United States Ex Rel. Campie v. Gilead Sciences, Inc. ( 2017 )

FOR PUBLICATION
UNITED STATES COURT OF APPEALS
FOR THE NINTH CIRCUIT
UNITED STATES OF AMERICA EX No. 15-16380
REL. JEFFREY CAMPIE and SHERILYN
CAMPIE, D.C. No.
Plaintiffs-Appellants, 3:11-cv-00941-
EMC
v.
GILEAD SCIENCES, INC., OPINION
Defendant-Appellee.
Appeal from the United States District Court
for the Northern District of California
Edward M. Chen, District Judge, Presiding
Argued and Submitted April 19, 2017
San Francisco, California
Filed July 7, 2017
Before: Stephen Reinhardt and A. Wallace Tashima,
Circuit Judges and Donald W. Molloy,* District Judge.
Opinion by Judge Molloy
*
The Honorable Donald W. Molloy, District Judge for the U.S.
District Court for the District of Montana, sitting by designation.
2 UNITED STATES EX REL. CAMPIE V. GILEAD SCIENCES
SUMMARY**
False Claims Act
The panel reversed the district court’s Fed. R. Civ. P.
12(b)(6) dismissal of claims under the False Claims Act by
relators Jeff and Sherilyn Campie alleging that their former
employer, Gilead Sciences, Inc., made false statements about
its compliance with Food and Drug Administration
regulations regarding certain HIV drugs, resulting in the
receipt of billions of dollars from the government; and
alleging retaliation against relator Jeff Campie.
The panel held that the relators stated a plausible claim
that Gilead’s claims seeking payment for noncompliant drugs
were a basis for liability under the False Claims Act.
Considering the four elements of False Claims Act liability,
first, the panel held that relators alleged a “false claim” under
theories of factually false certification, implied false
certification, and promissory fraud. Second, relators
adequately pled “scienter.” Third, the relators sufficiently
pled “materiality” at this stage of the case where they alleged
more than the mere possibility that the government would be
entitled to refuse payment if it were aware of the violations.
Fourth, the relators sufficiently alleged that Gilead submitted
false claims in a number of ways.
The panel held that the relators adequately pled a claim
for retaliation in violation of the False Claims Act.
Specifically, the panel held that the second amended
**
This summary constitutes no part of the opinion of the court. It has
been prepared by court staff for the convenience of the reader.
UNITED STATES EX REL. CAMPIE V. GILEAD SCIENCES 3
complaint sufficiently alleged facts showing that Jeff Campie
had an objectively reasonable, good faith belief that Gilead
was possibly committing fraud against the government; that
Gilead knew Campie was engaged in protected activity: and
that Gilead discriminated against Campie because he engaged
in protected activity.
The panel declined to decide in the first instance the
question of whether relators’ claims pursuant to 31 U.S.C.
§ 3729(a)(1)(A), (B) met the heightened pleading standard
under Fed. R. Civ. P. 9(b).
COUNSEL
Tejinder Singh (argued) and Thomas C. Goldstein, Goldstein
& Russell P.C., Bethesda, Maryland; Andrew S. Friedman
and Francis J. Balint, Jr., Bonnett Fairbourn Friedman &
Balint P.C., Phoenix, Arizona; Ingrid M. Evans and Michael
A. Levy, Evans Law Firm Inc., San Francisco, California; for
Plaintiffs-Appellants.
Ethan M. Posner (argued) and Joshua N. DeBold,
Washington, D.C.; Gretchen Hoff Varner, Covington &
Burlington LLP, San Francisco, California; for Defendant-
Appellee.
Douglas N. Letter (argued ), Benjamin Schultz, and Michael
S. Raab, Attorneys, Appellate Staff; Brian Stretch, Acting
United States Attorney; Benjamin Mizer, Principal Deputy
Assistant Attorney General; Civil Division, United States
Department of Justice, Washington, D.C.; for Amicus Curiae
United States.
4 UNITED STATES EX REL. CAMPIE V. GILEAD SCIENCES
Charles S. Siegel, Waters & Kraus LLC, Dallas, Texas, for
Amicus Curiae Professor Peter Linzer.
OPINION
MOLLOY, District Judge:
This case involves allegations under the False Claims Act,
31 U.S.C. §§ 3729–33, that Defendant-Appellee Gilead
Sciences, Inc. (Gilead) made false statements about its
compliance with Food and Drug Administration (FDA)
regulations regarding certain HIV drugs, resulting in the
receipt of billions of dollars from the government. Relators
Jeff and Sherilyn Campie (relators), two former Gilead
employees, allege that these noncompliant drugs were not
eligible to receive payment or reimbursement and, therefore,
any claims presented to the government for payment were
false under the False Claims Act. Relators further allege that
Gilead violated the False Claims Act when it fired relator Jeff
Campie, who discovered and ultimately reported the
violations. See 31 U.S.C. § 3730(h). The district court
dismissed relators’ claims under Federal Rule of Civil
Procedure 12(b)(6). It did so before the Supreme Court
decided Universal Health Servs., Inc. v. United States
(Escobar), ___ U.S. ___, 136 S. Ct. 1989 (2016). We
reverse.
I.
Gilead is a large drug producer, with a majority of its
prescription drug product sales occurring in the United States.
Relevant here, Gilead produces anti-HIV drug therapies,
UNITED STATES EX REL. CAMPIE V. GILEAD SCIENCES 5
including the drugs Atripla, Truvada, and Emtriva. In 2008
and 2009 alone, the government spent over $5 billion on
these anti-retrovirals. Relators claim that in its sale of these
drugs to the government, Gilead concealed violations of FDA
regulations and knowingly made false statements regarding
its regulatory compliance. The facts recited in the relators’
complaints, which are taken as true at this stage, Escobar,
136 S. Ct. at 1997, are as follows.
When a drug manufacturer wishes to get a drug approved
for manufacture and sale in the United States, it must submit
a “new drug application” (NDA) to the FDA, in which it
states the chemical composition of a drug and specifies the
facilities where it will be manufactured, as well as methods
and controls used in the manufacturing process. 21 U.S.C.
§ 355(a), (b)(1); 21 C.F.R. § 314.50(d)(1). Acceptable
facilities must meet federal standards, known as “good
manufacturing practices.” See 21 C.F.R. Parts 210, 211. The
FDA may refuse an application or withdraw a previously
approved application if the methods or facilities “are
inadequate to preserve [the drug’s] identity, strength, quality,
and purity.” 21 U.S.C. § 355(d), (e). Once approved, the
manufacturer must obtain FDA approval to make major
changes to the manufacturing process “before the distribution
of the drug” by submitting an application called a Prior
Approval Supplement, or PAS. 21 U.S.C. § 356a(c)(2);
21 C.F.R. § 314.70(b)(3). Both an NDA and PAS require the
applicant to certify that all statements in the application are
true and agree to comply with all applicable laws and
regulations. See Form 356h.
In the mid-2000s, Gilead submitted NDAs and received
FDA approval for Emtriva, Truvada, and Atripla. These
6 UNITED STATES EX REL. CAMPIE V. GILEAD SCIENCES
drugs contain the active ingredient1 emtricitabine (commonly
known as FTC).2 In its NDA applications, Gilead represented
to the FDA that it would source the FTC from specific
registered facilities in Canada, Germany, the United States,
and South Korea. But, relators allege that as early as 2006,
Gilead contracted with Synthetics China to manufacture
unapproved FTC at unregistered facilities. For a period of
sixteen months beginning in December 2007, Gilead brought
illicit FTC from a Synthetics China facility into the United
States to use in its commercial drugs, claiming that the FTC
had come from its approved South Korean manufacturer.
Gilead allegedly began using Synthetics China to save money
and trigger price reduction clauses in contracts with other
FTC suppliers.
Gilead ultimately sought approval from the FDA to use
Synthetics China’s FTC in October 2008, but according to
relators, Gilead had been including products from Synthetics
China in its finished drug products for at least two years
before this approval was obtained in 2010. Relators also
allege that Gilead falsified or concealed data in support of its
application to get Synthetics China approved by the FDA.
For example, Gilead claims in its application that it had
received three full-commercial-scale batches of FTC from
Synthetics China that passed testing and were consistent with
1
The term “active ingredient” refers to the biologically active
component of a drug, i.e., any “component that is intended to furnish
pharmacological activity or other direct effect in the diagnosis, cure,
mitigation, treatment, or prevention of disease, or to affect the structure of
any function of the body.” 21 C.F.R. § 210.3(b)(7).
2
In addition to using the term FTC, relators use the term “API” to
refer to “active pharmaceutical products” throughout their complaints. To
avoid confusion, this opinion uses only the term FTC.
UNITED STATES EX REL. CAMPIE V. GILEAD SCIENCES 7
or equivalent to FTC batches made from existing, approved
manufacturers. Relators contend that this representation was
false as two of three batches had failed internal testing. One
of the batches purportedly contained “residual solvent levels
in excess of established limits” and other impurities. A
second batch had “microbial contamination” and showed the
presence of arsenic, chromium and nickel contaminants.
Gilead did not report this to the FDA, but rather secured two
new batches from the unapproved Chinese site and amended
its PAS on April 24, 2009, to include the substitute data. The
FDA approved the amended PAS in May 2009 and the
Synthetics China facility was registered in 2010. Gilead also
began using FTC from another, unapproved Synthetics China
facility, but ultimately stopped using Synthetics China as a
supplier in October 2011, following continued contamination
issues. Two recalls of contaminated products occurred in
2014.
Gilead never acknowledged or notified the FDA about the
bad test results or the contamination and adulteration
problems. Despite being aware of manufacturing problems
with Synthetics China, Gilead allegedly released 77 lots of
FTC produced by Synthetics China to its contract
manufacturers before the FDA approval of the Synthetics
China facility. Relators allege that the drug products made
with FTC affecting the quality and purity of the drug and
produced at a different, uninspected manufacturing site are
not FDA-approved. And, according to relators, had the FDA
been aware of these issues, it would not have approved the
use of the Synthetics China manufacturing facility. Relators
make a similar argument for the use of unapproved sites in
Alberta, Canada to produce ambrisentan, the active ingredient
in Letairis, and contamination of tenofovir disoproxil
fumarate (a.k.a. Viread), another active ingredient.
8 UNITED STATES EX REL. CAMPIE V. GILEAD SCIENCES
Relators insist that Gilead actively concealed its use of
illicit FTC products by Synthetics China in a number of ways.
First, Gilead imported the FTC through its Canadian facilities
and used fraudulent labeling. Second, the labels and
paperwork for the FTC were obscured or augmented to
conceal where the FTC was actually produced. Third, Gilead
credited its approved FTC manufacturers with the production
of the Synthetics China FTC. Relators allege Gilead’s false
statements and fraudulent conduct resulted in government
payments both directly, through programs such as the
Department of Defense, Department of Veterans Affairs,
Federal Bureau of Prisons, USAID, and the Public Health
Service, and through reimbursement programs, such as
Medicare, Medicaid, TRICARE, FEHBP, and the Ryan White
Program. Payment for drugs under these programs is
contingent upon FDA approval. See, e.g., 48 C.F.R. § 46.408
(direct payment); 42 U.S.C. § 1396r-8(k)(2)(A)(i)
(Medicaid); 42 U.S.C. § 1395w-102(e) (Medicare Part D).
Relators allege that because the drugs paid for by the
government contained FTC sourced at unregistered facilities,
they were not FDA approved and therefore not eligible for
payment under the government programs.
Relators further claim that these drugs were “adulterated”
or “misbranded” in violation of the law. Congress expressly
prohibits any person from introducing or receiving any
“adulterated” or “misbranded” drugs in interstate commerce.
21 U.S.C. § 331(a), (c). A drug is “adulterated” if “the
methods used in, or the facilities or controls used for, its
manufacture, processing, packing, or holding do not conform
to or are not operated or administered in conformity with
current good manufacturing practice,” or if “any substance
has been (1) mixed or packed therewith so as to reduce its
quality or strength or (2) substituted wholly or in part
UNITED STATES EX REL. CAMPIE V. GILEAD SCIENCES 9
therefor.” 21 U.S.C. § 351(a)(2)(B), (d). A drug is
“misbranded” if, inter alia, “it is an imitation of another
drug,” or “it was manufactured, prepared, propagated,
compounded, or processed in an establishment not duly
registered” under the Food, Drug, and Cosmetic Act.
21 U.S.C. § 352(i)(2), (o). Violations of that restriction are
crimes and adulterated or misbranded drugs can be seized.
21 U.S.C. §§ 333(a), 334.
Relators finally raise a retaliation claim regarding the
termination of Relator Jeff Campie. See 31 U.S.C. § 3730(h).
Mr. Campie worked at Gilead as its Senior Director of Global
Quality Assurance from July 2006 to July 2009. His “regular
job duties focused on commercial drug product quality
assurance/control issues[, but] he was (based on job
requirements) expected to review [active ingredient]
submissions as well.” While employed with Gilead, Campie
had quality control oversight of (1) all commercially released
drug products by Gilead; (2) Gilead’s policies, practices, and
good manufacturing practice compliance; and (3) the
development of quality systems. It appears that Campie
raised concerns about “the integrity of the data being
generated to support the release of Gilead drugs” as early as
July 2007. In 2008, Campie became worried about Gilead’s
use of FTC manufactured by Synthetics China, and in January
2009, convened a meeting to caution Gilead management that
FTC could not be shipped from an unapproved manufacturing
site. Through the remainder of his employment, “Mr. Campie
continued to voice strenuous objections to the false
representations and omissions being made to the Government
concerning the source and lack of purity of the [active
ingredients] from Synthetics China and that [sic] lack of a
truthful, valid and approved PAS.” “Although Mr. Campie
was supposed to be responsible for commercial quality input
10 UNITED STATES EX REL. CAMPIE V. GILEAD SCIENCES
on regulatory filings implicating quality or supply issues,
Gilead began to selectively circumvent Mr. Campie’s review
and effectively removed or excluded him from Gilead’s
regulatory review process.” In a March 2009 meeting, “Mr.
Campie made clear that he expected Gilead to stop its
deceptive practices and threatened to inform the FDA if
Gilead continued its fraudulent conduct.” In April 2009,
Campie initiated a quarantine to prevent non-approved
Letairis from entering the supply chain. That quarantine was
lifted and Campie was chastised by management. During this
time, Campie continued to voice his concerns.
On June 20, 2009, Campie was informed he would be
terminated effective July 2009. He was told that his “heart
wasn’t in the job anymore.” Campie maintains, however, that
he was terminated because he “discovered, investigated, and
raised concerns over Gilead’s release and distribution . . . of
tons of contaminated and adulterated [active ingredients] that
had been manufactured at unregistered and uninspected”
facilities and thus “were not eligible for payment under the
Government Payment Programs, causing the submission of
false claims paid by the [federal] Government and the States.”
Upon termination, Campie was asked to sign a severance
agreement agreeing not to initiate any claims under the False
Claims Act. He refused.
The district court dismissed relators’ first amended
complaint on January 7, 2015, under Federal Rule of Civil
Procedure 12(b)(6) for failure to state a claim, but gave
relators an opportunity to amend. On June 12, 2015, the
district court dismissed relators’ second amended complaint
with prejudice, holding that it also failed to state a claim
UNITED STATES EX REL. CAMPIE V. GILEAD SCIENCES 11
under the False Claims Act.3 Relators timely appealed.
Although it declined to intervene in the case below, the
United States Department of Justice submitted a brief as
amicus curiae supporting reversal of the district court.
II.
We have jurisdiction pursuant to 28 U.S.C. § 1291. We
review the dismissal of claims under the False Claims Act de
novo. United States ex rel. Hendow v. Univ. of Phx.,
461 F.3d 1166, 1170 (9th Cir. 2006). We assume the facts as
alleged are true and examine only whether relators’
allegations support a cause of action under the False Claims
Act under the theories presented. Id. A Rule 12(b)(6)
dismissal “can be based on a lack of a cognizable legal theory
or the absence of sufficient facts alleged under a cognizable
legal theory.” Balistreri v. Pacifica Police Dep’t, 901 F.2d
696, 699 (9th Cir. 1990). A complaint must plead “sufficient
factual matter, accepted as true, to ‘state a claim to relief that
is plausible on its face.’” Ashcroft v. Iqbal, 556 U.S. 662, 678
(2009) (quoting Bell Atl. Corp. v. Twombly, 550 U.S. 544,
570 (2007)). A claim under the False Claims Act must not
only be plausible, Fed. R. Civ. P. 8(a), but pled with
particularity under Rule 9(b), Cafassao ex rel. United States
v. Gen. Dynamics C4 Sys., Inc., 637 F.3d 1047, 1054–55 (9th
Cir. 2011). The district court based its dismissal on Rule
12(b)(6) and did not address whether the relators’ complaints
met Rule 9(b)’s heightened pleading standard.
3
The parallel state claims were dismissed without prejudice.
12 UNITED STATES EX REL. CAMPIE V. GILEAD SCIENCES
III.
The False Claims Act makes liable anyone who
“knowingly presents, or causes to be presented, a false or
fraudulent claim for payment or approval,” or “knowingly
makes, uses, or causes to be made or used, a false record or
statement material to a false or fraudulent claim.” 31 U.S.C.
§ 3729(a)(1)(A), (B). A “claim” includes direct requests for
government payment as well as reimbursement requests made
to the recipients of federal funds under a federal benefits
program. 31 U.S.C. § 3729(b)(2)(A); Escobar,136 S. Ct. at
1996. A claim under the False Claims Act requires a showing
of “(1) a false statement or fraudulent course of conduct,
(2) made with the scienter, (3) that was material, causing
(4) the government to pay out money or forfeit moneys due.”
Hendow, 461 F.3d at 1174. It is not enough to allege
regulatory violations, United States ex rel. Hopper v. Anton,
91 F.3d 1261, 1266 (9th Cir. 1996); rather, the false claim or
statement must be the “sine qua non of receipt of state
funding,” Ebied ex rel. United States v. Lungwitz, 616 F.3d
993, 998 (9th Cir. 2010). We construe the Act broadly, as it
is “intended to reach all types of fraud, without qualification,
that might result in financial loss to the Government.”
Hendow, 461 F.3d at 1170 (quoting United States v. Neifert-
White Co., 390 U.S. 228, 232 (1968)).4 Such broad
4
Although the Supreme Court admonished in Escobar that “[t]he
False Claims Act is not ‘an all-purpose antifraud statute,’ or a vehicle for
punishing garden variety breaches of contract or regulatory violations,”
136 S. Ct. at 2003 (quoting Allison Engine Co. v. United States ex rel.
Sanders, 555 U.S. 662, 672 (2008) (citation omitted)), this instruction
related only to the “demanding” materiality requirement of a False Claims
Act claim, see id., and therefore did not displace this court’s obligation to
construe broadly any theory of liability in which materiality can be
proven.
UNITED STATES EX REL. CAMPIE V. GILEAD SCIENCES 13
construction has thus given rise to a number of doctrines “that
attach potential False Claims Act liability to claims for
payment that are not explicitly and/or independently false.”
Hendow, 461 F.3d at 1171.
Relators insist that Gilead’s claims seeking payment for
noncompliant drugs are a basis for liability under the False
Claims Act for three reasons. First, Gilead charged the
government for approved drugs, knowing that it had delivered
unapproved “knock-offs” (factually false certification).
Second, by selling its drugs to the government and causing
others to seek reimbursement for them, Gilead implicitly
certified that the drugs were approved for distribution when
it knew otherwise (implied false certification). Third, Gilead
lied to the FDA to secure approval of Chinese facilities,
making them eligible for government payments (promissory
fraud). The district court below rejected all three of relators’
theories for recovery under the False Claims Act. First, the
district court rejected relators’ formulation of a factually false
theory based on the provision of nonconforming goods. As
to relators’ second and third arguments, the district court
recognized claims brought under either an implied false
certification or promissory fraud theory could be viable, but
concluded that relators failed to state a claim under either one
because they failed to allege Gilead made a false statement
related to a material precondition for payment. The United
States, while not taking a position on the merits of relators’
claims, identifies in its amicus briefing two rulings by the
district court as particularly significant to the government.
First, it argues that the district court’s dismissal of relators’
nonconforming goods theory improperly limits liability under
the False Claims Act. Second, it argues that the district court
improperly rejected a promissory fraud theory where the
fraud was initially directed at a non-payor agency. We
14 UNITED STATES EX REL. CAMPIE V. GILEAD SCIENCES
address each of the relevant theories for recovery under the
False Claims Act and conclude that relators state a plausible
claim.
A. Factually False Certification
Relators insist that Gilead’s HIV drugs were not
manufactured at an approved facility and thus were not
approved by the FDA, and therefore Gilead’s sale of those
medicines, and attendant receipt of government payments,
constituted a material false statement. Although the district
court analyzed this claim in part as a failed claim for
worthless services, United States ex rel. Lee v. SmithKline
Beecham, Inc., 245 F.3d 1048, 1053 (9th Cir. 2001), the claim
is one of nonconforming goods, United States v. Nat’l
Wholesalers, 236 F.2d 944, 950 (9th 1956); see United States
ex rel. Wilkins v. United Health Group, Inc., 659 F.3d 295,
305 (3d Cir. 2011) (“A claim is factually false when the
claimant misrepresents what goods or services that it
provided to the Government . . . .”). The value of the goods
at issue is dispositive under the first characterization, Lee,
245 F.3d at 1053–54, and immaterial to the latter, Nat’l
Wholesalers, 236 F.2d at 949–51 (finding a violation of the
False Claims Act despite substitute goods of “equal”
performance); United States v. Aerodex, Inc., 469 F.2d 1003,
1007–08 (5th Cir. 1972) (“The mere fact that the item
supplied under contract is as good as the one contracted for
does not relieve defendants of liability if it can be shown that
they attempted to deceive the government agency.”).
Although relators failed to allege that the drugs paid for by
the government were “worthless,” that failure does not affect
relators’ claim for nonconforming goods.
UNITED STATES EX REL. CAMPIE V. GILEAD SCIENCES 15
In National Wholesalers, a wholesaler contracted with the
United States to furnish proprietary engine regulators but
instead delivered regulators manufactured by the wholesaler
bearing spurious proprietary labels. 236 F.2d at 945–47.
Even though the substitute regulators functioned equally to
those contracted for, we found liability under the False
Claims Act because the wholesaler “misbrand[ed]” the
substitutes to make them appear to be the genuine article. Id.
at 950. The Fifth Circuit reached a similar conclusion in
Aerodex, where the defendants sold the United States Navy
engine bearings different from the ones contracted for,
admitting that they both reworked and renumbered the
bearings to appear compliant with their contract. 469 F.2d at
1007. Despite the fact that the bearings provided were also
approved for use in the engines at issue, the Fifth Circuit
found liability under the False Claims Act due to the
defendant’s deliberate mislabeling. Id. at 1007–08.
Contrary to the position taken by Gilead, a claim for
nonconforming goods is not limited to situations where there
is an express specification in a payment contract between a
supplier and the government regarding the disputed aspect of
the product to be supplied. Such a circumscribed view of
False Claims Act liability was expressly rejected by the
Supreme Court in Escobar, 136 S. Ct. at 2001, a case decided
after the district court had ruled in this case. Additionally, as
we have previously explained, the False Claims Act “was
enacted during the Civil War with the purpose of forfending
widespread fraud by government contractors who were
submitting inflated invoices and shipping faulty goods to the
government.” Hopper, 91 F.3d at 1265–66. That core
purpose would not be served if a defendant could escape
liability for delivering nonconforming goods merely because
the goods retained some value or in the absence of a bilateral
16 UNITED STATES EX REL. CAMPIE V. GILEAD SCIENCES
contract. It is fraudulent conduct that gives rise to liability,
regardless of whether the underlying relationship is based in
contract, regulation, or statute. Nat’l Wholesalers, 236 F.2d
at 950.
As we have previously held, the provision of
nonconforming goods can be a basis of liability under the
False Claims Act. See Hopper, 91 F.3d at 1266 (citing
Aerodex for proposition that “[False Claims Act] actions have
also been sustained under theories of supplying substandard
products or services”). But, unlike the situation in Lee, where
a claim for medically “worthless” drugs does not require a
showing of “false certification,” 245 F.3d at 1053, a claim for
nonconforming goods must include an intentionally false
statement or fraudulent course of conduct that was material
to the government’s decision to pay, Nat’l Wholesalers,
236 F.2d at 950.
B. Implied False Certification
Claims under an implied false certification theory can
also be viable under the False Claims Act. Escobar, 136 S.
Ct. at 1999. Under such a theory, “when a defendant submits
a claim, it impliedly certifies compliance with all conditions
of payment. But if the claim fails to disclose the defendant’s
violation of a material statutory, regulatory, or contractual
requirement . . . the defendant has made a misrepresentation
that renders the claim ‘false or fraudulent’ under
§ 3729(a)(1)(A).” Id. at 1995. In Escobar, the Supreme
Court recently “clarif[ied] some of the circumstances in
which the False Claims Act imposes liability” under this
theory. Id. As pointed out above, the district court did not
have the benefit of Escobar in making its decision.
UNITED STATES EX REL. CAMPIE V. GILEAD SCIENCES 17
In Escobar, parents brought suit following the death of
their daughter after she was treated at a mental health clinic
by various unlicensed and unsupervised staff in violation of
state Medicaid regulations. Id. at 1997. The operative
complaint asserted that the healthcare provider “submitted
reimbursement claims that made representations about the
specific services provided by specific types of professionals,
but that failed to disclose serious violations of regulations
pertaining to staff qualifications and licensing requirements
for those services.” Id. at 1997–98 (footnote omitted). The
state Medicaid program, “unaware of these deficiencies, paid
the claims.” Id. at 1998. The Court concluded that “by
submitting claims for payment using payment codes that
corresponded to specific counseling services, [the healthcare
provider] represented that it had provided individual therapy,
family therapy, preventive medication counseling, and other
types of treatment.” Id. at 2000. Moreover, staff members
“submitt[ed] Medicaid reimbursement claims by using
National Provider Identification numbers corresponding to
specific job titles. And these representations were clearly
misleading in context.” Id.
The Supreme Court held that although the implied
certification theory can be a basis for liability, two conditions
must be satisfied. Id. at 2000. First, the claim must not
merely request payment, but also make specific
representations about the goods or services provided. Id.
Second, the defendant’s failure to disclose noncompliance
with material statutory, regulatory, or contractual
requirements must “make[] those representations misleading
half-truths.” Id. at 2001 (footnote omitted). The violation
need not be of a contractual, statutory, or regulatory provision
that the Government expressly designated as a condition of
payment. Id. However, the misrepresentation must be
18 UNITED STATES EX REL. CAMPIE V. GILEAD SCIENCES
“material to the Government’s payment decision.” Id. at
2002. Although Escobar clarifies the conditions upon which
an implied false certification claim can be made, the four
essential elements identified above remain the same. See
Hendow, 461 F.3d at 1174; see also United States ex rel.
Kelly v. Serco, Inc., 846 F.3d 325, 332–33 (9th Cir. 2017)
(applying Escobar to former employee of a defense
contractor alleging that his employer’s submission of
vouchers constituted a false certification of work performed
under a contract).
C. Promissory Fraud
Another approach to finding liability under the False
Claims Act in the absence of an explicitly false claim is the
“promissory fraud” or “fraud-in-the-inducement” theory.
Hendow, 461 F.3d at 1173. Under this theory, “liability will
attach to each claim submitted to the government under a
contract, when the contract or extension of the government
benefit was originally obtained through false statements or
fraudulent conduct.” Id. “In other words, subsequent claims
are false because of an original fraud (whether a certification
or otherwise).” Id. The elements of a claim for promissory
fraud are very similar to those necessary for an implied false
certification claim, requiring a false claim wherein the falsity
is knowingly perpetrated and the underlying fraud is material
to the government’s decision to pay. Id. at 1174.
D. Elements
Under all three theories the essential elements of False
Claims Act liability are: (1) a false statement or fraudulent
course of conduct, (2) made with scienter, (3) that was
material, causing (4) the government to pay out money or
UNITED STATES EX REL. CAMPIE V. GILEAD SCIENCES 19
forfeit moneys due. Escobar, 136 S. Ct. at 2000–02; Nat’l
Wholesalers, 236 F.2d at 950; Hendow, 461 F.3d at 1174.
Here, the dispute focuses primarily on the first and third
elements, falsity and materiality. The district court rejected
relators’ claims for a number of reasons, including that the
fraud was directed at the FDA, not the payor agency;
payment was not conditioned on compliance with FDA
regulations, but merely FDA approval; and the False Claims
Act was not meant to intrude on the FDA’s complex
regulatory regime.
1. Falsity
The first requirement of a False Claims Act claim is a
false claim. Hendow, 461 F.3d at 1171; Hopper, 91 F.3d at
1266 (“Violations of laws, rules, or regulations alone do not
create a cause of action. It is the false certification of
compliance which creates liability when certification is a
prerequisite to obtaining a government benefit.”). Relators
allege a false claim here.
a. Factually false certification
Relators have adequately satisfied the falsity requirement
under a theory of factually false certification. As in National
Wholesalers, Gilead committed factually false certification by
supplying “misbrand[ed]” goods. 236 F.2d at 950.
Specifically, Gilead represented to the FDA that its active
ingredients had been manufactured in approved facilities that
had been registered therewith.
20 UNITED STATES EX REL. CAMPIE V. GILEAD SCIENCES
b. Implied false certification
Relators have also adequately satisfied the falsity
requirement under a theory of implied false certification. To
succeed on such a claim, pursuant to National Wholesalers
and Escobar, Gilead must not merely request payment, but
also make specific representations about the goods or services
provided. Escobar, 136 S. Ct. at 2000; Nat’l Wholesalers,
236 F.2d at 950. Here, relators allege that by submitting
claims for payment or reimbursement for Truvada, Emtriva,
and Atripla, Gilead represented that it provided medications
approved by the FDA that were manufactured at approved
facilities and were not adulterated or misbranded. Just as
payment codes correspond to specific health services,
Escobar, 136 S. Ct. at 2000, and proprietary labels indicate
that engine regulators are a proprietary design, Nat’l
Wholesalers, 236 F.2d at 950, these drug names necessarily
refer to specific drugs under the FDA’s regulatory regime.
Escobar further requires that Gilead’s failure to disclose
noncompliance with material statutory, regulatory, or
contractual requirements must “make[] those representations
misleading half-truths.” 136 S. Ct. at 2000 (footnote
omitted). Setting aside the question of materiality, relators
allege Gilead’s representations were misleading in this
context because Gilead acquired unapproved FTC from a
Chinese supplier, re-labeled it to conceal its true nature,
falsified test results that showed it was contaminated, and
then used that unapproved and contaminated FTC in drugs for
which payment was requested and received. Although the
drugs at issue were at all times ostensibly “FDA approved,”
relators allege Gilead requested payment for drugs that fell
outside of that approval and omitted critical information
regarding compliance with FDA standards.
UNITED STATES EX REL. CAMPIE V. GILEAD SCIENCES 21
The district court rejected relators’ claims in part because
the alleged fraud was directed at the FDA, not the payor
agency. That concern is factually assuaged to some degree
for the purposes of this case in that both the FDA and the
Center for Medicare & Medicaid Services (CMS) (the
primary payor agency for reimbursement claims) are
overseen by the Secretary of Health and Human Services.
Therefore, the fraud was, at all times, committed against the
Department of Health and Human Services. But more
importantly, the False Claims Act imposes no such limitation.
See 31 U.S.C. § 3729(a)(1)(B) (extending liability to those
who cause false statements to be used). It is not the
distinction between the agencies that matters, but rather the
connection between the regulatory omissions and the claim
for payment. See United States ex rel. Petratos v. Genentech
Inc., 855 F.3d 481, 492 (3d Cir. 2017) (“[O]ur focus here
should not be whether the alleged fraud deceived the
prescribing physicians, but rather whether it affected CMS’s
payment decision.”). As we stated in Hendow, “if a false
statement is integral to a causal chain leading to payment, it
is irrelevant how the federal bureaucracy has apportioned the
statements among layers of paperwork.” 461 F.3d at 1174.
Hendow itself involved false statements submitted to the
Department of Education where claims were submitted to
private lenders. Id. at 1169–80; see also, e.g., United States
ex rel. Duxbury v. Ortho Biotech Products, L.P., 579 F.3d 12,
29–30 (1st Cir. 2009) (alleging defendant’s fraud caused
medical providers to submit false claims); Hutchenson,
647 F.3d at 378 (similar). Moreover, relators allege that in
addition to making a number of false and fraudulent
statements to the FDA, Gilead’s submission of alleged
unapproved and noncompliant drugs to the payor agencies
was itself an alleged false certification. Escobar, 136 S. Ct.
at 2000.
22 UNITED STATES EX REL. CAMPIE V. GILEAD SCIENCES
The district court also rejected relators’ claims because
payment was not “conditioned on the falsity.” As made clear
in Escobar, “‘[I]nstead of adopting a circumscribed view of
what it means for a claim to be false or fraudulent,’ concerns
about fair notice and open-ended liability ‘can be effectively
addressed through strict enforcement of the Act’s materiality
and scienter requirements.’” 136 S. Ct. at 2002 (quoting
United States v. Science Applications Int’l Corp., 626 F.3d
1257, 1270 (D.C. Cir. 2010)). We therefore address the
district court’s concern in the context of materiality.
Gilead insists its certification was not “false” pursuant to
United States ex rel. Rostholder v. Omnicare, Inc., 745 F.3d
694, 701–02 (4th Cir. 2014). In Omnicare, the Fourth Circuit
concluded that
once a new drug has been approved by the
FDA and thus qualifies for reimbursement
under the Medicare and Medicaid statutes, the
submission of a reimbursement request for
that drug cannot constitute a “false” claim
under the [False Claims Act] on the sole basis
that the drug has been adulterated as a result
of having been processed in violation of FDA
safety regulations.
745 F.3d at 701–02. In Omnicare, the relator alleged only
regulatory violations, not a false claim. Id. Although we
rejected a regulatory violation claim in Hopper, 91 F.3d at
1265–67, we have since clarified that the “fatal defect” in that
case “was not that the claimed infraction was a regulatory
violation, but that there was a ‘lack of a false claim,’”
Hendow, 461 F.3d at 1171; see also Kelly, 846 F.3d at 333
(finding no evidence of a “false claim” where dispute was
UNITED STATES EX REL. CAMPIE V. GILEAD SCIENCES 23
over format of cost reports). Here, relators allege false
statements permeating the regulatory process. They allege
Gilead mislabeled and misbranded nonconforming drugs and
misrepresented its compliance with FDA regulations by
omitting critical information. They allege that Gilead
established policies and practices to violate the FDA’s
regulatory requirements and allege specific instances of such
violations, such as altering inventory codes, and mislabeling
or altering shipping and tracking information. All the while,
Gilead was submitting claims for payment for “FDA
approved” drugs. Moreover, they allege that Gilead made
false statements regarding test results in order to get FDA
approval and thus become eligible for government funds. As
was the case in Escobar, “[t]he claims in this case do more
than merely demand payment. They fall squarely within the
rule that half-truths—representations that state the truth only
so far as it goes, while omitting critical qualifying
information—can be actionable misrepresentations.” 136 S.
Ct. at 2000 (footnote omitted). Relators adequately plead
falsity under the False Claims Act. To hold otherwise would
reduce FDA regulations akin to approval of the curate’s egg.
c. Promissory fraud
Finally, relators have adequately satisfied the falsity
requirement under a theory of promissory fraud. Because
Gilead committed either factually false or impliedly false
certification through its representations to the FDA and
labeling of its products, see supra, each claim was fraudulent
even if false representations were not made therein. See
Hendow, 461 F.3d at 1173.
24 UNITED STATES EX REL. CAMPIE V. GILEAD SCIENCES
2. Scienter
Had Gilead accidentally produced adulterated pills and
unwittingly shipped them and requested payment from the
government, the intent requirement under the False Claims
Act would not be met. That is not the case. Relators allege
a false statement or course of conduct made knowingly and
intentionally. See 31 U.S.C. § 3729(b)(1). They allege
Gilead took internal actions perpetuating its fraud: altering
test results, batch numbers, and Inventory Control Numbers,
and representing that nonapproved FTC came from approved
facilities. They also allege Gilead established practices to
deceive the government, and repeatedly took actions to hide
its fraud. In other words, relators allege Gilead provided
statements to the government that were “intentional, palpable
lie[s],” made with “knowledge of the falsity and with intent
to deceive.” Hopper, 91 F.3d at 1265, 1267. The scienter
element is adequately pled.
3. Materiality
Under the False Claims Act, a falsehood is material if it
has “a natural tendency to influence, or be capable of
influencing, the payment or receipt of money or property.”
31 U.S.C. § 3729(b)(4). In Escobar, the Supreme Court
clarified that “[t]he materiality standard is demanding.”
136 S. Ct. at 2003. “A misrepresentation cannot be deemed
material merely because the Government designates
compliance with a particular statutory, regulatory, or
contractual requirement of payment. Nor is it sufficient for
a finding of materiality that the Government would have the
option to decline to pay if it knew of the defendant’s
noncompliance.” Id. Materiality also “cannot be found
where noncompliance is minor or insubstantial.” Id. Proof
UNITED STATES EX REL. CAMPIE V. GILEAD SCIENCES 25
of materiality can include whether “the Government pays a
particular claim in full despite its actual knowledge that
certain requirements were violated.” Id.
FDA approval is the “the sine qua non” of federal funding
here. Hendow, 461 F.3d at 1176. Eligibility for federal
funding and reimbursement is conditioned on FDA approval
under Medicaid, 42 U.S.C. § 1396r-8 (limited to “covered
outpatient drug,” which is defined as “approved for safety and
effectiveness as a prescription drug” by the FDA), Medicare,
42 U.S.C. § 1395w-102e (similar), and the direct payment
programs identified by relators, 48 C.F.R. § 46.408 (assigning
FDA responsibility for ensuring quality of drugs purchased
by agencies). All of these payment programs look to FDA-
approval as a determination of the “safety and effectiveness”
of the drugs at issue.5 It is undisputed that at all times
relevant, the drugs at issue were FDA-approved,6 and that the
government continues to make direct payments and provide
reimbursements for the sale of the three drugs. Relators thus
face an uphill battle in alleging materiality sufficient to
maintain their claims.
We note that other courts have cautioned against allowing
claims under the False Claims Act to wade into the FDA’s
regulatory regime. See Omnicare, 745 F.3d at 702–03;
5
Payment can also be conditioned on other aspects of the drug not
regulated by the FDA, such as whether the product is “reasonable and
necessary” under Medicare. See 42 U.S.C. § 1395y(a)(1)(A).
6
The district court focused extensively on the difference between
NDA-approval and PAS-approval, ultimately concluding NDA-approval
was the sole condition of payment. That distinction is not persuasive post-
Escobar. See 136 S. Ct. at 1999.
26 UNITED STATES EX REL. CAMPIE V. GILEAD SCIENCES
D’Agostino v. ev3, Inc., 845 F.3d 1, 9 (1st Cir. 2016);7
Petratos, 855 F.3d at 490. However, just as it is not the
purpose of the False Claims Act to ensure regulatory
compliance, it is not the FDA’s purpose to prevent fraud on
the government’s fisc. Mere FDA approval cannot preclude
False Claims Act liability, especially where, as here, the
alleged false claims procured certain approvals in the first
instance.8 A conclusion to the contrary would not be
consistent with Escobar:
By punishing defendants who submit “false or
fraudulent claims,” the False Claims Act
encompasses claims that make fraudulent
misrepresentations, which include certain
misleading omissions. When, as here, a
defendant makes representations in submitting
a claim but omits its violations of statutory,
regulatory, or contractual requirements, those
omissions can be a basis for liability if they
render the defendant’s representations
misleading with respect to the goods or
services provided.
7
In D’Agostino, the First Circuit went as far as to conclude that “[t]he
FDA’s failure actually to withdraw its approval of [a medical device]. . .
precludes [the relator] from resting his claims on a contention that the
FDA’s approval was fraudulently obtained” and that “the absence of some
official agency action confirming its position and judgment in accordance
with the law renders [a relator]’s fraud-on-the-FDA theory futile.”
845 F.3d at 9.
8
Take the hypothetical posed by relators: if a reimbursement request
was submitted for 10 pills of Atripla, but Gilead actually provided 10 pills
of Tylenol, that request for payment would be undeniably false. Even
though Tylenol is FDA approved, it is not what the government paid for.
UNITED STATES EX REL. CAMPIE V. GILEAD SCIENCES 27
136 S. Ct. at 1999. The dispositive question is rather one of
materiality, which turns on a number of factors:
when evaluating materiality under the False
Claims Act, the Government’s decision to
expressly identify a provision as a condition
of payment is relevant, but not automatically
dispositive. Likewise, proof of materiality can
include, but is not necessarily limited to,
evidence that the defendant knows that the
Government consistently refuses to pay
claims in the mine run of cases based on
noncompliance with the particular statutory,
regulatory, or contractual requirement.
Conversely, if the Government pays a
particular claim in full despite its actual
knowledge that certain requirements were
violated, that is very strong evidence that
those requirements are not material. Or, if the
Government regularly pays a particular type
of claim in full despite actual knowledge that
certain requirements were violated, and has
signaled no change in position, that is strong
evidence that the requirements are not
material.
Id. at 2003–04.
Here, Gilead insists that because the government
continued to pay for the medications after it knew of the FDA
violations, those violations were not material to its payment
decision. Relators outline a variety of facts that speak to the
government’s knowledge, such as a September 2010 warning
letter regarding impurities in the form of black specks and
28 UNITED STATES EX REL. CAMPIE V. GILEAD SCIENCES
spots, a June/July 2012 inspection and noncompliance letter
regarding product from Synthetics China, December 2012
and July 2013 inspections of a specific facility, and two
recalls that took place in 2014. Gilead’s argument is
premised on the continued FDA approval of the drugs even
after the agency became aware of certain noncompliance.
Relators and the United States persuasively argue,
however, that to read too much into the FDA’s continued
approval—and its effect on the government’s payment
decision—would be a mistake. First, to do so would allow
Gilead to use the allegedly fraudulently-obtained FDA
approval as a shield against liability for fraud. Second, as
argued by Gilead itself, there are many reasons the FDA may
choose not to withdraw a drug approval, unrelated to the
concern that the government paid out billions of dollars for
nonconforming and adulterated drugs. Third, unlike Kelly,
where the government continued to accept noncompliant
vouchers, 846 F.3d at 334, Gilead ultimately stopped using
FTC from Synthetics China. Once the unapproved and
contaminated drugs were no longer being used, the
government’s decision to keep paying for compliant drugs
does not have the same significance as if the government
continued to pay despite continued noncompliance. In
making its argument, Gilead specifically cites to Petratos,
where the Third Circuit concluded the materiality standard
was not met where the relator did “not dispute that CMS
would reimburse these claims even with full knowledge of
the alleged reporting deficiencies.” 855 F.3d at 490. Beside
the fact that the relator in Petratos did not allege regulatory
or statutory violations, id. (“Petratos does not claim that [the
defendant]’s safety-related reporting violated any statute or
regulation.”), no such concession is made here. Rather, the
parties dispute exactly what the government knew and when,
UNITED STATES EX REL. CAMPIE V. GILEAD SCIENCES 29
calling into question its “actual knowledge.” Although it may
be that the government regularly pays this particular type of
claim in full despite actual knowledge that certain
requirements were violated, such evidence is not before us.
The issues raised by the parties here are matters of proof,
not legal grounds to dismiss relators’ complaint.9 See Kelly,
846 F.3d at 334 (concluding relator “failed to establish a
genuine issue of material fact regarding [] materiality”). And,
other statutes regulating “adulterated” and “misbranded”
drugs reinforce the idea that violations of the FDA regulatory
regime have ramifications beyond FDA enforcement actions.
See 21 U.S.C. § 331; see, e.g., United States v. Marcus,
82 F.3d 606, 610 (4th Cir. 1996) (upholding criminal liability
for manufacturer’s undisclosed addition of two inactive
pharmaceutical ingredients not included in FDA-approved
NDA given their unknown effect on safety and efficacy of the
drug product).
In sum, relators allege more than the mere possibility that
the government would be entitled to refuse payment if it were
aware of the violations, Kelly, 846 F.3d at 334, sufficiently
pleading materiality at this stage of the case.
9
In D’Agostino, the First Circuit highlighted the “[p]ractical problems
of proof” in how a relator would show that the FDA would not have
granted approval but for the fraudulent representations. 845 F.3d at 9.
That concern is exactly that: a problem of proof. At the pleading stage we
assume the facts alleged by the relators to be true. Hendow, 461 F.3d at
1170.
30 UNITED STATES EX REL. CAMPIE V. GILEAD SCIENCES
4. Claim
Relators allege Gilead submitted false claims in a number
of ways, including submitting direct requests for payment
from government agencies, as well as submitting requests for
reimbursement. Those allegations are sufficient under the
False Claims Act. Hendow, 461 F.3d at 1177.
Ultimately, relators have alleged sufficient facts under the
False Claims Act to state a claim for relief that is plausible on
its face. Fed. R. Civ. P. 8(a); Ashcroft, 556 U.S. at 678. We
do not reach whether that claim is alleged with sufficient
particularity to meet the requirements of Rule 9(b), as that
question was not addressed by the district court.
IV.
Relator Jeff Campie also alleges Gilead retaliated against
him in violation of the False Claims Act. 31 U.S.C.
§ 3730(h). To state a claim for retaliation, a plaintiff must
demonstrate that: (1) he “engaged in activity protected under
the statute”; (2) the employer knew the plaintiff engaged in a
protected activity; and (3) the employer discriminated against
the plaintiff “because he . . . engaged in protected activity.”
Mendiondo v. Centinela Hosp. Med. Ctr., 521 F.3d 1097,
1103 (9th Cir. 2008) (holding that the heightened pleading
requirements of Rule 9(b) do not apply). The district court
dismissed Campie’s retaliation claim, holding that he failed
to show either that he was engaged in a protected activity or
that Gilead had notice of such activities. We reverse.
UNITED STATES EX REL. CAMPIE V. GILEAD SCIENCES 31
A. Protected Activity
An employee engages in a protected activity by
“‘investigating matters which are calculated or reasonably
could lead to a viable [False Claims Act] action.’” Moore v.
Cal. Inst. of Tech. Jet Propulsion Lab., 275 F.3d 838, 845
(9th Cir. 2002) (quoting Hopper, 91 F.3d at 1269). The
district court relied extensively on Hopper to conclude that
because Campie’s allegations are consistent with an
investigation into regulatory noncompliance—as opposed to
an effort to uncover fraud against the government—he failed
to show he engaged in a protected activity. See 91 F.3d at
1263–65. However, in Moore we subsequently clarified “that
an employee engages in protected activity where (1) the
employee in good faith believes, and (2) a reasonable
employee in the same or similar circumstances might believe,
that the employer is possibly committing fraud against the
government.” 275 F.3d at 845–46 (footnote omitted). The
Second Amended Complaint sufficiently alleges facts
showing that Campie had an objectively reasonable, good
faith belief that Gilead was possibly committing fraud against
the government.
B. Notice
It is not enough for relators to allege that Jeff Campie was
engaged in a protected activity; they must also show that
Gilead knew Campie was engaged in such activity.
Mendiondo, 521 F.3d at 1103; Hopper, 91 F.3d at 1269. As
made clear in Mendiondo, an allegation of knowledge is not
a high bar:
For the second element of her . . . retaliation
claims, Mendiondo alleges she complained to
32 UNITED STATES EX REL. CAMPIE V. GILEAD SCIENCES
[the defendant]’s CEO . . . about possible
“civil and criminal violations.” Although
vague, the reference to “civil violations” can
be construed to include the suspected
Medicare fraud described above. Because
Mendiondo complained to [the CEO] about
the suspected civil violations, [the defendant]
was informed of Mendiondo’s protected
activity.
521 F.3d at 1104. Here, the Second Amended Complaint
alleges Campie was told it was “none of his concern” when
he discussed contamination and adulteration problems on
multiple occasions, and he was asked to sign a severance
agreement stating he would not bring a False Claims Act
claim. Further, “Mr. Campie explicitly complained that
Gilead was violating FDA regulations in order to sell its
drugs to the Government and States notwithstanding their
lack of compliance with [regulatory requirements] . . . .”
These allegations are sufficient under Mendiondo.
That said, as noted by the district court, the monitoring
and reporting activities outlined by relators are by-and-large
the types of activities Campie was required to undertake as
part of his job. Courts have held that when an employee is
tasked with such investigations, it takes more than an
employer’s knowledge of that activity to show that an
employer was on notice of a potential qui tam suit. See
United States ex rel. Ramseyer v. Century Healthcare Corp.,
90 F.3d 1514, 1523 (10th Cir. 1996) (holding retaliation
allegation insufficient where plaintiff’s job duties entailed the
monitoring and reporting activities at issue); see also
Robertson v. Bell Helicopter Textron, Inc., 32 F.3d 948, 952
UNITED STATES EX REL. CAMPIE V. GILEAD SCIENCES 33
(5th Cir. 1994) (concluding that relator failed to rebut
defendant’s trial testimony regarding lack of knowledge).
Although Ramseyer is instructive, it is distinct from this
case. First, the plaintiff in Ramseyer “gave no suggestion that
she was going to report [the] noncompliance to government
officials.” 90 F.3d at 1523. Here, the Second Amended
Complaint alleges that “Mr. Campie made clear that he
expected Gilead to stop its deceptive practices and threatened
to inform the FDA if Gilead continued its fraudulent
conduct.” Second, Campie alleges he was “selectively
circumvent[ed]” and “exclud[ed]” from the regulatory review
process in which he was meant to take part, was told certain
regulatory compliance actions, such as issuing a quarantine,
were “not in his job description,” and had conversations
outside of his chain of command regarding his concerns. The
Second Amended Complaint alleges sufficient facts to show
Gilead knew of Campie’s protected activity.
C. Causation
Finally, relators’ pleading must show that Gilead
discriminated against Mr. Campie “because he [] engaged in
protected activity.” Mendiondo, 521 F.3d at 1104. It is
sufficient at the pleading stage for the plaintiff “to simply
give notice that []he believes [the defendant] terminated
h[im] because of h[is] investigation into the practices []
specified in the complaint.” Id. Although the district court
did not address this requirement because it found the
operative complaint insufficient under the first two
requirements, such a showing has been made here.
34 UNITED STATES EX REL. CAMPIE V. GILEAD SCIENCES
Based on the forgoing, the retaliation claim included in
the Second Amended Complaint contains sufficient facts to
survive dismissal under Rule 12(b)(6).
V.
Relators plead sufficient factual allegations to state a
claim under the False Claims Act. Because the district court
did not address whether relators’ claims pursuant to 31 U.S.C.
§ 3729(a)(1)(A), (B) meet the heightened pleadings standard
under Rule 9(b), we decline to decide that question in the first
instance.
REVERSED AND REMANDED.