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State ex rel. Gohil v. Aventis Inc.

United States District Court, E.D. Pennsylvania

January 9, 2017

AVENTIS, INC., et al., Defendants


          STENGEL, J.

         Relator Yoash Gohil brings this False Claims Act lawsuit on behalf of the United States against his former employer Sanofi-Aventis U.S., Inc. (Aventis) and its subsidiaries. Mr. Gohil alleges that Aventis engaged in a fraudulent pharmaceutical marketing scheme, which caused numerous healthcare providers to submit false claims to federally-funded health insurance programs. Aventis has moved for a partial judgment on the pleadings, asserting a statute of limitations bar and a First Amendment defense. I will deny this motion.

         I. BACKGROUND [1]

         Mr. Gohil was employed by Aventis and its predecessor companies from February 1982 until his resignation in June 2002. At all relevant times, Mr. Gohil was a Senior Oncology Sales Specialist whose duties included the marketing, promotion, and sale of pharmaceuticals manufactured by Aventis. This case concerns the marketing of Taxotere, a chemotherapy agent manufactured by Aventis which Mr. Gohil was assigned to promote and sell in the Philadelphia region.

         Originally, the Food and Drug Administration (FDA) approved Taxotere for the treatment of patients with Non-Small Cell Lung Cancer and Breast cancer, but only after the failure of prior platinum based chemotherapy. This is also known as second line treatment. In November 2002, the FDA approved Taxotere for first line treatment of Non-Small Cell Lung Cancer. There were no other approved medical indications. Between 1996 and 2004, Taxotere was the most expensive taxane on the market. A substantial portion of individuals who are treated with Taxotere are participants in a federal insurance program including Medicare, Medicaid, CHAMPUS/Tricare, and the Federal Employee Health Benefit Plan (FEHBP).[2]

         In 2000, Aventis was formed through the merger of RPR and Hoechst Marion Roussel. Rhone-Poulenc Rorer Pharmaceuticals, Inc. (RPR) had manufactured and marketed Taxotere. The plaintiff was an employee of Hoechst and then became an employee of Aventis. After the merger, he was assigned to market Taxotere.

         The plaintiff alleges that, from 1996 until 2004, Aventis engaged in a marketing plan which promoted Taxotere for off-label uses. Gohil alleges that Aventis trained and directed its employees to misrepresent the safety and effectiveness of the off-label use of Taxotere to expand the market for Taxotere into unapproved settings. He claims Aventis also paid healthcare providers illegal kickbacks-i.e., sham unrestricted grants, speaking fees, travel, entertainment, sports and concert tickets, preceptorship fees, and free samples and free reimbursement assistance-to incentivize providers to prescribe Taxotere for off-label uses. By the means of this fraudulent marketing scheme, Aventis dramatically increased revenue on sales of Taxotere from $424 million in 2000 to $1.4 billion in 2004.

         Federal Insurance Programs will pay for an off-label use of a prescription drug if the drug is used for a medically accepted indication or the drug is medically necessary. Aventis marketed Taxotere for off-label use in the first line treatment of Breast Cancer and Non-Small Cell Lung Cancer, for the second line treatment of Ovarian Cancer, and for the treatment of other unspecified medical indications. According to Gohil, the prescription of Taxotere in these settings would not be eligible for reimbursement. Additionally, prescriptions of Taxotere which were “produced through the payment directly or indirectly of a kickback” were ineligible for reimbursement. As a result, Aventis' fraudulent marketing scheme allegedly caused a substantial number of healthcare providers to submit claims for reimbursement to Governmental medical reimbursement systems for the use of Taxotere, which would not have otherwise been paid had the Government reimbursement programs known of Aventis' fraudulent marketing scheme.


         Mr. Gohil filed his original False Claims Act (FCA) qui tam complaint under seal on May 17, 2002.[3] He filed his First Amended Complaint on July 19, 2002 under seal. In June 2002, Mr. Gohil resigned from Aventis, and he initiated a wrongful termination action against Aventis in New Jersey Superior Court pursuant to New Jersey's Conscientious Employee Protection Act and New Jersey's Law Against Discrimination. In the state court lawsuit, Mr. Gohil alleged that Aventis retaliated against him because he objected to sales activities which violated federal and state laws, including FDA regulations.

         The parties engaged in discovery in the New Jersey action. Aventis produced tens of thousands of pages of training materials, manuals, and journal abstracts about Taxotere. Mr. Gohil took depositions of several current and former Aventis employees. After the close of discovery but before any judgment was entered, the parties settled the New Jersey action on October 19, 2005. The settlement agreement included a broad release of liability in favor of Aventis.

         On August 15, 2006, the Government declined to intervene in this qui tam case. The case was unsealed and a summons issued to Aventis on September 11, 2006. With leave of court, Mr. Gohil filed the Second Amended Complaint under seal on February 9, 2007; the Government again declined to intervene. The Second Amended Complaint was unsealed on February 29, 2008.

         The First Amended Complaint outlined facts regarding FCA violations for sales of both Taxotere and Anzemet (another oncological drug product marketed by Gohil while working for Aventis). The Second Amended Complaint deleted the majority of facts and claims related to the sale of Anzemet, leaving claims and facts regarding the sale of Taxotere as the primary focus.[4] The Second Amended Complaint also added more detail about the Taxotere claims laid-out in the First Amended Complaint. The Second Amended Complaint defined the applicable timeframe as 1996 to 2004.

         After a contentious jurisdictional discovery period (which included an interlocutory appeal), the defendants moved to dismiss the Second Amended Complaint based on several theories: the general release the plaintiff executed in connection with the settlement of the New Jersey lawsuit, the original source requirements of the FCA, and the plaintiff's failure to allege Aventis' supposed fraudulent conduct with particularity as required under Rule 9(b). I denied that motion in part and granted it in part. I dismissed Counts III and IV of the plaintiff's Second Amended Complaint without prejudice because those Counts were factually deficient.[5]

         The defendants filed a motion for reconsideration of my decision regarding the public disclosure bar's effect on claims related to years 1996-1999 and 2002-2004. I denied that motion.[6]

         I granted the plaintiff leave to file a Third Amended Complaint. The defendants again moved to dismiss Counts III and IV of that complaint, arguing again that these claims were factually deficient and did not meet the heightened pleading standard of Rule 9(b), required of qui tam pleading. See U.S. ex rel. LaCorte v. SmithKline Beecham Clinical Labs., Inc., 149 F.3d 227, 234 (3d Cir. 1998). I denied this motion and placed the parties on a discovery schedule.[7]

         The defendants now move once more for the dismissal of Counts III and IV under Rule 12(c)(i.e., a motion for judgment on the pleadings), based on two legal defenses not previously presented.[8]


         “After the pleadings are closed--but early enough not to delay trial--a party may move for judgment on the pleadings.” Fed.R.Civ.P. 12 (c). When a defendant moves to dismiss a claim because it fails to offer a basis upon which relief can be granted under Rule 12(c), the same standard used in deciding motions under Rule 12(b)(6) is applied to motions brought under Rule 12(c). See, e.g., Turbe v. Gov't of V.I., 938 F.2d 427, 428 (3d Cir. 1991); United States v. Cephalon, --- F.Supp.3d ---, No. 08-287, 2016 WL 398014, at *2 (E.D. Pa. Feb. 2, 2016). District courts may grant a motion for judgment on the pleadings under Rule 12(c) “only if, viewing all the facts in the light most favorable to the nonmoving party, no material issue of fact remains and the moving party is entitled to judgment as a matter of law.” Knepper v. Rite Aid Corp., 675 F.3d 249, 257 (3d Cir. 2012)(citing Rosenau v. Unifund Corp., 539 F.3d 218, 221 (3d Cir. 2008)). See also Sikirica v. Nationwide Ins. Co., 416 F.3d 214, 220 (3d Cir. 2005); Society Hill Civic Ass'n v. Harris, 632 F.2d 1045, 1054 (3d Cir. 1980). “[I]f the pleadings do not resolve all of the factual issues in the case, a trial on the merits would be more appropriate than an attempt at resolution of the case on a Rule 12(c) motion.” 5A C. Wright & A. Miller, Federal Practice and Procedure § 1367, at 515 (1990).


         The defendants offer two grounds for dismissal: (1) they argue that the plaintiff's claims dating between 1996 and 2000 are barred by the statute of limitations; and (2) the parts of plaintiff's Counts III and IV of the Third Amended Complaint based on “truthful, non-misleading speech” are barred by First Amendment free speech protections.

         A. The False Claims Act Statute of Limitations

         Under the False Claims Act (FCA), persons who submit fraudulent applications for payment to the United States are liable to the Government in a civil action for civil penalties and treble damages. 31 U.S.C. § 3729(a)(1) (West 2015). The qui tam provisions of the act empower private individuals, like Mr. Gohil, to file lawsuits on behalf of the United States seeking damages sustained by the Government for the payment of false claims.[9] 31 U.S.C. § 3730(b). Relators, the citizen plaintiff in a FCA action, must file their complaints under seal and serve the Government with a copy of the complaint and disclosure of all material evidence. 31 U.S.C. § 3730(b)(2). The court cannot lift the seal until the Government investigates the claims and either decides to take over the action or notifies the court that it declines to intervene in the case. 31 U.S.C. § ...

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