[PUBLISH]
IN THE UNITED STATES COURT OF APPEALS
FOR THE ELEVENTH CIRCUIT FILED
________________________ U.S. COURT OF APPEALS
ELEVENTH CIRCUIT
DECEMBER 4, 2009
No. 08-15810 THOMAS K. KAHN
________________________ CLERK
D.C. Docket No. 04-02356-CV-T-23-TGW
JAMES HOPPER,
COLIN HUTTO,
Plaintiffs-Appellants,
versus
SOLVAY PHARMACEUTICALS, INC.,
UNIMED PHARMACEUTICALS, INC.
UNITED STATES OF AMERICA,
Defendants-Appellees.
________________________
Appeal from the United States District Court
for the Middle District of Florida
________________________
(December 4, 2009)
Before BLACK, WILSON and COX, Circuit Judges.
COX, Circuit Judge:
Solvay Pharmaceuticals, Inc. and its wholly owned subsidiary, Unimed
Pharmaceuticals, Inc., manufacture and market Marinol, a synthetic form of THC, a
hallucinogenic compound found naturally in marijuana. Qui tam relators James
Hopper and Colin Hutto allege that Solvay engaged in an off-label marketing
campaign to increase sales of Marinol for purposes not approved by the United States
Food and Drug Administration. The relators sought recovery on behalf of the United
States pursuant to the False Claims Act, 31 U.S.C. § 3729 et seq., for claims paid by
government health programs as a result of the marketing campaign. The district court
dismissed their action because the relators’ Second Amended Complaint failed to
plead the submission of specific false claims with particularity as required by Federal
Rule of Civil Procedure 9(b). The relators appeal. We affirm.
I. BACKGROUND & PROCEDURAL HISTORY
Relevant sections of the False Claims Act, 31 U.S.C. § 3729 et seq., prohibit the
presentment of false claims to the government and the use of false records or
statements to get a false claim paid or approved. The Act may be enforced through
civil actions initiated by the government or suits by private individuals on behalf of
the United States, called qui tam actions. The private plaintiffs in qui tam actions are
known as “relators,” and the Act entitles them to a percentage of any recovery made
on behalf of the government from a False Claims Act defendant.
We summarize the allegations of the relators in this case, Hopper and Hutto,
from their Second Amended Complaint. Solvay employed the relators as sales
2
representatives in its Mental Health Division. One of their duties was to implement
what they allege to be an illegal marketing scheme for Marinol, a prescription drug
manufactured and sold by Solvay.
In 1999, Solvay acquired Unimed, which owned the rights to manufacture and
distribute Marinol, a synthetic form of THC, the active compound in marijuana.1
Marinol is approved by the FDA for use as an appetite stimulant for AIDS patients and
for the treatment of nausea and vomiting associated with cancer chemotherapy.
According to the relators, Marinol is not particularly effective for these on-label uses,
so sales of the drug did not generate substantial profits for Solvay. To increase
Marinol sales, the relators allege, Solvay implemented an off-label marketing
campaign for the drug beginning in 2001. The relators assert that Solvay instructed
its sales representatives to encourage physicians to prescribe Marinol for appetite loss
in cancer patients and for treatment of nausea in HIV patients, purposes for which
Marinol was not approved. Because the FDA prohibits the marketing of drugs for off-
label uses, the relators allege that Solvay’s marketing scheme was illegal.
The relators assert that sales generated from the marketing scheme caused the
government to pay false claims through Medicaid and other programs that provide
1
Unimed, a wholly owned subsidiary of Solvay, is a named defendant in this case, but most
of the allegations in the Second Amended Complaint refer to Solvay. It is unclear which of these
allegations are alleged to be attributable to Unimed. References to Solvay hereafter include Unimed.
3
prescription drug benefits. The government does not knowingly pay for drugs through
these programs if they are prescribed for off-label uses. The relators allege that the
marketing campaign convinced doctors to prescribe Marinol for off-label uses, and
claims were ultimately submitted by state health programs and other third parties to
the federal government to pay for some of those prescriptions. The relators do not
allege that Solvay itself submitted any false claims. Rather, they allege that every time
federal funds were used to pay for an off-label prescription, the third party who
requested payment from the government made a false claim. (R.2-84 at 52-53.) Those
false claims were attributable to Solvay, according to the relators, because the off-label
marketing campaign caused the claims to be submitted against federal funds and
because Solvay intended that its campaign cause the filing of false claims. (Id. at 60.)
To support their allegations that the government paid false claims, the relators point
to a marked increase in prescriptions for Marinol and an increase in Medicaid
payments for Marinol between 2001 and 2005, years in which Solvay is alleged to
have engaged in the marketing campaign.
In 2004, the relators filed a complaint based on these allegations, under seal,
pursuant to the qui tam provisions of the False Claims Act. See 31 U.S.C. §
3730(b)(2) (requiring complaints be filed under seal and submitted to the government
so it can conduct an investigation). They filed a First Amended Complaint in 2005.
4
The Government was served with these complaints, investigated the allegations, and
in 2006 ultimately chose not to intervene in the case. Shortly thereafter, the court
ordered the lawsuit unsealed, and the relators sought leave to file a Second Amended
Complaint (“Complaint”) , which the court granted.
The Complaint alleges that Solvay violated two subsections of the False Claims
Act, 31 U.S.C. § 3729(a)(1) and (a)(2)2, and parallel Illinois, California, and
Massachusetts statutes. In a nutshell, it alleges that Solvay executed a sophisticated
marketing plan for the purpose of inducing physicians to prescribe Marinol for uses
not approved by the FDA, and this conduct “caused submission for reimbursement by
Government Healthcare Programs of millions of dollars worth of prescriptions which
were ineligible for such reimbursement.” (R.2-84 at 2.) It also alleges that Solvay
gave kickbacks to physicians and other healthcare providers to induce them to
prescribe Marinol for off-label purposes. (Id. at 3.) The complaint does not identify
any specific false claims presented to a government healthcare program or any person
or entity who submitted a claim. Nor does it allege that Solvay intended that the
government rely on the alleged false statements or records in deciding whether to pay
2
The Fraud Enforcement and Recovery Act of 2009 amended and renumbered sections of the
False Claims Act relevant to this appeal. Pub. L. No. 111-21, 123 Stat. 1617. These amendments,
however, do not apply retroactively to this case. See infra note 3. Citations to the U.S. Code herein
refer to the pre-amendment sections of the False Claims Act that apply to this case and do not reflect
the 2009 amendments.
5
claims. Instead, it alleges that Solvay’s marketing campaign caused healthcare
providers to submit claims to state healthcare programs, and the state programs
submitted false claims to the federal government. (Id. at 62.)
Solvay filed a motion to dismiss pursuant to Federal Rules of Civil Procedure
12(b)(1), and 12(b)(6). The Rule 12(b)(6) motion was grounded in an assertion that
the relators failed to plead their allegations of fraud with particularity as required by
Rule 9(b). Solvay also asserted that the court lacked subject matter jurisdiction over
the case because some of the allegations were based on publicly disclosed information,
and the relators were not the original source. See 31 U.S.C. § 3730(e)(4)(A) (creating
jurisdictional bar to claims where plaintiffs are not the original source for information
in the complaint). The district court referred the matter to a magistrate judge who
recommended that the motion to dismiss be denied as to subject matter jurisdiction.
He recommended, however, that the federal claims be dismissed for failing to satisfy
Rule 9(b) because the relators failed to plead with particularity their allegations that
Solvay’s marketing scheme caused the submission of actual false or fraudulent claims
to the government. (R.2-101 at 26-27.) The magistrate judge also recommended that
the court decline to retain supplemental jurisdiction over the state law claims. The
relators filed objections to the magistrate judge’s report, but the district court adopted
6
it in full, dismissed the relators’ federal claims with prejudice, and declined to exercise
supplemental jurisdiction over the state law claims. The relators appeal.
II. ISSUE ON APPEAL & CONTENTIONS OF THE PARTIES
The sole issue on appeal is whether the Complaint, which does not include
allegations of specific false claims or allege that Solvay intended for its statements to
influence the government’s decisions to pay any claims, satisfies the particularity
requirements of Rule 9(b). The relators brought claims under 31 U.S.C. § 3729(a)(1)
and (a)(2). Subsection (a)(1) makes liable any person who presents, or causes to be
presented, a false or fraudulent claim. Subsection (a)(2) makes liable any person who
knowingly makes, uses, or causes to be made or used, a false record or statement to
get a false claim paid or approved. Solvay contends that to satisfy the particularity
requirements under either 31 U.S.C. § 3729(a)(1) or (a)(2), a complaint must identify
actual false claims. The relators counter that the requirements of Rule 9(b) may be
satisfied as to subsection (a)(1) without identifying specific false claims as long as the
complaint contains factual allegations which reliably indicate that false claims were
submitted to the government. As to subsection (a)(2), the relators argue that the
presentment of a false claim to the government is not an element of the cause of
action. So, they claim the particularity requirements of Rule 9(b) are satisfied by
alleging that the defendants made false statements for the purpose of causing the
7
payment of false claims. For claims under subsection (a)(2), the relators argue they
need not allege that false or fraudulent claims were actually submitted to or paid by
the government.
III. STANDARD OF REVIEW
We review de novo the grant of a motion to dismiss pursuant to Rule 12(b)(6)
for failure to state a claim upon which relief can be granted. Leib v. Hillsborough
County Pub. Transp. Comm’n, 558 F.3d 1301, 1305 (11th Cir. 2009).
IV. DISCUSSION
A complaint under the False Claims Act must meet the heightened pleading
standard of Rule 9(b), which states “[i]n alleging fraud or mistake, a party must state
with particularity the circumstances constituting fraud or mistake.” See United States
ex rel. Clausen v. Lab. Corp. of Am., 290 F.3d 1301, 1309-10 (11th Cir. 2002) (noting
“it was ‘well settled’ and ‘self-evident’ that the False Claims Act is ‘a fraud statute’
for the purposes of Rule 9(b)”) (citation omitted). A False Claims Act complaint
satisfies Rule 9(b) if it sets forth “‘facts as to time, place, and substance of the
defendant’s alleged fraud,’ specifically ‘the details of the defendants’ allegedly
fraudulent acts, when they occurred, and who engaged in them.’” Id. at 1310 (quoting
United States ex rel. Cooper v. Blue Cross & Blue Shield of Fla., 19 F.3d 562, 567-68
(11th Cir. 1994)).
8
The district court held that the relators’ Complaint did not satisfy the
particularity requirements of Rule 9(b) because it failed to include specific allegations
of “the actual presentment of false claims.” (R.2-101 at 25.) The court did not
distinguish between the relators’ allegations under 31 U.S.C. § 3729(a)(1) and their
allegations under § 3729(a)(2). It reasoned that our precedents require all False
Claims Act complaints to identify specific false claims, and the court appears to have
concluded that these precedents apply equally to subsections (a)(1) and (a)(2) of the
Act. Because the Complaint did not identify a specific false claim, the court found it
did not satisfy Rule 9(b) and was subject to dismissal, pursuant to Rule 12(b)(6), for
failing to state a claim upon which relief can be granted. (R.2-101 at 20.)
Indeed, in cases on which the district court relied, Clausen; United States ex rel.
Corsello v. Lincare, Inc., 428 F.3d 1008 (11th Cir. 2005), cert. denied, 549 U.S. 810,
127 S. Ct. 42 (2006); and United States ex. rel Atkins v. McInteer, 470 F.3d 1350 (11th
Cir. 2006), we did not differentiate between claims raised under subsection (a)(1) and
subsection (a)(2) of the False Claims Act. The relators acknowledge that under
subsection (a)(1), a plaintiff must prove that the defendant submitted or caused to be
submitted a false claim to the government. But, they contend that submission of an
actual false claim is not an element of a subsection (a)(2) claim. So, we will consider
the claims separately.
9
A. 31 U.S.C. § 3729(a)(1)
31 U.S.C. § 3729(a)(1) contains a “presentment clause.” It imposes liability on
a person who “knowingly presents, or causes to be presented, to an officer or
employee of the United States Government or a member of the Armed Forces of the
United States a false or fraudulent claim for payment or approval.” Id. (emphasis
added). In Clausen, we explained that “[w]ithout the presentment of such a claim,
while the practices of an entity that provides services to the Government may be
unwise or improper, there is simply no actionable damage to the public fisc as required
under the False Claims Act.” 290 F.3d at 1311 (emphasis in original). We reasoned,
“if Rule 9(b) is to be adhered to, some indicia of reliability must be given in the
complaint to support the allegation of an actual false claim for payment being made
to the Government.” Id. (emphasis in original).
In Clausen, the relator alleged that a medical testing corporation billed the
government for unnecessary laboratory tests. Id. at 1303. The complaint included
detailed allegations of a scheme to overcharge; it identified the patients who received
tests, specified which tests were improper, and set forth the dates on which the
procedures were performed. Id. at 1304-05. We upheld the dismissal of the complaint
pursuant to Rule 9(b), however, because it failed to provide any information linking
the testing schemes to the submission of actual false claims. Id. at 1313. The
10
complaint included “the conclusory allegation that [the defendant] submitted bills to
the Government ‘on the date of service or within a few days thereafter.’” Id. We
explained that 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.” Id.
We considered similar circumstances in Corsello, in which a relator alleged that
medical equipment companies engaged in kickback and referral schemes to falsify
certificates of medical necessity to submit false claims for Medicare payments. 428
F.3d at 1011. Here, too, the relator failed to allege specific fraudulent submissions to
the government. Id. at 1014. The relator argued “that a pattern of improper practices
of the defendants leads to the inference that fraudulent claims were submitted to the
government . . . .” Id. at 1013. Nevertheless, we upheld the dismissal of the complaint
because it did not allege that “a specific fraudulent claim was in fact submitted to the
government.” Id. at 1014 (citing Clausen, 290 F.3d at 1311).
Similar issues were again presented in Atkins, where a relator alleged that
psychiatrists improperly sought payments from Medicare and Medicaid for psychiatric
services that were not actually rendered, were provided with substandard levels of
care, and were medically unnecessary. 470 F.3d at 1354. The complaint in Atkins
described “an elaborate scheme for defrauding the government by submitting false
11
claims.” Id. at 1359. It cited “particular patients, dates and corresponding medical
records for services” that were not eligible for reimbursement. Id. We upheld the
dismissal of the complaint, however, because the relator failed “to provide the next
link in the [False Claims Act] liability chain: showing that the defendants actually
submitted reimbursement claims for the services he describes.” Id. (emphasis in
original).
Like in Clausen, Corsello, and Atkins, the Complaint in this case offers detailed
allegations of an illegal scheme to cause the government to pay amounts it did not
owe. The Complaint also includes what the relators describe as “a highly-compelling
statistical analysis [that] renders inescapable the conclusion that a huge number of
claims for ineffective off-label uses of Marinol resulted from [Solvay’s illegal
marketing] campaign.” (Appellants’ Br. at 19.) But, the Complaint does not allege
the existence of a single actual false claim. In fact, we are unable to discern from the
complaint a specific person or entity that is alleged to have presented a claim of any
kind, let alone a false or fraudulent claim.
The relators contend that the illegal marketing campaign first induced
physicians to write off-label prescriptions for Marinol. Then, pharmacies and other
healthcare providers submitted claims to various state healthcare programs for
reimbursement. Finally, these state agencies submitted claims to the federal
12
government for payment. (R.2-84 at 52-53.) The Complaint does not identify specific
persons or entities that participated in any step of this process. Nor does it allege
dates, times, or amounts of individual false claims.
We will assume arguendo that when a physician writes an off-label prescription
with knowledge or intent that the cost of filling that prescription will be borne by the
federal government, and when a claim is ultimately submitted to the federal
government to pay for that prescription, 31 U.S.C. § 3729(a)(1) may have been
violated. See United States ex rel. Rost v. Pfizer, Inc., 507 F.3d 720, 732-33 (1st Cir.
2007) (suggesting that submitting off-label prescriptions for federal reimbursement
could lead to the filing of false claims). Nonetheless, the relators’ Complaint does not
identify a single physician who wrote a prescription with such knowledge, does not
identify a single pharmacist who filled such a prescription, and does not identify a
single state healthcare program that submitted a claim for reimbursement to the federal
government. The relators contend that their Complaint “contains factual allegations
which reliably indicate that false claims were submitted to the Government.”
(Appellants’ Br. at 16.) We disagree. The Complaint piles inference upon inference
to suggest that Solvay’s marketing campaign influenced some unknown third parties
to file false claims. We cannot conclude that the Complaint satisfies the particularity
requirements of Rule 9(b) by offering “some indicia of reliability . . . of an actual false
13
claim for payment being made to the Government.” Clausen, 290 F.3d at 1311
(emphasis in original).
This is not a case like United States ex rel. Walker v. R&F Properties of Lake
County, Inc., in which a relator alleged personal knowledge of the defendants’ billing
practices that gave rise to a well-founded belief that the defendant submitted actual
false or fraudulent claims. 433 F.3d 1349, 1360 (11th Cir. 2005). The relator in
Walker pled a claim with particularity because the complaint included allegations
grounded in first-hand knowledge that explained why she believed a specific
defendant submitted false or fraudulent claims to the government. Id. Here, unlike
in Walker, the relators do not allege personal knowledge of the billing practices of any
person or entity. The complaint does little more than hazard a guess that unknown
third parties submitted false claims for Medicaid reimbursement.
The relators’ allegations pursuant to 31 U.S.C. § 3729(a)(1) are deficient under
Rule 9(b). The “central question” in such a claim “is whether the defendant ever
presented [or caused to be presented] a ‘false or fraudulent claim’ to the government.”
Clausen, 290 F.3d at 1311 (quotation and citation omitted). Therefore, Rule 9(b)
requires that actual presentment of a claim be pled with particularity. Because the
relators’ complaint fails to assert the “‘who,’ ‘what,’ ‘where,’ ‘when,’ and ‘how’ of
fraudulent submissions to the government,” Corsello, 428 F.3d at 1014, the district
14
court did not err by concluding the complaint failed to plead allegations of fraud with
particularity.
B. 31 U.S.C. § 3729(a)(2)
In Clausen, we relied on the “presentment clause” of 31 U.S.C. § 3729(a)(1) to
require that a complaint allege with particularity that the defendant submitted or
caused to be submitted an actual false claim to the government. See Clausen, 290
F.3d at 1307 (quoting § 3729(a)(1)). In cases following Clausen, we have never
explicitly considered whether the pleading requirements of § 3729(a)(1) apply with
equal force to claims under § 3729(a)(2). See, e.g., Corsello, 428 F.3d at 1012 (noting
relator brought claims under both subsections (a)(1) and (a)(2), but not distinguishing
between claims in analysis). Subsection (a)(2) does not contain a presentment clause.
It imposes liability on any person who “knowingly makes, uses, or causes to be made
or used, a false record or statement to get a false or fraudulent claim paid or approved
by the Government.”3
3
In May 2009, Congress enacted the Fraud Enforcement and Recovery Act, which amended
31 U.S.C. § 3729(a)(2) (2003), replacing the words “to get a false or fraudulent claim paid or
approved by the government” with the words “material to a false or fraudulent claim.” Pub. L. No.
111-21, §4, 123 Stat. 1617, 1621. Section 4(f)(1) of the Act provides that this change “shall take
effect as if enacted on June 7, 2008, and apply to all claims . . . that are pending on or after that date.”
Id. §4(f)(1), 123 Stat. at 1625 (emphasis added). We interpret the word “claim” in section 4(f) to
mean “any request or demand . . . for money or property,” as defined by 31 U.S.C. § 3729(b)(2)(A)
(as amended May 2009). While this case was pending on and after June 7, 2008, the relators do not
allege that any claims, as defined by § 3729(b)(2)(A), were pending on or after June 7, 2008.
Therefore, we conclude the Fraud Enforcement and Recovery Act does not apply retroactively to this
15
The relators contend that because subsection (a)(2) does not contain a
presentment clause, proof that a false claim was submitted to the government is not
an element of the cause of action. Plaintiffs are not required to allege what they are
not required to prove. Therefore, the relators argue, their Complaint need not allege
that a false claim was submitted to the government. We agree that 31 U.S.C. §
3729(a)(2) does not demand proof that the defendant presented or caused to be
presented a false claim to the government or that the defendant’s false record or
statement itself was ever submitted to the government. We conclude, however, that
a plaintiff must show that (1) the defendant made a false record or statement for the
purpose of getting a false claim paid or approved by the government; and (2) the
defendant’s false record or statement caused the government to actually pay a false
claim, either to the defendant itself, or to a third party. The Complaint fails to satisfy
the first requirement; it does not allege that Solvay intended its false statements to
influence the government’s decision to pay a false claim. Therefore, even if we were
to assume that it alleges with particularity that the government paid a false claim, the
Complaint remains deficient.
In Allison Engine Co. v. United States ex rel. Sanders, __ U.S. __, 128 S. Ct.
case. See United States v. Sci. Applications Int’l Corp., No. 04-1543, 2009 WL 2929250, at *13-14
(D.D.C. Sept. 14, 2009) (concluding Fraud Enforcement and Recovery Act not retroactive because
no claims were pending on or after June 7, 2008).
16
2123 (2008), the Supreme Court discussed the presentment requirement of §
3729(a)(2):
[T]he concept of presentment is not mentioned in § 3729(a)(2). The
inclusion of an express presentment requirement in subsection (a)(1),
combined with the absence of anything similar in subsection (a)(2),
suggests that Congress did not intend to include a presentment
requirement in subsection (a)(2). . . . What § 3729(a)(2) demands is not
proof that the defendant caused a false record or statement to be
presented or submitted to the Government but that the defendant made
a false record or statement for the purpose of getting “a false or
fraudulent claim paid or approved by the Government.”
__ U.S. at __, 128 S. Ct. at 2129-30. The relators interpret this language to suggest
that § 3729(a)(2) is violated as soon as a defendant makes a false or fraudulent
statement for the purpose of causing the government to pay a false claim. In their
view, § 3729(a)(2) may be violated even if a false claim is never submitted to or paid
by the government. Essentially, the relators contend that Allison Engine teaches that
subsection (a)(2) is an attempt provision, imposing liability for statements made with
the intent to defraud the government, whether or not the government actually pays a
false claim. We disagree; the language of § 3729(a)(2) suggests it demands proof that
the government paid a false claim, and Allison Engine does not cast doubt on this
conclusion.
We have repeatedly held that the submission of a false claim is the “sine qua
non of a False Claims Act violation.” Clausen, 290 F.3d at 1311. Improper practices
17
standing alone are insufficient to state a claim under either § 3729(a)(1) or (a)(2)
absent allegations that a specific fraudulent claim was in fact submitted to the
government. Corsello, 428 F.3d at 1014. Subsection (a)(2) relieves plaintiffs of the
presentment requirement found in subsection (a)(1): the burden of proving that the
defendant presented or caused to be presented a false claim to the government. But,
the text of § 3729(a)(2)—proscribing false statements made “to get a false or
fraudulent claim paid or approved by the Government”—suggests Congress intended
this subsection to impose liability for false statements that actually cause the
government to pay amounts it does not owe. See United States ex rel. Schmidt v.
Zimmer, Inc., 386 F.3d 235, 242 (3d Cir. 2004) (citing 1 John T. Boese, Civil False
Claims and Qui Tam Actions § 2.01[B], at 2-20 (2d ed. 2003) (“[A] plaintiff must also
show that the defendant made or used . . . a false record in order to cause [a] false
claim to be actually paid or approved.”)). A defendant’s false statements themselves
need not be presented to the government, and the defendant need not personally
submit a false claim. Nevertheless, because the Act protects the government from loss
due to fraud, and it is not “an all-purpose antifraud statute,” Allison Engine, ___ U.S.
at ___, 128 S. Ct. at 2130, the relators must show that the government paid a false
claim to prove a violation of subsection § 3729(a)(2). Subsection (a)(2) is not, as the
relators contend, a separate “attempt” provision of the False Claims Act. Nothing
18
in Allison Engine conflicts with our conclusion. If Allison Engine speaks to this issue
at all, it implies that under 31 U.S.C. § 3729(a)(2), a relator must prove that the
government paid a false claim. The opinion states, “[o]ur reading of § 3729(a)(2) . .
. gives effect to Congress’ efforts to protect the Government from loss due to fraud but
also ensures that ‘a defendant is not answerable for anything beyond the natural,
ordinary and reasonable consequences of his conduct.’” Id. (citation omitted). If the
government has not paid funds it does not owe, it has suffered no loss. To impose
liability in such a case would do nothing to protect the government from loss due to
fraud, and it would extend liability beyond the “natural, ordinary and reasonable
consequences” of a defendant’s conduct.
We hold that under § 3729(a)(2),4 a plaintiff must prove that the government in
fact paid a false claim.5 Therefore, the relators’ Complaint must allege with
4
Because the May 2009 amendments to 31 U.S.C. § 3729(a)(2) do not apply retroactively to
this case, see supra note 3, we do not consider whether actual payment of a false claim is an element
of this subsection as amended by the Fraud Enforcement Recovery Act of 2009.
5
Our precedents interpreting 31 U.S.C. § 3729(a)(1) speak of the “submission” of false
claims. See, e.g., Clausen, 290 F.3d at 1311 (discussing the submission and presentment of claims,
not the payment of false claims). We have not explicitly considered whether a violation of §
3729(a)(1) occurs when a false claim is submitted, but the government does not pay the claim. The
Third Circuit has held that payment of a false claim is not an element of a subsection (a)(1) claim,
but actual payment is an element of a subsection (a)(2) claim. Schmidt, 386 F.3d at 242. Because
the relators do not allege that Solvay submitted or caused to be submitted false claims that went
unpaid, we do not address whether actual payment of a claim is an element of 31 U.S.C. §
3729(a)(1). We do consider whether actual payment of a claim is an element of 31 U.S.C. §
3729(a)(2), and we answer that it is an element.
19
particularity, pursuant to Rule 9(b), that Solvay’s false statements ultimately led the
government to pay amounts it did not owe. The relators contend that they have done
so. Their Complaint alleges that state health programs presented false claims of
uncertain amounts on uncertain dates to the government, and this resulted in a marked
increase in Medicaid payments. As discussed above, these allegations would be
insufficient to state a claim under subsection (a)(1) of the Act. Because liability under
subsection (a)(1) is predicated upon the defendant itself submitting or directly causing
the submission of a false claim, we require a plaintiff prove the “‘who,’ ‘what,’
‘where,’ ‘when,’ and ‘how’ of fraudulent submissions to the government.” Corsello,
428 F.3d at 1014. But, under subsection (a)(2), a plaintiff must prove that the
defendant made false statements to get a false claim paid or approved, not that the
defendant caused the submission of the claim itself. So, our analyses in Clausen,
Corsello, and Atkins do not necessarily foreclose the possibility that, for claims under
subsection (a)(2), general allegations of improper government payments to third
parties, supported by factual or statistical evidence to strengthen the inference of
fraud, like those in the relators’ Complaint, could satisfy the particularity requirements
of Rule 9(b). The identity of the person or entity who submitted or caused to be
submitted a claim for payment is not an element of a § 3729(a)(2) cause of action. So,
in the appropriate case, we may consider whether the particularity requirements of
20
Rule 9(b), as to the details of the alleged false claims at issue, are more relaxed for
claims under 31 U.S.C. § 3729(a)(2) than for claims under § 3729(a)(1). See United
States ex rel. Duxbury v. Ortho Biotech Prods., 579 F.3d 13, 29 (1st Cir. 2009)
(distinguishing between qui tam actions alleging that the defendant made a false claim
and actions in which the defendant induced third parties to file false claims; reasoning,
“[i]n the latter context . . . a relator could satisfy Rule 9(b) by providing factual or
statistical evidence to strengthen the inference of fraud beyond possibility without
necessarily providing details as to each false claim”) (quotation and citation omitted).
Nevertheless, because we conclude the relators’ Complaint in this case is deficient
whether or not it alleges with particularity that a false claim was paid by the
government, we do not reach this issue.
Whether the relators’ Complaint alleges with particularity the payment of a false
claim is a question we need not answer. Even if it did, the Complaint remains
deficient because it fails to allege that the defendants intended for the government to
rely on their false statements in deciding whether to pay a false claim.
To be liable under 31 U.S.C. § 3729(a)(2), a defendant must make a false record
or statement “to get a false or fraudulent claim paid or approved by the Government.”
It is insufficient for a plaintiff to show merely that “a false statement resulted in the
use of Government funds to pay a false or fraudulent claim.” Allison Engine, __ U.S.
21
at __, 128 S. Ct. at 2128 (emphasis added). “Instead, a plaintiff asserting a §
3729(a)(2) claim must prove that the defendant intended that the false record or
statement be material to the Government’s decision to pay or approve the false claim.”
Id. at __, 128 S. Ct. at 2126.
The relators in this case claim that their Complaint “allege[s] copiously that
[the] defendants intended their off-label campaign to cause the submission of false
claims.” (Appellants’ Br. at 26.) But, their complaint does not link the alleged false
statements to the government’s decision to pay false claims. It fails to allege that the
defendants intended for the government to rely on the substance of their off-label
marketing campaign to decide to pay a claim. The Complaint alleges that Solvay
intended for physicians to rely on their false statements to write off-label prescriptions.
(R.2-84 at 2.) It does not allege that, aside from the unnamed physicians, any person
or entity had knowledge of the off-label marketing campaign—not any pharmacists,
state health programs, or significantly, the federal government. We cannot infer that
because Solvay allegedly intended its marketing campaign to convince physicians to
write off-label prescriptions, Solvay intended for that campaign to influence the
government’s decision to pay for those prescriptions.
If a . . . defendant makes a false statement to a private entity and does not
intend the Government to rely on that false statement as a condition of
payment, the statement is not made with the purpose of inducing payment
22
of a false claim “by the Government.” In such a situation, the direct link
between the false statement and the Government’s decision to pay or
approve a false claim is too attenuated to establish liability.
Allison Engine, __ U.S. at __, 128 S. Ct. at 2130.
To illustrate why the relators’ Complaint is deficient, compare this case with
Duxbury, a recent First Circuit case involving the off-label promotion of a prescription
drug. In Duxbury, the relator “alleged facts . . . that support his claim that [the
defendant] intended to cause the submission of false claims.” 579 F.3d at 30 (emphasis
in original). For example, the complaint in Duxbury alleged, in part, that the defendant
pharmaceutical marketer gave a healthcare provider “more than $5,000 of [prescription
drugs] so that [the provider] could submit the free product for reimbursement to
Medicare under the false and fraudulent certification that the provider had paid for the
product and that [the provider] was reimbursed by Medicare for the free [prescription
drugs].” Id. at 31 (quotations omitted) (emphasis in original). The First Circuit found
these and similar allegations supported the claim that the defendant intended its false
statements to be material to the government’s decision to pay a claim. Id. at 30 (citing
Allison Engine, __ U.S. at __, 128 S. Ct. at 2126). In contrast, the relators’ Complaint
in this case alleges that Solvay intended its statements to be material to physicians’
decisions to write off-label prescriptions. It does not allege that Solvay intended its
false statements to play any role in the government’s decision to reimburse state health
23
programs for the cost of those prescriptions. Because the relators failed to allege any
connection between Solvay’s alleged false statements and the government’s decision
to pay amounts it does not owe, the Complaint does not meet the particularity
requirements of Rule 9(b).
V. CONCLUSION
Therefore, we affirm the district court’s dismissal of the relators’ federal claims
for failure to comply with Federal Rule of Civil Procedure 9(b). And, we find no error
in the court’s declining to retain supplemental jurisdiction over the state law claims.
AFFIRMED.
24