1

UNITED STATES DISTRICT COURT

DISTRICT OF NEW JERSEY

 

:

UNITED STATES OF AMERICA, ex :

rel. MARC SILVER, et al., :

:

Relators, : Civil Action No.

: 11-1326

v. :

:

OMNICARE, INC., et al., : OPINION

:

Defendants. :

:

______________________________ :

APPEARANCES:

LISA J. RODRIGUEZ

SCHNADER HARRISON SEGAL & LEWIS LLP 

WOODLAND FALLS CORPORATE PARK 

220 LAKE DRIVE EAST 

SUITE 200 

CHERRY HILL, NJ 08002-1165

WILLIAM H. ELLERBE 

RUSSELL D. PAUL 

BERGER & MONTAGUE PC 

1818 MARKET STREET 

PHILADELPHIA, PA 19103

DANIEL WILLIAM MEYLER

U.S. ATTORNEY’S OFFICE

DISTRICT OF NEW JERSEY

970 BROAD STREET, SUITE 700

NEWARK, NJ 07102

Attorneys for Relators

JUDITH H. GERMANO 

GERMANO LAW LLC 

460 BLOOMFIELD AVENUE 

SUITE 200 

MONTCLAIR, NJ 07043

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MICHAEL MANTHEI (Pro Hac Vice)

WILLIAM PEZZOLO (Pro Hac Vice)

HOLLAND & KNIGHT LLP

10 ST. JAMES AVENUE

BOSTON, MA 02116

PETER J. KOCORAS (PRO HAC VICE)

THOMPSON HINE LLP

20 NORTHT CLARK STREET, SUITE 800

CHICAGO, IL 60602

Attorneys for Defendant PharMerica Corp.

HILLMAN, District Judge:

This is a False Claims Act (“FCA”) suit. As set forth in 

this Court’s previous opinion, Relator Marc Silver (“Silver”) 

alleges that PharMerica Corp. (“PharMerica”) “engaged in a 

[‘swapping’] scheme that violated the Anti-Kickback Statute by 

offering nursing homes below market prices for drugs to patients 

insured by Medicare Part A in exchange for referrals of 

prescriptions for nursing home patients insured by Medicare Part 

D or by Medicaid.” United States ex rel. Silver v. Omnicare, 

Inc., No. 11-1326, 2014 WL 4827410, at *1 (D.N.J. Sept. 29, 

2014). Silver alleges that PharMerica defrauded the federal 

government when it submitted Medicare and Medicaid claims for 

reimbursement which certified PharMerica’s compliance with the 

Anti-Kickback Statute. Currently before the Court is 

PharMerica’s Motion for Judgment on the Pleadings (“Motion for 

Judgment”). For the following reasons, the motion will be 

GRANTED.

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BACKGROUND

The relevant factual and procedural history of this is set 

forth in the Court’s previous Opinions (ECF Nos. 131, 388) and 

need not be repeated here. 

ANALYSIS

A. Subject Matter Jurisdiction

Silver has alleged that PharMerica violated the federal 

False Claims Act, 31 U.S.C. § 3729, et seq., and the federal 

Anti-Kickback Statute, 42 U.S.C.A. § 1320a-7b, et seq. 

Therefore, this Court exercises subject matter jurisdiction 

pursuant to 28 U.S.C. § 1331 (federal question jurisdiction) and 

exercises supplemental jurisdiction over Silver’s related state 

law claims pursuant to 28 U.S.C. § 1367.

B. Motion for Judgment on the Pleadings Standard

A Rule 12(c) motion for judgment on the pleadings may be 

filed after the pleadings are closed. FED. R. CIV. P. 12(c); Turbe 

v. Gov’t of V.I., 938 F.2d 427, 428 (3d Cir. 1991). In analyzing 

a Rule 12(c) motion, a court applies the same legal standards as 

applicable to a motion filed pursuant to Rule 12(b)(6). Turbe, 

938 F.2d at 428. Thus, a court must accept all well-pleaded 

allegations in the complaint as true and view them in the light 

most favorable to the plaintiff. Evancho v. Fisher, 423 F.3d 

347, 351 (3d Cir. 2005).

A district court, in weighing a motion to dismiss, asks 

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“not whether a plaintiff will ultimately prevail but whether the 

claimant is entitled to offer evidence to support the claim[].” 

Bell Atl. Corp. v. Twombly, 550 U.S. 544, 583 (2007) (quoting 

Scheuer v. Rhodes, 416 U.S. 232, 236 (1974)); see also Phillips 

v. Cty. of Allegheny, 515 F.3d 224, 234 (3d Cir. 2008) (stating 

the “Supreme Court’s Twombly formulation of the pleading standard 

can be summed up thus: ‘stating . . . a claim requires a 

complaint with enough factual matter (taken as true) to suggest’ 

the required element. This ‘does not impose a probability 

requirement at the pleading stage,’ but instead ‘simply calls for 

enough facts to raise a reasonable expectation that discovery 

will reveal evidence of’ the necessary element”). A court need 

not credit either "bald assertions" or "legal conclusions" in a 

complaint when deciding a motion to dismiss. In re Burlington 

Coat Factory Sec. Litig., 114 F.3d 1410, 1429-30 (3d Cir. 1997). 

The defendant bears the burden of showing that no claim has been 

presented. Hedges v. United States, 404 F.3d 744, 750 (3d Cir. 

2005) (citing Kehr Packages, Inc. v. Fidelcor, Inc., 926 F.2d 

1406, 1409 (3d Cir. 1991)).

In addition, “on a motion for judgment on the pleadings,” a 

court “reviews not only the complaint but also the answer and any 

written instruments and exhibits attached to the pleadings.” 

Perelman v. Perelman, 919 F. Supp. 2d 512, 520 n.2 (E.D. Pa. 

2013).

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C. Silver’s Sur-Reply

On September 18, 2020 Silver filed a letter seeking leave 

to file a Sur-Reply and attached, as an exhibit, a proposed surreply brief. Silver alleges that this sur-reply is necessary to 

address new arguments PharMerica made for the first time in its 

reply brief. PharMerica responded in opposition to this motion 

on September 22, 2020. Local Rule of Civil Procedure 7.1(d) 

controls the filing of a sur-reply in this specific situation. 

It states: “No sur-replies are permitted without permission of 

the Judge or Magistrate Judge to whom the case is assigned.” 

Loc. R. Civ. P. 7.1(d)(6). Silver did not file a supporting 

brief in violation of Local Rule 7.1(d)(1). See Loc. R. Civ. P. 

7.1(d)(1) ("No application will be heard unless the moving 

papers and a brief . . . are filed with the Clerk . . . . The 

brief shall be separate document for submission to the Court . . 

."). Notwithstanding this failure to file a supporting brief 

pursuant to local rules, the Court finds that Silver’s proposed 

sur-reply consists substantially of arguments originally made in 

his opposition brief to PharMerica’s Motion for Judgment and 

does not highlight any exceptional circumstances warranting the 

filing of a sur-reply.

D. PharMerica’s Motion for Judgment on the Pleadings

PharMerica challenges Counts I-III of Silver’s Third 

Amended Complaint (the “Complaint”). First, PharMerica alleges 

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Counts I and, by extension, the related conspiracy claim under 

Count III must be dismissed in insofar as they are based on the 

alleged submission of false claims to commercial insurance 

companies under Medicare Part D and under Medicaid Managed Care 

prior to May 20, 2009. PharMerica argues dismissal is warranted 

because PharMerica neither presented, nor caused to be 

presented, any Medicare Part D or Medicaid Managed Care claims 

to an officer or employee of the United States Government, which 

PharMerica argues was a requirement prior to Congress’ enactment 

of the Fraud Enforcement and Recovery Act (“FERA”) amendments to 

the FCA. 

Second, PharMerica argues Count II should be dismissed in 

its entirety as well as the related conspiracy claims in Count 

III for failure to satisfy the double falsity requirement of 

Sections 3729(a)(2) and 3729(a)(1)(B) of the FCA. In the 

alternative, as to Count II, PharMerica moves to dismiss Count 

II, and by extension, the related conspiracy claim under Count 

III insofar as they are based on the alleged submission of false 

claims to commercial insurance companies under Medicare Part D 

and under Medicaid Managed Care prior to June 7, 2008.

PharMerica argues dismissal is warranted because Silver fails to 

allege the use of any false records or statements that are 

distinct from the underlying pharmacy claims. In the event the 

Court disagrees with that argument, PharMerica argues this Court 

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should also accept its alternative argument because Silver 

failed to allege PharMerica created a false record or statement 

to get the government to pay a false claim.

Silver, as could be expected, refutes each of these 

arguments. First, Silver argues the law of the case doctrine 

bars PharMerica’s Motion for Judgment because it impermissibly 

attempts to re-litigate the same arguments that this Court has 

already rejected. Second, Silver alleges the presentment 

element of pre-FERA claims is met because PharMerica submitted 

false electronic claims to the Part D Sponsor and the Part D 

Sponsor submitted Prescription Drug Event (“PDE”) records to 

CMS, which Silver contends are claims for purposes of the FCA. 

Third, Silver alleges Count II should survive dismissal because 

the PDEs are the false claims and the pharmacy claims that 

PharMerica submitted to Sponsors are the false records or 

statements that PharMerica used to get the government to pay the 

PDE data. Fourth and in regard to PharMerica’s alternative 

argument, Silver argues the pre-FERA version of 31 U.S.C. 

3729(a)(1)(B) does not apply to Count II and even if it did 

dismissal is still not warranted because Medicare Part D payment 

scheme requires PharMerica to submit electronic claims to a Part 

D Sponsor, which then uses those records to submit PDEs, along 

with certifications about the validity of the claims presented 

by the PDEs, to the government. This Court will not address 

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PharMerica’s alternative argument because Silver has failed to 

demonstrate it satisfied the double falsity requirement of 

Sections 3729(a)(2) and 3729(a)(1)(B).

a. Law of the Case Doctrine 

Silver first argues PharMerica’s Motion for Judgment must 

be denied because the law of the case doctrine bars PharMerica’s 

attempt to relitigate issues that were already decided by this 

Court. See (ECF No. 491 (“Pl. Br.”) at 14-17). In response, 

PharMerica argues the law of the case doctrine is not applicable 

because the legal issues at the heart of this Motion for 

Judgment and PharMerica’s previous motion to dismiss are 

substantially different. More specifically, PharMerica argues 

the Court addressed PharMerica’s motion through the lens of 

Foglia and rejected PharMerica’s argument that the 9(b) required 

Silver to identify specific patients or claims to survive 

dismissal. See (ECF No. 501 (“Def. Reply Br.”) at 10-13). This 

Court agrees with PharMerica.

The doctrine of the law of the case precludes review of 

legal issues previously decided. See In re City of Phila. 

Litig., 158 F.3d 711, 717-18 (3d Cir. 1998); see also Hamilton 

v. Leavy, 322 F. 3d 776, 786-87 (3d Cir. 2003) (“The law of the 

case doctrine ‘limits relitigation of an issue once it has been 

decided’ in an earlier stage of the same litigation.”(quoting In 

re Continental Airlines, 279 F. 3d 226, 232 (3d Cir. 2002))).

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The previous disposition of a motion to dismiss may constitute 

the law of the case. “The doctrine of the law of the case, 

however, does not apply if a court did not previously address 

the subject issue.” Prime Energy & Chem., LLC v. Tucker 

Arensberg, P.C., No. 18-00345, 2019 WL 3778756, *6 (W.D. Pa. 

Aug. 12, 2019); see also Slater v. Marshall, 906 F. Supp. 256, 

259 (E.D. Pa. 1995) (holding that the law of the case doctrine 

did not preclude consideration of a motion to dismiss, even 

though the court had found that the complaint stated a claim 

when it ruled on prior motion to dismiss filed by another 

defendant, because the issues raised by the two defendants were 

different).

PharMerica raises new arguments regarding Counts I-III in 

its Motion for Judgment. In United States ex rel. Silver v. 

Omnicare, Inc., No. 11-1326, 2014 WL 4827410 (D.N.J. Sept. 29, 

2014), relevant to this motion, the PharMerica argued: (1) “the 

third amended complaint must be dismissed because a FCA claim 

must be plead with particularity and Relator fails to adequately

plead fraud with specificity as required under Federal Rule of 

Civil Procedure 9(b);” and (2) “the complaint fail[ed] to state 

a claim for conspiracy.” Omnicare, 2014 WL 4827410, at *1. 

Neither of these arguments addressed the arguments PharMerica 

now raises before the Court. 

In support of PharMerica’s 9(b) argument, PharMerica argued 

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Silver failed to specifically allege “details concerning the 

dates of the claims, the content of the forms or bills 

submitted, 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.” Id. at *4.

In applying the Foglia standard, the Court disagreed with 

PharMerica and held Silver was not required to include such 

allegations at early the pleading stage. Id. Therefore, in 

denying PharMerica’s attempt to hold Silver to a higher standard 

than one required by Foglia, this Court found that Silver had 

alleged sufficient facts under Rule 9(b) to support his FCA 

claims against PharMerica. Id. Similarly, this Court rejected 

PharMerica’s argument that Silver failed to plead an antikickback statute violation by applying the Foglia standard. Id.

The law of the case doctrine does not apply here because 

the Court’s Opinion denying the initial motion to dismiss 

contained no rule of law that dictated the resolution of 

PharMerica’s Motion for Judgment. Simply, this Court “did not 

previously address the subject issue” of PharMerica’s current 

Motion for Judgment. Tucker Arensberg, P.C., 2019 WL 3778756, 

*6. The Motion for Judgment includes new arguments that address 

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issues that were not before this Court or even referenced by 

either party during the Court’s previous ruling on the Motion to 

Dismiss. 

The Third Circuit Court of Appeals has concluded that

application of the law of the case doctrine “is a discretionary, 

not absolute, process and if, as happened here, a party advances 

a basis for a court to reach a different result than it did 

previously the court will not be bound by its earlier decision.” 

Bridges v. Commissioner Soc. Sec., 672 Fed. App’x 162, 167 (3d 

Cir. Oct. 5 2016) (citing Africa v. City of Philadelphia (In re 

City of Philadelphia Litig.), 158 F.3d 711, 718 (3d Cir. 1998)). 

Since PharMerica now argues dismissal is warranted based on a 

new basis, the law of the case doctrine is not applicable. 

b. Count I and Count III Pre-FERA Claims Relating to 

Medicare Part D and Medicaid Managed Care

PharMerica first argues Silver’s claims in Count I and III

relating to Medicare Part D and Medicaid Managed Care prior to 

May 20, 2009, when FERA was enacted, fail because PharMerica 

neither presented, nor caused to be presented, any Medicare Part 

D or Medicaid Managed Care claims to an officer or employee of 

the United States Government. See (ECF No. 479 (“Def. Br.”) at 

17-20). Silver, relying on a decision involving PharMerica from 

the Eastern District of Wisconsin, responds that the presentment 

element is satisfied because when PharMerica submits an 

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electronic claim to a Part D Sponsor, PharMerica then causes the 

Part D Sponsor to submit a PDE record to the Centers for 

Medicare & Medicaid Services (“CMS”). (Pl. Br. at 19-21). As 

recognized by the Court in Buth, PharMerica now argues that the 

PDEs that are submitted by the Part D sponsor are the claims 

upon which CMS makes payment. (Pl. Br. at 19). In response, 

PharMerica argues that Silver is impermissibly attempting to 

amend his Complaint through its Opposition Brief. (Def. Reply 

Br. 1-4). Specifically, PharMerica notes that “Nowhere in the 

[Complaint], or in any prior iteration of his complaint, or in 

any other document filed with the Court in the many years that 

this case has been pending does Silver ever mention PDE data, 

much less assert that these are the ‘false claims’ at issue in 

this case.” (Def. Reply. Br. at 2). This Court agrees with the 

PharMerica that Silver is attempting to amend his Complaint 

through his Opposition.

“On May 20, 2009, Congress enacted the Fraud Enforcement 

and Recovery Act of 2009 (FERA), Pub. L. No. 111-21, 123 Stat. 

1617 (2009), which amended the FCA and re-designated 31 U.S.C. § 

3729(a)(1) as 31 U.S.C. § 3729(a)(1)(A) and 31 U.S.C. § 

3729(a)(2) as 31 U.S.C. § 3729(a)(1)(B).” United States ex rel. 

Wilkins v. United Health Grp., Inc., 659 F.3d 295, 303 (3d Cir. 

2011). The FERA amendments relevant to this action that relate 

to Section 3729(a)(1) “apply to conduct on or after the date of 

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enactment.” Pub. L. No. 111-21. Accordingly, the Pre-FERA 

version applies to Silver’s claims in Counts I and, by 

extension, the related claims in Count III that occurred prior 

to May 20, 2009. 

Under the Pre-FERA version of 3729(a)(1), Silver must 

allege PharMerica “knowingly present[e]d, or cause[d] to be 

presented, to an officer or employee of the United States 

Government or a member of the Armed Forces of the United States 

a false or fraudulent claim for payment of approval.” 31 U.S.C. 

§ 3729(a)(1) (emphasis added). Silver alleges he has satisfied 

this Pre-FERA requirement because “when PharMerica submit[ed] an 

electronic claim to a Part D Sponsor to seek payment for a drug 

it has dispensed to a patient covered by that Part D Sponsor, 

PharMerica causes the Part D Sponsor to then submit a PDE record

to CMS.” (Pl. Br. at 19) (emphasis added). 

However, as PharMerica notes, Silver only alleges the 

Medicare-related claims at issue in this litigation are the 

claims from the institutional pharmacies to private insurance 

companies. Silver fails to include allegations suggesting that 

the false claims are instead the PDEs submitted by the Plan D 

Sponsors to the CMS as the plaintiffs did in Buth. Although 

Silver’s Opposition brief includes this argument, the Court 

cannot consider this argument on a motion for judgment on the 

pleadings. Silver’s legal theories are viable “only to the 

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extent that they find support in the allegations set forth in 

the complaint.” Com. of Pa. ex rel. Zimmerman v. PepsiCo, Inc., 

836 F.2d 173, 181 (3d Cir. 1988). This Court agrees that 

Silver’s Complaint is devoid of allegations supporting his new 

theory that PharMerica’s liability arises from the submission of 

the PDE data to CMS by the Part D Plan Sponsors and their PDMs. 

These arguments and their factual foundation exist only in 

Silver’s Opposition and “it is axiomatic that the complaint may 

not be amended by the briefs in opposition to a motion to 

dismiss.” Olson v. Ako, 724 Fed App’x 160, 166 (3d Cir. Mar. 

20, 2018 (quoting Zimmerman, 836 F.2d at 181); see also Ross v. 

Hayt, Hayt & Landau, LLC, No. 15-1506, 2015 U.S. Dist. LEXIS 

166787, at *7 n.2 (D.N.J. Dec. 14, 2015) (“Plaintiff cannot use 

an opposition brief to supplement his complaint.”) (citing 

Zimmerman, 836 F.2d at 181).

This Court does not find persuasive Silver’s argument in 

his Opposition that he should be able to rely on this argument 

because the information regarding the Medicare Part D Program 

contained in the sources cited are a matter of public record 

that this Court can consider. This response misses the point of 

PharMerica’s argument. PharMerica’s argument is focused on 

Silver’s attempt to now allege the false claims are actually the 

PDEs, which this Court agrees, is not supported by the 

Complaint. Moreover, Silver points to a few allegations in the 

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Complaint to suggest the Complaint actually does include this 

theory; however, this Court does not agree that the cited 

allegations actually support a theory of liability based on the 

PDE claims. Accordingly, this Court finds the Complaint as 

currently pled does not satisfy the presentment element for 

Silver’s Pre-FERA claims relating to Medicare Part D and 

Medicaid Managed Care in Count I and thus, the Pre-FERA claims 

in Count I and, by extension, the related conspiracy claims in 

Count III relating to Medicare Part D and Medicaid Managed Care

must be dismissed.

c. Count II and Count III Pre-FERA and Post-FERA Claims

PharMerica next argues dismissal of Count II in its 

entirety, and, by extension, the related conspiracy claims under 

Count III, is warranted because the Complaint fails to allege 

the use of any false records or statements that are distinct 

from the underlying pharmacy claims. (Def. Br. at 21-23).

Silver responds that this “double falsity” requirement is 

satisfied because “PharMerica . . . submit[s] electronic claims 

to a Part D Sponsor, which then uses those records to submit 

PDEs, along with certifications about the validity of the claims 

represented by the PDES, to the government.” (Pl. Br. at 34). 

In its Reply, PharMerica argues this argument is improper 

because, as discussed supra, the Complaint as currently drafted 

does not allege that the PDE data are the claims at issue in 

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this matter. (Def. Reply Br. at 3-4). 

Unlike Sections 3729(a)(1) and 3729(a)(1)(A) of the FCA, 

Sections 3729(a)(2) and 3729(a)(1)(B) impose liability upon any 

person who “knowingly makes, uses, or causes to be made or used, 

a false record or statement” either “to get a false or 

fraudulent claim paid or approved by the Government” or that is 

“material to a false or fraudulent claim[.]” “This subsection 

contains a ‘double falsity’ requirement—the plaintiff must plead 

both a false statement and a corresponding false claim.” United 

States ex rel. Hussain v. CDM Smith, Inc., No. 14-CV-9107, 2019 

WL 1428360, at *12 (S.D.N.Y. Mar. 29, 2019); see also Race Tires 

Am., Inc. v. Hoosier Racing Tire Corp., 674 F.3d 158, 165 (3d 

Cir. 2012) (“It is a well-established canon of statutory 

interpretation that the use of different words or terms within a 

statute demonstrates that Congress intended to convey a 

different meaning for those words.”).

Silver attempts to allege double falsity through the act of 

Part D Sponsors submitting PDEs to CMS; however, as discussed 

supra, this Court will not permit Silver to rely on theories

that are not supported by his Complaint. Accordingly, Count II

in its entirety and the related conspiracy claims in Count III 

will be dismissed for failure to satisfy the double falsity 

requirement.

CONCLUSION

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For the foregoing reasons, this Court will GRANT

PharMerica’s Motion for Judgment. An appropriate Order will be 

entered.

Date: November 25, 2020 s/ Noel L. Hillman

At Camden, New Jersey NOEL L. HILLMAN, U.S.D.J.

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