United States Court of Appeals 

For the First Circuit 

No. 16-1382 

PETER P. LAWTON, ex rel. UNITED STATES OF AMERICA; and THE 

STATES OF CALIFORNIA, COLORADO, CONNECTICUT, DISTRICT OF 

COLUMBIA, DELAWARE, FLORIDA, GEORGIA, HAWAII, IOWA, ILLINOIS, 

INDIANA, LOUISIANA, MASSACHUSETTS, MARYLAND, MICHIGAN, 

MINNESOTA, MONTANA, NORTH CAROLINA, NEW JERSEY, NEW MEXICO, 

NEVADA, NEW YORK, OKLAHOMA, RHODE ISLAND, TENNESSEE, TEXAS, 

VIRGINIA, WASHINGTON, WISCONSIN, 

Plaintiffs, Appellants, 

v. 

TAKEDA PHARMACEUTICAL COMPANY, LTD.; TAKEDA PHARMACEUTICALS 

U.S.A., INC., f/k/a Takeda Pharmaceuticals North America, Inc.; 

TAKEDA PHARMACEUTICALS INTERNATIONAL INC.; TAKEDA DEVELOPMENT 

CENTER AMERICAS, INC., f/k/a Takeda Global Research & 

Development Center Inc.; ELI LILLY AND COMPANY, 

Defendants, Appellees. 

APPEAL FROM THE UNITED STATES DISTRICT COURT 

FOR THE DISTRICT OF MASSACHUSETTS 

[Hon. Mark L. Wolf, U.S. District Judge] 

Before 

Lynch, Stahl, and Barron, 

Circuit Judges. 

 David E. Kovel, with whom John R. Low-Beer, Of Counsel, and 

Kirby McInerney LLP were on brief, for appellants. 

 R. Jeffrey Layne, with whom Jonathan S. Franklin, Sarah M. 

Cummings, and Norton Rose Fulbright US LLP were on brief, for 

appellees. 
November 22, 2016 
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STAHL, Circuit Judge. Relator-Appellant Peter Lawton 

("Lawton") brought a qui tam action against Appellees Takeda 

Pharmaceutical Company, Ltd. and its affiliates ("Takeda") and Eli 

Lilly and Company ("Eli Lilly") (collectively, "Defendants") under 

the False Claims Act ("FCA"), 31 U.S.C. § 3729 et seq., and the 

False Claims Acts of 28 different states and the District of 

Columbia.1 Lawton alleges that Takeda and Eli Lilly conspired in 

a fraudulent marketing campaign that caused third-parties to 

submit false reimbursement claims to government entities for offlabel uses of Actos, a treatment for Type 2 diabetes.2

The district court dismissed all of Lawton's claims, 

holding that Lawton had not pled his claims with the particularity 

required by Federal Rule of Civil Procedure 9(b). Lawton contests 

this ruling on appeal, and maintains that his allegations 

sufficiently plead that false claims were submitted to both federal 

 1 "'Qui tam' comes from the phrase 'qui tam pro domino rege 

quam pro se ipso in hac parte sequitur,' which translates as 'who 

pursues this action on our Lord the King's behalf as well as his 

own.'" United States ex rel. Rost v. Pfizer, Inc., 507 F.3d 720, 

727 n.4 (1st Cir. 2007) (quoting Rockwell Int'l Corp. v. United 

States, 549 U.S. 457, 463 n.2 (2007)), overruled on other grounds 

by Allison Engine v. United States ex rel. Sanders, 553 U.S. 662 

(2008). 

2 "Off-label uses" refer to uses for drugs that are not 

approved as safe and effective by the Food and Drug Administration 

("FDA"). Though Medicaid reimbursement is available for certain 

off-label uses that are medically "essential" or recognized within 

one of several medical compendia, see 42 U.S.C. § 1396r-8(a)(3), 

(g)(1)(B)(i), (k)(6), these uses are not at issue in this case. 
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and state government programs. After thoroughly reviewing these 

allegations, we affirm. 

I. Facts & Background

Since this appeal follows the granting of a motion to 

dismiss, we recite the relevant facts as they appear in Lawton's 

Second Amended Complaint. See Hochendoner v. Genzyme Corp., 823 

F.3d 724, 728 (1st Cir. 2016). 

Actos is a brand name drug approved by the FDA for 

improving blood sugar control in adults with Type 2 diabetes. The 

drug is manufactured, promoted, marketed, and sold by Takeda.3

In May 2012, Peter Lawton filed a qui tam complaint 

against Takeda alleging that it had engaged in an illegal offlabel marketing campaign for Actos in violation of 21 U.S.C. § 321 

et seq. (the "Food, Drug & Cosmetic Act"), and used illegal 

kickbacks to support that campaign in violation of 42 U.S.C. § 

1320a-7b(b) (the "Anti-Kickback Statute").4 Lawton -- a former 

 3 In his Second Amended Complaint, Lawton named Eli Lilly as 

a defendant for the first time, alleging that it had entered into 

a partnership with Takeda to jointly market Actos from 1999 to 

2006. 

4 The FDA has only approved Actos for treatment in adults with 

Type 2 diabetes. Physicians may prescribe Actos for non-FDAapproved treatments, but the Food, Drug & Cosmetic Act prohibits 

pharmaceutical companies from marketing drugs for off-label uses. 

The Anti-Kickback Statute, meanwhile, imposes criminal penalties 

on anyone who, among other things, "solicits" or "pays any 

remuneration (including any kickback, bribe or rebate) directly or 

indirectly, overtly or covertly, in cash or in kind, to purchase 

or recommend purchasing any good, facility, service or item for 

which payment may be made in whole or in part under a federal 
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chemist and patent litigator at Takeda competitor GlaxoSmithKline 

-- further alleged that through this campaign, Takeda and Eli Lilly 

had knowingly caused third-parties to submit false or fraudulent 

claims for payment to federal and state government programs.5 See, 

e.g., 31 U.S.C. § 3729(a); N.Y. State Fin. Law §§ 188-89. 

Lawton made his first amendment to his complaint in 

February 2014, and after the United States declined to intervene 

and the action was unsealed, his case began in earnest. In August 

2015, the district court allowed Lawton to amend his complaint 

again ("Second Amended Complaint"), which he filed the following 

month and is the subject of this appeal. 

The Second Amended Complaint alleged that starting in 

the late 1990s and lasting until 2011, Defendants utilized a 

marketing scheme designed to develop and promote "quasiscientific" bases for off-label use of Actos, specifically the 

 

healthcare program." 42 U.S.C. § 1320a-7b(b). Since Lawton claims 

Defendants violated both provisions, FCA liability would attach if 

Lawton proved the violations caused third-parties to submit false 

claims for reimbursement to government programs. 

5 Lawton claims he initially learned of Takeda's illegal 

conduct when, while working at GlaxoSmithKline, he met with various 

Takeda representatives in an intellectual property dispute 

concerning Actos and Avandia, GlaxoSmithKline's diabetes drug, in 

2001. Subsequent to this, he claims to have learned more specifics 

about Takeda's strategy via internal discussions at 

GlaxoSmithKline between 2001 and 2003 and a series of three job 

interviews he had at Takeda in 2009. 
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treatment of prediabetes.6 The claimed centerpiece of this 

campaign involved the development of dozens of pro-Actos research 

studies and subsequent publications substantiating these claims. 

The most prominent of these studies, Lawton claims, was a 2006 

paper ("ACT NOW Study") on the prevention of Type 2 diabetes. 

Allegedly conceived and funded by Takeda but ostensibly authored 

by Dr. Ralph DeFronzo, the ACT NOW Study advocated for the use of 

Actos as an effective treatment for prediabetes. Lawton alleges 

that Dr. DeFronzo and other "thought leaders" and researchers like 

him received compensation, kickbacks, and other indirect financial 

inducements from Takeda for their Actos studies, related speeches, 

and supporting presentations. Many of these studies, however, 

were criticized by various academic journals, peer review panels, 

and the FDA. 

Takeda allegedly also established a specialized Actos 

sales force to parallel this campaign, and tasked it with 

encouraging physicians to prescribe Actos as a safe and effective 

treatment for prediabetes. Takeda also supposedly engaged in 

direct marketing to the public about the off-label use of Actos 

and made large contributions to several educational and research 

organizations to gain influence over their views on prediabetes 

 6 Prediabetes refers to the condition of having a high 

probability of developing diabetes in the future. 
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treatments. These efforts purportedly continued even after Takeda 

knew that the results of many of these studies were inconclusive. 

Based on these allegations, Lawton claimed that Takeda 

and Eli Lilly violated the FCA and analogous state statutes by 

causing false claims for Actos to be presented to both federal and 

state government healthcare programs. 

Lawton first pointed to the dramatic increase in Actos 

sales between 2006 ($1.5 billion) and 2011 ($3.6 billion), 

attributing these increased numbers to greater off-label use of 

Actos for patients with a prediabetes condition. Lawton then 

identified three non-diabetic members of the Suffolk County (NY) 

Health Plan who, between 2011 and 2014, were prescribed a total of 

11 scripts for Actos, for which the Health Plan paid a total of 

$3,170.14. With respect to the federal programs, Lawton cited 

evidence that public sector programs like Medicaid and Medicare 

accounted for more than half of Actos purchases between 2003 and 

2011. This evidence, he claimed, demonstrated that the Actos 

marketing campaign had caused violations of the False Claims Act. 

Takeda and Lilly moved to dismiss the complaint on 

multiple grounds. On March 8, 2016, the district court granted 

the motion, dismissing the federal and pendant state claims with 

prejudice. The court reached this conclusion after finding that 

neither Lawton's federal nor state allegations pled fraud with the 
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particularity required by Federal Rule of Civil Procedure 9(b). 

Lawton now appeals. 

II. Analysis 

Lawton raises two issues on appeal, arguing that the 

district court erred in dismissing his federal FCA claim and 

associated state claims with prejudice. We review each in turn. 

A. Federal Claim 

Lawton first contends that the court erred when it 

dismissed the federal claim in Lawton's Second Amended Complaint 

based on his failure to plead the alleged fraud with enough 

particularity to satisfy Federal Rule of Civil Procedure 9(b). In 

such cases, we review de novo the granting of a motion to dismiss, 

United States ex rel. Gagne v. City of Worcester, 565 F.3d 40, 45 

(1st Cir. 2009), "accepting as true all well-pleaded facts, 

analyzing those facts in the light most hospitable to the 

plaintiff's theory, and drawing all reasonable inferences for the 

plaintiff," United States ex rel. Hutcheson v. Blackstone Med. 

Inc., 647 F.3d 377, 383 (1st Cir. 2011). 

Rule 9(b) provides: "In alleging fraud or mistake, a 

party must state with particularity the circumstances constituting 

fraud or mistake." Fed. R. Civ. P. 9(b). As we have often said 

in these cases, relators are "required to set forth with 

particularity the who, what, when, where, and how of the alleged 

fraud." See, e.g., United States ex rel. Ge v. Takeda Pharm. Co., 
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Ltd., 737 F.3d 116, 123 (1st Cir. 2013) (internal citation and 

quotation marks omitted); see also United States ex rel. Karvelas 

v. Melrose-Wakefield Hosp., 360 F.3d 220, 228 (1st Cir. 2004), 

abrogated on other grounds by United States ex rel. Gagne v. City 

of Worcester, 565 F.3d 40 (1st Cir. 2009) (applying Rule 9(b) to 

FCA claims). 

The FCA penalizes persons who present, or cause to be 

presented, to the federal government "a false or fraudulent claim 

for payment or approval." 31 U.S.C. § 3729(a)(1). Thus, Rule 

9(b) requires both that the circumstances of the alleged fraud and 

the claims themselves be alleged with particularity. United States 

ex rel. Rost v. Pfizer, Inc., 507 F.3d 720, 727 (1st Cir. 2007), 

overruled on other grounds by Allison Engine v. United States ex 

rel. Sanders, 553 U.S. 662 (2008) ("FCA liability does not attach 

to violations of federal law or regulations, such as marketing of 

drugs in violation of the FDCA, that are independent of any false 

claim."). 

We briefly note that Lawton cites this Court's decision 

in Rodi v. Southern New England School of Law for the proposition 

that the relevant statements about which Rule 9(b) specificity is 

required are not the claims filed by innocent third-parties, but 

rather the allegedly fraudulent statements made by Takeda. 389 

F.3d 5, 15 (1st Cir. 2004) (stating "the specificity requirement 

[of Rule 9(b)] extends only to the particulars of the allegedly 
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misleading statement itself."). Rodi, however, was a case about 

specific fraudulent misrepresentations made by the defendant, and 

not one about false or fraudulent claims. Id. at 5. While it 

made sense for us only to require that the misleading statements 

be pled with particularity in that case, we will not do so here 

where the fraudulent act of filing false claims is distinct from 

actions trying to induce such filing. 

That being said, we have also recognized a difference 

between qui tam actions alleging that the defendant made false 

claims to the government and those alleging that the defendant 

induced third-parties to file false claims with the government. 

See United States ex rel. Duxbury v. Ortho Biotech Products, L.P., 

579 F.3d 13, 29 (1st Cir. 2009) (citing Rost, 507 F.3d at 732). 

In these circumstances, we apply a "more flexible" 

standard such that a relator can satisfy Rule 9(b) by providing 

"factual or statistical evidence to strengthen the inference of 

fraud beyond possibility without necessarily providing details as 

to each [submitted] false claim." Duxbury, 579 F.3d at 29-30. 

Still, the evidence necessary to achieve this inference generally 

requires the relator to plead, inter alia, the "'specific medical 

providers who allegedly submitted false claims,' the 'rough time 

periods, locations, and amounts of the claims,' and 'the specific 

government programs to which the claims were made.'" United States 

ex rel. Kelly v. Novartis Pharms. Corp., 827 F.3d 5, 13 (1st Cir. 
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2016) (quoting Ge, 737 F.3d at 124); see also Rost, 507 F.3d at 

733 (rationalizing Rule 9(b)'s application to FCA claims in part 

because "[i]t is a serious matter to accuse a person or company of 

committing fraud" and the rule "discourages plaintiffs from filing 

allegations of fraud merely in the hopes of conducting embarrassing 

discovery and forcing settlement"). 

In Karvelas, we likewise explained that while there is 

no "checklist of mandatory requirements" that each allegation in 

a complaint must meet to satisfy Rule 9(b): 

[D]etails concerning the dates of the claims, the 

content of the forms or bills submitted, their 

identification numbers, the amount of money charged 

to the government, the particular goods or services 

for which the government was billed, the 

individuals involved in the billing, and the length 

of time between the alleged fraudulent practices 

and the submission of claims based on those 

practices are the types of information that may 

help a relator to state his or her claims with 

particularity. 

360 F.3d at 233. 

Viewing Lawton's Second Amended Complaint against the 

backdrop of these guidelines, we have little trouble concluding 

that his allegations do not satisfy Rule 9(b). 

While the complaint describes at considerable length the 

Takeda's marketing machinations, the Second Amended Complaint 

falls well short of alleging, with the requisite amount of 

specificity, who submitted false claims to the government, how 
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many false claims were submitted to the government, or how the 

Defendants' actions resulted in the submission of false claims. 

Lawton compares his complaint to the one in Duxbury, 

where we concluded that the relator's complaint had met Rule 9(b)'s 

particularity requirement. 579 F.3d at 30. There, the relator 

alleged that a company paid kickbacks to eight different medical 

providers which induced these providers to submit false claims for 

reimbursement to Medicare. Id. Although a "close call," we held 

that the complaint satisfied Rule 9(b) because Duxbury, in addition 

to setting forth allegations of kickbacks, provided information 

concerning the dates and amounts of the false claims, who filed 

these false claims, the applicable time periods and locations, and 

how the claims were filed. Id. 

We agree with the district court that Lawton's 

allegations are materially weaker than those seen in Duxbury. The 

complaint does not allege that every prescription of Actos was 

unlawful because it was off-label or that every claim submitted to 

the federal government was false. See United States ex rel. 

Westmoreland v. Amgen, Inc., 738 F. Supp. 2d 267, 277 (D. Mass. 

2010) (holding complaint satisfied Rule 9(b), in part because it 

included allegations that, as a result of the defendant's 

inducement, a specific provider issued a "standing order" for 

doctors to write fraudulent prescriptions for all patients). He 

merely alleges that off-label prescriptions of Actos submitted to 
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government programs were unlawful. But Lawton, unlike the relator 

in Duxbury, identifies no false claims, either individual or 

aggregated, from particular medical providers that were submitted 

for reimbursement. 

Instead, Lawton simply postulates that "as much as" 30% 

of Actos annual sales were for off-label prescriptions, points to 

the amounts of Medicare and Medicaid funds used to pay for Actos 

prescriptions between 2003 and 2012, and asks us to infer that a 

portion of these funds must have been used to pay unlawful claims. 

As Yogi Berra allegedly said, "it's like déjà vu all over again."7 

See Ge, 737 F.3d at 124 (holding, in another case concerning Actos, 

that "aggregate expenditure data . . . with no effort to identify 

specific entities who submitted claims or government program 

payers, much less times, amounts, and circumstances" falls short 

of Rule 9(b)'s requirements). 

Lawton, like the relator in Rost, has "[a]t most . . . 

raise[d] facts suggesting fraud was possible," but his pleadings 

do not suffice under Rule 9(b) to show that doctors, patients, or 

patients' private insurers did seek out federal reimbursement for 

off-label Actos prescriptions. 507 F.3d at 733. Because Lawton's 

 7 "This epigram is often attributed to [Berra], a man as 

famous for mangling the English language as for belting baseballs. 

Berra coined many aphorisms -- but not this one. . . . The phrase's 

origin is unknown." Williams v. Ashland Engineering Co., Inc., 45 

F.3d 588, 589 n.1 (1st Cir. 1995). 
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"evidence and arguments proceed more by insinuation than any 

factual or statistical evidence that would strengthen the 

inference of fraud beyond possibility," we affirm the district 

court's dismissal of Lawton's complaint under Rule 9(b). See 

Kelly, 827 F.3d at 15. 

B. State Claims 

The district court similarly did not err when it 

dismissed Lawton's state claims with prejudice. Rule 9(b)'s 

heightened pleading standard generally applies to state law fraud 

claims brought in federal court. See Rost, 507 F.3d at 731 n.8; 

Universal Commc'n Sys., Inc. v. Lycos, Inc., 478 F.3d 413, 427 

(1st Cir. 2007). Lawton's Second Amended Complaint only contains 

allegations that false claims were submitted to New York State 

authorities in violation of the New York State False Claims Act 

("NYSFCA"). See N.Y. State Fin. Law § 187 et seq. Even these 

allegations, however, are not pled with the requisite 

particularity. 

Lawton alleges that between April 2011 and March 2014, 

three non-diabetic members of the Suffolk County Health Plan in 

New York State were prescribed Actos 11 times and that the health 

plan paid a total of $3,170.14 for these prescriptions. The Second 

Amended Complaint does not, however, identify the medical 

providers who prescribed Actos, nor does it allege how those 

prescriptions resulted from Defendants' marketing campaign or 
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supposed kickback scheme. And given the timeframe of the 

allegation, it is unclear whether the prescriptions in question 

were issued before or after the end of the alleged marketing 

campaign in 2011. This is relevant because if the prescriptions 

were written after the campaign ended, we cannot conclude that 

Lawton has strengthened the inference of fraud beyond possibility. 

In short, Lawton's state law claims fail to satisfy Rule 

9(b) for many of the same reasons why his federal FCA claim failed. 

Since Lawton does not offer any new evidence on appeal that would 

"cure the inferential gaps" found in the Second Amended Complaint, 

the district court's decision to dismiss these claims with 

prejudice is affirmed. See Kelly, 827 F.3d at 15. 

III. Conclusion 

We affirm the district court's order dismissing relator 

Peter Lawton's claims, and because we reach this conclusion, we 

decline to consider whether Lawton's Second Amended Complaint is 

barred by the FCA's public disclosure bar, 31 U.S.C. § 

3730(e)(4)(A), or the NYSFCA's public disclosure bar, N.Y. State 

Fin. Law § 190(9)(b).