United States: Where Has This Been Hiding? – First Amendment-Based Dismissal Of FCA Action

Last Updated: June 17 2019
Article by James Beck

This post is about a hidden gem. That brings to mind a hiking trail that's one of the two best in Pennsylvania (along with Ricketts Glen), but isn't found in any of the "Fifty Hikes in [fill in the blank]" books that one finds in outdoorsy stores. The hike is part of the Appalachian Trail, and begins on the west side of the Lehigh Gap, where the Lehigh River cut through Blue Mountain north of Allentown. Rather than in any book, we found it by looking at an AT map, which read "exposed rock, continuous views, dangerous during bad weather." That's the kind of trail we like, and it's a rarity in Pennsylvania, and indeed anywhere on the east coast south of northern New England/New York. Too many trees, but not on Lehigh Gap. Best views in Pennsylvania, and not in any guidebook that we've seen.

Returning to the law, ever since the Department of Justice/FDA got spanked – hard – by the courts in United States v. Caronia, 703 F.3d 149 (2d Cir. 2012), and Amarin Pharma, Inc. v. FDA, 119 F. Supp.3d 196 (S.D.N.Y. 2015), we've noticed (and been told) that the government is being much more careful with its "off-label promotion" prosecutions. A couple of left-over, pre-Caronia prosecutions dragged on, into the post-Caronia world, with inconsistent and at times disconcerting results, but the government takes care these days to go after only off-label communications that it can also portray as "false and misleading" in the First Amendment context.

Thus, we're on record as predicting that, instead of direct challenges to criminal prosecutions, the "most promising spawning ground for future Caronias seems likely to be in False Claims Act ("FCA") litigation." The "why" is relatively simple:

While FCA claims are ostensibly brought in the name of the government, agencies like the FDA have relatively little control over the allegations that FCA plaintiffs (called "relators") make. Also, to increase their own take, such relators have the incentive to make the broadest allegations, which means they would like to avoid having to prove reliance on false information on a one-by-one basis.

Well then, you might ask, where are those decisions? Caronia has been around for over six years and Amarin for four. Surely, some defendant should have tagged some FCA relator with a First Amendment dismissal in the meantime. Heck, we've been wondering the same thing.

Speaking of hidden gems, we just turned up United States ex rel. Sullivan v. Atrium Medical Corp., 2015 WL 13799885, at *1 (Mag. W.D. Tex. Nov. 20, 2015), and our first reaction is "where has this been hiding all this time," since the opinion is 3 ½ years old, but only recently appearing on Westlaw.

Sullivan is just that – a First Amendment based – more specifically an Amarin-based − dismissal of wayward FCA claims for seeking to impose liability for truthful off-label communications.

So how did the First Amendment win in Sullivan?

It helped that the relator's allegations about supposed off-label promotion were, to use the Texas phrase, all hat and no cattle. First, the relator alleged that old saw, fraud on the FDA. But those claims had already been dismissed, because the fraud alleged was too remote – no fraud had been committed against the government payor agencies, as opposed to the FDA, which doesn't pay claims. See > 6/15/15 Order at 19-23. Second, the relator alleged that the defendant handed out "69 reprints of papers and articles" about the off-label use at issue. 2015 WL 13799885, at *7. Third, the complaint contained the usual unsupported boilerplate "false and misleading" allegations that we have come to expect in this type of complaint.

As to off-label use itself, Sullivan held:

Off-label marketing concerns the dissemination of information about "product uses" not approved by the FDA. Although the FDA "generally restricts a manufacturer from marketing for off-label purposes" physicians and hospitals are not prohibited from purchasing, "prescribing, or using a medical device for an off-label purpose." As a result, the "off-label use of many products and drugs is an accepted medical practice. Further, "[c]ourts recognize that off-label use of a drug or medical device is not the same as medically unnecessary use of that drug or device."

Sullivan, 2015 WL 13799885, at *11 (footnotes omitted).

Next, Sullivan addressed the implications of the First Amendment decision in Amarin on FCA cases:

When making its findings on likelihood of success, the Court held that the FDA could not support its claims against Amarin based on truthful and non-misleading speech. The Amarin Pharma court also referenced the FCA, stating Amarin had "separately sought protection from civil claims under the FCA, on the premise that the Government might seek to hold Amarin liable if doctors submitted false claims securing reimbursement in connection with Vascepa prescriptions." The Court granted Amarin the injunctive relief it sought to permit Amarin to promote the off-label use of Vascepa "without exposing itself to liability for misbranding" and "without incurring liability for misbranding."

Id. at *11 (footnotes omitted) (emphasis original). Amarin therefore warranted "a detailed examination of whether relator has sufficiently pleaded false or misleading promotions sufficient to state a claim." Id. at 12. It was a "new, persuasive precedent" that "Caronia . . . a criminal case, also applies in a civil action and that truthful and non-misleading speech cannot be used to state an actionable off-label marketing claim." Id. at *12, n.137 (this judge loves footnotes).

Then, the court TwIqballed the general "false and misleading" allegations.

[G]eneral allegations that [defendant] promoted the [device] for off-label uses . . . do not meet the Twombly/Iqbal plausibility standard because truthful and non-misleading promotions fall within the protection of the First Amendment and cannot render any subsequent claim false. . . . [Relator] has not provided a particularized statement of facts sufficient to meet the Twombly/Iqbal plausibility standard to show why [defendant's] off-label marketing of the [device] was false and misleading.

Id. at *13. The court also threw out relator's "generalized allegations of fraud, including . . . about training," as "not meet[ing] Rule 9(b)'s pleading standard." Id. This is a significant point. Back when we were first developing the First Amendment as a defense, during the Bone Screw litigation, plaintiffs could get away with rote recitals that anything and everything was "false" or "misleading." Back then, we had easier defenses than the First Amendment. But now we have TwIqbal.

Finally, the one specific allegation the relator had made, about the use of scientific articles, could not overcome the First Amendment.

The Amarin Pharma court expressly rejected the allegation, as relator makes here, that sharing reprints of articles about off-label use is impermissible. Instead, Amarin Pharma held that sharing reprints of articles about off-label use is permissible, protected speech.

Id. (footnote omitted).

All told, the Sullivan decision concluded that the "allegations of false and misleading speech, taken as a whole and viewed in the light most favorable to relator, are not sufficient to state a claim" under the First Amendment protection of the defendant device manufacturer's right to say truthful things about off-label uses of its product. Id. (lengthy footnote about various allegations in the complaint omitted). Therefore, "off-label marketing claims under federal or state law should be dismissed with prejudice." Id. at *14.

Boom! That's precisely the kind of First Amendment decision, brought about by an overreaching FCA relator, that we've been expecting to see. And to think that it's been out there, unbeknownst to anyone (or at least by us), for 3 ½ years.

Having read the magistrate's report/recommendation in Sullivan, we immediately wondered whether it had been adopted by the district court – the usual next step. We found nothing to that effect on Westlaw, or Lexis. But we have a PACER account and we're not afraid to use it, so we took a look at the docket. Turns out that the relator in Sullivan never even sought district court review. Instead, after a series of deadline extensions, the case settled in mid-2016 for who-knows-what. So Sullivan wasn't appealed, even to a district court. Still we think it's an important demonstration of the power of a post-TwIqbal First Amendment defense in FCA litigation. So add Sullivan to your First Amendment repertoire.

This article is presented for informational purposes only and is not intended to constitute legal advice.

To print this article, all you need is to be registered on Mondaq.com.

Click to Login as an existing user or Register so you can print this article.

Authors
Similar Articles
Relevancy Powered by MondaqAI
 
In association with
Related Topics
 
Similar Articles
Relevancy Powered by MondaqAI
Related Articles
 
Related Video
Up-coming Events Search
Tools
Print
Font Size:
Translation
Channels
Mondaq on Twitter
 
Mondaq Free Registration
Gain access to Mondaq global archive of over 375,000 articles covering 200 countries with a personalised News Alert and automatic login on this device.
Mondaq News Alert (some suggested topics and region)
Select Topics
Registration (please scroll down to set your data preferences)

Mondaq Ltd requires you to register and provide information that personally identifies you, including your content preferences, for three primary purposes (full details of Mondaq’s use of your personal data can be found in our Privacy and Cookies Notice):

  • To allow you to personalize the Mondaq websites you are visiting to show content ("Content") relevant to your interests.
  • To enable features such as password reminder, news alerts, email a colleague, and linking from Mondaq (and its affiliate sites) to your website.
  • To produce demographic feedback for our content providers ("Contributors") who contribute Content for free for your use.

Mondaq hopes that our registered users will support us in maintaining our free to view business model by consenting to our use of your personal data as described below.

Mondaq has a "free to view" business model. Our services are paid for by Contributors in exchange for Mondaq providing them with access to information about who accesses their content. Once personal data is transferred to our Contributors they become a data controller of this personal data. They use it to measure the response that their articles are receiving, as a form of market research. They may also use it to provide Mondaq users with information about their products and services.

Details of each Contributor to which your personal data will be transferred is clearly stated within the Content that you access. For full details of how this Contributor will use your personal data, you should review the Contributor’s own Privacy Notice.

Please indicate your preference below:

Yes, I am happy to support Mondaq in maintaining its free to view business model by agreeing to allow Mondaq to share my personal data with Contributors whose Content I access
No, I do not want Mondaq to share my personal data with Contributors

Also please let us know whether you are happy to receive communications promoting products and services offered by Mondaq:

Yes, I am happy to received promotional communications from Mondaq
No, please do not send me promotional communications from Mondaq
Terms & Conditions

Mondaq.com (the Website) is owned and managed by Mondaq Ltd (Mondaq). Mondaq grants you a non-exclusive, revocable licence to access the Website and associated services, such as the Mondaq News Alerts (Services), subject to and in consideration of your compliance with the following terms and conditions of use (Terms). Your use of the Website and/or Services constitutes your agreement to the Terms. Mondaq may terminate your use of the Website and Services if you are in breach of these Terms or if Mondaq decides to terminate the licence granted hereunder for any reason whatsoever.

Use of www.mondaq.com

To Use Mondaq.com you must be: eighteen (18) years old or over; legally capable of entering into binding contracts; and not in any way prohibited by the applicable law to enter into these Terms in the jurisdiction which you are currently located.

You may use the Website as an unregistered user, however, you are required to register as a user if you wish to read the full text of the Content or to receive the Services.

You may not modify, publish, transmit, transfer or sell, reproduce, create derivative works from, distribute, perform, link, display, or in any way exploit any of the Content, in whole or in part, except as expressly permitted in these Terms or with the prior written consent of Mondaq. You may not use electronic or other means to extract details or information from the Content. Nor shall you extract information about users or Contributors in order to offer them any services or products.

In your use of the Website and/or Services you shall: comply with all applicable laws, regulations, directives and legislations which apply to your Use of the Website and/or Services in whatever country you are physically located including without limitation any and all consumer law, export control laws and regulations; provide to us true, correct and accurate information and promptly inform us in the event that any information that you have provided to us changes or becomes inaccurate; notify Mondaq immediately of any circumstances where you have reason to believe that any Intellectual Property Rights or any other rights of any third party may have been infringed; co-operate with reasonable security or other checks or requests for information made by Mondaq from time to time; and at all times be fully liable for the breach of any of these Terms by a third party using your login details to access the Website and/or Services

however, you shall not: do anything likely to impair, interfere with or damage or cause harm or distress to any persons, or the network; do anything that will infringe any Intellectual Property Rights or other rights of Mondaq or any third party; or use the Website, Services and/or Content otherwise than in accordance with these Terms; use any trade marks or service marks of Mondaq or the Contributors, or do anything which may be seen to take unfair advantage of the reputation and goodwill of Mondaq or the Contributors, or the Website, Services and/or Content.

Mondaq reserves the right, in its sole discretion, to take any action that it deems necessary and appropriate in the event it considers that there is a breach or threatened breach of the Terms.

Mondaq’s Rights and Obligations

Unless otherwise expressly set out to the contrary, nothing in these Terms shall serve to transfer from Mondaq to you, any Intellectual Property Rights owned by and/or licensed to Mondaq and all rights, title and interest in and to such Intellectual Property Rights will remain exclusively with Mondaq and/or its licensors.

Mondaq shall use its reasonable endeavours to make the Website and Services available to you at all times, but we cannot guarantee an uninterrupted and fault free service.

Mondaq reserves the right to make changes to the services and/or the Website or part thereof, from time to time, and we may add, remove, modify and/or vary any elements of features and functionalities of the Website or the services.

Mondaq also reserves the right from time to time to monitor your Use of the Website and/or services.

Disclaimer

The Content is general information only. It is not intended to constitute legal advice or seek to be the complete and comprehensive statement of the law, nor is it intended to address your specific requirements or provide advice on which reliance should be placed. Mondaq and/or its Contributors and other suppliers make no representations about the suitability of the information contained in the Content for any purpose. All Content provided "as is" without warranty of any kind. Mondaq and/or its Contributors and other suppliers hereby exclude and disclaim all representations, warranties or guarantees with regard to the Content, including all implied warranties and conditions of merchantability, fitness for a particular purpose, title and non-infringement. To the maximum extent permitted by law, Mondaq expressly excludes all representations, warranties, obligations, and liabilities arising out of or in connection with all Content. In no event shall Mondaq and/or its respective suppliers be liable for any special, indirect or consequential damages or any damages whatsoever resulting from loss of use, data or profits, whether in an action of contract, negligence or other tortious action, arising out of or in connection with the use of the Content or performance of Mondaq’s Services.

General

Mondaq may alter or amend these Terms by amending them on the Website. By continuing to Use the Services and/or the Website after such amendment, you will be deemed to have accepted any amendment to these Terms.

These Terms shall be governed by and construed in accordance with the laws of England and Wales and you irrevocably submit to the exclusive jurisdiction of the courts of England and Wales to settle any dispute which may arise out of or in connection with these Terms. If you live outside the United Kingdom, English law shall apply only to the extent that English law shall not deprive you of any legal protection accorded in accordance with the law of the place where you are habitually resident ("Local Law"). In the event English law deprives you of any legal protection which is accorded to you under Local Law, then these terms shall be governed by Local Law and any dispute or claim arising out of or in connection with these Terms shall be subject to the non-exclusive jurisdiction of the courts where you are habitually resident.

You may print and keep a copy of these Terms, which form the entire agreement between you and Mondaq and supersede any other communications or advertising in respect of the Service and/or the Website.

No delay in exercising or non-exercise by you and/or Mondaq of any of its rights under or in connection with these Terms shall operate as a waiver or release of each of your or Mondaq’s right. Rather, any such waiver or release must be specifically granted in writing signed by the party granting it.

If any part of these Terms is held unenforceable, that part shall be enforced to the maximum extent permissible so as to give effect to the intent of the parties, and the Terms shall continue in full force and effect.

Mondaq shall not incur any liability to you on account of any loss or damage resulting from any delay or failure to perform all or any part of these Terms if such delay or failure is caused, in whole or in part, by events, occurrences, or causes beyond the control of Mondaq. Such events, occurrences or causes will include, without limitation, acts of God, strikes, lockouts, server and network failure, riots, acts of war, earthquakes, fire and explosions.

By clicking Register you state you have read and agree to our Terms and Conditions