procedure, and implicates the pleading standard for all civil actions under Fed. R.Civ.P. 8, as well as the heightened standard for fraud claims under Fed.R.Civ.P. 9(b).
1. Standard of Review
In the first instance, whether a complaint states a claim for relief is judged by reference to the pleading requirements of Fed.R.Civ.P. 8(a)(2). It provides that a complaint must contain a “short and plain statement of the claim showing that the pleader is entitled to relief.” The purpose of the Rule is to provide the defendant with “fair notice” of the claim and the “grounds” for entitlement to relief. Bell Atl. Corp. v. Twombly,
A plaintiff need not include “detailed factual allegations” in order to satisfy Rule 8(a)(2). Id. at 555,
A defendant may test the adequacy of a complaint by way of a motion to dismiss under Rule 12(b)(6). See, e.g., Davani v. Va. Dept. of Transp.,
In reviewing a Rule 12(b)(6) motion, a court “ ‘must accept as true all of the factual allegations contained in the complaint,’ ” and must “ ‘draw all reasonable inferences [from those facts] in favor of the plaintiff.’ ” E.I. du Pont de Nemours & Co. v. Kolon Indus., Inc.,
“Ordinarily, a court may not consider any documents that are outside of the complaint, or not expressly incorporated therein, on a motion to dismiss” under Rule 12(b)(6). Clatterbuck v. City of Charlottesville,
Suits brought under the False Claims Act sound in fraud, and thus are “subject to Federal Rule of Civil Procedure 9(b), which requires that claimants plead fraud with particularity.” Harrison v. Westinghouse Savannah River Co.,
Rule 9(b) states: “In alleging fraud or mistake, a party must state with particularity the circumstances constituting fraud or mistake. Malice, intent, knowledge, and other conditions of a person’s mind may be alleged generally.” Under the rule, a plaintiff alleging claims that sound in fraud “ ‘must, at a minimum, describe the time, place, and contents of the false representations, as well as the identity of the person making the misrepresentation and what he obtained thereby.’ ” United States ex rel. Owens v. First Kuwaiti Gen’l Trading & Contracting Co.,
Rule 9(b) serves several salutary purposes:
“First, the rule ensures that the defendant has sufficient information to formulate a defense by putting it on notice of the conduct complained of.... Second, Rule 9(b) exists to protect defendants from frivolous suits. A third reason for the rule is to eliminate fraud actions in which all the facts arе learned after discovery. Finally, Rule 9(b) protects defendants from harm to their goodwill and reputation.”
Harrison,
2. Pleading of Particular False Claims
Defendants contend that the relator’s Amended Complaint does not pass muster under Rule 12(b)(6) because it fails to allege any particular instance in which a false claim was submitted to the government. To be sure, the Amended Complaint is replete with details of the marketing scheme allegedly perpetrated by defendants. But, the relator has not alleged the details of the submission of any Flector Patch prescription to a government entity for payment. Rather, as noted, the relator relies on the inference that, given defendants’ alleged unlawful scheme to market Flеctor Patch and the contemporaneous governmental expenditures on Flector Patch prescriptions, some prescriptions caused by the fraudulent scheme must be among the prescriptions that were reimbursed from government coffers. Defendants maintain that a qui tarn relator must allege the “who, what, when, where, and how” required by Rule 9(b) with respect to the specific false claims that the relator alleges were submitted to the government, and must specify how a defendant “caused” such claims to be submitted, within the meaning of the FCA. In contrast, Mr. Palmieri argues that, so long as the specifics of the defendants’ actions are adequately alleged under the Rule 9(b) standard, the pleading of the actual fraudulent submissions resulting from those actions may be more general.
In their briefing, the parties have sought to have this Court take a side in an emerging circuit split on this issue. Defendants rely primarily on United States ex rel. Clausen v. Laboratory Corporation of America, Inc.,
Rule 9(b)’s directive that ‘the circumstances constituting fraud or mistake shall be stated with particularity’ does not permit a False Claims Act plaintiff merely to describe a private scheme in detail but then to allege simply and without any stated reason for his belief that claims requesting illegal payments must have been submitted, were likely submitted or should have been submitted to the Government.
In contrast, Mr. Palmieri relies on several federal appellate decisions that have expressed a more lenient pleading standard. See, e.g., Duxbury, supra,
I need not extensively review the appellate decisions on either side of the split or conduct an independent evaluation of their merits because, after briefing of this case was completed, the Fourth Circuit chose a side in the controversy.
As in this case, the relator in Nathan alleged a false claim violation arising out of a scheme to promote a prescription drug for off-label use. The alleged marketing scheme for Kapidex, the drug at issue in Nathan, was remarkably similar to the scheme to promote Flector Patch alleged here: “The identified marketing practices werе: (1) Takeda’s promotion of Kapidex to rheumatologists, who typically do not treat patients having conditions for which Kapidex has been approved; and (2) Takeda’s practice of marketing high doses of Kapidex for the treatment of conditions for which only a lower dose has been approved by the FDA.” Nathan,
The Fourth Circuit said that “the critical question is whether the defendant caused a false claim to be presented to the government, because liability under the [False Claims] Act attaches only to a claim actually presented to the government for payment, not to the underlying fraudulent scheme.” Id. at 546. Citing Clausen, the Nathan Court continued: “Therefore, when a relator fails to plead plausible allegations of presentment, the relator has not alleged all the elements of a claim under the Act.” Id. The Court left no doubt as to its considered agreement with Clausen, id. at 456-57:
We agree with the Eleventh Circuit’s observation that the particularity requirement of Rule 9(b) “does not permit a False Claims Act plaintiff merely to describe a рrivate scheme in detail but then to allege simply and without any stated reason for his belief that claims requesting illegal payments must have been submitted, were likely submitted or should have been submitted to theGovernment.” [Clausen, 290 F.3d] at 1311. Rather, Rule 9(b) requires that “some indicia of reliability” must be provided in the complaint to support the allegation that an actual false claim was presented to the government. Id. Indeed, without such plausible allegations of presentment, a relator not only fails to meet the particularity requirement of Rule 9(b), but also does not satisfy the general plausibility standard of Iqbal. See Clausen, 290 F.3d at 1313 (“If Rule 9(b) is to carry any water, it must mean that an essential allegation and circumstance of fraudulent conduct cannot be alleged in such conclusory fashion.”)....
Rejecting the contrary views of other circuits, the Court said: “To the extent that other cases apply a more relaxed construction of Rule 9(b) in such circumstances, we disagree with that approach.” Id. at 457-58. Encapsulating its holding, the Nathan Court said: “[WJhen a defendant’s actions, as alleged and as reasonably infеrred from the allegations, could have led, but need not necessarily have led, to the submission of false claims, a relator must allege with particularity that specific false claims actually were presented to the government for payment.” Id. at 457 (emphasis in original). To be sure, the Court cautioned that whether the “factual allegations in a given case meet the required standard must be evaluated on a case-specific basis.” Id. at 458. But, the Court held that the facts alleged in Nathan failed to meet the standard, and that conclusion, in my view, guts Palmieri’s claim.
First, the Court rejected the sufficiency of the allegation that the defendant promoted its drug to specialists who did not treat the conditions for which the drug was approved. It said: “Fatal to the claim, Relator does not allege in the amended complaint that the targeted rheumatologists wrote any off-label prescriptions that were submitted to the government for payment, a critical omission in a case brought under the [False Claims] Act.” Id. The same is true of Mr. Palmieri’s Amended Complaint. The Court similarly concluded that allegations of promoting excessive dosages were insufficient, because the fact that a prescription for a large dose was written “would not itself constitute a plausible allegation that the prescription was for an off-label use.” Id. at 459.
If anything, the complaint in Nathan was more detailed than the Amended Complaint here, because the relator in Nathan actually identified two physicians “who averred that they prescribed 60 mg dosages of Kapidex to treat [a particular condition] in Medicare patients and were unaware that the drug was available in a 30 mg dosage due to Takeda’s sampling practices.” Id. at 460. Mr. Palmieri’s Amended Complaint does not contain any such specific allegation that a particular physician prescribed Flector Patch to Medicare or Medicaid patients. Yet, even such an allegation in Nathan was not specific enough, according to the Fourth Circuit. It said, id. at 460-61 (internal citation omitted) (emphasis added):
[T]he amended complaint does not include any details about the particular prescriptions these physicians wrote for Medicarе patients, such as approximate dates or patient information, nor does the amended complaint contain allegations that the Medicare patients ever “filled” these prescriptions or that corresponding claims for reimbursement ever were submitted to the government.
As previously discussed, liability under the Act attaches only to false claims actually submitted to the government for reimbursement. General allegations such as those made here, that unidentified Medicare patients received prescriptions for off-label uses, do not identify with particularity any claims that would trigger liability under the Act. In the absence of the required specific allegations, a court is unable to infer that a Medicare patient who has received a prescription for an off-label use actually filled the prescription and sought reimbursement from the government. Indeed, “[i]t may be that physicians prescribed [the drug] for off-label uses only where the patients paid for it themselves or when the patients’ private insurers paid for it.” We therefore disagree with Relator’s assertion that, if a patient is insured under a government program, we reasonably may infer that any prescription the patient received for an off-label use was filled and that a claim was presented to the government.
I recognize that, unlike this case, Nathan apparently did not involve allegations of violations of the Anti-Kickback Statute. However, Mr. Palmieri’s charges concerning the Anti-Kickback Statute suffer from the same fatal flaw as his other qui tarn allegations: although the relator alleges an illegal scheme that could have resulted in the submission of false claims to the government, he does not provide details of any false claim that actually was submitted.
In sum, Nathan is binding circuit precedent that is completely dispositive of the issue. It dictates that the Amended Complaint must be dismissed for failure to state a claim upon which relief can be granted.
C. With or Without Prejudice
Defendants urge dismissal with prejudice. In contrast, Mr. Palmieri asks that, in the event suit is dismissed, it should be without prejudice and with leave to amend.
Fed.R.Civ.P. 15(a)(2) provides that leave to amend should freely be given when justice so requires. It seems doubtful that Mr. Palmieri could possess sufficient information to plead actual instances when false claims were submitted to government entities as a result of the scheme he alleges. For one thing, if Mr. Palmieri had such information, there is no reason he would have withheld it. For another, by the nature of the scheme alleged, it is doubtful that such information would be in Mr. Palmieri’s possession — the false claims themselves would have been submitted by patients, or at best by their physicians, but not by anyone in defendants’ employ.
Nevertheless, defendants’ arguments for summary dismissal with prejudice are unconvincing. This is the first occasion on which the sufficiency of Mr. Palmieri’s allegations has been .challenged, and he did not previously have the benefit of the Fourth Circuit’s guidance in Nathan. No discovery has yet occurred. Although defendants point out that the United States has twice declined to prosecute the relator’s allegations, that fact is immaterial. “The government’s decision not to intervene in аn FCA action does not mean that the government believes the claims are without merit, and the government’s decision not to intervene therefore is not relevant in an FCA action brought by a
I am mindful of the liberal standard for amendment of pleadings under Rule 15(a)(2). Even if it is unlikely that Mr. Palmieri will successfully be able to amend his cоmplaint to state a cognizable claim, dismissal with prejudice is not appropriate at this juncture. Therefore, I will dismiss the Amended Complaint without prejudice and with leave to amend within 28 days. If no timely second amended complaint is filed, however, the dismissal will be with prejudice. See Choice Hotels Int’l, Inc. v. Goodwin & Boone,
ORDER
For the reasons stated in the accompanying Memorandum Opinion it is, this 5th day of March, 2013, by the United States District Court for the District of Maryland, ORDERED:
1. Defendants’ Motion to Dismiss (ECF 70) is GRANTED. In particular, the Court concludes that it possesses subject matter jurisdiction, but that the relator’s Amended Complaint (ECF 43) fails to state a claim upon which relief can be granted.
2. Accordingly, the Amended Complaint is DISMISSED, WITHOUT PREJUDICE, and with leave to file a second amended complaint; PROVIDED, however, that dismissal shall be WITH PREJUDICE if, within 28 days after this Order is docketed, neither a second amended complaint is filed by the relator nor a motion to intervene is filed by the United States or any of the Qui Tam States.
3. The Clerk is directed to CLOSE this case. If the relator files a timely second amended complaint, or if anyplaintiff timely files a motion to intervene, the case will be reopened.
Notes
. The “Qui Tam States” are California; Delaware; Florida; Georgia; Hawaii; Illinois; Indiana; Louisiana; Michigan; Montana; Nevada; New Hampshire; New Jersey; New Mexico; New York; Oklahoma; Rhode Island; Tennessee; Texas; and Wisconsin; the Commonwealths of Massachusetts and Virginia; and the District of Columbia.
. Alpharma Pharmaceuticals, LLC is a subsidiary of Alpharma, Inc. Through a merger between Alpharma and one of King’s subsidiaries, Alpharma became a wholly owned subsidiary of King in December 2008. In October 2010, King merged with Pfizer. See Complaint ¶¶ 25-27.
. In addition to ordinary federal question jurisdiction, see 28 U.S.C. § 1331, the FCA contains a specific grant of subject matter jurisdiction to the federal district courts. See 31 U.S.C. § 3732(a). Moreover, a district court with jurisdiction under the FCA also has jurisdiction as to state-law qui tom claims ”aris[ing] from the same transaction or occurrence.” Id. § 3732(b).
. Mr. Palmieri initially filed suit in the United States District Court for the Eastern District of Pennsylvania. Only Alpharma and King were named as defendants in the original Complaint. The United States moved to transfer venue, pursuant to 28 U.S.C. § 1404(a). The relator did not object and the suit was transferred to this district on or about June 11, 2010. In this Court, the case was reassigned from Judge Catherine C. Blake to me on January 13, 2011.
. The analogous qui tam statutes of the Qui Tam States also provide for initial filing of a qui tam complaint under seal, in order to permit the state to investigate the claim and determine whether it wishes to intervene.
. The factual summary is derived from the relator’s 110-page Amended Complaint.
. Although defendants’ challenges are based primarily on federal law, both sides agree that the relator’s state law claims are governed by the same standards. See Motion at 30-31; Opposition at 29.
. It so happens that Littlewood was an action in this district, and I was the presiding judge. However, the first-to-file rule, by its text, is not limited to first-filed actions pending in the same court or before the same judge.
. The Fourth Circuit considered the aspect of § 3730(b)(5) that prohibits intervention in a pending FCA suit by a private party in LaCorte, supra,
. Each of the false claims acts of the Qui Tam States also contains a first-to-file rule. See Cal. Gov’t Code § 12652(c)(10); Del. Code Ann. tit. 6, § 1203(b)(5); Fla. Stat. Ann. § 68.083(7); Ga. Code Ann. § 49-4-168.2(c)(6); Haw.Rev.Stat. § 661-25(e); 740 Ill. Comp. Stat. § 175/4(b)(5); Ind. Code Ann. § 5 — 11—5.5—4(g); La.Rev.Stat. Ann. § 46:439.2(A)(3); Mich. Comp. Laws Ann. § 400.610a(4); Mont. Code Ann. § 17 — 8— 406(7); Nev.Rev.Stat. Ann. § 357.080(2); N.H.Rev.Stat. Ann. § 167:61-c(II)(b); N.J. Stat. Ann. § 2A:32C-5(i); N.M. Stat. Ann. § 44-9-5(E); N.Y. State Fin. Law § 190(4); Okla. Stat. Ann. tit. 63, § 5053.2(B)(5); R.I. Gen. Laws Ann. § 9-1.1-4(b)(5); Tenn. Code Ann. § 4-18-104(c)(10); Tex. Hum. Res. Code Ann. § 36.106; Wis. Stat. Ann. § 20.931(5)(e); Mass. Gen. Laws Ann. ch. 12, § 5C(6); Va. Code Ann. § 8.01-216.5(E); D.C. Code § 2 — 381.03(b)(6).
. According to the docket in Littlewood, the complaint was not actually entered on the docket until April 20, 2010, the same day that the original Complaint in this case was filed. However, both sides agree that Littlewood was initiated on April 16, 2010, and the partiеs have not briefed the issue of whether a case is considered "pending” under § 3730(b)(5) at the time it is filed with the court or, instead, at the time it is entered on the docket. Accordingly, I assume, without deciding, that a case is "pending” for purposes of the first-to-file rule as of the date that the complaint is filed with the court, regardless of when it is docketed.
. Mr. Palmieri also argues that, unlike this suit, Littlewood contained no allegations that defendants violated the Anti-Kickback Statute. Therefore, he insists that, even if the remainder of his suit is jurisdictionally barred by the first-to-file rule, the Court should permit his claims based on the Anti-Kickback Statute to proceed. In light of my resolution of the Motion on other grounds, discussed infra, I need not resolve whether the kickback allegations are sufficiently distinct from the claims in Littlewood to evade the first-to-file bar.
. Both the United States and the relator in Littlewood sought to keep portions of the suit under seal, despite the United States' decision not to intervene and the dismissal of the suit, resulting in the issuance of the above-cited
. Defendants suggest that "it is highly doubtful that Relator Palmieri could establish himself as an original source,” so as to defeat the public disclosure bar in such a hypothetical new case. Reply at 12. Maybe so. To be sure, the Chovanec Court noted that the pub-
Another potential pitfall for a second-filed qui tam suit that survives the first-to-file bar is the doctrine of claim or issue preclusion. The Chovanec Court said, id. at 362:
[I]f [a second-filed qui tam ] action is related to and based on the facts of an earlier suit, then it often cannot be refiled — for, once the initial suit is resolved and a judgment entered (on the merits or by settlement), the doctrine of claim preclusion may block any later litigation. The plaintiff in a qui tam action, after all, is the United States rather than the relatоr; whether the United States wins or loses in the initial action, that is the end of the dispute. Only when the initial action concludes without prejudice (or covers a different transaction) will a later suit — by the original relator, a different relator, or the Department of Justice— be permissible.
Preclusion doctrine does not foreclose Mr. Palmieri’s suit because Littlewood was dismissed without prejudice. See Littlewood,
. In their briefing, defendants suggested that Fourth Circuit precedent was already aligned with the Eleventh Circuit's decision in Clausen, but for this proposition, they cited only district court decisions. District court decisions cannot establish circuit precedent because " ‘[a] decision of a federal district court judge is not binding precedent in either a different judicial district, the same judicial district, or even upon the same judge in a different case.’ " Camreta v. Greene,-U.S. -,
. Both sides mentioned the district court decision in Nathan, see No. l:09-cv-1086,
. Like the defendants here, the defendant in Nathan had also argued that the relator failed tо state a plausible claim of causation. In other words, in addition to arguing that the relator did not sufficiently allege the submission of false claims, the defendant in Nathan argued that the relator failed to state a plausible claim that the defendant caused such submissions. In light of its conclusion that the relator failed to allege sufficiently that any false claims were presented, the Fourth Circuit did "not reach the additional question whether Relator alleged sufficient facts to support the required causation element for a claim asserted under the Act.” Nathan,
. It is noteworthy that King and Alpharma entered into a settlement agreement with the United States to resolve a qui tam action concerning a similar alleged marketing scheme with respect to another prescription drug, Kadian. See Ex.B. to Opposition (ECF 71-2).
. This 28-day period for amendment will also allow the United States an opportunity, in light of the Court’s determination under Rule 9(b), to "intervene ... upon a showing of good cause,” 31 U.S.C. § 3730(c)(3), (or for any of the Qui Tam States to do so under analogous provisions of their state qui tam statutes), as is their right, despite having previously declined to prosecute the suit.