Court Opinion

ID: 4702556
Source: CourtListenerOpinion
Date Created: 2021-07-09 20:02:47.757653+00
Date Added: 2024-06-11T08:06:25.664838
License: Public Domain

NOT FOR PUBLICATION                        FILED
                    UNITED STATES COURT OF APPEALS                        JUL 9 2021
                                                                      MOLLY C. DWYER, CLERK
                                                                       U.S. COURT OF APPEALS
                           FOR THE NINTH CIRCUIT

FRANK SOLIS, United States of America           No.    20-15682
ex rel.,
                                                D.C. No.
                Plaintiff-Appellant,            2:09-cv-03010-MCE-EFB

 v.
                                                MEMORANDUM*
MILLENNIUM PHARMACEUTICALS,
INC.; et al.,

                Defendants-Appellees,

and

UNITED STATES OF AMERICA, ex rel.,

                Real-party-in-interest.

FRANK SOLIS, United States of America           No.    20-15863
ex rel.,
                                                D.C. No.
                Plaintiff-Appellee,             2:09-cv-03010-MCE-EFB

 v.

MILLENNIUM PHARMACEUTICALS,
INC.,

                Defendant-Appellant,

      *
             This disposition is not appropriate for publication and is not precedent
except as provided by Ninth Circuit Rule 36-3.
and

SCHERING-PLOUGH CORPORATION;
MERCK & CO., INC.,

                Defendants.

FRANK SOLIS, United States of America           No.    20-15864
ex rel.,
                                                D.C. No.
                Plaintiff-Appellee,             2:09-cv-03010-MCE-EFB

 v.

SCHERING-PLOUGH CORPORATION;
MERCK & CO., INC.,

                Defendants-Appellants,

and

MILLENNIUM PHARMACEUTICALS,
INC.,

                Defendant.

                  Appeal from the United States District Court
                      for the Eastern District of California
                Morrison C. England, Jr., District Judge, Presiding

                       Argued and Submitted June 17, 2021
                            San Francisco, California

Before: THOMAS, Chief Judge, and BRESS and BUMATAY, Circuit Judges.

      Plaintiff-relator Frank Solis appeals from the district court’s dismissal of his

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qui tam action against Millennium Pharmaceuticals, Inc., Schering-Plough Corp.,

and Merck & Co. (collectively, “Defendants”) alleging violations of the False

Claims Act (“FCA”), 31 U.S.C. §§ 3729, et seq.            The district court granted

Defendants’ motion to dismiss under Fed. R. Civ. P. 12(b)(1) on the ground that

Solis’s claims were barred by the FCA’s jurisdictional public-disclosure bar. We

“review de novo a district court’s dismissal for lack of subject matter jurisdiction

and its interpretation of the False Claims Act.” United States ex rel. Mateski v.

Raytheon Co., 816 F.3d 565, 568 (9th Cir. 2016).           We accept the plaintiff’s

allegations as true and assess whether they “are insufficient on their face to invoke

federal jurisdiction.” Leite v. Crane Co., 749 F.3d 1117, 1121 (9th Cir. 2014)

(quoting Safe Air for Everyone v. Meyer, 373 F.3d 1035, 1039 (9th Cir. 2004)). And

“[w]here the district court relied on findings of fact to draw its conclusions about

subject-matter jurisdiction, we review factual findings for clear error.” United States

ex rel. Hartpence v. Kinetic Concepts, Inc., 792 F.3d 1121, 1126–27 (9th Cir. 2015)

(en banc). We have jurisdiction over the district court’s final judgment under 28

U.S.C. § 1291 and we affirm.

      The 2006 version1 of the FCA’s public-disclosure bar deprives courts of

      1
         The district court determined that the 2006 version of the FCA was in effect
when Solis initially filed suit and Solis has not challenged this ruling. United States
ex rel. Solis v. Millennium Pharm., Inc. (Solis I), 885 F.3d 623, 626 n.1 (9th Cir.
2018).

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jurisdiction over actions based on allegations or transactions previously disclosed in

certain public fora, “unless the action is brought by the Attorney General or the

person bringing the action is an original source of the information.” 31 U.S.C.

§ 3730(e)(4)(A) (2006) (emphasis added). An original source is an individual who

has (1) “direct and independent knowledge of the information on which the

allegations are based” and (2) “voluntarily provided the information to the

Government before filing an action under [the FCA].” Id. at § 3730(e)(4)(B) (2006);

Hartpence, 792 F.3d at 1128. We have already determined that a public disclosure

occurred regarding Solis’s allegations, Solis I, 885 F.3d at 627, and it is undisputed

that Solis satisfies the second prong of the original source test. So, our analysis

focuses on whether Solis had “direct and independent knowledge” of the information

underlying his FCA claim. Hartpence, 792 F.3d at 1128.

      To demonstrate that his knowledge is “direct,” a relator “must show that he

had firsthand knowledge of the alleged fraud, and that he obtained this knowledge

through his ‘own labor unmediated by anything else.’” United States v. Alcan Elec.

& Eng’g, Inc., 197 F.3d 1014, 1020 (9th Cir. 1999) (quoting United States ex rel.

Aflatooni v. Kitsap Physicians Servs., 163 F.3d 516, 525 (9th Cir. 1999)). The relator

must have “‘true knowledge,’ as opposed to guesswork or suspicion.” Prather v.

AT&T, Inc., 847 F.3d 1097, 1104 (9th Cir. 2017) (quoting Aflatooni, 163 F.3d at

525–26) (finding no jurisdiction when the relator’s claim of fraud was based on “his

                                          4
inference” that information amounted to evidence of FCA violations); Malhotra v.

Steinberg, 770 F.3d 853, 860 (9th Cir. 2014) (holding that “generalized suspicion”

did not constitute “knowledge” of a kickback scheme).

      The district court correctly concluded that Solis failed sufficiently to allege

that he had direct and independent knowledge of Defendants’ alleged fraud. Solis’s

allegations that improper claims must have been submitted to the government due to

Defendants’ alleged off-label promotion of Integrilin or alleged payment of

kickbacks to physicians are purely speculative. Solis’s inability to identify any

instances of false claims for reimbursement makes his allegations inadequate to

show direct knowledge. See United States ex rel. Cafasso v. Gen. Dynamics C4 Sys.,

Inc., 637 F.3d 1047, 1058 (9th Cir. 2011) (“It is not enough . . . to describe a

[fraudulent] scheme in detail but then to allege simply and without any stated reason

. . . that claims requesting illegal payments must have been submitted.”) (simplified).

Accordingly, Solis is not an “original source” under the FCA and the district court

lacked subject-matter jurisdiction over his claims. See 31 U.S.C. § 3730(e)(4)(A)

(2006).

      Because the district court lacked jurisdiction over Solis’s FCA claims, we do

not reach Defendants’ cross-appeal.

      AFFIRMED.

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