PRECEDENTIAL

UNITED STATES COURT OF APPEALS

FOR THE THIRD CIRCUIT

___________

No. 15-3805

___________

UNITED STATES OF AMERICA, ex rel.

GERASIMOS PETRATOS,

GERASIMOS PETRATOS, ex rel. UNITED STATES OF 

AMERICA; STATE OF CALIFORNIA; STATE OF 

COLORADO; STATE OF CONNECTICUT; STATE OF 

DELAWARE; STATE OF FLORIDA; STATE OF 

GEORGIA; STATE OF HAWAII; STATE OF ILLINOIS; 

STATE OF INDIANA; STATE OF LOUISIANA; STATE 

OF MARYLAND; COMMONWEALTH OF 

MASSACHUSETTS; STATE OF MICHIGAN;

STATE OF MINNESOTA; STATE OF MONTANA; 

STATE OF NEVADA; STATE OF NEW HAMPSHIRE; 

STATE OF NEW JERSEY; STATE OF NEW MEXICO; 

STATE OF NEW YORK; STATE OF NORTH CAROLINA; 

STATE OF OKLAHOMA; STATE OF RHODE ISLAND; 

STATE OF TENNESSEE; STATE OF TEXAS; 

COMMONWEALTH OF VIRGINIA; 

DISTRICT OF COLUMBIA,

 Appellants

v.
2

GENENTECH INC; ROCHE GROUP; 

HOFFMAN LA ROCHE, INC.; ROCHE HOLDINGS, LTD.; 

F HOFFMAN - LA ROCHE, LTD

__________

On Appeal from the United States District Court 

for the District of New Jersey

(D.C. No. 2-11-cv-03691)

District Judge: Honorable Madeline C. Arleo 

___________

Argued November 1, 2016

Before: HARDIMAN and SCIRICA, Circuit Judges,

and ROSENTHAL,* District Judge.

(Filed: May 1, 2017)

Michael J. DeBenedictis

Debenedictis & Debenedictis, LLC

125 Kings Highway West

Haddonfield, NJ 08033

 

* The Honorable Lee H. Rosenthal, United States 

District Judge for the Southern District of Texas, sitting by 

designation.
3

Adam Gutride

Seth Safier

Anthony Patek 

Matthew T. McCrary [Argued]

Gutride Safier LLP

100 Pine Street, Suite 1250

San Francisco, CA 94111

Counsel for Plaintiffs-Appellants

Lawrence S. Lustberg

Gibbons P.C.

One Gateway Center

Newark, NJ 07102

Matthew J. O’Connor

Mark W. Mosier [Argued]

Matthew F. Dunn

David M. Zionts

Covington & Burling LLP

850 10th Street, N.W.,

One City Center

Washington, DC 20001

Counsel for Defendants-Appellees

Michael S. Raab

Weili J. Shaw [Argued]

U.S. Department of Justice

950 Pennsylvania Ave., N.W.

Washington, D.C. 20530

Counsel for United States of America as Amicus 

Curiae in support of neither party
4

____________

OPINION OF THE COURT

____________

HARDIMAN, Circuit Judge.

This appeal arising under the False Claims Act 

involves a multi-billion dollar cancer drug, Avastin, which 

was developed by Appellee Genentech. Relator Gerasimos 

Petratos, who was head of healthcare data analytics for 

Genentech, filed a qui tam action soon after leaving the 

company. He alleged that Genentech suppressed data that

caused doctors to certify incorrectly that Avastin was 

“reasonable and necessary” for certain at-risk Medicare 

patients. The District Court dismissed Petratos’s suit for 

failure to state a claim. Although we disagree with the District 

Court’s grounds for dismissal, we will affirm because

Petratos failed to satisfy the False Claims Act’s materiality 

requirement. 

I

A

A widely prescribed cancer drug that has accounted for 

$1.13 billion a year in Medicare reimbursements, Avastin is 

approved by the FDA to treat several types of cancer. Petratos 

alleged that Genentech concealed information about 

Avastin’s health risks. Specifically, he claimed the company

ignored and suppressed data that would have shown that

Avastin’s side effects for certain patients were more common 

and severe than reported. According to Petratos, such 

analyses would have required the company to file adverse-
5

event reports with the FDA, and could have resulted in 

changes to Avastin’s FDA label. Genentech also allegedly 

suppressed information regarding Avastin’s side effects for 

patients with renal failure despite a request to disclose that 

information by a “Key Opinion Leader,” a recognized 

industry expert who “influence[s] peers’ medical practice, 

including but not limited to prescribing behavior.” John 

Mack, A KOL by Any Other Name, 14-03 Pharm. Mktg. News 

1, 1 (2015).

Petratos claimed Genentech’s data suppression was 

part of a formal campaign, dubbed “Optimizing Data Value,” 

during which the company avoided certain analyses and data 

sets that might yield negative results to mitigate its “business 

risk.” App. 324–26. Petratos asserted that he tried to bring the 

safety risks inherent in this strategy to the attention of upper 

management, but was told “to stop any further work in [the] 

area,” App. 318, and had his job “threatened,” App. 314.

As a consequence of Genentech’s data-suppression

strategy, Petratos claimed the company caused physicians to 

submit Medicare claims that were not “reasonable and 

necessary.” In the opinion of one oncologist, if Genentech 

had properly disclosed Avastin’s side-effects for certain atrisk patients, “the standard of care would have been to 

prescribe a lower dose of Avastin, a lower frequency of 

doses, or no dose at all.” App. 341.

B

Initially filed in 2011, this case was heard by three 

judges of the United States District Court for the District of 

New Jersey. Soon before his retirement, Judge Cavanaugh 

dismissed Petratos’s initial complaint in part, but granted a 
6

stay of the order so Petratos could amend his complaint. The 

case was reassigned to Judge Wigenton, who rejected 

Genentech’s argument that an amendment would be futile and

held that Petratos “sufficiently alleged causes of action” 

under the False Claims Act. App. 56. Finally, the case was 

transferred to Judge Arleo, who took a different tack than 

Judge Wigenton and reasoned that “medically ‘reasonable 

and necessary’ is a determination made by the relevant 

agency, not individual doctors.” App. 16–17. Because 

Petratos’s theory relied on the doctors as part of the 

“reasonable and necessary” determination, Judge Arleo 

deemed the complaint fatally deficient and dismissed all 

claims. App. 18–19. Petratos filed this timely appeal. 

II

The District Court had subject-matter jurisdiction over 

Petratos’s federal claim under 28 U.S.C. § 1331 and 

supplemental jurisdiction over his state-law claims under 28 

U.S.C. § 1367. We have appellate jurisdiction under 28 

U.S.C. § 1291. We “exercise plenary review of the District 

Court’s order granting appellees’ motion to dismiss for failure 

to state a claim.” United States ex rel. Wilkins v. United 

Health Grp., Inc., 659 F.3d 295, 302 (3d Cir. 2011). We 

review for abuse of discretion both the District Court’s 

decision to reconsider a predecessor judge’s ruling, Fagan v. 

City of Vineland, 22 F.3d 1283, 1290 (3d. Cir. 1994), and its

denial of leave to amend the complaint, United States ex rel. 

Schumann v. Astrazeneca Pharms. L.P., 769 F.3d 837, 849 

(3d Cir. 2014). 
7

III

A

Petratos’s claims implicate three interlocking federal 

schemes: the False Claims Act, Medicare reimbursement, and 

FDA approval. We begin by briefly outlining each scheme. 

The False Claims Act is meant “to reach all types of 

fraud . . . that might result in financial loss to the 

Government.” Cook Cty. v. United States ex rel. Chandler, 

538 U.S. 119, 129 (2003) (quoting United States v. NeifertWhite Co., 390 U.S. 228, 232 (1968)). A False Claims Act 

violation occurs when a person “knowingly presents, or 

causes to be presented, a false or fraudulent claim for 

payment or approval.” 31 U.S.C. § 3729(a)(1)(A). A claim is 

legally false when it does not comply “with a statute or 

regulation the compliance with which is a condition for

Government payment.” Wilkins, 659 F.3d at 305.1

The allegedly false claims in this case were submitted 

to the Medicare program, which reimburses the health care 

costs incurred by program beneficiaries. The Medicare statute 

provides that “no payment may be made” for items and 

services that “are not reasonable and necessary for the 

 

1 A claim may be factually or legally false. Wilkins,

659 F.3d at 305. “A claim is factually false when the claimant 

misrepresents what goods or services that it provided to the 

Government.” Id. Although Petratos halfheartedly argues that 

the claims at issue are factually false, he is incorrect. There is 

no dispute that the physicians actually provided the claimed 

good (Avastin) in the claimed doses. 
8

diagnosis and treatment of illness or injury.” 42 U.S.C. 

§ 1395y(a)(1)(A). Because a claim can be false if it does not 

comply with statutory conditions for payment, the claims at 

issue here are false if Avastin was not “reasonable and 

necessary.” See id.

One important factor considered by the Centers for 

Medicare and Medicaid Services (CMS) to determine whether 

a prescribed drug is “reasonable and necessary” is whether it

has received FDA approval. Indeed, CMS guidance explains 

that “with some exceptions, a drug must have final marketing 

approval from the FDA to be considered ‘reasonable and 

necessary.’” Medicare Benefit Policy Manual, CMS Pub. 

100-2, ch. 1, § 30 (Part A). In most instances, the drug must 

also be used for a “medically accepted indication”—meaning 

that it has been deemed appropriate for the particular treated 

condition. 42 U.S.C. § 1395x(t)(2). An indication is 

“medically appropriate” if it has been approved by the FDA 

or supported by research in certain authoritative compendia. 

See id.; 42 C.F.R. § 414.930.

B

A False Claims Act violation includes four elements: 

falsity, causation, knowledge, and materiality. Universal 

Health Servs., Inc. v. United States ex rel. Escobar, 136 S. Ct. 

1989, 1996 (2016) (materiality); Wilkins, 659 F.3d at 304–05 

(falsity, causation, knowledge). The District Court focused on 

the falsity element, concluding that the disputed claims were

not false because they were “reasonable and necessary” as a 

matter of law. 

The District Court reached its conclusion by conflating 

two separate standards from the Medicare statute. First, the 
9

Court noted that § 1395x provides that a drug is used for a 

“medically accepted indication” when it has been approved

by the FDA or listed in authoritative compendia. 42 U.S.C. 

§ 1395x(t)(2)(A). It then adopted the rule from another 

district court case that this “medically accepted” standard is 

coterminous with the “reasonable and necessary” standard in 

§ 1395y(a)(1)(A). App. 14 (citing United States ex rel. 

Simpson v. Bayer Corp., 2013 WL 4710587, at *3 (D.N.J. 

Aug 30, 2013)). Consequently, the District Court held that 

because “Avastin is approved by the FDA and supported by 

compendia listings, . . . [Petratos cannot] argue that

prescriptions [for] Avastin were not ‘reasonable and 

necessary.’” App. 14 (citations omitted) (second alteration in 

original). The Court explained that its decision aligns with the 

principle that “‘reasonable and necessary’ is a determination 

made by the relevant agency, not individual doctors.” App. 

17. 

We disagree with the District Court’s reading of the 

statute. In our view, its analysis was premised on a false 

choice, namely, that “this dispute comes down to whether 

medically ‘reasonable and necessary’ is assessed by doctors 

individually or is defined by the regulatory scheme.” App. 16. 

But these two options do not account for all possibilities. As 

Petratos and the United States argue, a third possibility exists: 

that the “reasonable and necessary” determination is a process 

involving the FDA, CMS, and individual doctors. Indeed, 

CMS guidance, other Medicare provisions and regulations, 

and canons of statutory construction lead us to conclude that 

this is the best reading of the statute.

First, CMS guidance makes clear that the “reasonable 

and necessary” determination does not end with FDA 

approval. The claim at issue must also be “reasonable and 
10

necessary for [the] individual patient” based on “accepted 

standards of medical practice and the medical circumstances 

of the individual case.” Medicare Benefit Policy Manual, ch. 

15, § 50.4.3 (emphases added). The Manual provides 

examples of when a drug treatment could be approved by the 

FDA and used for a medically accepted indication, but still 

not be “reasonable and necessary.” For example, a drug 

treatment is not “‘reasonable and necessary’ for Medicare 

Part B if standard medical practice indicates that oral 

administration (as opposed to injection) ‘is effective and is an 

accepted or preferred method of administration,’ or if the 

administration of injections ‘exceed[s] the frequency or 

duration of injections indicated by accepted standards of 

medical practice.’” United States Br. 21 (quoting Medicare 

Benefit Policy Manual, ch. 15, § 50.4.3). 

Second, other Medicare provisions and regulations 

underscore the critical role of the physician in Medicare’s 

payment and reimbursement scheme. The regulations provide 

that “[t]he physician has a major role in determining 

utilization of health services furnished by providers. The 

physician decides upon admissions, orders tests, drugs, and 

treatments, and determines the length of stay.” 42 C.F.R. 

§ 424.10(a). Under Medicare Parts A and B, it usually is “a 

condition for Medicare payment that a physician certify the 

necessity of the services and, in some instances, recertify the 

continued need for those services.” Id. Indeed, physicians 

prescribing Avastin often must submit CMS Form 1500 along 

with a claim for reimbursement, wherein the doctor certifies 

that the drug was “medically necessary and personally 

furnished by me or . . . my employee under my direct 

supervision.” United States Br. 29–30 (quoting CMS Form 

1500). In addition, the Medicare statute contains a separate 
11

section that outlines the obligations of physicians when 

providing services to plan beneficiaries, including the 

obligation to provide services “economically and only when, 

and to the extent, medically necessary.” 42 U.S.C. § 1320c5(a). 

Third, principles of statutory construction show that

“medically accepted” and “reasonable and necessary” are not

coterminous. “[T]he use of different words or terms within a 

statute demonstrates that Congress intended to convey a 

different meaning for those words.” Race Tires Am., Inc. v. 

Hoosier Racing Tire Corp., 674 F.3d 158, 165 (3d Cir. 2012)

(citation omitted). And once this erroneous premise is 

removed from the District Court’s decision, its analysis 

falters. See App. 14 (reasoning that because “the ‘reasonable 

and necessary’ standard [is] coterminous with the ‘medically 

accepted’ requirement, . . . [Petratos cannot concede that] 

Avastin is approved by the FDA and supported by compendia 

listings” and “still argue that prescriptions [for] Avastin were 

not reasonable and necessary”). 

The cases cited by the District Court do not hold that 

the “reasonable and necessary” decision is decided 

exclusively by federal agencies. Rather, these cases show that 

federal agencies retain ultimate control over the decision and 

that Government approval is a necessary component of the 

determination. See, e.g., United States ex rel. Bodnar v. 

Secretary of Health & Human Servs., 903 F.2d 122, 125 (2d 

Cir. 1990). And none of the cited cases purports to eliminate 

the treating physician from the process. Indeed, other Courts 

of Appeals have recognized that “Congress intends the 

physician to be a key figure in determining what services are 

needed and consequently reimbursable.” Goodman v. 
12

Sullivan, 891 F.2d 449, 450 (2d Cir. 1989) (citing Rush v. 

Parham, 625 F.2d 1150, 1157 (5th Cir. 1980)). 

From a practical perspective, this multi-step 

interpretation makes sense. CMS and the FDA are best 

positioned to make high-level policy decisions— such as 

issuing national coverage determinations and drug approvals. 

These general approvals demarcate what treatments can be 

considered “reasonable and necessary,” and are thus a 

necessary condition for reimbursement. Meanwhile, the 

doctors are best suited to evaluate each patient and determine 

whether a treatment is “reasonable and necessary for [that] 

individual patient.” See Medicare Benefit Policy Manual, ch. 

15, § 50.4.3 (emphasis added). For example, Avastin is 

approved by the FDA to treat patients with metastatic 

colorectal cancer and such prescriptions are reimbursable by 

CMS. But if a doctor determined that a colorectal cancer 

patient had five hours to live and would best be treated with 

palliative care, then prescribing Avastin in that situation may 

not be “reasonable and necessary.” 

C

Although we disagree with the District Court’s 

reasoning, we may affirm its judgment on any ground 

supported by the record. See, e.g., Guthrie v. Lady Jane 

Collieries, Inc., 722 F.2d 1141, 1145 n.1 (3d Cir. 1983). Our 

review of the record leads us to conclude that Petratos cannot

establish materiality, which the False Claims Act defines as 

“having a natural tendency to influence, or be capable of 

influencing, the payment or receipt of money.” 31 U.S.C. 

§ 3729(b)(4).
13

Just last year in Universal Health Services v. United 

States ex rel. Escobar, the Supreme Court confirmed that “[a] 

misrepresentation about compliance with a statutory, 

regulatory, or contractual requirement must be material to the 

Government’s payment decision in order to be actionable 

under the False Claims Act.” 136 S. Ct. 1989, 1996 (2016). 

The Court described this standard as “demanding” and 

“rigorous,” id. at 2002–03, and explained that a material 

misrepresentation is one that goes “to the very essence of the 

bargain,” id at 2003 n.5 (citations omitted). This requirement 

helps ensure that the False Claims Act does not become “an 

all-purpose antifraud statute or a vehicle for punishing 

garden-variety breaches of contract.” Id. at 2003 (citation and 

internal quotation marks omitted). 

The Supreme Court also provided guidance as to how 

the materiality requirement should be enforced. It explained 

that a misrepresentation is not material “merely because the 

Government designates compliance with a particular 

statutory, regulatory, or contractual requirement as a 

condition of payment . . . [or because] the Government would 

have the option to decline to pay if it knew of the defendant’s 

noncompliance.” Id. Materiality may be found where “the 

Government consistently refuses to pay claims in the mine 

run of cases based on noncompliance with the particular 

statutory, regulatory, or contractual requirement.” Id. On the 

other hand, it is “very strong evidence” that a requirement is 

not material “if the Government pays a particular claim in full 

despite its actual knowledge that certain requirements were 
14

violated.” Id. Finally, materiality “cannot be found where 

noncompliance is minor or insubstantial.” Id.2

Petratos’s allegations do not meet this high standard. 

As the District Court noted: “there are no factual allegations 

showing that CMS would not have reimbursed these claims 

had these [alleged reporting] deficiencies been cured.” App. 

18. Petratos does not dispute this finding, which dooms his 

case. Simply put, a misrepresentation is not “material to the 

Government’s payment decision,” when the relator concedes 

that the Government would have paid the claims with full 

knowledge of the alleged noncompliance. See Universal 

Health Servs., 136 S. Ct. at 1996 (emphasis added). Similarly, 

we think that where a relator does not plead that knowledge 

of the violation could influence the Government’s decision to 

pay, the misrepresentation likely does not “have[] a natural 

tendency to influence . . . payment,” as required by the 

statute. See 31 U.S.C. § 3729(b)(4). At a minimum, this 

would be “very strong evidence” that the misrepresentation 

was not material. Universal Health Servs., 136 S. Ct. at 2003. 

The Supreme Court’s guidance in Universal Health 

Services also militates against a finding of materiality. The 

mere fact that § 1395y is a condition of payment, without 

more, does not establish materiality. See id. In addition, 

Petratos not only fails to plead that CMS “consistently refuses 

to pay” claims like those alleged, see id., but essentially 

concedes that CMS would consistently reimburse these 

claims with full knowledge of the purported noncompliance. 

 

2 The Court also rejected the argument that materiality 

is “too fact intensive” to allow dismissal at the pleading stage, 

explaining that plaintiffs must “plead[] facts to support 

allegations of materiality.” Id. at 2004 n.6.
15

Nor has he cited to a single successful claim under § 1395y

involving drugs prescribed for their on-label uses or a court 

decision upholding such a theory. 

Petratos’s allegations are much like the sort of “minor 

or insubstantial” noncompliance that the Supreme Court 

explained should not be litigated under the False Claims Act. 

See id. Petratos does not claim that Genentech’s safety-related 

reporting violated any statute or regulation. He acknowledges 

that the FDA would not “have acted differently had 

Genentech told the truth.” App. 64. And as we have 

explained, he does not dispute that CMS would reimburse 

these claims even with full knowledge of the alleged 

reporting deficiencies. 

In fact, Petratos admits that he disclosed “material, 

non-public evidence of Genentech’s campaign of 

misinformation” to the FDA and Department of Justice in 

2010 and 2011. App. 337. Since that time, the FDA has not 

merely continued its approval of Avastin for the at-risk 

populations that Petratos claims are adversely affected by the 

undisclosed data, but has added three more approved 

indications for the drug. Nor did the FDA initiate proceedings 

to enforce its adverse-event reporting rules or require 

Genentech to change Avastin’s FDA label, as Petratos claims 

may occur. And in those six years, the Department of Justice 

has taken no action against Genentech and declined to 

intervene in this suit.

Since Petratos concedes that the expert agencies and 

government regulators have deemed these violations 

insubstantial (or at least would do so if made aware), we do 

not think it appropriate for a private citizen to enforce these 

regulations through the False Claims Act. See United States v. 
16

Sanford-Brown, Ltd., 840 F.3d 445, 447 (7th Cir. 2016) 

(dismissing False Claims Act complaint on materiality 

grounds because “federal agencies in this case have already 

examined [the claims] multiple times over and concluded that 

neither administrative penalties nor termination was 

warranted” (citations and internal quotation marks omitted)). 

After all, the False Claims Act is not “a blunt instrument to 

enforce compliance with all . . . regulations.” Wilkins, 659 

F.3d at 307 (citation omitted).

Petratos’s arguments to the contrary are unpersuasive. 

First, he claims that materiality is established because “if 

physicians would have prescribed no or less Avastin, the 

Government would have paid less claims.” Reply Br. 4. In 

other words, Petratos argues that materiality can be 

established by proving that the alleged fraud was the “but for” 

cause of the submitted claim. Petratos’s argument conflates 

materiality with causation, a separate element of a False 

Claims Act cause of action. See Wilkins, 659 F.3d at 304–05. 

Collapsing the materiality analysis into a causation inquiry 

would render the materiality element “surplusage” and fail to 

“give effect . . . to every clause and word of [the] statute,” 

which we are loath to do. Tavarez v. Klingensmith, 372 F.3d 

188, 190 (3d Cir. 2004) (citations and internal quotation 

marks omitted). And even the causation element cannot be 

met merely by showing “but for” causation. See United States

ex rel. Hendow v. Univ. of Phoenix, 461 F.3d 1166, 1174 (9th 

Cir. 2006) (explaining that the false claim must be “integral 

to a causal chain leading to payment” (citations omitted)); 

United States Br. 27 (“The United States does not contend 

that a claim is necessarily false or fraudulent because an 

antecedent fraud was a “but for” cause of the claim being 

submitted.”); cf. Paroline v. United States, 134 S. Ct. 1710, 
17

1720 (2014) (“Proximate cause is a standard aspect of 

causation in . . . the law of torts”). If a “but for” causation 

theory is insufficient to meet the causation element—where 

that type of proof is more properly directed—it follows that it 

should be insufficient to demonstrate materiality. 

Petratos next argues that it is incorrect to focus our 

materiality inquiry on the Government’s payment decision. 

Rather, he claims that “the relevant question is whether 

Genentech’s fraudulent misrepresentations were material to 

the physicians’ determinations.” Reply Br. at 13. Petratos 

points to Universal Health Services, where the Supreme 

Court quoted a treatise to explain that “materiality ‘look[s] to 

the effect on the likely or actual behavior of the recipient of 

the alleged misrepresentation.’” Universal Health Servs., 136 

S. Ct. at 2002 (quoting 26 R. Lord, Williston on Contracts 

§ 69:12, p. 549 (4th ed. 2003)). Petratos reads this language to 

mean that in indirect-causation cases—where the fraud is first 

directed at an intermediary who then unwittingly forwards it 

to the Government for payment—we look solely to the initial 

recipient of the misrepresentation and not to the Government.

We disagree. The full context of the quotation shows 

that when the Court wrote “the recipient of the alleged 

misrepresentation,” it was referring to the Government, not 

the initial recipient. See id. This makes sense because the 

Government will always be the recipient of the 

misrepresentation in the False Claims Act context. See

Wilkins, 659 F.3d at 304–05 (explaining that a plaintiff must 

prove that “the defendant presented or caused to be presented 

to an agent of the United States a claim for payment” 

(emphasis added) (citation omitted)). Indeed, when the Court 

turned to materiality in the False Claims Act–specific context, 

it exclusively referred to the Government as the ultimate 
18

recipient of the misrepresentation. Universal Health Servs., 

136 S. Ct. at 1996 (“A misrepresentation about compliance 

with a statutory, regulatory, or contractual requirement must 

be material to the Government’s payment decision in order to 

be actionable under the False Claims Act.” (emphasis 

added)).

Our sister courts have interpreted Universal Health 

Services the same way. See, e.g., United States ex rel. 

Garzione v. PAE Gov't Servs., Inc., 2016 WL 6518539, at *1 

(4th Cir. Nov. 3, 2016) (“The relevant question is whether the 

defendant knowingly violated a requirement that the 

defendant knows is material to the government’s decision to 

pay a claim.”); United States ex rel. Escobar v. Universal 

Health Servs., Inc., 842 F.3d 103, 109 (1st Cir. 2016) (“In 

order for False Claims Liability to attach, these misleading 

omissions must be material to the government’s decision to 

pay the claim.”); United States v. Sanford–Brown, Ltd., 840 

F.3d 445, 447 (7th Cir. 2016) (dismissing claim where there 

was “no evidence that the government’s decision to pay [the 

claim] would likely or actually have been different had it 

known of [the violation]”). Besides, it would make little

practical sense to give the doctors’ materiality determinations 

dispositive weight. Because the False Claims Act was passed 

to protect the federal treasury, United States v. McNinch, 356

U.S. 595, 599 (1958), and since the Government decides on 

payment, Universal Health Servs., 136 S. Ct. at 1996, it is the 

Government’s materiality decision that ultimately matters.

By attempting to focus our inquiry solely on the 

physician’s materiality determination, Petratos again tries to 

pass off restyled causation arguments as proof of materiality. 

The alleged fraud’s effect on physicians is relevant to the 

extent that it caused claims eventually to reach CMS. That is, 
19

evidence of how the claim makes its way to the government 

should be considered under the causation analysis, while the 

materiality analysis begins after a claim has been submitted. 

The materiality inquiry, in asking whether the government’s

payment decision is affected, assumes that the claim has in 

fact reached the government. See Universal Health Servs., 

136 S. Ct. at 1996.

The Supreme Court’s treatment of indirect-causation

cases confirms this result. In United States ex rel. Marcus v. 

Hess, the defendant contractors submitted fraudulent bids to 

local governments for various projects funded by the federal 

government. 317 U.S. 537, 542–43 (1943). Even though the 

fraud was not directed at the federal government in the first 

instance, the Court held the defendants liable because their 

“fraud did not spend itself with the execution of the contract,” 

but rather “taint[ed]” the claims paid by the United States. Id. 

at 543–44. In other words, if the fraud had deceived only the

initial recipients (and not the government), then the 

defendants would not have been liable under the False Claims 

Act. Therefore, the alleged fraud must affect the United 

States’ payment decision to be actionable. Following this 

logic, our focus here should not be whether the alleged fraud 

deceived the prescribing physicians, but rather whether it 

affected CMS’s payment decision. Because it did not, 

Petratos’s claim fails.3

 

3 Having reached this conclusion, it follows that

Petratos’s two related claims also fail. Petratos’s state law 

claims are, as he notes, dependent on the viability of his FCA 

claim. See Petratos Br. 54 (arguing that because “dismissal of 

the FCA claims was in error, the dismissal of the other claims 

should be reversed.”). The same is true for his “reverse” FCA 
20

In holding that Petratos did not sufficiently plead 

materiality, we now join the many other federal courts that 

have recognized the heightened materiality standard after 

Universal Health Services. See, e.g., United States ex rel. 

Kelly v. Serco, Inc., 2017 WL 117154, at *6–7 (9th Cir. Jan. 

12, 2017); Sanford-Brown, 840 F.3d at 447; City of Chicago 

v. Purdue Pharma L.P., 2016 WL 5477522, at *15 (N.D. Ill. 

Sept. 29, 2016); United States ex rel. Scharff v. Camelot 

Counseling, 2016 WL 5416494, at *8 (S.D.N.Y. Sept. 28, 

2016); United States v. N. Adult Daily Health Care Ctr., 205 

F. Supp. 3d 276, 295–96 (E.D.N.Y. 2016); Knudsen v. Sprint 

Commc’ns Co., 2016 WL 4548924, at *12–13 (N.D. Cal. 

Sept. 1, 2016); cf. Escobar, 842 F.3d at 111 (finding FCA 

violations material where those violations were “as central to 

the bargain as the United States ordering and paying for a 

shipment of guns, only to later discover that the guns were 

incapable of firing”). 

IV

We turn next to what is essentially a procedural 

challenge. Petratos claims that Judge Arleo erred by granting

Genentech’s motion to dismiss in light of Judge Wigenton’s 

earlier finding that Petratos had “sufficiently alleged causes 

of action.” App. 56. He alleges that Judge Arleo did not 

 

claims. A reverse false claim occurs when a defendant acts 

improperly to avoid paying an “obligation” owed to the 

government. 31 U.S.C. § 3729(a)(1)(G). But Genentech did 

not violate the FCA and, as the District Court noted, Petratos 

“provides no other basis for reverse false claims liability.” 

App. 21. 
21

satisfy our rule that absent “‘exceptional circumstances,’

‘judges of co-ordinate jurisdiction sitting in the same court 

and in the same case should not overrule the decisions of each 

other.’” Petratos Br. 22 (quoting Hayman Cash Register Co. 

v. Sarokin, 669 F.2d 162, 168 (3d Cir. 1982) (citation 

omitted)). 

Though Petratos does not cite it by name in his 

opening brief, he invokes the “law of the case” doctrine: a 

judicial rule of practice meant to “maintain consistency and 

avoid reconsideration of matters once decided during the 

course of a single continuing lawsuit.” 18 Charles A. Wright 

& Arthur R. Miller, Federal Practice and Procedure § 4478

(2d ed.). The law of the case doctrine is unhelpful to Petratos 

because it “does not limit the power of trial judges to 

reconsider their [own] prior decisions.” Williams v. Runyon, 

130 F.3d 568, 573 (3d Cir. 1997). Therefore, “[i]nterlocutory 

orders . . . remain open to trial court reconsideration, and do 

not constitute the law of the case.” Perez-Ruiz v. CrespoGuillen, 25 F.3d 40, 42 (1st Cir. 1994). And the grant of a 

leave to amend is an interlocutory order. Powers v. Southland

Corp., 4 F.3d 223, 229 (3d Cir. 1993). Therefore, Judge 

Wigenton’s order granting leave to amend was not the law of 

the case—and Judge Arleo was within her discretion to 

disagree with it. 

That this case was transferred between judges does not 

change the result. Although the doctrine provides that “a 

successor judge should not lightly overturn decisions of [her]

predecessors in a given case,” “it does not limit the power of 

trial judges from reconsidering issues previously decided by a 

predecessor judge from the same court.” Fagan, 22 F.3d at 

1290; see also Rimbert v. Eli Lilly & Co., 647 F.3d 1247, 

1252 (10th Cir. 2011) (explaining that the “law of the case 
22

doctrine has no bearing on the revisiting of interlocutory 

orders, even when a case has been reassigned from one judge 

to another”).

V

Finally, Petratos argues that the District Court abused 

its discretion because it denied his request for leave to amend

without explanation. But there was nothing to explain. 

Petratos offered no reason why leave to amend was 

appropriate or what his amendment would have looked like. 

His cursory request for leave was contained in the final clause

of his brief opposing Genentech’s motion to dismiss. See 

App. 99 (“Relator respectfully requests that this Court deny 

Genentech’s motion in its entirety or, alternatively, that 

Relator be granted leave to amend.”). This threadbare recital 

was insufficient. “While Federal Rule 15(a) provides that 

leave to amend shall be freely given when justice so requires, 

a mere request in [a brief in] opposition to a motion to 

dismiss—without any indication of the particular grounds on 

which amendment is sought—does not constitute a motion 

within the contemplation of Rule 15(a).” U.S. ex rel. Williams 

v. Martin-Baker Aircraft Co., 389 F.3d 1251, 1259 (D.C. Cir. 

2004) (citation omitted). Because Petratos did not properly 

seek leave to amend in the District Court, we will not

consider this argument on appeal. 

* * *

Petratos’s allegations may be true and his concerns 

may be well founded—but a False Claims Act suit is not the 

appropriate way to address them. He concedes that Genentech 

followed all pertinent statutes and regulations. If those laws 

and regulations are inadequate to protect patients, it falls to 
23

the other branches of government to reform them. We will 

affirm the judgment of the District Court.