United States ex rel. Feldstein v. Organon, Inc.

364 F. App'x 738
CourtCourt of Appeals for the Third Circuit
DecidedFebruary 2, 2010
DocketNo. 09-2341
StatusPublished

This text of 364 F. App'x 738 (United States ex rel. Feldstein v. Organon, Inc.) is published on Counsel Stack Legal Research, covering Court of Appeals for the Third Circuit primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
United States ex rel. Feldstein v. Organon, Inc., 364 F. App'x 738 (3d Cir. 2010).

Opinion

OPINION

SMITH, Circuit Judge.

Jeffrey D. Feldstein, M.D., brought this qui tam action under the False Claims Act (“FCA”), 31 U.S.C. §§ 3729 et seq., against appellees Organon and Schering Plough, claiming that Organon’s failure to disclose the harmful side effects of the pharmaceutical drug Raplon resulted in the submission of false claims to Medicare and Medicaid.1 The District Court dismissed Feldstein’s complaint for lack of jurisdiction, and, in the alternative, for failure to comply with the heightened pleading requirements of Rule 9(b) of the Federal Rules of Civil Procedure. We will affirm.

I.

Because we write only for the parties, who are familiar with the record, we recount only those facts which are essential to our decision. Organon developed, manufactured, and sold Raplon, which was approved by the FDA on August 18, 1999. Raplon was a neuromuscular blocking agent used during surgery and other medical procedures. After Raplon entered the market, there were reports of episodes of an adverse side effect known as bronchos-pasm, and in some cases a severe form of bronchospasm known as “cement lung,” in patients who were treated with the drug. These conditions made breathing difficult and led to severe injuries in certain patients, and in some cases, death. These harmful side effects also spawned lawsuits against Organon, several of which alleged that Organon fraudulently concealed safety information about Raplon’s potential to cause bronchospasm and cement lung, both before and after the FDA approved [740]*740the drug. Organon voluntarily withdrew Raplon from the market in March of 2001.

In May of 2000, Organon hired Feldstein to serve as its Associate Director of Medical Services for Antithrombotics. His duties included assisting with the launch of the anticoagulant drug Arixtra. A disagreement soon arose between Feldstein and his superiors. Feldstein complained that Organon personnel were concealing instances of bleeding associated with Arix-tra, and that his supervisor, Dr. Jonathan Deutsch, attempted to coerce Feldstein into disseminating false information about such bleeding. Organon fired Feldstein in May of 2001.

During his tenure at Organon, Feldstein did not work on Raplon, nor was he involved in obtaining FDA approval for the drug. He makes no claim that he was part of, or personally observed, any fraud related to Raplon. Before he left Organon, however, Feldstein voiced his concerns about Deutsch and Arixtra to Dr. Daniel Sack, Organon’s Associate Director of Anesthesiology. Sack informed Feldstein that Raplon, with which Deutsch was also involved, had caused multiple deaths since its approval. Sack then showed Feldstein an email concerning Raplon that he had discovered on his laptop computer. The email was written by Deutsch and sent to Dr. Deborah Shapse, Organon’s Vice President of Medical Services. It predated Raplon’s FDA approval. In the email, Deutsch described bronchospasm as “a potential problem that needed to be addressed prior to launch” and stated that “Michael may be correct in not wanting to draw attention to bronchospasm.” Feld-stein claims that “Michael” was Michael Novinsky, Organon’s Vice President of Marketing. He describes this email as a “smoking gun” because he claims that it proves that Organon knew of the respiratory dangers posed by Raplon before it was approved, but failed to disclose those dangers to the FDA and otherwise attempted to withhold safety information about Raplon from the medical community.

Later, Feldstein reviewed Organon’s submissions to the FDA concerning Ra-plon and concluded that Organon had inadequately disclosed Raplon’s risk of serious adverse events (SAEs). He also spoke with Robert Piona, Organon’s former Brand Manager for Anesthetics. Piona had been involved with Raplon marketing efforts, and he supplied Feldstein with more details about events referenced in the “smoking gun” email. Feldstein’s conversation with Piona reinforced his belief that the email from Sack to Shapse was evidence of fraud.

In April of 2002, Feldstein filed a qui tam complaint against Organon pursuant to the FCA. After the government declined to intervene in June of 2006, see 31 U.S.C. § 3730(b)(4)(B), Feldstein filed an amended, one-count complaint in the United States District Court for the District of New Jersey on April 14, 2008. The complaint alleged that Organon concealed the respiratory dangers of Raplon and contended that Raplon’s regulatory approval was “invalid” because it was obtained through fraud on the FDA. The consequence of this fraud, Feldstein alleged, was that hospitals, physicians and patients submitted “false claims” to Medicare and Medicaid, because those programs “would not have reimbursed ... for the use of Raplon had [they] known that the FDA approved Raplon without the benefit of adequate disclosures” regarding Raplon’s potential for harmful side effects.

The District Court dismissed Feldstein’s complaint for lack of jurisdiction because it concluded that Feldstein’s claim was foreclosed by the FCA’s public disclosure bar. See 31 U.S.C. § 3730(e)(4)(A). As an alternative holding, the District Court concluded that Feldstein’s “false claims” alie-[741]*741gations were generalized and speculative, and thus dismissed the complaint for failure to comply with Rule 9(b).

Feldstein filed this timely appeal. Jurisdiction in this court arises under 28 U.S.C. § 1291. We exercise plenary review of the District Court’s dismissal under Rule 12(b)(1). United States ex rel Paranich v. Sorgnard, 396 F.3d 326, 331 (3d Cir.2005).2

II.

The FCA’s public disclosure bar provides that “[n]o court shall have jurisdiction” over a qui tam action brought by a private plaintiff if that action is “based upon the public disclosure of allegations or transactions in a criminal, civil, or administrative hearing,” certain government reports, or “the news media, 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). In other words, if Feld-stein’s complaint is “based upon” allegations that were previously disclosed in certain qualifying public sources, his claim is barred unless he is an original source of those allegations. The list of qualifying sources includes certain government reports and the news media. See id. It also includes allegations contained in civil complaints. United States ex rel. Stinson, Lyons, Gerlin & Bustamante P.A. v. Prudential Ins. Co., 944 F.2d 1149, 1157 (3d Cir.1991).

A. Feldstein’s Claim Was “Based Upon” Publicly Disclosed Allegations

A “qui tam action is ‘based upon’ a qualifying disclosure if the disclosure sets out either the allegations advanced in the qui tam action or

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