Zachary Silbersher v. Allergan, Inc.

• Court: Court of Appeals for the Ninth Circuit
• Decided: January 29, 2025
• Docket: 23-15613
• Status: Unpublished

Opinion

NOT FOR PUBLICATION FILED UNITED STATES COURT OF APPEALS JAN 29 2025 MOLLY C. DWYER, CLERK U.S. COURT OF APPEALS FOR THE NINTH CIRCUIT

UNITED STATES OF AMERICA, EX REL. No. 23-15613 ZACHARY SILBERSHER, Relator, D.C. No. 3:18-cv-03018-JCS Plaintiff-Appellant,

v. MEMORANDUM*

ALLERGAN, INC.; ALLERGAN USA, INC.; ALLERGAN SALES, LLC; FOREST LABORATORIES HOLDINGS, LTD.; ADAMAS PHARMA LLC; ADAMAS PHARMACEUTICALS, INC.,

Defendants-Appellees.

Appeal from the United States District Court for the Northern District of California Joseph C. Spero, Magistrate Judge, Presiding

Argued and Submitted November 21, 2024 San Jose, California

Before: FRIEDLAND and BUMATAY, Circuit Judges, and KENNELLY,** District Judge.

Appellant Zachary Silbersher appeals from the dismissal of his qui tam relator

* This disposition is not appropriate for publication and is not precedent except as provided by Ninth Circuit Rule 36-3. ** The Honorable Matthew F. Kennelly, United States District Judge for the Northern District of Illinois, sitting by designation. suit brought under the False Claims Act (“FCA”) against appellees Allergan, Inc.,

Adamas Pharma LLC, and their various affiliates and subsidiaries (hereinafter

“Allergan and Adamas”). We have jurisdiction under 28 U.S.C. § 1291 and affirm.

We review a district court’s dismissal of claims under the FCA de novo.

United States ex rel. Campie v. Gilead Scis., Inc., 862 F.3d 890, 898 (9th Cir. 2017).

Now on his second appeal, Silbersher alleges that Allergan and Adamas

violated the FCA and equivalent state laws by fraudulently obtaining patents for two

drugs used to treat Alzheimer’s disease, Namenda XR® and Namzaric®. According

to Silbersher, Allergan and Adamas were thus able to prevent generic manufacturers

from entering the market, allowing them to submit artificially high prices for

reimbursement or payment by Medicare, Medicaid, and various federal and state

agencies that provide or pay for health services.

On remand, the district court dismissed Silbersher’s qui tam action. The

district court had previously held that Silbersher’s complaint alleged substantially

the same transactions as those contained in public disclosures as defined by 31

U.S.C. § 3730(e)(4)(A), and his claim therefore failed under the public disclosure

bar of the FCA unless he could qualify as an original source as defined in

§ 3730(e)(4)(B). On remand, the district court concluded that Silbersher did not

qualify as an original source and dismissed his claims.

Silbersher contends that the district court erred for two reasons. First,

2 Silbersher argues that his complaint does not contain substantially the same

allegations or transactions as those contained in the qualifying public disclosures and

therefore the public disclosure bar is not triggered. Second, Silbersher contends that

if the public disclosure bar is triggered, he can still proceed with the qui tam action

under the original source exception.

We hold that Silbersher waived the argument that the public disclosure bar

does not apply by conceding at a hearing on the first motion to dismiss “that the

relevant information from which the inference of fraud could be drawn is in the

[patent prosecution history].” After that concession, Silbersher expressly agreed

with the district court that the only remaining questions pertained to other issues not

involving the “substantially the same” prong. See United States v. Allergan, Inc., 46

F.4th 991, 996 n.6 (9th Cir. 2022) (declining to consider Silbersher’s argument “that

the information upon which he based his qui tam action was not ‘substantially the

same’ as that which was publicly disclosed” because he waived that argument before

the district court).

Silbersher contends that we should overlook his concession because of our

recent decision in Silbersher v. Valeant Pharmaceuticals International, Inc., 89

F.4th 1154 (9th Cir. 2024). Silbersher asserts that Valeant functions as a “recent

change in the law” that would allow us to consider anew whether he triggers the

public disclosure bar despite his previous concession. See United States v. Patrin,

3 575 F.2d 708, 712 (9th Cir. 1978). We disagree. Silbersher is the same plaintiff as

in Valeant and successfully argued that the public disclosure bar is not triggered.

The same argument that allowed him to do so there was available here, but he

conceded the issue before the district court.

Valeant makes clear that Silbersher’s argument that his expertise allows him

to act as a qui tam relator is assessed under the “substantially the same” prong of the

public disclosure bar, not the original source exception. In Valeant, we allowed

Silbersher to proceed because “the scattered qualifying public disclosures . . . each

contain[ed] a piece of the puzzle, but when pieced together, they fail[ed] to present

the full picture of fraud.” 89 F.4th at 1168. The court in Valeant determined that

Silbersher’s expertise brought those pieces of the puzzle together to “provide a

critical fact necessary for scienter: [defendants] took conflicting positions in their

patent prosecutions.” Id. Silbersher did not trigger the public disclosure bar in

Valeant because “[n]either of [the] patent prosecutions, or any other disclosure,

reveals that fact.” Id.

Silbersher argued in Valeant that he used his expertise to piece together

information and thereby avoided the public disclosure bar. See id. at 1161–63. He

makes the same assertions here. Therefore, Silbersher’s expertise argument is

assessed under the “substantially the same” prong rather than the original source

exception. As laid out above, Silbersher’s November 2020 waiver already conceded

4 that his claims are substantially the same as those in the public patent prosecution

histories. Accordingly, the public disclosure bar applies, and we do not reach his

arguments improperly directed to the “original source” exception.

AFFIRMED.