Source: s3://data.kl3m.ai/documents/govinfo/USCOURTS/USCOURTS-caed-2_09-cv-03010/USCOURTS-caed-2_09-cv-03010-20/pdf.json

Nature of Suit Code: 890
Nature of Suit: Other Statutory Actions
Cause of Action: 31:3729 False Claims Act

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UNITED STATES DISTRICT COURT

EASTERN DISTRICT OF CALIFORNIA

UNITED STATES OF AMERICA, 

ex rel. FRANK SOLIS,

Plaintiff,

v.

MILLENNIUM PHARMACEUTICALS, 

INC., SCHERING-PLOUGH CORP., 

and MERCK & CO.,

Defendants.

No. 2:09-cv-03010-MCE-EFB

MEMORANDUM AND ORDER

This lawsuit was originally filed under seal on November 4, 2009, pursuant to the 

qui tam provisions of the Federal False Claims Act, 31 U.S.C. §§ 3729, et seq. (“FCA”) 

The Defendants, who are pharmaceutical companies, include Millennium 

Pharmaceuticals, Inc., Schering-Plough Corp., and Merck & Co. (“Defendants” unless 

otherwise indicated). The so-called “Relator” plaintiff, Frank Solis, (“Relator” or 

“Plaintiff”) a former sales employee who at various points worked for all three 

Defendants, claims that the companies fraudulently marketed and/or promoted the use 

of two drugs, Integrilin and Avelox. Relator alleges that Defendants promoted so-called

“off label” uses for Integrilin not approved by the Food and Drug Administration (“FDA”). 

In so doing, according to Relator, Defendants “caused” physicians to improperly 

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prescribe the drugs and to submit false claims to Medicare, Medicaid and TRICARE 

(United States Military Healthcare) for federal reimbursement which the government 

allegedly paid without knowing the claims were ineligible for reimbursement. In addition, 

Relator alleges that Defendants paid illegal kickbacks to entice physicians to prescribe 

the drugs. Following a three-year investigation, the United States and all twenty-four 

states named in the initial complaint chose not to intervene, and Relator’s Complaint was 

subsequently unsealed on December 20, 2012. 

Presently before the Court are Motions brought by Defendants Schering-Plough 

Corp. and Merck & Co., Inc, (collectively “Schering”) and Defendant Millennium 

Pharmaceuticals, Inc. (“Millennium”). ECF Nos. 195, 199. Both Motions are brought 

pursuant to Federal Rule of Civil Procedure 12(b)(1)1 and allege this Court lacks subjectmatter jurisdiction over Relator’s allegations, as set forth in his operative Third Amended 

Complaint (“TAC”). Defendants contend that Relator’s Integrilin-related allegations as to 

both off-label promotion and kickbacks are barred by the FCA’s public disclosure bar

(which divests federal courts of jurisdiction where the alleged fraud has already been 

publicly disclosed) since Relator cannot qualify as an “original source” as to those 

allegations. 31 U.S.C. § 3730(e)(4). In addition, by way of a separate Motion to 

Dismiss, Defendant Schering argues that Relator’s allegations as to the improper 

promotion of Avelox also fail to state a viable claim under Rule 12(b)(6) or to allege fraud 

with the requisite particularity under Rule 9(b).

As set forth below, Defendants’ Motions under Rule 12(b(1) are GRANTED

because Relator has not shown he is an original source as to the allegations at issue. 

Because the Court consequently concludes that it has no jurisdiction over Relator’s 

claims, Defendants’ concurrently filed additional motions challenging the TAC are 

///

///

1 All further references to “Rule” or “Rules” are to the Federal Rules of Civil Procedure unless 

otherwise noted.

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DENIED2 as moot except for Defendant Schering’s Motion to Dismiss under Rule 9(b), 

which is GRANTED since Relator’s allegations with respect to the fraudulent promotion 

of Avelox remain insufficient.3

FACTUAL BACKGROUND

Integrilin helps reduce blood clots and thereby helps to prevent heart attacks and 

death in patients suffering from acute coronary syndrome (“ACS”). ACS is an umbrella 

term that covers a variety of diseases related to clotting in the coronary arteries that 

supply blood to the heart muscle, including unstable angina, mild heart attacks known as 

non-ST-segment elevation myocardial infarctions, and more severe heart attacks called 

ST-segment elevation myocardial infarctions (“STEMI”). Avelox, on the other hand, is an 

antibiotic approved by the FDA for treating adult patients with infections caused by a few 

susceptible strains of microorganisms.

With respect to Integrilin, FDA approval was first obtained in May 1998 by a 

company named COR Therapeutics, Inc. (“COR”), which thereafter promoted the drug 

along with Defendant Schering-Plough. In February of 2002, Defendant Millennium

acquired COR and thereby obtained the right to co-promote Integrilin. In September of 

2005, Defendant Millennium transferred its right to market Integrilin within the United 

States to Defendant Schering-Plough, thereby relinquishing any responsibility for the 

drug after a period of less than four years. Schering-Plough later merged with Merck in 

November of 2009 to form a new company, also known as Merck.

///

2 Those Motions include Motions to Dismiss brought by Defendants Millennium, Schering-Plough 

and Merck to dismiss pursuant to Rules 9(b) and 12(b)(6) (ECF Nos. 196, 200); a Joint Motion to Strike 

portions of the TAC under California’s so-called “anti-SLAPP” statute, Cal. Code Civ. Proc. § 425.16 (ECF 

No. 198) brought by both Defendants; and a Motion to Strike portions of the TAC pursuant to Rule 12(f) 

(ECF No. 197), also brought by both Defendants.

3 Having determined that oral argument was not of material assistance, the Court ordered this 

matter submitted on the briefs in accordance with Local Rule 230(g).

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Relator Solis was a pharmaceutical sales representative for Millennium covering 

the Los Angeles area between July 2003 and September of 2005. At that time he 

transitioned to employment for Schering-Plough. Then, in November of 2009, after the 

Schering/Merck merger, he became a Merck sales representative. Relator was 

terminated by Merck on March 9, 2010.

Relator’s operative TAC alleges that Defendants promoted improper uses of 

Integrilin, including its early use for STEMI patients, despite the fact that such early use 

is “extremely dangerous, off-label and fraudulent.” TAC, ¶¶ 5, 11. Relator further claims

that Defendants violated the so-called Anti-Kickback Statute (“AKS”), which prohibits a 

drug company from knowingly and willfully offering or paying remuneration to purchase 

goods or services for which payment may be made by a federal healthcare program. 

See 42 U.S.C. § 1320a-7(b)(2)(B). Relator alleges that Defendants violated the AKS by 

“funnel[ing] millions of dollars” in grants, honoraria, and meals to physicians in order to 

induce Integrilin prescriptions and to drive “off label” sales, all in violation of the AKS. 

See TAC, ¶¶ 7-8.

4

While most of the TAC focuses on allegations pertaining to the use and promotion 

of Integrilin, Relator also includes more limited averments concerning Avelox, which 

Schering marketed and Relator claims he also promoted. Id. at ¶ 32. Those allegations 

are based solely on alleged kickbacks; no off-label claims pertaining to Avelox are 

asserted.

PROCEDURAL HISTORY

As indicated above, Relator’s initial lawsuit was filed on November 4, 2009. After 

a three-year investigation, the United States and the twenty-four states named in the 

///

4 Off-label use of a drug occurs when it is used either for a purpose not approved by the FDA, of 

where non-indicated dosing regimens for the drug are promoted.

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initial complaint chose not to intervene, and Relator’s complaint was unsealed on 

December 20, 2012. 

In response to earlier Motions to Dismiss filed on behalf of each of the 

Defendants, Relator filed a First Amended Complaint (“FAC”) on June 27, 2013. The 

viability of Plaintiff’s FAC was attacked through three separate motions. Defendant

Schering filed a Motion to Dismiss for lack of subject matter jurisdiction under Federal 

Rule of Civil Procedure 12(b)(1) on grounds that Relator’s complaint was barred by the 

FCA’s so-called “public disclosure” limitation. Defendant Millennium subsequently joined 

in that motion. Additionally, two other motions, one filed jointly by Schering and Merck 

and the other by Millennium, argued that the various causes of action pled in the FAC 

were substantively deficient in contravention of Rule 12(b)(6). By Memorandum and 

Order filed March 26, 2014 (ECF No. 105), this Court granted Defendants’ Rule 12(b)(1) 

motion agreeing that the public disclosure bar applied to Relator’s “combination use” 

allegations. Because Relator’s FAC contained other allegations beyond combination 

use, however, including assertions pertaining to a completely different drug, Avelox, as 

well as allegations of fraud, improper billing, and impermissible kickbacks, the Court 

permitted Relator to file a Second Amended Complaint (“SAC”) omitting the combination 

use allegations.5 

Relator’s SAC was also met by motions to dismiss. The Court again granted 

Millennium’s motion to dismiss for lack of subject matter jurisdiction and denied as moot 

Millenium’s concurrently filed dismissal request under Rules 12(b)(6) and 9(b). See 

March 26, 2015 Mem. and Order, (ECF No. 157) at 15. It held that both the kickback 

and off-label claims brought under federal law were substantially similar to allegations 

first raised in civil actions filed in 2007. Id. at 11-15. The Court further found that Relator 

was not an “original source” so as to escape the FCA’s public disclosure bar as to those 

5 Because the Rule 12(b)(6) motions challenged the sufficiency of the FAC’s allegations at a point 

when the question of the Court’s jurisdiction over this qui tam action had not yet been determined, and 

since the parameters of a SAC without the combination use allegations would likely be far different than its 

predecessor, the Court denied those motions without prejudice to being renewed following submission of 

the SAC.

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allegations because he “presented no evidence that he ‘had a hand’ in the prior 2007 

litigation.” Id. at 15. Finally, the Court dismissed Relator’s state law claims through 

application of the same analysis and because the Court declined to exercise 

supplemental jurisdiction over the state law claims in any event.” Id. at 16. Although the 

Court denied Schering’s initial motion under Rules 12(b)(6) and 9(b) challenging the 

SAC (Mar. 30, 2015 Mem. and Order, ECF No. 158), it ultimately dismissed Relator’s 

claim against Schering following a subsequently filed Rule 12(b)(6) motion, ruling that 

the prior public disclosures were “equally applicable” to both Schering and Millennium, 

and that consequently Schering’s dismissal was proper for the same reasons set forth in 

the Court’s earlier March 26, 2015 Memorandum. Sept. 1, 2015 Mem. and Order, ECF 

No. 164.

Relators appealed from the Rule 12(b)(1) dismissal of his claims, and Defendants 

cross-appealed the Court’s denial of their substantive motions to dismiss. On March 15, 

2018, the Ninth Circuit affirmed in part and vacated in part, remanding the case with 

instructions. United States ex rel. Solis v. Millennium Pharm., Inc. (“Solis”), 885 F.3d 

623 (2018). The Ninth Circuit affirmed this Court’s determination that Relator’s claims as 

to Integrilin were “substantially similar to those in . . . prior public disclosures” and found 

that they were then precluded by the FCA’s public disclosure bar unless Relator can 

show he qualified as an “original source” of the claims. Id. at 627. Although this Court 

had found that Relator did not so qualify, the Ninth Circuit pointed out that intervening 

circuit law had in fact undercut the basis for that determination by repudiating an earlier 

recognized requirement that the Relator must have “had a hand” in the disclosure in 

order to qualify for the original source exception to the public disclosure bar. Id. at 628, 

citing United States ex rel. Hartpence v. Kinetic Concepts, Inc., 792 F.3d 1121, 1129

(9th Cir. 2015) (en banc). Consequently, the Ninth Circuit remanded for consideration of 

whether Relator had satisfied the original source test as articulated in Hartpence, which 

requires, in pertinent part, that Relator have “direct and independent knowledge” of the 

information on which his allegations are based in order to qualify as an additional 

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source. Moreover, with regard to Relator’s Avelox claims, while the Ninth Circuit 

rejected the notion that those claims had been previously disclosed, it nonetheless 

affirmed dismissal of the Avelox allegations under Rule 9(b), finding that Relator had 

failed to plead them with the requisite particularity. Id. at 629. The Ninth Circuit’s 

decision instructed this Court to decide upon remand whether leave to amend should be 

permitted so as to give Relator another opportunity to make viable allegations 

concerning Avelox.

Following remand of the matter this Court held a Status Conference on April 4, 

2019, at which time it directed Relator to file a TAC. Relator’s TAC alleges causes of 

action for false claims based on the AKS (Counts One and Two), false claims for causing 

the submission of off-label billings (Counts Three and Four), and false claims for the 

fraudulent promotion of Integrilin (Count Five). Plaintiff’s claims are all rooted in the 

federal FCA, but additional causes of action based on corresponding state law statutory 

provisions are also made on behalf of both California (Count Six) and twenty-seven other 

states (Counts Eight through Thirty-Two).6

Although counsel for Relator indicated during the Status Conference that the 

Avelox claims would not be pursued, the May 10, 2019, TAC continues to make Avelox 

related claims stemming from alleged kickbacks, albeit with a few additional allegations 

to remedy the earlier deficiencies identified by the Ninth Circuit. Relator also attempts to 

augment allegations pertaining to his own knowledge of Defendant’s alleged fraudulent 

activities in order to shore up his claim that he qualifies as an “original source” of those 

allegations.

///

///

///

///

6

In his TAC, Relator drops some states (New Hampshire and Wisconsin) and adds others 

(Colorado, Connecticut, Maryland, Minnesota, North Carolina, and Washington)

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STANDARD

A. Dismissal under Rule 12(b)(1)

Federal courts are courts of limited jurisdiction and are presumptively without 

jurisdiction over civil actions. Kokkonen v. Guardian Life Ins. Co. of Am., 511 U.S. 375, 

377 (1994). The burden of establishing the contrary rests upon the party asserting 

jurisdiction. Id. Because subject matter jurisdiction involves a court’s power to hear a 

case, it can never be forfeited or waived. United States v. Cotton, 535 U.S. 625, 630 

(2002). Accordingly, lack of subject matter jurisdiction may be raised by either party at 

any point during the litigation, through a motion to dismiss pursuant to Federal Rule of 

Civil Procedure 12(b)(1). Arbaugh v. Y&H Corp., 546 U.S. 500, 506 (2006); see also Int’l 

Union of Operating Eng’rs v. Cnty. of Plumas, 559 F.3d 1041, 1043-44 (9th Cir. 2009). 

Lack of subject matter jurisdiction may also be raised by the district court sua sponte. 

Ruhrgas AG v. Marathon Oil Co., 526 U.S. 574, 583 (1999). Indeed, “courts have an 

independent obligation to determine whether subject matter jurisdiction exists, even in 

the absence of a challenge from any party.” Id.; see Fed. R. Civ. P. 12(h)(3) (requiring 

the court to dismiss the action if subject matter jurisdiction is lacking).There are two 

types of motions to dismiss for lack of subject matter jurisdiction: a facial attack, and a 

factual attack. Thornhill Publ’g Co. v. Gen. Tel. & Elec. Corp., 594 F.2d 730, 733 

(9th Cir. 1979). Thus, a party may either make an attack on the allegations of jurisdiction 

contained in the nonmoving party’s complaint, or may challenge the existence of subject 

matter jurisdiction in fact, despite the formal sufficiency of the pleadings. Id.

When a party makes a facial attack on a complaint, the attack is unaccompanied 

by supporting evidence, and it challenges jurisdiction based solely on the pleadings. 

Safe Air for Everyone v. Meyer, 373 F.3d 1035, 1039 (9th Cir. 2004). If the motion to 

dismiss constitutes a facial attack, the Court must consider the factual allegations of the 

complaint to be true, and determine whether they establish subject matter jurisdiction. 

Savage v. Glendale High Union Sch. Dist. No. 205, 343 F.3d 1036, 1039 n.1 (9th Cir. 

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2003). In the case of a facial attack, the motion to dismiss is granted only if the 

nonmoving party fails to allege an element necessary for subject matter jurisdiction. Id. 

However, in the case of a facial attack, district courts “may review evidence beyond the 

complaint without converting the motion to dismiss into a motion for summary judgment.” 

Safe Air for Everyone, 373 F.3d at 1039. 

In the case of a factual attack, “no presumptive truthfulness attaches to plaintiff’s 

allegations.” Thornill, 594 F.2d at 733 (internal citation omitted). The party opposing the 

motion has the burden of proving that subject matter jurisdiction does exist, and must 

present any necessary evidence to satisfy this burden. St. Clair v. City of Chico, 

880 F.2d 199, 201 (9th Cir. 1989). If the plaintiff’s allegations of jurisdictional facts are 

challenged by the adversary in the appropriate manner, the plaintiff cannot rest on the 

mere assertion that factual issues may exist. Trentacosta v. Frontier Pac. Aircraft Ind., 

Inc., 813 F.2d 1553, 1558 (9th Cir. 1987) (quoting Exch. Nat’l Bank of Chi. v. Touche 

Ross & Co., 544 F.2d 1126, 1131 (2d Cir. 1976)). Furthermore, the district court may 

review any evidence necessary, including affidavits and testimony, in order to determine 

whether subject matter jurisdiction exists. McCarthy v. United States, 850 F.2d 558, 560 

(9th Cir. 1988); Thornhill, 594 F.2d at 733. If the nonmoving party fails to meet its 

burden and the court determines that it lacks subject matter jurisdiction, the court must 

dismiss the action. Fed. R. Civ. P. 12(h)(3).

A court granting a motion to dismiss a complaint must then decide whether to 

grant leave to amend. Leave to amend should be “freely given” where there is no 

“undue delay, bad faith or dilatory motive on the part of the movant, . . . undue prejudice 

to the opposing party by virtue of allowance of the amendment, [or] futility of the 

amendment . . . .” Foman v. Davis, 371 U.S. 178, 182 (1962); Eminence Capital, LLC v. 

Aspeon, Inc., 316 F.3d 1048, 1052 (9th Cir. 2003) (listing the Foman factors as those to 

be considered when deciding whether to grant leave to amend). Not all of these factors 

merit equal weight. Rather, “the consideration of prejudice to the opposing party . . . 

carries the greatest weight.” Id. (citing DCD Programs, Ltd. v. Leighton, 833 F.2d 183, 

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185 (9th Cir. 1987)). Dismissal without leave to amend is proper only if it is clear that 

“the complaint could not be saved by any amendment.” Intri-Plex Techs. v. Crest Group, 

Inc., 499 F.3d 1048, 1056 (9th Cir. 2007) (citing In re Daou Sys., Inc., 411 F.3d 1006, 

1013 (9th Cir. 2005); Ascon Props., Inc. v. Mobil Oil Co., 866 F.2d 1149, 1160 (9th Cir. 

1989) (“Leave need not be granted where the amendment of the complaint . . . 

constitutes an exercise in futility . . . .”).

B. Pleading Fraud Claims

Rule 9(b) requires that “in all averments of fraud or mistake, the circumstances 

constituting fraud or mistake shall be stated with particularity. To meet the requisite 

particularity standards on a case like the present one, which asserts claims under the 

federal FCA, Relator’s allegations must be accompanied by the “who, what, when, 

where, and how of the misconduct charged.” Ebeid ex rel. U.S. v. Lungwitz, 616 F.3d 

993, 998 (9th Cir. 2010) (quoting Vess v. Ciba-Geigy Corp., U.S., 317 F.3d 1097, 1106 

(9th Cir. 2003)). In the Ninth Circuit, “it is sufficient to allege ‘particular’ details of a 

scheme to submit false claims paired with reliable indicia that lead to a strong inference 

that claims were also submitted.” Ebeid, 616 F.3d 998-99.

ANALYSIS

A. The “Public Disclosure” Bar: Initial Considerations

If a public disclosure has occurred and the Relator cannot qualify as an “original 

source” of the false claim allegations, this Court lacks jurisdiction under the FCA over the 

previously disclosed allegations. See Rockwell Int’l Corp. v. United States, 549 U.S. 

U.S. 457, 472-73 (2007); United States ex rel. Meyer v. Horizon Health Corp., 565 F.3d 

1195, 1199 (9th Cir. 2009). This “public disclosure” bar seeks to “strike a balance 

between encouraging private persons to root out fraud and stifling parasitic lawsuits” in 

which “opportunistic plaintiffs who have no significant information to contribute of their 

///

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own” seek to collect a share of the government’s recovery. Graham Cnty. Soil & Water 

Conservation Dist. v. U.S. ex rel. Wilson, 559 U.S. 280, 295 (2010).

By its Memorandum and Order filed March 26, 2014, (ECF No. 105) this Court 

determined that the statutory bar in effect at the time Relator’s initial complaint was filed 

on November 4, 2009, governs here. As amended in 2006, that public disclosure bar 

precludes jurisdiction over a qui tam action “based upon” previously disclosed 

allegations, unless the party bringing the action qualifies as an “original source of the 

information already disclosed:

No court shall have jurisdiction over an [FCA qui tam] 

action . . . based upon the public disclosure of allegations

or transactions in a criminal, civil, or administrative hearing, in 

a congressional, administrative, or Government Accounting 

Office report, hearing, audit or investigation, or from the news

media, unless the action is brought by the Attorney General 

or the person bringing the action is an original source of 

the information.

31 U.S.C. § 3730(e)(4)(A) (2006) (emphasis added).

The 2006 statute goes on to define the term “original source” as follows:

For purposes of this paragraph, “original source” means an 

individual who has direct and independent knowledge of the 

information on which the allegations are based and has 

voluntarily provided the information to the Government before 

filing an action under this section which is based on the 

information.

Id. at § 3730(e)(4)(B) (2006).

B. The Original Source Exception

As indicated above, by Memorandum and Order dated March 26, 2015, this Court 

determined that a public disclosure occurred. Therefore, Plaintiff can avoid the 

jurisdictional bar posed by public disclosure only upon a showing that he is an “original 

source” as defined by the statute and case law. A-1 Ambulance Ser., Inc. v. California, 

202 F.3d 1238, 1243 (9th Cir. 2000) (under a two-part test, a court need only address 

the original source issue if it first determines a prior public disclosure has occurred). 

Relator bears the burden of establishing that he qualifies as an original source. See

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United States ex rel. Harshman v. Alcan Elec. & Eng’g, Inc., 197 F.3d 1014, 1018

(9th Cir. 1999) (holding that a relator bears the burden of establishing subject matter 

jurisdiction, including whether he is an “original source” under the statute).

Ninth Circuit law makes it clear that to qualify as an original source, Relator must 

demonstrate (1) “direct and independent knowledge” of the information on which his 

allegations rest; and (2) that he “voluntarily provided” that information to the government 

before filing his action. Hartpence, 792 F.3d at 1128.7 In order to show the requisite 

direct knowledge, Relator must demonstrate “firsthand knowledge of the alleged fraud, 

and that he obtained this knowledge through his ‘own labor unmediated by anything 

else.’” Harshman, 197 F.3d at 1020; United States ex rel. Aflatooni v. Kitsap Physicians 

Servs., 163 F.3d 516, 524-25 (9th Cir. 1999). Former employment with a defendant 

does not automatically make a Relator an original source with direct knowledge of 

fraudulent behavior alleged to have occurred while Relator was employed. See, e.g.,

United States ex rel. Bly-Magee v. Premo, 470 F.3d 914, 917 (9th Cir. 2006) (rejecting 

as insufficient mere fact of employment as executive director absent “specifics”); 

Harshman, 197 F.3d at 1021 (rejecting argument that “status as a member of the union” 

sufficed to show direct knowledge); United States v. Scan Health Plan, No. CV 09-5013, 

2015 WL 12778776 at *7 and n. 9 (rejecting assertion that everything “learned during the 

course of [a relator’s] employment . . . constitutes ‘direct knowledge’” as “contrary” to 

“Ninth Circuit authority”).

To the contrary, courts have made it clear that a former employee does not 

qualify as an original source absent direct knowledge of instances where a defendant 

caused a false claim to be submitted. See, e.g., Harshman, 197 F.3d at 1021 (holding 

relator failed to satisfy his burden in proving original source status, explaining that that 

relator did “not allege that he played any role in submitting false claims to the 

government”); United States ex rel. Green v. Serv. Contract Educ. & Training Trust 

7 Defendants do not dispute, for purposes of these motions, that Relator provided information to 

the government before filing this action. See Schering Mot., ECF No. 199, p. 10, n. 6; Millennium Mot., 

ECf No. 195, p. 7, n.2.

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Fund, 843 F. Supp. 2d 20, 36 (D.D.C. 2012) (finding original source averments lacking 

where relator “ha[d] not pled that he observed first-hand the pay vouchers or supporting 

documentation allegedly submitted”). Relators must possess first-hand knowledge that 

“make[s] a genuinely valuable contribution to the exposure of the alleged fraud.” United 

States ex rel Devlin v. California, 84 F.3d 358, 362 (9th Cir. 1996).8 Moreover, 

particularly given the presumption against federal jurisdiction, conclusory allegations will 

not suffice. See. e.g., Bly-Magee, 470 F.3d at 917 (affirming dismissal despite “lengthy 

explanation of [relator’s] involvement” and former employment where allegations made 

were “short of specifics”); United States ex rel. Casady v. Am. Int’l Grp., Inc.,

No. 10CV0431, 2013 WL 1702777 at * 5 (S.D. Cal. 2013) (finding no direct knowledge 

where allegations made only in a “conclusory fashion”); Scan Health Plan, 2015 WL 

12778776 at * 6 (conclusory statements or allegations” insufficient for purposes of 

satisfying original source requirement). Instead, Relator must demonstrate facts that, if

accepted as true, show that he is an original source by a preponderance of the 

evidence. Aflatooni, 163 F.3d at 525; United States ex rel. Hastings v. Wells Fargo 

Bank, N.A., No. CV 12-03624, 2014 WL 3519129 at * 7 (C.D. Cal. July 15, 2014); aff’d, 

656 F. App’x 328 (9th Cir. 2016).

C. Whether Relator Qualifies as an Original Source

With this background in mind, the Court looks to what Relator claims he knew 

concerning the submission of fraudulent claims as a result of Defendants’ purported 

misconduct. The focus must necessarily be on his knowledge concerning the improper 

claims themselves since that is the relevant inquiry: “the FCA ‘attaches liability, not to the 

underlying fraudulent conduct or to the government’s wrongful payment, but to the 

claims for payment.’” United States ex rel. Kelly v. Serco, Inc., 846 F.3d 325, 333 

(9th Cir. 2017) (quoting United states ex rel. Cafasso v. Gen. Dynamics C4 Sys., Inc., 

8 While Hartpence abrogated earlier decisions finding that to qualify under the original source 

exception, a Relator also had to show that he “had a hand” in the original disclosure, it did not change the 

“direct and independent knowledge” component of the exception and earlier caselaw remains viable as to 

that component.

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637 F.3d 1047, 1055 (9th Cir. 2011). As the Ninth Circuit has observed, “[i]t is not 

enough . . . ‘to describe a [fraudulent scheme] in detail but then to allege simply and 

without any stated reason . . . that claims requesting illegal payments must have been 

submitted.’” Id. at 1058 quoting United States ex rel. Clausen v. Laboratory Corp. of 

America, Inc., 290 F.3d 1301, 1311. 

Relator points to various steps taken by Defendants while he was employed as a 

sales representative to support the fraudulent practices he alleges. He claims he “lived 

through the fraud” by speaking with other sales employees as well as physician clients

during the period of his employment with Defendants. Omnibus Opp., ECF No. 204: 

3:27-4:1. As indicated above, however, the mere fact of employment is not enough 

absent direct knowledge of instances where a qui tam defendant caused a false claim to 

be submitted. Harshman, 197 F.3d at 1021. Nor can conversations with third parties 

establish direct knowledge. Moreover, while Relator points to his participation “in regular 

company training events” as well as “national and sales training conferences” at which 

he purportedly received “training, communications and feedback” geared towards his 

participation in the fraud he alleges,” and while he claims those activities “clearly 

establish” a basis for his direct and independent knowledge of Defendants’ sales 

scheme (see Omnibus Opp., 2:22-27), knowledge of a sales scheme is insufficient for 

purposes of qualifying as an original source unless Relator can also show that actual 

fraudulent claims were submitted as a result of the scheme. Mr. Solis has failed to set 

forth any such claims here. Finally, Relator’s identification of aspirational business plans 

enumerating sales objectives for Integrilin use also do not suffice in the absence of any 

showing that those plans were actually executed, let alone that Relator had any role in 

such execution or caused any false claims to be sumitted as a result. See TAC, ¶¶ 68, 

124. 

Given the foregoing, this case is analogous to Aflatooni, where a former employer 

alleged that defendants submitted false claims to Medicare for treatment and services 

that were not performed or were unnecessary. 163 F.3d at 519-20, 525. The relator in 

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that case simply claimed, much as Mr. Solis does here, that he was an original source 

simply “[b]y virtue of his position” as a treating physician at a facility operated by one of 

the defendants where he discovered that “over 50 percent of Medicare radiology claims”

were missing information about the referring physician.” Id. at 525. The Ninth Circuit 

found these allegations insufficient to qualify as an original source since the relator could 

not identify any specific patient charged for unnecessary medical services. Id. at 526. 

Without such information, the relator could not demonstrate knowledge of the 

defendant’s “involvement in the submission of false Medicare claims.” Id.

Also on point is United States ex rel. Meyer v. Horizon Health Corp., 565 F.3d 

1195 (9th Cir. 2002). There the Ninth Circuit found that two nurses did not qualify as 

original sources where they had no “direct access” to the fraudulent invoices occasioned 

by a patient who allegedly could not benefit from the care for which charges were being 

submitted. Id. at 1205. In upholding dismissal under Rule 12(b)(1), the Ninth Circuit 

held that there was “an important distinction” between “kn[owing] about alleged fraud” 

and demonstrating “direct and independent knowledge of [defendants’] alleged 

fraudulent billing . . . ” Id. at 1202. As Defendant Millenium points out, “not all 

knowledge equates to “direct and independent” knowledge sufficient to qualify as an 

original source.” Def. Millennium’s Mot., ECF No. 195, 9:11-12.

It is therefore clear that the Relator in this case cannot simply rely upon the fact of 

his employment and must instead point to specific facts demonstrating his direct and 

independent knowledge of fraudulent behavior. He has failed to do so. Turning first to 

his off-label allegations, Relator makes no real attempt to show his own involvement in 

the fraudulent scheme so as to show his direct and independent knowledge of the 

scheme, let alone whether he had knowledge of actual claims submitted because of the 

fraud. Indeed, his best argument is that Schering’s Medical Science Liaison (“MSL”)

provided letters and material which summarized publicly available studies about off-label 

use of Integrilin in combination with other drugs. TAC, ¶¶ 51-58. Relator claims that 

MSL letters also provided physicians with reprints of scientific studies published in 

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medical journals between 2001 and 2008 that discussed improper off-label “early use of 

Integrilin.” See id. at 77-79. He does not allege, however, that he had any personal role 

in preparing those letters, and he does not even identify any specific doctors to which 

they were directed. 

Moreover, even assuming Plaintiff had the requisite direct and independent 

knowledge of these activities, he concedes that is was only later studies published in 

2009 that called into question the reasoning of that prior research. Consequently, the 

alleged “falsity” of those earlier studies was, at best, only apparent in hindsight. This is 

insufficient. “[A]n actual false claim is the sine qua non of a[n FCA] violation.” Cafasso., 

637 F.3d at 1055. Importantly, with respect to dissemination of false information after 

the 2009 studies were published, only two paragraphs contend that such practices, 

continued, and both of those allegations are made only on “information and belief,”

9

 

probably because Relator ceased his employment with Defendants in March of 2010, 

shortly after the 2009 studies were published.

Additionally, whether a use is on- or off-label is not dispositive of whether 

Medicare properly reimburses providers in any event; the salient issue is instead 

whether treatment is “reasonable and necessary for the diagnosis or treatment” of an 

illness.” 42 U.S.C. § 1395y(a)(1)(A). Relator’s TAC, however, sweepingly alleges that 

“bills for Integrilin . . . were ineligible for reimbursement under Medicaid and Medicare 

because the drugs were used for off-label purposes.” TAC ¶ 45. As Defendants point 

out, that is incorrect. The FDA itself has “long recognized that in certain circumstances, 

new (off-label) uses are appropriate, rational, and accepted medical practices.” Schering 

Mot., ECF No. 200, 12:2-6, citing Dissemination of Information on Unapproved/New 

Uses for Marketed Drugs, Biologics, and Devices, 63 Fed. Reg. 31,143, 31,153 (June 8, 

1998) (codified at 21 C.F.R. pts. 16, 99). The FDA accordingly protects certain off-label 

9 See TAC, ¶ 65 (“On information and belief, Defendants’ promotion of Integrilin off-label as an 

early treatment for ACS patents and as an off-label treatment for STEMI patients continue to this day.”); Id.

at ¶ 100 (“[U]pon information and belief, Merck continues to promote Integrilin for off-label use in off-label 

patient populations in the same manner as set forth in this Complaint today.”).

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use by physicians as “not merely legitimate but important to the practice of medicine.” 

Carson v. Depuy Spine, Inc., 365 F. App’x 812, 815 (9th Cir. 2010). There must be 

allegations that distinguish between bona fide prescribing decisions for off-label use and 

improper use. U.S. ex re. Rost v. Pfizer, 253 F.R.D. 11, 16-17 (D. Mass. 2008) (alleging 

off labels marketing as criminal “is not sufficient, without more, to plead a false claims act 

violation”).

Relator’s TAC is silent as to this crucial distinction, since he seemingly 

characterizes all off-label use and promotion as fraudulent. He assumes that 

Defendants’ off-label promotion of Integrilin, for example, would necessarily “cause 

hospitals to submit false claims to Medicare, Medicaid, and TRICARE.” Omnibus Opp.,

6:23-25. That sweeping characterization cannot carry the day. Without showing direct 

and independent knowledge of an actual false claim being made as a result of such 

activities, Relator cannot qualify as an original source. Speculation that a false claim 

“must have been submitted” as a result of Defendant’s activities cannot suffice. 

In addition to these off-label allegations, Relator thus further alleges that 

Defendants provided kickbacks to physicians in connection with Integrilin and Avelox. In 

support of his sweeping allegation that Defendants “illegally provided monetary and 

other incentives for physicians who were willing to prescribe the drugs” (TAC, ¶ 15), 

Relator primarily points to meals allegedly paid for by Defendants, as well as some 

speaker fees and travel expenses provided to those physicians. Relator exhaustively 

lists at least twenty separate and specific meals which he claims were kickbacks to 

doctors prescribing Integrilin and Avelox. 

Again, however, Relator does not identify payments that were actually intended 

to, or did, induce doctors to prescribe Integrilin. At most, Relator alleges that the 

“dramatic increase in Integrilin prescriptions at hospitals with a large number of Medicare 

and Medicaid patients that Defendants specifically targeted creates a highly plausible 

inference that the government reimbursed claims that were the direct results of 

kickbacks, or were influenced by improper marketing.” ECF No. 204 at p.15. However, 

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Relator provides no factual support for that conclusory statement. Indeed, nowhere 

does the TAC allege that attendees at the events hosted by Defendants were actually 

asked, or agreed, to use Integrilin as a quid pro quo. Relator fails to identify even a 

single claim submitted by anyone who attended the meals hosted by Defendants. 

Indeed, the TAC fails to, at the very least, specifically allege that those meals

themselves had any concrete effect on physicians’ prescribing practices for Integrilin. To 

the contrary, Relator concedes that the physicians who attended those meals had 

already prescribed Integrilin extensively before the meals alleged.

Paying for a client’s meals in order to strengthen business relationships is, in and 

of itself, hardly an unusual sales strategy. Relator consequently provides no indicia, 

much less reliable indicia, that could give rise to a strong inference that claims for 

Integrilin were submitted to the government as a result of an unlawful quid pro quo 

arrangement between Defendants and any of the medical professionals attending the 

events they hosted. More specifically, Relator makes no showing that he played any 

independent role either in formulating a fraudulent promotion scheme or, more critically, 

in knowing that the scheme actually resulted in false claims. Without such showing 

Relator cannot qualify as an original source. He simply cannot sweepingly assert that 

such activities must necessarily have resulted in false claims when none have been 

identified. As the court in Aflatooni made clear, Relator must point to “information, as 

opposed to speculation” concerning the submission of false claims. Aflatooni, 163 F.3d 

at 526. Given the many opportunities the Court has granted Relator, he apparently 

cannot do so.

Like the relators in Meyer and Aflatooni, the Relator here has not identified even a 

single instance of a false claim for reimbursement allegedly caused by Defendants. As in 

Aflatooni, Relator does not provide “the name of any [M]edicare patient who was

allegedly charged for” an Integrilin prescription purportedly caused by off-label promotion 

or kickbacks allegedly received from Defendants. Id. at 526. And, as in Meyer, Relator 

does not allege that he ever personally observed “allegedly fraudulent billing” by a 

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physician due to such off-label promotion or kickbacks. 545 F.3d at 1198-99, 1202.

While Relator does set forth conclusory allegations that the TAC rests “entirely upon [his] 

personal observations” and that those allegations “were not learned through external 

public disclosures” (TAC, ¶ 33), he offers little beyond such broad and unsubstantiated 

declarations to support his claims. That is insufficient. See Bell Atl. Corp v. Twombly, 

550 U.S. 544, 545 (2007) (holding mere “labels and conclusions” or “a formulaic 

recitation of a cause of action’s elements” as insufficient).

To reiterate, there is “an important distinction” between “kn[owing about alleged 

fraud” and demonstrating “direct and independent knowledge of ‘defendants’ allegedly 

fraudulent billing”, which is necessary to qualify as an original source. Meyer, 565 F.3d 

at 1198-1292 (overturned on other grounds by Hartpence, supra); see also Aflatooni, 

163 F.3d 525. Relator must do more than simply provide a “lengthy explanation of [his] 

involvement” while employed by Defendants; he must supply specifics to prove his direct 

and independent knowledge of actual false claims. Bly-Magee, 470 F.3d at 917. 

Instead here, Relator provides no specifics about his purported direct and independent 

knowledge of actual false claims for reimbursement. His bid for original source status 

accordingly still falls short.

This is four times in over ten years that Relator has been given the opportunity to 

plead these fundamental jurisdictional facts, but he still has been unable to do so. As 

such, the TAC is DISMISSED without leave to amend because it is “fatally short of 

specifics” as to how Relator has direct and independent knowledge of false claims 

allegedly caused by Defendants. Bly-Magee, 470 F.3d at 917; see also Casady, 

2013 WL 1702777 at *5.

B. Avelox Allegations

To reiterate, the Ninth Circuit affirmed dismissal of Relator’s claims pertaining to 

Avelox on grounds that they were not pled with the requisite specificity to survive 

challenge under Rule 9(b), which requires claims grounded in fraud to be pleaded with 

particularity. That court explained that because “FCA claims are subject to Federal Rule 

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of Civil Procedure 9(b),” a relator “must state with particularity ‘the who, what, when, 

where, and how of the misconduct alleged.’” Solis, 885 F.3d at 628. Application of this 

heightened Rule 9(b) pleading standard is particularly justified in FCA cases “because 

the FCA is geared primarily to encourage insiders to disclose information necessary to 

prevent fraud on the government.” Ebeid, 616 F.3d at 999. In order to satisfy that

exacting standard, then, a relator must set out “what is false or misleading about a 

statement, and why it is false.” Id. at 998.

As previously stated, once the matter was remanded to this Court, a status 

conference was held to address, among other things, whether or not to afford Relator 

the opportunity to amend in order to rectify that shortcoming. Although counsel for 

Relator indicated in open court that he no longer intended to pursue allegations 

pertaining to Avelox, amendment was nonetheless permitted with respect to Relator’s 

alleged status as an original source of fraudulent allegations levied against Defendants.

The TAC as filed ran counter to Relator’s representations inasmuch as it 

continued to include averments that Avelox was improperly marketed by Defendants 

through the use of the same kickbacks identified above with respect to Integrilin. While 

the Court would be within its authority to disregard any Avelox allegations under these 

circumstances, because substantive examination of the TAC shows squarely that the 

deficiencies identified by the Ninth Circuit have still not been rectified, dismissal of the 

Avelox claims is nonetheless warranted in any event.

The TAC fails to meaningfully add to its allegations pertaining to Avelox so as to 

address the Ninth Circuit’s concerns. Although the Ninth Circuit found that Relator 

violated Rule 9(b) in failing to either “identify a single claim” submitted pursuant to 

Defendants’ alleged scheme or to set forth “reliable indicia supporting a strong inference 

that such claims were submitted” (Solis, 885 F.3d at 629), Relator makes virtually no 

attempt to augment his allegations beyond a new one-sentence-long paragraph and 

exhibit. TAC, ¶ 146, Ex. 52. The new sentence contained in the TAC simply avers that 

a “sales spreadsheet from 2004 tracked 18,794,263 California patients who were 

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covered by Medicaid or Medicare Part D plans in order to determine the effectiveness of 

Defendants’ efforts to put Avelox on Medicaid and Medicare formularies (Exhibit 52).” Id.

As Defendant Schering points out, however, whether or not Avelox was placed on 

a hospital’s formulary still says nothing about whether actual “claims were submitted.” 

ECF No. 200, 19:3-5, citing Solis, 885 F.3d at 629. Indeed, Solis had already rejected 

Relator’s allegations pertaining to formularies as insufficient to show that actual claims 

were submitted, since “[b]eing ‘on formulary’ merely means that the drug is available to 

be used or prescribed” and does not prove in itself that actual false claims were 

submitted. Id. Consequently, Relator’s claims pertaining to Defendant’s promotion of 

Avelox still fail to satisfy Rule 9(b) standards, and Defendant Schering’s Motion to 

Dismiss on that basis will be granted. 

CONCLUSION

For all the reasons stated above, the Motions to Dismiss submitted by Defendants 

Millennium and Schering asserting lack of subject matter jurisdiction under Rule 12(b)(1), 

ECF Nos. 195 and 199, are GRANTED. Because Relator has not met his burden of 

proof in showing that he was an original source of allegations made pertaining to

Integrilin, the public disclosure bar applies and prevents Relator from maintaining any of 

the three causes of actions rooted in the federal FCA. 

In addition, although Relator goes on to assert some additional claims predicated 

on the false claim laws of some twenty-seven states, because those claims also hinge 

on the same false claim analysis set forth above, they too fail. Moreover, even were the 

state law claims to have some viability apart from the merits of the federal FCA claims, 

which the Court believes they do not, in the absence of any predicate federal claim the 

Court declines to exercise supplemental jurisdiction over the state law claims in any 

event.

///

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Because the Court does not believe that the jurisdictional infirmities of Relator’s 

claims against Defendants can be rectified through further amendment, no additional 

leave to amend will be permitted. Relator has already had three opportunities to correct 

the fatal deficiencies in his pleadings, including a trip to the Ninth Circuit. That is enough.

Defendant Schering’s Motion to Dismiss pursuant to Rules 12(b)(6) and 9(b) (ECF 

No. 200) is also GRANTED to the extent that the TAC fails to state any claims pertaining 

to Avelox with the particularity required for claims sounding in fraud. Since the TAC 

makes virtually no attempt to remediate the deficiencies of its predecessor with respect 

to the promotion of Avelox, no further leave to amend will be permitted.

The remainder of Defendant Schering’s Motion to Dismiss (ECF No. 200) is 

DENED as moot. In addition, since the Court concludes that it lacks jurisdiction over 

Relator’s claims pertaining to Integrilin in the first instance, Defendants’ other motions 

challenging the substance of Relator’s claims are moot. Defendant Millennium’s Motion 

to Dismiss (ECF No. 196), as well as Defendants’ Joint Motion to Strike (ECF No. 197), 

and Motion to Dismiss under California’s Anti-SLAPP statue (ECF No. 198) are 

accordingly DENIED on that basis.

Since this now concludes the Court’s handling of this matter, the Clerk of Court is 

directed to close the file.

IT IS SO ORDERED.

Dated: March 31, 2020

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