NOT FOR PUBLICATION WITHOUT THE APPROVAL OF THE APPELLATE DIVISION
SUPERIOR COURT OF NEW JERSEY APPELLATE DIVISION DOCKET NOS. A- 2731

- 20 A- 2733

- 20 THE STATE OF NEW JERSEY ex rel. HEALTH CHOICE GROUP, LLC, Plaintiff-Appellant,

v. BAYER CORPORATION and BAYER HEALTHCARE PHARMACEUTICALS, INC., Defendants-Respondents.

____________________________ THE STATE OF NEW JERSEY ex rel. HEALTH CHOICE ALLIANCE, LLC, Plaintiff-Appellant,

v. ELI LILLY AND COMPANY, INC., Defendant-Respondent.

____________________________

Argued November 14, 2023

– Decided March 1, 2024 APPROVED FOR PUBLICATION

March 1, 2024 APPELLATE DIVISION2 A- 2731

- 20Before Judges Gilson, Berdote Byrne, and BishopThompson. On appeal from the Superior Court of New Jersey, Law Division, Middlesex County, Docket Nos. L

- 3311 -20 and L- 3312

- 20. Radu A. Lelutiu (McKool Smith PC ) of the New York bar, admitted pro hac vice, and Ruby Khallouf argue d the cause for appellant Health Choice Group, LLC, i n A- 2731

- 20 and appellant Health Choice Alliance, LLC, in A- 2733

- 20 (Florio Perrucci Steinhardt Cappelli Tipton & Taylor, LLC, Radu A. Lelutiu, W. Mark Lanier (The Lanier Law Firm) of the Texas bar, admitted pro hac vice, Zeke DeRose III (The Lanier Law Firm) of the Texas bar, admitted pro hac vice, and Eric B. Halper (McKool Smith PC ) of the New York bar, admitted pro hac vice, attorneys; Brian Russel l Tipton, Ruby Khallouf, W. Mark Lanier, Zeke DeRose III, Eric B. Halper, and Radu A. Lelutiu , of counsel and on the briefs ). Lawrence S. Lustberg argued the cause for respondents Bayer Corporation and Bayer Healthcare Pharmaceuticals, Inc., in A- 2731

- 20 ( Gibbons PC, Matthew J. O’Connor (Covington & Burling LLP ) of the District of Columbia and Massachusetts bars , admitted pro hac vice, Matthew F. Dunn (Covington & Burling LLP) of the District of Columbia and Maryla nd bars, admitted pro hac vice, and Kristin M. Cobb (Covington & Burling LLP) of the District of Columb ia and Virginia bars, admitted pro hac vice, attorneys ; Lawrence S. Lustberg, Matthew J. O'Connor, Matthew F. Dunn, and Kristin M. Cobb, of counsel and on the brief). Allon Kedem (Arnold & Porter Kaye Scholer LLP) of the District of Columbia and New York b ar s, admitted3 A- 2731

- 20 pro hac vice, argued the cause for respondent Eli L illy and Company, Inc., in A- 2733

- 20 (Faegre Drinker Biddle & Reath LLP, Michael A. Rogoff (Arnold & Porter Kaye Scholer LLP) of the New York bar, admitted pro hac vice, Sara L. Shudofsky (Arnold & Porter Kaye Scholer LLP) of the New York bar, admitted pro hac vice, and Debra E. Schreck, attorn eys ; Jeffrey S. Jacobson, Michael Charles Zogby, Michael A. Rogoff, Sara L. Shudofsky, and Debra E. Schreck, of counsel and on the brief). The opinion of the court was delivered by GILSON, P.J.A.D. These two appeals, which we consolidate for purpos es of this opinion, arise out of separate, but similar, qui tam lawsuit s filed by plaintiffs Health Choice Group, LLC (HCG) and Health Choice Alliance, LLC (HCA) (collectively, plaintiffs or Relators) on behalf of the State of New Jersey. HCG sued defendants Bayer Corporation and Bayer Healthc are Pharmaceuticals, Inc. (collectively, Bayer), and HCA sued Eli Lilly and C ompany, Inc. (Lilly). Plaintiffs alleged that Bayer and Lilly (collective ly, defendants) had violated the New Jersey False Claims Act (NJFC Act), N.J.S.A. 2A :32C-1 to -15, -17 to -18, by engaging in unlawful marketing schemes that caus ed false claims to be submitted to and paid by government-funded healthca re programs. Defendants moved to dismiss plaintiffs' complaints on several grounds, including under Rule 4:6

- 2( e) and Rule 4:5 -8(a). The trial court granted those4 A- 2731

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motions, holding that plaintiffs' claims were barred by the public disclosure and first- to -file provisions in the NJFC Act. The trial court also ru led that plaintiffs had failed to plead fraud with the particularity re quired by Rule 4:5 -8(a). Plaintiffs appeal from the orders dismissing their complaints with prejudice. Because the allegations in plaintiffs' complaints h ad previously been public ly disclosed and because plaintiffs were not the origi nal source of that information, we hold that plaintiffs' complaints were properly d ismissed under the public disclosure bar of the NJFC Act. See N.J.S.A. 2A:32 C-9(c). Accordingly, we affirm on that basis and do not address the alternative grounds for the dismis sals.
I. Plaintiffs are subsidiaries of the National Health Care Analysis Group (the
NH CA Group), a partnership of limited liability compa nies established by investors and former bankers "for the purpose of fi ling qui tam actions alleging instances of fraud in medicine and pharmaceuticals. " United States ex rel. Health Choice All., L.L.C. v. Eli Lilly & Co ., 4 F.4th 255, 259 (5th Cir. 2021) (italicization omitted). The federal False Claims Act (FCA), 31 U.S.C. §§ 3729- 33, and similar state statutes, including the NJFC Act, permit private persons, called "relators," to bring qui tam suits on behalf of the government and, if the5 A- 2731

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relators prove that false claims were paid by the g overnment, receive a portion of any recovery. 31 U.S.C. § 3730 (b), (d)(2); N.J.S.A. 2A:32C-5(b), -7(d). In June 2017, plaintiffs filed separate, sealed qu i tam actions against Bayer and Lilly in the United States District Court for the Eastern District of Texas (the Federal Actions). Both actions were fil ed on behalf of the United States and thirty-one states, including New Jersey, and alleged that defendants had violated the FCA and similar state false claims stat utes, including the NJFC Act. At approximately the same time, affiliates of plaintiffs filed numerous other qui tam actions against other pharmaceutical companies based on similar allegations. 1 In the Federal Actions, plaintiffs alleged that Ba yer and Lilly had used unlawful marketing schemes to induce healthcare pro viders to prescribe their drugs, thereby causing billions of dollars of false claims to be submitted to and paid by government-administered programs, primarily Medicaid and Medicare. Plaintiffs represented in their complaints that age nts of the NHCA Group had conducted multi-part investigations, which included interviewing various

1 Another subsidiary of the NHCA Group sued Gilead Scienc es, Inc. first in the federal Eastern District of Texas and later in New Jersey. In a separate unpublished opinion, we have affirmed the dismissal of the clai ms against Gilead. See State ex rel. Health Choice Advoc s. , LLC v. Gilead Sci s. , Inc., No. A- 2736

- 20 (App. Div. 2024).6 A- 2731

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ind ividuals who were familiar with defendants' practic es and examining Medicare and Medicaid data for defendants' products . Through those investigations, plaintiffs contend they discovered that Bayer and Lilly were engaging in three marketing schemes that violated t he FCA and the NJFC Act. The first two schemes involved providing free nurs e services (the "Free Nurse Scheme") and reimbursement support services ( the "Support Services Scheme") to healthcare providers who wrote prescrip tions for Bayer 's and Lilly's drugs. Bayer and Lilly allegedly allowed prescribe rs who prescribed their drugs to use free "nurse educators" to provide follow-up care and monitoring for patients, thereby relieving the prescribers of the responsibility to provide those services. Bayer and Lilly also allegedly provided free support services to assist providers who prescribed patients their drugs. These services assisted providers with determining and obtaining insurance coverage for p atients for the cost of the drugs and obtaining prior authorization. Plain tiffs asserted that those free services induced providers to prescribe Bayer's and Lilly's drugs over competitors' drugs and caused false claims to be su bmitted to and paid for by government programs. In the third scheme, Bayer and Lilly allegedly use d registered nurses to promote their drugs (the "White Coat Marketing Sche me"). The registered7 A- 2731

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nurses, who were independent contractors, used their professional credentials to gain access to providers. Bayer and Lilly allegedl y paid those nurses to recommend their drugs, and plaintiffs alleged that those payments were illegal kickbacks. In October 2017, the United States and all named s tates, including New Jersey, declined to intervene in the Federal Action s, and the complaints were then unsealed and served on Bayer and Lilly. Short ly thereafter, Bayer and Lilly moved to dismiss the claims in the Federal Actions. Plaintiffs then filed an amended complaint, and defendants again moved to di smiss. Before the federal court ruled on defendants' moti ons, the United States moved to dismiss the Federal Actions. The United S tates offered two reasons to support its request for dismissal: (1) "the allegations . . . lack[ed] sufficient merit to justify the cost of investigation and pros ecution[;]" and (2) "further litigation . . . [would] undermine practices that b enefit federal healthcare programs by providing patients with greater access to product education and support." Eli Lilly, 4 F.4th at 267. The United S tates also asserted that the drug education services provided by Bayer and Lilly "ben efit[ed] federal healthcare programs" and were lawful. Id. at 268. New Jersey took no position on the United States' motion to dismiss the Federal Action s.8 A- 2731

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In September 2019, the court overseeing the Federa l Actions dismissed with prejudice plaintiffs' FCA claims but dismissed wit hout prejudice plaintiffs' state law claims, including the claims based on the NJFC Act. Shortly thereafter, plaintiffs appealed the dismissal of their FCA clai ms. They did not challenge the dismissal without prejudice of their state law claims. In July 2021, the United States Court of Appeals f or the Fifth Circuit affirmed the dismissal of the FCA claims against Ba yer and Lilly in the Federal Actions. Id. at 269. The Fifth Circuit held that the United States' dismissal of the action was proper , id. at 267, and plaintiffs did not show the governm ent had acted arbitrarily, capriciously, or illegally in se eking the dismissal, i d. at 269. In October 2019, while the Federal Actions were on appeal, plaintiffs filed these two qui tam actions under seal on behalf of t he State of New Jersey. When New Jersey declined to intervene, both complaints we re unsealed in April 2020. The complaints filed in New Jersey alleged the sam e marketing scheme s identified in the Federal Actions and contended tha t those schemes resulted in false claims being submitted to and paid by New Jer sey in violation of the NJFC
Act. In that regard, plaintiffs' complaints against Baye r and Lilly filed in New Jersey were based on the Free Nurse Scheme, the Suppo rt Servic es Scheme, and the White Coat Marketing Scheme.9 A- 2731

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Bayer and Lilly moved to dismiss plaintiffs' compl aints under Rule 4:46

- 2 on three grounds. They argued that the claims fi led in New Jersey were (1) barred by the public disclosure provision in the NJ FC Act, N.J.S.A. 2A: 32C

9(c); (2) barred by the first- to -file provision, N.J.S.A. 2A:32C- 5( i); and (3) inadequate because they did not plead fraud with th e particularity required by Rule 4:5 -8(a). The trial court heard arguments on both mot ions to dismiss. On April 22, 2021, the trial court issued two order s and a consolidated opinion granting Bayer's and Lilly 's motions to dismiss with prejudice. The trial court based its rulings on three grounds. First, the court found that the allegations in plaintiffs' complaints filed in New Jersey were based on transactions previously publicly disclosed in the F ederal Actions, as well as in newspaper articles. The court then determined that plaintiffs did not qualify as the original source of the information as required by the NJFC Act. See N.J.S.A.
2A:32C -9(c). Second, the trial court held that plaintiffs' comp laints should be dismissed under the NJFC Act's first- to -file bar. That bar prohibits a plaintiff from bringing a related action based on facts underlying a pending NJFC Act action. N.J.S.A. 2A:32C-5(i). The trial court found that t he allegations in the complaints filed in New Jersey were like the allegations in the then-pending10 A- 2731

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Federal Actions. In that regard, the trial court i ssued its rulings several months before the Fifth Circuit affirmed the dismissal of the federal FCA claims in the Federal Actions. Finally, the trial court found that both complaint s failed to plead fraud with the specificity required by Rule 4:5 -8(a). In particular, the trial court noted that plaintiffs' complaints failed to allege specif ic facts showing that the schemes increased prescriptions of Bayer and Lilly products or that any prescriptions were issued for reasons other than valid medical re asons. Plaintiffs filed separate appeals from the orders dismissing their New Jersey complaints with prejudice.
II. In both appeals, plaintiffs make the same three ar guments. They contend that the trial court erred in holding that (1) the public disclosure bar applied ; (2) the first- to -file bar applied; and (3) the complaints failed to plead fraud with particularity. Regarding their arguments about ple ading fraud with particularity , plaintiffs contend that the court co mpounded its error by dismissing the complaints with prejudice because they should have been allowed to amend their complaints.11 A- 2731

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Appellate courts review orders granting motions to dismiss for failure to state a claim under a de novo standard. Baskin v. P.C. Richard & Son, LLC , 246 N.J. 157, 171 (2021) (citing Dimitrakopoulos v. Borrus, Goldin, Foley, Vignuolo, Hyman & Stahl, P.C. , 237 N.J. 91, 108 (2019)). In doing so, we "examine 'the legal sufficiency of the facts allege d on the face of the complaint,' giving the plaintiff the benefit of 'every reasonab le inference of fact.'" Ibid. (quoting Dimitrakopoulos, 237 N.J. at 107). "The c omplaint must be searched thoroughly 'and with liberality to ascertain whethe r the fundament of a cause of action may be gl ea ned even from an obscure statement of claim, opport unity being given to amend if necessary.'" Ibid. (quotin g Printing Mart-Morristown v. Sharp Elecs. Corp., 116 N.J. 739, 746 (1989)). We hold that the complaints were properly dismisse d with prejudice under the NJFC Act's public disclosure bar. In that rega rd, we point out that the public disclosure bar involves a question of standing. Re lators lack standing to bring claims under the NJFC Act when the claims are based on allegations or transactions that have already been publicly disclo sed and the relators were not the original source of the information. See Brennan v. Lonegan, 454 N.J. Super. 613, 620 (App. Div. 2018).12 A- 2731

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Standing "involves a threshold determination of th e court's power to he ar the case." Watkins v. Resorts Int'l Hotel & Casino, I nc., 124 N.J. 398, 418 (1991). Although our courts "have historically tak en a much more liberal approach on the issue of standing than have the fed eral cases," Crescent Park Tenants Ass'n v. Realty Equities Corp. of N.Y., 58 N.J. 98, 101 (1971), the public disclosure bar in the NJFC Act uses the word "shall," which denotes that it is a mandatory bar when applicable. See Aponte -Correa v. Allstate Ins. Co. , 162 N.J. 318, 325 (2000) (explaining that a statute's use of "shall" generally means that the statutory provision is mandatory ). "Whether a party has standing to pursue a claim is a question of law subject to de novo review." Cherokee LCP Land, LLC v. City of Linden Plan. Bd., 234 N.J. 403, 414 (2018); accord Br ennan, 454 N.J. Super. at 618. An appellate court therefore owes no "special deferenc e" to the "trial court's interpretation of the law and the legal consequence s that flow from established facts." Manalapan Realty, L.P. v. Twp. Comm. of Ma nalapan, 140 N.J. 366, 378 (1995).
A. The NJFC Act. The NJFC Act imposes civil penalties on any person who "[k]nowingly presents . . . a false or fraudulent claim for paym ent or approval." N.J.S.A.13 A- 2731

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2A:32C -3(a). The NJFC Act is modeled on the FCA and is intended to protect the government, and ultimately taxpayers, from payi ng false claims. See State ex rel. Hayling v. Corr. Med. Servs., Inc., 422 N.J . Super. 363, 372 (App. Div. 2011) (quoting Assemblyman Herb Conaway, Jr., who descri bed the NJFC Act to the Assembly Judicial Committee "as New Jersey's [whistleblower] statute which tracks the federal law that allows private in dividuals . . . to sue on behalf of the government to recover the losses to the publ ic"). A "claim" is defined to include a request or demand for money, property, or services that is "made to any employee, officer, or agent of the State" if the State p rovides any portion of the money, property, or services requested. N.J.S. A. 2A:32C- 2. The NJFC Act precludes actions by private persons based on allegations or transactions that have previously been publicly disclosed, unless "the person bringing the action is an original source of the in formation." N.J.S.A. 2A:32C9(c). In construing the FCA, the United States Sup reme Court has held that the "original source" language was "an effort to strike a balance between encouraging private persons to ro ot out fraud and stifling parasitic lawsuits." Graham Cnty. Soil & Water Conservation Dist. v. Uni ted States ex rel. Wilson , 559 U.S. 280, 295 (2010). Because our Legislature has adopt ed "essentially the same 'original source' language" for the NJFC Act, we have previously14 A- 2731

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concluded "our Legislature likewise intended to avo id 'parasitic lawsuits' based on publicly disclosed information." Brennan, 454 N .J. Super. at 620.
B. The 2023 Amendment to the NJFC A ct

. In 2023, the New Jersey Legislature amended severa l sections of the NJFC Act, including the definition of "original source." L. 2023, c. 73

. So, the initial question we must decide is which definition applies to plaintiffs' action s, which were brought in 2019, dismissed by the trial court in 2021, and are currently o n appeal. That question, in turn, depends on whether the 2023 amendments apply retroactively. When the Legislature first adopted the NJFC Act in 2008, it used substantially the same "original source" definition that was used in the FCA. Brennan, 454 N.J. Super. at 620. Thus, "original s ource" was defined as "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 State before filing an action under t his act based on the information." N.J.S.A. 2A:32C-9(c) (2008). In 2010, Congress amended the FCA and defined "ori ginal source" to

mean: [A]n individual who either (i) prior to a public

disclosure under subsection (e)(4)(a), has voluntar ily15 A- 2731

- 20 disclosed to the Government the information on whic h allegations or transactions in a claim are based, o r (2) who has knowledge that is independent of and materially adds to the publicly disclosed allegatio ns or transactions, and who has voluntarily provided the information to the Government before filing an acti on under this section. [31 U.S.C. § 3730(e)(4)(B).] As noted, in 2023, our Legislature amended the def inition of "original source" to track the federal definition. Consequen tly, original source is now defined to mean:

[A]n individual who either (1) prior to a public disclosure as described in this paragraph has voluntarily disclosed to the State the information on which allegations or transactions in a claim are ba sed, or (2) has knowledge that is independent of and material ly adds to the publicly disclosed allegations or transactions, and who has voluntarily provided the information to the State before filing an action un der this act. [N.J.S.A. 2A:32C-9(c).]
In the related legislative history, the Assembly expl ained it was revising the NJFC Act "to comply with certain provisions in federal law" because "[c]ompliance would make the State eligible for gre ater recoveries in Medicaid fraud cases." Assemb. Budget Comm. Statement to A. 5584 (June 27, 2023). The Assembly explained that,16 A- 2731

- 20 [u]nder federal law, a state is entitled to enhance d recovery in Medicaid fraud cases if the Inspector General in the federal Department of Health and Hum an Services determines that the state has a False Clai ms A ct that is "at least as effective" as the [FCA] in facilitating these whistleblower actions. Presentl y, the Inspector General has determined that the [NJFC Act ] is not "at least as effective" as the [FCA], and ha s recommended specific revisions. This bill would implement the Inspector General's recommendations. [Ibid.] The Legislature adopted the amendments on June 30, 2023, and stated that they were to "take effect immediately." L. 2023, c. 73 , § 11. "Settled rules of statutory construction favor pro spective rather than retroactive application of new legislation." Pisac k v. B & C Towing, Inc., 240 N.J. 360, 370 (2020) (quoting James v. N.J. Mfrs. I ns. Co., 216 N.J. 552, 563 (2014)); see also Twiss v. State, Dep't of the Treas ury, 124 N.J. 461, 466 (1991) (explaining that "[ g]enerally, courts favor prospective application of statutes"). "In determin ing whether a statute applies retroactive ly ," the primary goal is to determine whether the Legislature intended the amendment t o be prospective or retrospective in application. Pisack, 240 N.J. at 370; Twiss , 124 N.J. at 466-67. Accordingly, our Supreme Court has explained that t here are "three scenarios that justify retroactive application of a legislati ve amendment: '(1) when the Legislature expresses its intent that the law apply retr oactively, either expressly17 A- 2731

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or implicitly; (2) when an amendment is curative; o r (3) when the expectations of the parties so warrant.'" Pisack, 240 N.J. at 3 70 (quoting James, 216 N.J. at 563); see also Gibbons v. Gibbons, 86 N.J. 515, 522 (1981) (explaining that amendments will be applied retroactively when it is "necessary to make the statute workable or to give it the most sensible in terpretation"). The 2023 amendments to the NJFC Act used language clearly indicating that the Legislature intended the amendments to app ly prospectively. In that regard, the Legislature stated that the amendments "shall take effect immediately." L. 2023, c. 73 , § 11. "Our Supreme Court has consistently held that an amendment that is to take effect immediatel y is to be applied only prospectively." State v. Rosado , 475 N.J. Super. 266, 276 (App. Div. 202 3) ; s ee also Pisack, 240 N.J. at 371 (explaining that "the Legislature provided that the
2018 ame ndatory legislat io n 'shall take effect immediately.' Those 'words bespeak an intent contrary to, and not supportive o f, retroactive application.'" (internal citation omitted) (quoting Cruz v. Cent. Jersey Landscaping, Inc., 195 N.J. 33, 48 (2008))). The amendments to the NJFC Act were also not curati ve. Although the amendments were designed to bring the NJFC Act into compliance with the18 A- 2731

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FCA, the Legislature explained that the goal was to enhance recoveries in Medicaid fraud cases. Federal courts have consistently construed the 2010 amendment to the FCA to apply prospectively. Se e, e.g. , United States ex rel. Zizic v. Q2Administrators, LLC, 728 F.3d 228, 232 n.3 (3d Cir. 20 13); United States ex rel. Poteet v. Bahler Med ., Inc., 619 F.3d 104, 107 n.2 (1st Cir. 2010); Uni ted States ex rel. May v. Purdue Pharma L.P., 737 F.3d 908, 914-18 (4th Cir. 2013); Bellevue v. Universal Health Servs. of Har tg rove, Inc. , 867 F.3d 712, 717- 18 (7th Cir. 2017); Prather v. AT&T, Inc., 847 F.3d 10 97, 1103 (9th Cir. 2017). Accordingly, we presume that the New Jersey Legisla ture was aware of the federal law concerning the prospective application of the new definition of original source and meant to likewise apply the NJF C Act amendments prospectively.
C. Whether the Public Disclosure Provision Bars Plain tiffs' New Jersey Actions. The public disclosure bar in the NJFC Act prevents a private person from bringing a qui tam action that is based upon public ly disclosed allegations or transactions "unless the person bringing the action is an original source of the information." N.J.S.A. 2A:32C-9(c). Accordingly, the public disclosure provision bars an action by a private person when ( 1) there has been a prior19 A- 2731

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public disclosure of the alleged fraud; and (2) the pe rson's lawsuit is based upon "substantially the same allegations or transactions [;]" unless (3) the person is an original source of the information. Ibid. There is no dispute that there was a prior disclosu re of the fraud. Plaintiffs first sued Bayer and Lilly in federal court in Texa s, and the complaints in those actions were unsealed in 2017. The NJFC Act identi fies allegations made in a "criminal, civil, or administrative hearing in whic h the State or an agent of the State is a party" as prior disclosures. Ibid. Because the term "hearing" is used identically in the NJFC Act and FCA, we adopt the wel l-established federal rule that the public disclosure bar applies even when th e prior complaint was filed by the same relator. See, e.g. , Po teet, 619 F. 3d at 113 (holding that the public disc losure bar applies when relator's own lawsuit was t he source of the prior public disclosure and noting that after a relator h as "blow[n] the whistle on fraud . . . . there seems to be little need to encourage th em to give the whistle a second toot"); United States ex rel. Schweizer v. Canon, I nc., 9 F.4th 269, 275-76 (5th Cir. 2021) (relator's prior complaint barred the subsequent action). There is also no dispute that plaintiffs' allegations in th e New Jersey actions are substantially the same allegations they made in the Federal Actions. The complaints in the New Jersey actions identified the same three schemes20 A- 2731

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identified in the Federal Actions and were brought agains t the same defendants. Although the New Jersey actions were more limited in scope in that they did not involve claims under the FCA, they included the sam e claims concerning New Jersey because New Jersey was originally named as a plaintiff in the Federal Actions. Therefore, a critical issue in these appeals is whe ther plaintiffs are the original source of the allegations. In 2019, original sou rce was defined to mean "an individual who has direct and independent knowledge of t he information on which the allegations are based and has voluntarily provided the information to the State before filing an action under this act ba sed on the information." N.J.S.A. 2A:32C-9(c) (20 10 ). Bayer and Lilly argue that plaintiffs are not " individual s" that can qualify as an original source under the NJFC Act because th ey are limited liability companies, not natural persons. No New Jersey caselaw analyzes the meaning of the word "individual" in the context of the orig inal source exception to the NJFC Act's public disclosure bar. I n analyzing other statutes that use both "person" and "individual," the United States Suprem e Court has interpreted "individual" to mean "a natural person, and in part icular to distinguish between a natural person and a corporation." Mohamad v. Pa lestinian Auth. , 566 U.S.21 A- 2731

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449, 454 (2012). Nevertheless, courts in other jurisdictions have as sessed whether a corporate entity may be an original source without deciding this issue. See, e.g. , United States ex rel. Precision Co. v. Koch Indus., Inc., 971 F.2d 548 (10th Cir. 1992). We decline to decide this issue because even if a limited liability company may be considered an original sou rce under the NJFC Act, plaintiffs are not an original source because their knowledge is not "direct" and "independent." In construing "direct" and "independent," we start with the plain language of the statute. See State v. Thompson, 250 N.J. 556 , 572 (2022). The definition of "direct" includes "marked by absence of an inter vening agency, instrumentality, or influence." Merriam-Webster's Collegiate Dictionary 353 (11th ed. 2020). The definition of "independent" i ncludes "not requiring or relying on something else." Id. at 633. Taking those definitions together, "direct and independent" requires that the relator's knowle dge be gained from its own efforts and that the knowledge does not depend on p ublic information. New Jersey courts have not previously defined the t erms direct and independent, but federal courts have. The definitions use d by federal courts are consistent with the plain language of the NJFC Act. Federal courts have held that for knowledge to be "direct," it must be "'obt ained without any intervening22 A- 2731

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agency, instrumentality, or influence.'" United St ates ex rel. Schumann v. Astrazeneca Pharm s. , L.P., 769 F.3d 837, 845 (3d Cir. 2014) (quoting U nited States ex rel. Atkinson v. Pa. Shipbuilding Co., 47 3 F.3d 506, 520 (3d Cir. 2007) ) (internal quotation marks omitted). Direct knowl edge must be "based on 'first-hand' information, " Zizic, 728 F.3d at 239 (quoting United States ex re l. Paranich v. Sorgnard, 396 F.3d 329, 336 (3d Cir. 20 05)), and cannot be "derivative of the information of others, " Paranich, 396 F.3d at 336 (quoting United States ex rel. Hafter v. Spectrum Emergency Care, Inc., 190 F.3d 1156, 1162 (10th Cir. 1999)). In their complaints, plaintiffs acknowledge that t hey learned of the alleged fraudulent schemes by having their agents conduct a series of interviews. Indeed, those interviews were conducted before plai ntiffs, which are limited liability companies, were even formed. Therefore, plai ntiffs did not have direct and independent knowledge of the alleged fraud. In stead, they were twice removed from direct knowledge. Their parent corpor ation used agents to conduct interviews, then analyzed publicly availabl e data. After that information was collected indirectly, plaintiffs we re then incorporated to bring the actions. In short, plaintiffs' knowledge was n ot direct and independent23 A- 2731

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because it came from interviews conducted by agents who, in turn, were not directly involved in the alleged transactions. Plaintiffs argue that the definition of direct and independent should not be narrowly construed because the goal of the NJFC Act is to root out fraud. The New Jersey Legislature, like Congress, however, has struck a balance. Afte r there is a public disclosure of the alleged fraud, a private party's suit is not always necessary because the Attorney General can i nvestigate and bring a direct action on behalf of the State. See N.J.S.A 2A:32C-5(a), (d). Therefore, applying the plain-language definition of direct an d independent maintains the balance of rooting out fraud but also preventing pa rasitic private lawsuits.
Brennan , 454 N.J. Super. at 620. Having conducted a de novo review, we affirm the o rders dismissing plaintiff s' complaints in New Jersey against Bayer and Lilly based on t he public disclosure bar. Given that ruling, we need not rea ch the issues of the first- to

file rule and the sufficiency of the pleadings. Affirmed.