In yesterday’s post, we discussed various issues that can arise at the pleadings stage of a False Claims Act lawsuit. To correct any perceived deficiencies, relators may ask to submit an amended complaint to include additional information, add or delete certain defendants, or fix errors concerning formatting or filing requirements.
In an ongoing case handled by Berger Montague, our whistleblower client recently sought to amend a complaint filed against medical device manufacturers ev3 and Covidien, Ltd. The complaint alleged off-label marketing and various other issues under the False Claims Act. Upon seeking to submit an amended complaint, the defendants asserted that the whistleblower was trying to circumvent deadlines and unnecessarily extend the litigation process, causing the court to consider throwing out the case.
Today we will review the allegations of the case, as well as the First Circuit’s analysis of the issue. The court ultimately ruled in favor of our whistleblower and avoided an unnecessary dismissal of the case on technical grounds.
Background of D’Agostino v. ev3 Inc.
In 2010, whistleblower Jeffrey D’Agostino filed a False Claims Act lawsuit against Ireland’s Covidien, Ltd. and its subsidiary, ev3. In the lawsuit, D’Agostino alleged that the companies improperly coached sales representatives to instruct doctors on various off-label uses of medical devices. In his complaint, the relator alleged that the companies pushed the use of their Onyx and Axium medical devices for other procedures not specifically approved by the Food and Drug Administration (FDA). This knowledgeable fraud was grounds for False Claims Act liability concerning Medicare and Medicaid patients.
After earlier amended complaints, which were followed by a motion to dismiss by ev3, the relator prepared to submit an additional amended complaint, which added additional factual assertions and dropped several other defendants, in response to the defendants’ motion to dismiss. The court held that, absent of finding “good cause” for the third amendment, the relator could face dismissal of the case.
The District Court rejected D’Agostino’s amended complaint, citing lack of good cause for the request. The court additionally granted the defendants’ motions to dismiss on the premise that the whistleblower relied on documents previously filed by the FDA, which can be fatal to a False Claims Act case.
Berger Montague appeals the decision
As explained in yesterday’s post, public policy promotes the resolution of matters on the merits of the case rather than on a technicality or procedural issue. When possible, courts should grant plaintiffs the opportunity to amend their complaint and are expected to grant such amendments liberally.
In his appeal, D’Agostino argued that the court’s scheduling orders did not specifically state a deadline for the final amended complaint, and the more stringent “good cause” standard that applies only after a scheduling order deadline has passed did not apply and he should have been allowed to amend his complaint under the more lenient “leave freely given” standard.
In the end, the U.S. Court of Appeals for the First Circuit sided with D’Agostino, holding that the imposition of a stricter standard was not congruent with the rules of procedure and relying on the historic policy of allowing plaintiffs liberal opportunity to amend a complaint in order to keep a lawsuit afloat.
Contact Berger Montague today
If you are considering a False Claims Act lawsuit and would like to discuss your information with an experienced whistleblower attorney, please contact Berger Montague right away!