United States Ex Rel. Ge v. Takeda Pharmaceutical Co. , 737 F.3d 116 ( 2013 )

United States Court of Appeals
For the First Circuit
No. 13-1088
UNITED STATES ex rel. HELEN GE, M.D.,
Relator, Appellant,
STATE OF CALIFORNIA; STATE OF DELAWARE; STATE OF FLORIDA;
STATE OF GEORGIA; STATE OF HAWAII; STATE OF ILLINOIS; STATE OF
LOUISIANA; STATE OF INDIANA; STATE OF MICHIGAN; STATE OF
MINNESOTA; STATE OF MONTANA; STATE OF NEVADA; STATE OF NEW
HAMPSHIRE; STATE OF NEW JERSEY; STATE OF NEW MEXICO; STATE OF NEW
YORK; STATE OF NORTH CAROLINA; STATE OF OKLAHOMA; STATE OF RHODE
ISLAND; STATE OF TENNESSEE; STATE OF TEXAS; STATE OF WISCONSIN;
COMMONWEALTH OF MASSACHUSETTS; COMMONWEALTH OF VIRGINIA;
DISTRICT OF COLUMBIA,
Plaintiffs,
v.
TAKEDA PHARMACEUTICAL COMPANY LIMITED;
TAKEDA PHARMACEUTICAL NORTH AMERICA, INC.,
Defendants, Appellees.
No. 13-1089
UNITED STATES ex rel. HELEN GE, M.D.,
Relator, Appellant,
STATE OF CALIFORNIA; STATE OF DELAWARE; STATE OF FLORIDA; STATE
OF GEORGIA; STATE OF HAWAII; STATE OF ILLINOIS; STATE OF
LOUISIANA; STATE OF INDIANA; STATE OF MINNESOTA; STATE OF
MONTANA; STATE OF NEVADA; STATE OF NEW HAMPSHIRE; STATE OF NEW
JERSEY; STATE OF NEW MEXICO; STATE OF NEW YORK; STATE OF NORTH
CAROLINA; STATE OF OKLAHOMA; STATE OF RHODE ISLAND; STATE OF
TENNESSEE; STATE OF TEXAS; STATE OF WISCONSIN; COMMONWEALTH OF
MASSACHUSETTS; COMMONWEALTH OF VIRGINIA; DISTRICT OF COLUMBIA,
Plaintiffs,
v.
TAKEDA PHARMACEUTICAL COMPANY LIMITED;
TAKEDA PHARMACEUTICAL NORTH AMERICA, INC.,
Defendants, Appellees.
APPEALS FROM THE UNITED STATES DISTRICT COURT
FOR THE DISTRICT OF MASSACHUSETTS
[Hon. F. Dennis Saylor IV, U.S. District Judge]
Before
Lynch, Chief Judge,
Stahl and Howard, Circuit Judges.
Michael Sullivan, with whom The Ashcroft Group, Michael L.
Baum, Bijan Esfandiari, R. Brent Wisner, and Baum, Hedlund, Aristei
& Goldman, P.C. were on brief, for appellant.
Brian J. Murray, with whom Morgan R. Hirst, Marron A. Mahoney,
Christopher M. Morrison, Joseph B. Sconyers, and Jones Day were on
brief, for appellees.
Melissa N. Patterson, Attorney, Appellate Staff, Civil
Division, with whom Stuart F. Delery, Acting Assistant Attorney
General, Carmen M. Ortiz, United States Attorney, and Michael S.
Rabb, Attorney, Appellate Staff, Civil Division, were on brief, for
the United States of America as Amicus Curiae.
December 6, 2013
LYNCH, Chief Judge. In June 2010 Dr. Helen Ge originally
filed these two qui tam actions against her former employer, Takeda
Pharmaceutical Company Ltd. and its subsidiary Takeda
Pharmaceutical North America, Inc. (collectively, "Takeda"), under
the federal False Claims Act ("FCA"), 31 U.S.C. § 3729 et seq., and
various analogous state statutes. The two actions concern
different drugs. She has since amended each of her complaints
twice. The United States has declined to enter the case as a
party. In a successful qui tam action, the relator collects a
portion of the award to the government regardless of whether the
government intervenes. See United States ex rel. Duxbury v. Ortho
Biotech Prods., L.P. ("Duxbury I"), 579 F.3d 13, 16 (1st Cir.
2009).
Dr. Ge has alleged in her second amended complaints that
Takeda had failed to disclose adequately the risks associated with
four of its drugs and generally that this failure resulted in the
submission of false claims by various third-party patients and
physicians for government payment through, for example, Medicare or
Medicaid reimbursement.
On Takeda's motions to dismiss, the district court
dismissed both of Dr. Ge's actions under Federal Rule of Civil
Procedure 9(b) for failure to plead fraud with particularity and,
in addition, under Federal Rule of Civil Procedure 12(b)(6) for
failure to state a claim. United States ex rel. Ge v. Takeda
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Pharm. Co. Ltd., Nos. 10-11043-FDS, 11-10343-FDS, 2012 WL 5398564
(D. Mass. Nov. 1, 2012). Dr. Ge proposed to amend the second
amended complaint yet again, asserting still more theories of FCA
liability. The district court declined to allow further amendment.
Dr. Ge now appeals, making three levels of arguments:
(1) as to the Rule 9(b) dismissal, that her complaints contain
sufficient allegations concerning "the who, what, where, and when"
of Takeda's misconduct to satisfy Rule 9(b)'s particularity
requirement, see Duxbury I, 579 F.3d at 30 (quoting Rodi v. S. New
Eng. Sch. of Law, 389 F.3d 5, 15 (1st Cir. 2004)) (internal
quotation mark omitted), (2) the district court abused its
discretion in rejecting without opinion two requests, one pre-
judgment and one post-judgment, by Dr. Ge to amend her complaints
again, and (3) as to Rule 12(b)(6), that the district court's
analysis relies on an overly restrictive conception of FCA
liability.
This opinion concerns the first two arguments. We affirm
the district court on its Rule 9(b) and denial of amendment
rulings, and do not reach the 12(b)(6) issue.
I.
In September 2008, Dr. Ge took a position with Takeda as
a contract physician, contracting to perform medical reviews of
adverse event reports. Dr. Ge was responsible for reports of
adverse events, including those concerning four specific drugs for
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specific diseases: Actos (type 2 diabetes), Uloric (gout),
Kapidex/Dexilant (gastroesophageal reflux disease), and Prevacid
(same). Takeda sells all four drugs and each required Food and
Drug Administration ("FDA") approval for these uses. Dr. Ge's
tasks included ascertaining the seriousness of a reported event,
determining whether the associated drug was causally responsible
for that event, and determining whether that event constituted a
"safety signal," that is whether the reported event signaled the
need for additional safety warnings. Dr. Ge worked for Takeda
until January 2010. She asserts that when she complained about
improper reporting at Takeda, her contract was summarily
terminated.
On June 18, 2010, Dr. Ge filed an FCA complaint under
seal against Takeda pertaining to Actos. United States ex rel.
Helen Ge v. Takeda Pharmaceutical Co., et al, 10-11043-FDS. On
March 1, 2011, Dr. Ge filed a second complaint under seal
pertaining to Uloric, Kapidex/Dexilant, and Prevacid. United
States ex rel. Helen Ge v. Takeda Pharmaceutical Co., et al,
11-10343-FDS. In Dr. Ge's complaints, she alleged on behalf of the
United States1 that three FCA sections were violated: (a) 31 U.S.C.
1
Dr. Ge's complaints also brought claims on behalf of
California, Delaware, Florida, Georgia, Hawaii, Illinois, Indiana,
Louisiana, Massachusetts, Michigan, Minnesota, Montana, Nevada, New
Hampshire, New Jersey, New Mexico, New York, North Carolina,
Oklahoma, Rhode Island, Tennessee, Texas, Virginia, Wisconsin, and
the District of Columbia, alleging violations by Takeda of similar
state statutes. Michigan is only a party to the Actos appeal.
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§ 3729(a)(1)(A), which imposes liability on any person who
"knowingly presents, or causes to be presented, a false or
fraudulent claim for payment or approval," (b) § 3729(a)(1)(B),
which imposes liability on any person who "knowingly makes, uses,
or causes to be made or used, a false record or statement material
to a false or fraudulent claim," and (c) § 3729(a)(1)(C), which
imposes liability on any person who conspires to commit a violation
of, among other things, § 3729(a)(1)(A) or § 3729(a)(1)(B).
In late 2011 and early 2012, Dr. Ge filed amended
complaints in both cases while both complaints were still under
seal. Between late March and early April 2012, Dr. Ge filed a
second set of amended complaints after the complaints were
unsealed. Dr. Ge's second amended complaints are the ones directly
at issue on appeal.
Dr. Ge alleged Takeda had failed to report promptly and
accurately to the FDA a number of post-approval adverse events
associated with the four subject drugs. The FDA is responsible for
the approval of drugs for commercial marketing. See 21 U.S.C.
§ 355. The FDA is authorized after approval to continue to
evaluate the safety and effectiveness of the drug and, where
appropriate, to withdraw approval or require a change in labeling.
See id. § 355(k). FDA regulations require prompt, accurate reports
of adverse drug events by drug manufacturers. 21 C.F.R. §§ 314.80,
314.81. The receipt of an adverse report does not in and of itself
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show a causal relationship between a drug and the illness mentioned
in a report. N.J. Carpenters Pension & Annuity Funds v. Biogen
Idec, Inc., 537 F.3d 35, 53 (1st Cir. 2008).
It is undisputed that Takeda did submit adverse event
reports and there is no specific allegation that any of the events
which are the subject of the complaint were not eventually reported
in some form to the FDA. As to the drug Actos, Dr. Ge alleged that
she was asked by Takeda to misreport adverse events including
incidences of heart failure, renal failure, pancreatic cancer, and,
most notably, bladder cancer. Dr. Ge alleged that she complied
with those directions on certain occasions after having made known
her objections. In addition, Dr. Ge alleged that she had
discovered systematic under-reporting by Takeda of the incidence of
bladder cancer in adverse event reports.
The FDA did receive information on bladder cancer risk
because in June 2011, the FDA issued an official warning "that use
of the diabetes medication Actos (pioglitazone) for more than one
year may be associated with an increased risk of bladder cancer."
FDA Drug Safety Communication: Update to ongoing safety review of
Actos (pioglitazone) and increased risk of bladder cancer (June 15,
2011), http://www.fda.gov/Drugs/DrugSafety/ucm259150.htm. The FDA
also mandated a label change. FDA Drug Safety Communication:
Updated drug labels for pioglitazone-containing medicines (Aug. 4,
2011), http://www.fda.gov/drugs/drugsafety/ucm266555.htm. But it
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also issued a supplemental approval of Actos after knowing of the
bladder cancer risk. Dr. Ge alleges that after the labeling change
the sales of Actos plummeted.
As to the drugs Uloric, Kapidex/Dexilant, and Prevacid,
Dr. Ge alleged that Takeda pressured her to falsify her medical
conclusions, asking her to classify events as "non-serious" or to
change her causality assessment to "unrelated" so as to avoid
"reporting within 15 days" as required by FDA regulation. See 21
C.F.R. § 314.80(c)(1)(i) (requiring report of "serious and
unexpected" adverse event within 15 days). Specifically, Dr. Ge
alleged that she was directed to alter her analysis of reported
adverse events involving the interactions between the three drugs
and other medications likely to be taken by senior citizens. Dr.
Ge did not clearly allege that she complied with Takeda's
directions. Dr. Ge did allege, however, that on various occasions
Takeda officials altered her assessments directly.
As to Uloric, at some point Takeda submitted a
Supplemental New Drug Application to update the Adverse Reactions
section of the Uloric label. The FDA approved this supplemental
application on January 28, 2011.2
2
At times Dr. Ge's complaint appears to be directed against
the FDA for its failure to require greater warnings on labels, such
as for Prevacid.
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As to all four drugs Dr. Ge asserts that Takeda should
have reported adverse events earlier, and that Takeda consistently
took actions to resist label changes through under-reporting.
On May 11, 2012, Takeda filed its motion to dismiss. Dr.
Ge filed a memorandum in opposition on July 17, 2012. At the end
of her memorandum but not as a separate motion, Dr. Ge requested
leave to amend her complaints a third time, if the court was
inclined to dismiss, and supported it with a declaration from one
of her attorneys that included an attachment providing the total
expenditures by the federal government for Actos. On August 27,
2012, Takeda filed a motion to strike that declaration.
On November 1, 2012, the district court dismissed in a
written order Dr. Ge's claims under Rule 9(b), reasoning that
"although relator has alleged facts that would demonstrate a
'fraud-on-the-FDA' with respect to intentional under-reporting of
adverse events, she has failed to allege the specific details of
any claims that were allegedly rendered 'false' as a result."
Takeda, 2012 WL 5398564, at *4. The district court noted that Dr.
Ge had attempted to cure this defect by referring to her attorney's
declaration, which attached the total aggregate expenditure data by
the government for Actos. Id. The district court held, however,
that even assuming it was permissible for the court to consider the
Actos data, such aggregate expenditure data did not satisfy Rule
9(b)'s particularity requirement. Id. The district court
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contrasted Dr. Ge's pleadings with the pleadings of the relator in
Duxbury I, which identified eight specific medical providers who
allegedly submitted false claims, the rough time periods,
locations, and amounts of the claims, and the specific government
programs to which the claims were made. Takeda, 2012 WL 5398564,
at *4 (citing Duxbury I, 579 F.3d at 29-30).
From the absence of such specifics in Dr. Ge's
complaints, the district court inferred that Dr. Ge meant to assert
that all claims for the subject drugs during the relevant time
period were rendered false by Takeda's alleged misconduct. Id. at
*5. The district court held that Dr. Ge had not provided the
specific factual allegations necessary to support the inference
that the FDA would have withdrawn approval from all four drugs
immediately upon receiving the withheld information. Id.; see also
21 C.F.R. §§ 314.80(j), 314.81(d) ("If an applicant fails to
establish and maintain records and make reports required under this
section, FDA may withdraw approval of the application and, thus,
prohibit continued marketing of the drug product that is the
subject of the application.") (emphasis added). The district court
went beyond that to point out that even were it to accept the
unsubstantiated premise that drugs would have been taken off the
market, there were still no allegations about how the fraudulent
reporting would render false those claims which were filed before
the adverse events occurred.
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In the same November 1, 2012 order, the district court
also dismissed Dr. Ge's claims under Rule 12(b)(6) for failure to
state a claim, holding that Dr. Ge had not adequately established
that compliance with adverse-event reporting requirements was a
"material precondition" to the payment of the claims at issue.
Takeda, 2012 WL 5398564, at *6; see also United States ex rel.
Hutcheson v. Blackstone Med., Inc., 647 F.3d 377, 392 (1st Cir.
2011) (holding that FCA liability exists where claims submitted
"misrepresented compliance with a precondition of payment so as to
be false or fraudulent" and where "those misrepresentations were
material"). The district court observed that it is within the
FDA's discretion to respond to violations of adverse-event
reporting requirements in a number of ways, only the harshest of
which is the withdrawal of drug approval. Takeda, 2012 WL 5398564,
at *6. The district court noted in addition that the FDA's
enforcement procedures provide the opportunity for citizens to
petition the FDA to bring action against specific violators. Id.
(citing 21 C.F.R. § 10.30). The district court reasoned that "[i]t
is through that mechanism, rather than an FCA lawsuit, that relator
should have brought the reporting issues illuminated in the
complaints to the attention of the FDA." Id.
Finally, the district court dismissed in that same order
Dr. Ge's various state-law claims both because they failed to state
a claim under state law and because they failed to plead with
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specificity the details of any claims for payment made to any of
the states. Id. The district court did not address Dr. Ge's
request for leave to amend. Judgment was entered for defendants on
November 1, 2012.
On November 29, 2012, Dr. Ge filed a formal motion for
reconsideration pursuant to Rule 59(e) along with a motion for
leave to amend her complaint. Dr. Ge's motions were supported by
(a) an economic model constructed by a pharmaceutical economics
professor from the School of Pharmacy at the University of Southern
California purporting to show the amount of claims for Actos that
would not have been submitted for government payment but for
Takeda's alleged misconduct, and (b) the declarations of eight
individuals attesting that an individual patient would not have
submitted his or her claim if Takeda had promptly and accurately
disclosed the link between Actos and bladder cancer. On December
18, 2012, the district court denied Dr. Ge's motions without
opinion. On January 14, 2013, Dr. Ge filed a timely notice of
appeal.3
3
Appearing as amicus curiae in support of neither party, the
United States makes a limited argument that the district court
erred in its Rule 12(b)(6) analysis to the extent that it reasoned
(1) the availability of alternative administrative remedies
precludes FCA liability, and (2) the failure to comply with FDA
post-approval reporting requirements is per se immaterial to the
Government's decision whether to reimburse a claim and hence could
under no circumstances serve as a basis for FCA liability.
According to the United States, failure to comply with FDA post-
approval reporting requirements could serve as a basis for FCA
liability only in "rare circumstances." It was objecting only to
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II.
We review de novo the district court's dismissal order
for failure to comply with Rule 9(b). United States ex rel. Gagne
v. City of Worcester, 565 F.3d 40, 45 (1st Cir. 2009). Rule 9(b)
provides: "In alleging fraud or mistake, a party must state with
particularity the circumstances constituting fraud or mistake."
Fed. R. Civ. P. 9(b).
The district court correctly cited the relevant pleading
requirements: Relators are required to set forth with
particularity the "'who, what, when, where, and how' of the alleged
fraud." United States ex. rel Walsh v. Eastman Kodak Co., 98 F.
Supp. 2d 141, 147 (D. Mass. 2000) (quoting United States ex rel.
Thompson v. Columbia/HCA Healthcare Corp., 125 F.3d 899, 903 (5th
Cir. 1997)); see also Arruda v. Sears, Roebuck & Co., 310 F.3d 13,
18-19 (1st Cir. 2002).
As we noted a few months ago in United States ex rel.
Duxbury v. Orthobiotech Products, L.P. ("Duxbury II"), 719 F.3d 31,
33 (1st Cir. 2013):
"Although [the FCA's] financial incentive
encourages would-be relators to expose fraud,"
United States ex rel. Poteet v. Bahler Med.,
Inc., 619 F.3d 104, 107 (1st Cir. 2010), it
also attracts "'parasitic' relators who bring
a per se approach. The United States takes no position as to
whether Dr. Ge's complaints contain sufficient allegations to state
a claim for purposes of Rule 12(b)(6). Nor does the United States
take a position as to whether Dr. Ge's pleadings satisfy the
particularity requirement of Rule 9(b).
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FCA damages claims based on information within
the public domain or that the relator did not
otherwise discover," United States ex rel.
Rost v. Pfizer, Inc., 507 F.3d 720, 727 (1st
Cir. 2007).
For those reasons, there are a number of limitations on qui tam
actions, including the particularity requirements of Rule 9(b).
As we explained in United States ex rel. Karvelas v.
Melrose-Wakefield Hospital, 360 F.3d 220 (1st Cir. 2004):
[A] relator must provide details that identify
particular false claims for payment that were
submitted to the government. In a case such
as this, details concerning the dates of the
claims, the content of the forms or bills
submitted, their identification numbers, the
amount of money charged to the government, the
particular goods or services for which the
government was billed, the individuals
involved in the billing, and the length of
time between the alleged fraudulent practices
and the submission of claims based on those
practices are the types of information that
may help a relator to state his or her claims
with particularity. These details do not
constitute a checklist of mandatory
requirements that must be satisfied by each
allegation included in a complaint. However,
. . . we believe that "some of this
information for at least some of the claims
must be pleaded in order to satisfy Rule
9(b)."
Id. at 232-33 (quoting United States ex rel. Clausen v. Lab. Corp.
of Am., 290 F.3d 1301, 1312 n.21 (11th Cir. 2002)). Karvelas also
rejects the notion that the Rule 9(b) pleading standard is relaxed
for FCA claims. See id. at 228-31.
In a qui tam action in which the defendant is alleged to
have induced third parties to file false claims with the
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government, a relator can satisfy this requirement by "providing
'factual or statistical evidence to strengthen the inference of
fraud beyond possibility' without necessarily providing details as
to each false claim." Duxbury I, 579 F.3d at 29 (quoting Rost, 507
F.3d at 733).
Because FCA liability attaches only to false claims,
Karvelas, 360 F.3d at 225, merely alleging facts related to a
defendant's alleged misconduct is not enough, Rost, 507 F.3d at
732-33. Rather, a complaint based on § 3729(a)(1)(A) must
"sufficiently establish that false claims were submitted for
government payment" as a result of the defendant's alleged
misconduct. Rost, 507 F.3d at 733.
We will assume that the district court was correct that,
as to the allegations of fraud on the FDA, the alleged misconduct
suffices. Dr. Ge has, however, alleged next to no facts in support
of the proposition that Takeda's alleged misconduct resulted in the
submission of false claims or false statements material to false
claims for government payment. Dr. Ge alleges a conclusion that
numerous claims for the four subject drugs would not have been
submitted for government payment but for Takeda's misconduct, but
alleges no more than that. What is missing are any supporting
allegations upon which her conclusion rests and any particulars.
Dr. Ge's pleadings fall far short of what was found barely adequate
in Duxbury I, see 579 F.3d at 29-30, and are far less particular
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than those there whose sufficiency was deemed a "close call," id.
at 30.
There, this court reversed the district court's dismissal
under Rule 9(b) of some of the relator's claims, reasoning that the
relator's identification of eight specific medical providers who
allegedly submitted false claims, plus rough time periods,
locations, and amounts of the claims, and the specific government
programs to which the claims were made, were just enough to
constitute a pleading of fraud with particularity. Id. at 30.4
Here, by contrast, Dr. Ge provided in response to the motions to
dismiss, at most, aggregate expenditure data for one of the four
subject drugs, with no effort to identify specific entities who
submitted claims or government program payers, much less times,
amounts, and circumstances.
Dr. Ge thus made no attempt in her complaints to allege
facts that would show that some subset of claims for government
payment for the four subject drugs was rendered false as a result
of Takeda's alleged misconduct. And any theory that all claims
submitted during this period were false has even less basis to
survive. Dr. Ge attempts to satisfy the Rule 9(b) requirements
with a per se rule that if sufficient allegations of misconduct are
4
After discovery, those very claims were dismissed on
summary judgment as unsupported. United States ex rel. Duxbury v.
Ortho Biotech Prods., L.P., No. 03-12189-RWZ, 2012 WL 3292870 (D.
Mass. Aug. 13, 2012), aff'd, 719 F.3d 31 (1st Cir. 2013).
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made, it necessarily follows that false claims and/or material
false information were filed. We reject that approach, which
violates the specificity requirements of Rule 9(b).
On appeal, Dr. Ge articulates three new theories
purporting to support the notion that all claims submitted during
the relevant period for the four subject drugs must have been
rendered false by Takeda's alleged misconduct; and that allegations
of falsity would per se suffice to constitute compliance with Rule
9(b). All three theories are waived, however, not having been
raised properly before the district court.
We do not rule on whether, had they not been waived, any
of these theories under any subsection would have added the needed
specificity under Rule 9(b), and merely say it is doubtful.5 See
Clausen, 290 F.3d at 1311 (commenting that Rule 9(b) does not
permit an FCA 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
5
We recognize that, under Allison Engine Co. v. United
States ex rel. Sanders, 553 U.S. 662 (2008), as construed in Gagne,
565 F.3d at 46 & n.7, the "presentment" requirement applies only to
her subsection (a)(1)(A) claims and not her subsection (a)(1)(B) or
subsection (a)(1)(C) claims. However, Rule 9(b)'s particularity
requirement applies with full force to all three subsections. See
Gagne, 565 F.3d at 42, 45. Here, Dr. Ge has not alleged in her
second amended complaints, with specificity, facts that comply with
Rule 9(b) as to any of her claims. In any event, as discussed
infra, her new theories of FCA liability were waived.
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the [g]overnment"); see also United States ex rel. Nathan v. Takeda
Pharm. N. Am., Inc., 707 F.3d 451, 457 (4th Cir. 2013) ("[We] hold
that when a defendant's actions, as alleged and as reasonably
inferred 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." (emphasis added));
United States ex rel. Atkins v. McInteer, 470 F.3d 1350, 1359 (11th
Cir. 2006) ("[Relator] has described in detail what he believes is
an elaborate scheme for defrauding the government by submitting
false claims. . . . [Relator] fails to provide the next link in the
FCA liability chain: showing that the defendants actually submitted
reimbursement claims for the services he describes.").
A. Implied Warranty
Dr. Ge's first additional theory of per se ineligibility
for federal reimbursement of all claims for the four drugs rests on
the assertion that the subject drugs were not "as safe as Takeda
purported them to be." Dr. Ge contends that through labels and
participation in the adverse event reporting process, Takeda
represented to all patients, doctors, and the government that the
subject drugs possessed certain risks and benefits. Dr. Ge
alleges, however, that the subject drugs "did not possess the
safety profile Takeda claimed they would." And from this Dr. Ge
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infers that she has adequately stated that all claims submitted to
the government for those drugs were false.
Dr. Ge's first theory is waived, having been raised only
in "cursory fashion" before the district court. See Rodríguez v.
Municipality of San Juan, 659 F.3d 168, 175 (1st Cir. 2011) ("It
should go without saying that we deem waived claims not made or
claims adverted to in a cursory fashion, unaccompanied by developed
argument."). Dr. Ge asserted to the district court only that
Takeda's alleged fraudulent conduct led to the submission of claims
that would not have otherwise occurred, without providing any
specificity, and alleging nothing more. But that is inadequate;
courts should not be asked to guess the contents of a theory of
liability. "[I]ssues adverted to in a perfunctory manner,
unaccompanied by some effort at developed argumentation, are deemed
waived." United States v. Zannino, 895 F.2d 1, 17 (1st Cir. 1990).
Dr. Ge did offer a bit more argumentation in her Rule
59(e) motion for reconsideration. That was too late. "To the
extent that appellants' reconsideration motion sought to raise an
argument waived at the trial stage, it must necessarily fail."
DiMarco-Zappa v. Cabanillas, 238 F.3d 25, 34 (1st Cir. 2001).
B. "Reasonable and Necessary"
Dr. Ge on appeal invokes 42 U.S.C. § 1395y(a)(1)(A),
which prohibits Medicare payments for treatments that are not
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"reasonable and necessary."6 According to Ge, as a result of
Takeda's alleged misconduct, certain reimbursement claims were
rendered false under the FCA because they impliedly -- and
incorrectly -- certified that the subject drugs were "reasonable
and necessary."
No such theory was properly presented to the district
court before dismissal. Dr. Ge concedes that she did not cite or
discuss 42 U.S.C. § 1395y(a)(1)(A) before the district court in her
memorandum in opposition to Takeda's motions to dismiss. Dr. Ge
did provide a bare citation of § 1395y(a)(1)(A) in her second
amended complaints. However, Dr. Ge did not allege in those
complaints that Takeda's alleged misconduct rendered claims for the
four subject drugs "[un]reasonable" or "[un]necessary." Nor did
she make any effort to explain why that would be so. See Pan v.
Gonzales, 489 F.3d 80, 87 (1st Cir. 2007) ("We long have held that
legal theories advanced in skeletal form, unaccompanied by some
developed argumentation, are deemed abandoned.").
C. "Misbranded"
On appeal Dr. Ge newly argues that false claims must have
been submitted to the government for the four drugs on the theory
that Takeda's failure to properly update the subject drugs' labels
6
Various state statutes and regulations governing Medicaid
reimbursement impose similar restrictions. See, e.g., 130 Mass.
Code Regs. 450.204 ("The MassHealth agency will not pay a provider
for services that are not medically necessary . . . .") (emphasis
added).
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caused those drugs to be "misbranded" for purposes of the federal
Food, Drug, and Cosmetics Act ("FDCA"), 21 U.S.C. § 352(a), and so
they were ineligible to enter interstate commerce, id. § 331(a).
Consequently, she now says they were ineligible for reimbursement.
At best, there was a gesture to Dr. Ge's "misbranding" theory
before the trial court, and it is waived.
Dr. Ge rejoins that she did adequately raise a
"misbranding" argument before the district court. Her second
amended complaints alleged that Takeda failed to update the label
for Actos to accurately reflect the drug's risks, as required by
the FDCA. However, as to ineligibility, Dr. Ge's complaints state
only: "[The FDCA] forbids 'misbranding' and provides a range of
civil and criminal enforcement mechanisms against inaccurate
product labeling." Dr. Ge made no mention of ineligibility for
interstate commerce, let alone of ineligibility for reimbursement
on that basis. At most, a footnote in her memorandum opposing
dismissal referred to misbranding but nothing more. The argument
was waived. See City of Bangor v. Citizens Commc'ns Co., 532 F.3d
70, 95 n.11 (1st Cir. 2008) (deeming waived argument "presented
only in a passing fashion in a footnote"). The mention of
misbranding in Dr. Ge's Rule 59(e) motion was too little, too late.
See Cochran v. Quest Software, Inc., 328 F.3d 1, 11 (1st Cir. 2003)
("Litigation is not a game of hopscotch. It is generally accepted
that a party may not, on a motion for reconsideration, advance a
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new argument that could (and should) have been presented prior to
the district court's original ruling.").
To sum up: Dr. Ge waived all of her new arguments to the
effect that the four subject drugs were per se ineligible for
government reimbursement during the relevant period on these
varying theories. Dr. Ge's claims on all theories which were
presented fail under Rule 9(b).
III.
This court reviews the district court's denial of an
appellant's motion to amend and for reconsideration for abuse of
discretion. Fábrica de Muebles J.J. Álvarez, Incorporado v.
Inversiones Mendoza, Inc., 682 F.3d 26, 31 (1st Cir. 2012);
Torres-Alamo v. Puerto Rico, 502 F.3d 20, 25 (1st Cir. 2007).
Dr. Ge argues that she could have cured any defects in
her complaints had she been provided with leave to amend the two
times she asked. She had already twice amended both of her
complaints in the 21 months after the filing of her initial
complaint. The first request, after Takeda filed its motion to
dismiss in 2012, was in her memorandum in opposition to Takeda's
motion to dismiss and conditionally did state that if the court was
inclined to dismiss, then she would like to amend.7 The district
7
There, Dr. Ge's conditional request to amend consisted just
of two sentences:
If the Court were to determine that Relator's
Complaints are deficient in any regard, Relator
respectfully requests that this Court afford her an
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court did not explicitly discuss the request, but did discuss the
additional appended material on Actos and said it did not cure the
deficiencies in the pleading.
The second of her requests came in the form of a motion
to amend, filed post-judgment on November 29, 2012 in conjunction
with her motion for reconsideration under Rule 59(e) of the
judgment of dismissal. The district court dismissed this late
motion without opinion in its December 18, 2012 order.
When a motion to amend is properly made before entry of
judgment, the district court is to evaluate that motion under the
"liberal standard of Fed. R. Civ. P. 15(a)." Palmer v. Champion
Mortg., 465 F.3d 24, 30 (1st Cir. 2006). "Amendments may be
permitted pre-judgment, even after a dismissal for failure to state
a claim, and leave to amend is 'freely given when justice so
requires.'" Id. (quoting Fed. R. Civ. P. 15(a)). The "request"
was not properly made.
By contrast, as to post-judgment motions "a district
court cannot allow an amended pleading where a final judgment has
opportunity to amend her complaint. Federal Rule
of Civil Procedure 15(a) provides that leave to
amend a pleading "shall be freely given when
justice so requires," and reflects a liberal
amendment policy. O'Connell v. Hyatt Hotels of
P.R., 357 F.3d 152, 154 (1st Cir. 2004); Rost, 507
F.3d at 733-34 (same); see also Foman v. Davis, 371
U.S. 178, 182 (1962) (leave to amend should be
"freely given").
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been rendered unless that judgment is first set aside or vacated
pursuant to Fed. R. Civ. P. 59 or 60." Maldonado v. Dominguez, 137
F.3d 1, 11 (1st Cir. 1998). "The granting of a motion for
reconsideration is 'an extraordinary remedy which should be used
sparingly.'" Palmer, 465 F.3d at 30 (quoting 11 Charles Alan
Wright et al., Federal Practice and Procedure § 2810.1 (2d ed.
1995)). The moving party "must 'either clearly establish a
manifest error of law or must present newly discovered evidence.'"
Marie v. Allied Home Mortg. Corp., 402 F.3d 1, 7 n.2 (1st Cir.
2005) (quoting Pomerleau v. W. Springfield Pub. Schs., 362 F.3d
143, 146 n.2 (1st Cir. 2004)). A motion for reconsideration
"certainly does not allow a party to introduce new evidence or
advance arguments that could and should have been presented to the
district court prior to the judgment." Aybar v. Crispin–Reyes, 118
F.3d 10, 16 (1st Cir. 1997) (quoting Moro v. Shell Oil Co., 91 F.3d
872, 876 (7th Cir. 1996)).
Dr. Ge relies on Foman v. Davis, 371 U.S. 178 (1962),
which stated:
Of course, the grant or denial of an
opportunity to amend is within the discretion
of the District Court, but outright refusal to
grant the leave without any justifying reason
appearing for the denial is not an exercise of
discretion; it is merely abuse of that
discretion and inconsistent with the spirit of
the Federal Rules.
Id. at 182. Dr. Ge contends that the district court's denials
without a statement of reasons for her two requests amounted to
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just the sort of "outright refusal . . . without any justifying
reason" that Foman proscribes.
As explained in Silverstrand Investments v. AMAG
Pharmaceuticals, Inc., 707 F.3d 95, 107-08 (1st Cir. 2013), where,
as here, a request to file an amended complaint consists of nothing
more than "boilerplate sentences stating the well-settled 'freely
given' standard under which a request for leave to amend is
generally analyzed," a district court "act[s] well within its
discretion when completely disregarding the request."8 Indeed, in
Gray v. Evercore Restructuring LLC, 544 F.3d 320 (1st Cir. 2008),
a case involving a nearly identical request, this court explained
that except perhaps in "exceptional circumstances," a bare request
in an opposition to a motion to dismiss does not constitute a
motion to amend for purposes of Rule 15(a). Id. at 327 ("Although
a court's denial of a motion to amend is typically reviewed for an
abuse of discretion, in this case the district court neither
granted nor denied a motion to amend. . . . As [plaintiff] failed
to request leave to amend, the district court cannot be faulted for
failing to grant such leave sua sponte."); accord Fisher v. Kadant,
8
Dr. Ge argues that Silverstrand is inapposite because her
post-dismissal request for leave to amend consisted of several
pages of argument and was accompanied by two proposed amended
complaints and statistical and anecdotal evidence of the effects of
Takeda's alleged misconduct. Dr. Ge's second request is neither
here nor there with respect to whether the district court's
rejection of her first, "boilerplate" request amounted to an abuse
of discretion.
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Inc., 589 F.3d 505, 509-10 (1st Cir. 2009). And even at that,
Foman identifies "repeated failure to cure deficiencies by
amendments previously allowed" as reason for denying a motion for
leave to amend under the permissive Rule 15(a) standard. 371 U.S.
at 182.
There was also no abuse in denying Dr. Ge's second
request. It came after judgment, when the liberal leave to amend
language of Rule 15(b) does not apply. Id. In order to grant Dr.
Ge's second request, the district court would have had first to set
aside its judgment pursuant to Dr. Ge's motion to reconsider under
Rule 59(e). It did not and did not abuse its discretion.
Her argument, in any event, has no legs. Dr. Ge could
hardly contend that the so-called "newly discovered evidence"
accompanying her second request was "not previously available."
Palmer, 465 F.3d at 30. Dr. Ge could have sought the testimony of
an expert witness and/or subject drug users much earlier. Nor
could Dr. Ge plausibly identify some "manifest error of law"
committed by the district court. Id.
The district court's dismissal order identified the
evidentiary defects in Dr. Ge's complaints after Dr. Ge had twice
amended her complaints and after having considered arguendo Dr.
Ge's contested declaration and accompanying expenditure data. As
this court has stated previously:
To require the district court to permit
amendment here would allow plaintiffs to
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pursue a case to judgment and then, if they
lose, to reopen the case by amending their
complaint to take account of the court's
decision. Such a practice would dramatically
undermine the ordinary rules governing the
finality of judicial decisions, and should not
be sanctioned in the absence of compelling
circumstances.
James v. Watt, 716 F.2d 71, 78 (1st Cir. 1983) (Breyer, J.). So
too, here.
IV.
We affirm the district court's orders dismissing relator
Dr. Ge's claims and denying leave to amend her second amended
complaints. Costs are awarded to Takeda.
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