E.D. Pa. District Court Undertakes Granular Inquiry into First-to-File Challenge in False Claims Act Lawsuit


In U.S. ex rel. Galmines v. Novartis, 2013 U.S. DIST LEXIS 83100 (E.D. Pa. 2013), the United States District Court refused to dismiss the off-label marketing allegations by the relator, a former Novartis sales representative, when an earlier case alleging off-label marketing of the very same dermatological drug  – Elidel – focused on a “different off-label promotion scheme”.   In so deciding, the district court relied heavily on the 3rd Circuit Court of Appeals’ ruling in United States ex rel. LaCorte v. Smithkline Beecham Clinical Laboratories, Inc., 149 F.3d 227 (3d Cir. 1998), which separately analyzed  each claim of each relator to see whether a claim in the second action restated “all the essential facts” of a previously-filed claim and consequently was barred by the first-to-file rule.

Upon closely scrutinizing the claims in Galmines’s action, and comparing them to the claims in the earlier action filed by the relators Gina Moyer and Judith Sheldon (“the Moyer action”), the district court determined that Galmines’ s off-label claims were different from those in the Moyer action.  Thus, the Moyer action alleged that Novartis violated the FCA through its off-label marketing of Elidel for the treatment of psoriasis and seborrhea, while, in contrast, Mr. Galmines asserted that Novartis violated the FCA as a result of its promoting Elidel off-label for use on children under the age of two years.  In a well-reasoned opinion, the Court ruled that, as a result, “Mr. Galmines’s complaint does not share ‘all the essential facts of [the] previously-filed claim,’ but rather pertains to a different off-label promotion scheme.”  Id. at *27. Significant to the court was the fact that “the primary purpose of a qui tam complaint is to provide the government notice of the need to investigate a particular scheme.”  Id. at *27-*28. The Court noted that “[n] o reasonable reading of the Moyer complaint would have informed the government of the need to investigate whether Novartis was marketing Elidel as a first-line treatment or for use in young infants, because the Moyer complaint never alleged that such marketing occurred.” Id. at *28.

With the number of first-to-file challenges mounting as more and more relators come forward with valuable new information about misconduct by the same defendant and/or the same good or service, the district court’s opinion may evidence a growing willingness of the judiciary to examine claims on a granular level before reflexively barring claims under the first-to-file or public disclosure rules on the ground that the “same kind of misconduct” appears to be at issue.  See, e.g., Leveski v. ITT Educational Services, 2013 U.S. App. LEXIS 13722 (7th Cir. July 8, 2013) (discussed herein).