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U.S. v. Takeda Pharmaceuticals, No. 11-2077

Decided: January 11, 2013

The Fourth Circuit Court of Appeals affirmed the decision of the district court to dismiss relator’s action under the False Claims Act. The court of appeals found that the district court did not abuse its discretion.

Noah Nathan (Relator) is a sales manager for Takeda Pharmaceuticals (Takeda) and brought this action against his employer under the False Claims Act. Relator claimed that certain types of drugs that have not been approved by the Food and Drug Administration (FDA) are not reimbursable under federal health insurance programs. Relator claimed that since these drugs were not reimbursable, presenting a claim for payment for these drugs was a violation of the False Claims Act. The Act prohibits anyone from knowingly “caus[ing] to be presented” to the government false claims for payment or approval. The district court dismissed the case on two grounds: (1) the complaint did not allege the “presentment” of a false claim to the government for payment; and (2) the complaint also failed to adequately allege causation.

The court of appeals held that the Relator did not meet the pleading standards of Rule 9(b) of the Federal Rules of Civil Procedure. Rule 9(b) requires a False Claims Act plaintiff to provide “some indicia of reliability” that an actual false claim was presented to the government.  The court of appeals found that the Relator did not provide evidence of any false claims being submitted to the government but only general allegations. The False Claims Act requires more specific allegations than those given by the Relator. Since the Relator’s amended complaint was speculative, the motion to dismiss granted by the district court was affirmed.

Full Opinion

-Samantha James