High Court Declines to Hear Solvay and Duxbury FCA Cases

By Kurt R. Karst –   

Earlier today, the U.S. Supreme Court declined to hear appeals in two separate cases of interest to the food and drug law bar involving the False Claims Act (“FCA”) – Hopper v. Solvay Pharms, Inc., 588 F.3d 1318 (11th Cir. 2009) and United States, ex rel. Mark Eugene Duxbury v. Ortho Biotech Products, L.P., 579 F.3d 13 (1st Cir. 2009).  The decision lets stand two circuit court rulings.

In Solvay, the U.S. Court of Appeals for the Eleventh Circuit ruled that a FCA action should be dismissed when, as in this case, the Relators are unable to present any evidence that the defendant company actually caused false claims to be submitted based on an alleged off-label marketing campaign.  As we previously noted (here and here), Solvay is an important ruling in the context of FCA litigation generally, but more specifically with regard to off-label use cases.  The Eleventh Circuit’s ruling is the first decision by a United States Court of Appeals concerning off-label use in which the court ruled that a complaint was deficient where there were no claims identified by the Relator.  Many off-label FCA actions have been initiated by company sales representatives who claim first-hand knowledge about an alleged off-label sales program, but do not have first-hand knowledge about the reimbursement practices of the company (usually because  those functions are handled by others in the company).

As we previously reported (here and here), the underlying case in Duxbury asserted qui tam claims under the FCA against Ortho Biotech that were based on certain of the company’s product promotion activities, alleging promotion of off-label use, marketing the “spread” and providing “kickbacks” to providers in the form, among others, of free product samples.  The District Court dismissed all of the claims, citing multiple grounds.  On appeal, the U.S. Court of Appeals for the First Circuit reversed in part, reviving only those claims attributable to Duxbury based on kickbacks.

The United States recommended in an amicus brief that the Supreme Court decline to hear the case, in part, on the basis that a recent amendment to the FCA’s definition of the term “original source” made one question posed in the Petition for a Writ of Certiorari “not of sufficient continuing importance to warrant this Court’s review.”