Case: 13-10973   Date Filed: 06/11/2014   Page: 1 of 44


                                                              [DO NOT PUBLISH]

                IN THE UNITED STATES COURT OF APPEALS

                         FOR THE ELEVENTH CIRCUIT
                           ________________________

                            Nos. 13-10973; 13-11949
                          ________________________
                      D.C. Docket No. 1:09-cv-22302-KMW

UNITED STATES OF AMERICA,
Ex rel., et al.,
                                                                           Plaintiff,

MICHAEL KEELER,
Relator,

                                                                Plaintiff-Appellant,

                                      versus

EISAI, INC.,

                                                               Defendant-Appellee,

100 TICE BLVD, et al.,

                                                                         Defendants.

                           _______________________

                   Appeals from the United States District Court
                       for the Southern District of Florida
                           _______________________

                                  (June 11, 2014)
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Before MARTIN, FAY, and SENTELLE, * Circuit Judges.

PER CURIAM:

       We affirm the dismissal of this case for the reasons set forth in the district

court’s scholarly and thorough January 31, 2013, Order and its April 1, 2013,

clarification Order.

       AFFIRMED.




       *
      Honorable David Bryan Sentelle, United States Circuit Judge for the District of
Columbia, sitting by designation.
                                              2
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                         UNITED STATES DISTRICT COURT
                         SOUTHERN DISTRICT OF FLORIDA

                          Case No. 09-22302-CV-WILLIAMS


UNITED STATES OF AMERICA, et al.,
ex rel. Michael Keeler,

           Plaintiffs,

vs.

EISAI, INC.,

      Defendant.



                                        ORDER

      THIS MATTER is before the Court on Defendant Eisai Inc.’s (“Eisai”) Motion to

Dismiss (DE 95). Eisai is a Japanese manufacturer of pharmaceutical drugs. Michael

Keeler (“Relator”) was one of twenty-four sales representatives for Eisai’s United States

subsidiary, a position he held during a three-year period from sometime in 2006 through

April 2009. He initiated this qui tam action on August 4, 2009 under the False Claims

Act (“FCA”), which allows individuals to bring private actions in the name of the

Government against individuals who defraud the Government. 31 U.S.C. § 3730(b).1


1
      More specifically, the Act imposes liability on anyone who knowingly presents “or
      causes to be presented” a false claim for payment to be approved by the
      government. 31 U.S.C. § 3729(a)(1) (2006). It also prohibits knowingly making,
      using, or causing to be used “a false record or statement to get a false or
      fraudulent claim paid or approved by the government.” 

U.S.C.
      3729(a)(2). The Fraud Enforcement of Recovery Act (“FERA”), Pub. L. No. 111-
      21, § 4, 123 Stat. 1617 renumbered portions of the FCA and revised Section
      (a)(2) - now Section (a)(1)(8) - so that it imposes liability on any person who
      “knowingly makes, uses, or causes to be made or used, a false record or
      statement material to a false or fraudulent claim.” Although this case was
      commenced after the FERA’s June 7, 2008 effective date, the false claims
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After reviewing the pleadings and the parties’ arguments, the Court concludes that

although the Complaint - at 189 pages - recites numerous factual allegations and legal

conclusions,2 it fails to plead key elements of fraud in accordance with Federal Rule of

Civil Procedure 9(b). Because Relator has had ample opportunities to correct the

deficiencies, the Court will now dismiss his claims with prejudice.

         I.       BACKGROUND

         Principally, Relator claims that Eisai promoted its drugs for non-approved uses

and paid medical providers to use its drugs in non-approved ways, which he personally

observed or became aware of while working at the company. According to Relator,

service providers allegedly submitted claims for reimbursement through government-

administered health care programs that were not reimbursable and with respect to

which they falsely certified that they had not received a kickback in connection with the

claim.        Further, Relator contends that Eisai falsified drug payment information and

submitted it to the Government, thereby failing to give the Government preferred rates

as it was contractually obligated to do.       The Complaint describes this conduct as

beginning in 2006 and continuing to this date.




         alleged bridge that timeframe and implicate both versions of the law. See United
         States ex rel. Hopper v. Solvay Pharmaceuticals, Inc., 

, 1327 n.3
         (11th Cir. 2009). Nevertheless, the distinction between the old and new statutory
         language is immaterial for purposes of the motion and for ease of convenience,
         the Court refers to the superseded numbering. See United States ex Rel. Nowak
         v. Medtronic, Inc., 

, 342 nn.19-20 (D. Mass. 2011).
2
         In arguing against dismissal, Relator notes “the Complaint now contains 86 more
         pages” than the previous complaint. As is made clear from this order, volume
         does not necessarily equate to specificity.
               Case: 13-10973      Date Filed: 06/11/2014     Page: 5 of 44


              A.     Off-Label Promotion

       Relator contends that the Defendant marketed and promoted two cancer-treating

drugs, Ontak and Dacogen, for off-label uses, i.e., uses that go beyond what has been

approved after an exacting review process by the Food and Drug Administration. Ontak

was approved to treat cutaneous T-Cell lymphoma “for patients whose malignant cells

express the CD-25 component of the IL-2 receptor.” (Compl. ¶ 92.) Despite this, Eisai

allegedly promoted the drug for treatment of follicular non-Hodgkin’s lymphoma, chronic

lymphatic lymphoma, relapsed/refractory B-cell non-Hodgkin’s lymphoma, adult T-cell

leukemia lymphoma, peripheral T-cell lymphoma, graft versus host disease and

melanoma. (Id. ¶ 83).3 Dacogen is indicated solely for the treatment of myleodysplastic

syndromes, a condition in which bone marrow does not produce enough healthy blood

cells, but Eisai allegedly promoted it for treatment of acute myelogenous leukemia,

which is a cancer affecting blood cells.   (Id. ¶¶ 165-66.)

       As a sales representative for Eisai, who also attended company meetings and

interacted with other employees, Relator claims to have direct and personal knowledge

of the message Eisai sought to communicate to physicians. (Compl. ¶ 12-14, 54.)

While Eisai’s official policy was that off-label studies should not be distributed during

sales, he was “supplied with numerous articles of dubious scientific nature, touting

various off-label uses of Ontak which were to be distributed to physicians and referred

to during visits to physicians.” (Id. ¶¶ 87, 96, 125.) Apart from educating physicians

about the suitability of its drugs for other indications, Eisai “marketed the spread”: that


3
       Additionally, Relator suggests that Eisai might have promoted Ontak for
       cutaneous T-Cell lymphoma, a treatment outside the approved parameters.
       (Compl. ¶¶ 92-93.)
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is, Eisai alerted certain providers of the profit to be earned based on the difference

between the discounted price of Ontak they received and the reimbursements they

would recoup.       (Id. ¶ 129.)   The “spread” was approximately $700 per dose

administered and motivated doctors to prescribe the drug as much as possible. (Id. ¶

133.)4 He alleges that sales representatives were trained to use similar tactics to

market Dacogen. (Id. ¶ 172.)

       Eisai incentivized its representatives to act by providing “lucrative commissions to

its marketing force” and counting off-label sales toward representatives’ sales quotas.

(Compl. ¶ 36.) The pressure was such that Relator complained to his supervisor, David

Trexler, about having “to achieve the company’s required sales quotas which were

inflated because they included a high percentage of off-label sales.” (Id. ¶ 109.) In

October 2008, Eisai’s oncology sales representatives compiled sales information

showing that between 50 and 70 percent of Ontak’s total sales were derived from off-

label sales.   (Id. ¶ 111.)

       In the Complaint, Relator refers to just a few instances in which Eisai engaged in

this promotional conduct. For example, in November 2006, Relator was a trainee in an

Ontak sales class in which he received off-label studies to use in making presentations

to physicians and other similar materials. (Compl. ¶¶ 81-82, 88-90.) At an unspecified

time and with no details of its contents, an Eisai District Manager distributed a paper

advocating off-label use of Ontak to sales representatives. (Id. ¶ 90.) In June 2007,



4
       Because of this, at least one medical institution, the University of Louisville
       Cancer Center, was ultimately persuaded to purchase Ontak for off-label
       treatment. (Compl. ¶ 131 (“The University of Louisville Cancer Center was an
       institution persuaded to purchase Ontak for the off-label treatment of melanoma
       due to the “spread.’”).)
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Eisai’s director of research wrote an e-mail to Eisai’s sales managers suggesting that an

unapproved off-label marketing update (which is not further described) should be shown

to providers but not left with them. (Id. ¶ 99.) 5 At an unspecified time and without

elaboration, Eisai’s Vice President of Sales, Leslie Mirani, instructed unknown sales

representatives to promote Dacogen for off-label use, to promote longer administration

at more frequent intervals, and to use larger dosages.      (Id. ¶ 174.)   Finally, without

describing who was involved, where it occurred, or when it was said, Relator claims he

“was directed to tell physicians . . . that there were studies showing that CD-25

positive/negative made no difference in the treatment of patients, which was known to

be untrue.” (Id. ¶ 93.)

       Beyond employing its sales force to deliver such sales messages, Relator

alleges that Eisai engaged physicians to promote off-label uses. “Dr. Peter Heald was

compensated by Eisai to speak and write articles on off-label uses of Ontak.” (Compl.

¶¶ 90, 154.) Additionally, Lauren Pinter-Brown, M.D. was paid $20,000 as another

Ontak consultant and spoke to a group of South Florida physicians in 2008 about off-

label uses of Ontak and “presenting claims to Medicare and Medicaid.” (Id. ¶¶ 154,

164, 249.) And in October 2008, Dr. Francine Foss spoke at a dinner in South Florida

“on the use of Ontak for treating peripheral T cell lymphoma.” (Id. ¶ 153.)6


5
       Eisai’s director of research “routinely provided Eisai sales representatives
       updates and information on studies, events, and use of Ontak for various off­
       label uses for the sales representatives to use in their marketing and promotion
       of Ontak.” (Compl. ¶ 98.)
6
       Through “Advisory Board” meetings starting in 2008, Eisai hired doctors to speak
       about off-label uses for Ontak and Dacogen and hosted conferences at high-end
       resorts. (Compl. ¶¶ 152-54.) Attendees were “frequently paid thousands of
       dollars for their attendance.” (Compl. ¶ 158.) Two speakers - Drs. Dang and
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       According to the allegations, doctors were also paid to conduct off-label studies.

Relator provides a single example of this: a doctor named Nam Dang, M.D. was paid

$50,000 in consulting fees, and authored “clinical studies related to the off-label use of

Ontak for unapproved conditions, including B-cell lymphoma and [peripheral T-cell

lymphoma].” (Compl. ¶ 248.) Dr. Dang was also identified as an Eisai contact to

physicians, who were told to “call [him] directly with questions about the suitability of

Ontak for off-label uses.” (Id. ¶¶ 148, 154, 248.) 7

       Additionally, Eisai funded hospitals for their role in facilitating Eisai’s promotion of

off-label uses of its products to doctors. In March 2007, the University of Miami

Sylvester Cancer Center was given an “educational grant” to allow a doctor to make a

presentation on Ontak’s approved uses, but which ultimately addressed the off-label

use of Ontak. (Compl. ¶¶ 148-49.) Likewise, in July 2007, the University of Arizona and

a doctor received a “preceptorship” grant, which was followed by that doctor presenting

on Ontak’s use for treatment of 8-cell lymphoma. (Id. ¶ 150.) Relator believes that

similar educational grants were given to two other facilities – the Dana Farber Cancer

Center and the Lurie Cancer Center at Northwestern University.        (Id. ¶ 151.)

       Finally, although it is not tied to any payment, prescription, or claim submission,

Relator makes much of Eisai’s Oncology Reimbursement Assistance (“OAR”) Program,



       Foss - received $50,000 and $25,000, respectively, on an annual basis in
       speaking and consulting fees. (Compl.164.)

7
       The complaint also briefly mentions that Dr. Foss was paid “to conduct supposed
       clinical trials which were not submitted to the FDA . . . primarily to encourage and
       reward Dr. Foss and [her institution] for prescribing Ontak off-label and making
       false and fraudulent claims to Medicare and Medicaid.” (Compl. ¶ 256(a).) It is
       unclear whether the results of this study were included in marketing materials
       sent to physicians. (See Compl. ¶ 88 (referring to a “Foss paper”).)
               Case: 13-10973     Date Filed: 06/11/2014     Page: 9 of 44


which guaranteed that prescribers would be paid at Medicare rates. As purportedly

reflected in an e-mail that Relator sent to an Eisai employee in March 2007, Eisai

promised to cover the price of Ontak if it was not covered in whole or in part by

Medicare when a claim was submitted, regardless of whether it was ultimately approved

or rejected by the Government. (Compl. ¶¶ 139, 146.) 8 Relator alleges that this

practice “greatly increase[ed] the number of drug prescriptions and, indirectly, the

amount of money spent by the federal government for reimbursement of prescriptions

covered by the Government Health Care Programs.” (Id. ¶¶ 139-141.) More to the

point, he alleges that this practice was a recognition by Eisai that off-label uses might

not be reimbursed by the government. (Id. ¶¶ 142-43.) Relator claims that unnamed

Eisai sales representatives were trained at unspecified times to deliver messages that

Relator loosely describes in his Complaint as “essentially” comprised of the following:

       Medicare could reject these claims because you’re prescribing Ontak for
       an offlabel use. But don’t worry: We’ll coach you on the claims
       submission process to optimize reimbursement. With our tips on coding,
       these claims submissions will fly below the radar. Trust us. Besides,
       we’ve got your back—If Medicare or Medicaid doesn’t pay you, we will
       ensure that you are not out of pocket!

(Id. ¶ 142.)




8
       The e-mail states in relevant part: “FCS financial coordinator called me they are
       having problems getting the [Ontak] credit from the wholesaler even though we
       have officially taken care of everything on our end. I asked her to send me an
       email with what’s going on with wholesaler names & emails. That’s the 1st
       problem that occurred today.” Although not entirely straightforward, Relator
       contends that “[t]his e-mail reflects the existence of the OAR Program, and
       Eisai’s efforts to assure providers that they would not be out-of-pocket when a
       claim for reimbursement of Ontak was not approved.” (Compl. ¶ 146.)
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                  B.     Kickbacks

       Next, Relator alleges that Eisai engaged in a “nationwide system” of kickbacks as

part of its marketing strategy. (Compl. ¶ 33.) In addition to the payments to physicians

for conducting off-label studies and advocating off-label use and payments to hospitals

for hosting related lectures, 9 Relator cites several other instances of what he takes to

constitute illegal kickbacks: “any money, fee, commission, credit, gift, gratuity, thing of

value, or compensation of any kind which is provided, directly or indirectly, to any prime

contractor, prime contractor employee, subcontractor or subcontractor employee, for the

purpose of improperly obtaining or rewarding favorable treatment in connection with a

prime contract or in connection with a subcontract relating to a prime contract.” (Id. ¶¶

20-21 (quoting 41 U.S.C. §§ 52-53).)

      However, there few details regarding the payments these health care providers

received from Eisai. For example, Relator contends that at an unidentified Tampa

resort at some point in 2007, one unnamed physician received $3,000 in

accommodations relating to his attendance at a lecture “focus[ing] on Ontak’s use for T-

cell lymphoma and other cancers.” (Compl. ¶ 157.) In July 2007, unspecified “[m]onies”

were paid to a “Dr. Miller” for making a “presentation regarding use of Ontak for B cell

lymphoma.”     (Id. ¶ 150.)    And without elaboration, Relator claims that “[o]ther

physicians   promoting    off-label use    of Ontak    who received      very substantial

compensation from Eisai were Dr. Nam Dang, Nevada Cancer Center, Dr. Pinter-

Brown, UCLA, Dr. Timothy Kuzel with Northwestern, and Dr. Peter Heald, a

9
       The kickback allegations overlap significantly with details of Eisai’s scheme to
       promote off-label uses, particularly aspects that involved payments to physicians
       and hospitals for their assistance in promoting Eisai’s drugs.
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 dermatology professor.” (Id. ¶ 154.) “[S]imilar educational grants were paid in return

 for off-label presentation access to such well-known cancer treatment centers as:

 the Dana Farber Cancer Center in Boston, Lurie Cancer Center at Northwestern

 University in Chicago, and the M.D. Anderson Cancer Center in Houston, Texas.”

 (Id. ¶ 151.)

                C.    Submission of False Claims for Reimbursement

       Relator alleges that any claim for reimbursement resulting from Eisai’s off-label

promotion or payment of kickbacks is fraudulent, unreimbursable, and constitutes a

“false claim” within the meaning of the FCA. (Compl. ¶¶ 135, 219, 229.) Providers can

receive payment by submitting claims through three government-funded programs:

Medicare, which provides health services for individuals 65 and older (Compl. ¶ 2);

Medicaid, which provides health services to low-income individuals, and is paid for by

states that are reimbursed to some degree by the federal government (Id. ¶ 3); and

TRICARE, which provides health services to military personnel and their dependents.

(Id. ¶ 4.)

       With respect to kickbacks, providers seeking Medicare coverage agree that their

claims are “conditioned upon the claim and the underlying transaction complying with

[Medicare] laws, regulations, and program instructions (including, but not limited to, the

Federal anti-kickback statute and Stark law, and on the [provider’s] compliance with all

applicable conditions of participation in Medicare.”      (Id. ¶ 224.)   Similar language is

contained in certifications accompanying cost reports they must submit. (Id. ¶¶ 225-

226.)10 Individual state statutes control Medicaid reimbursements, but they generally



 10
         In greater detail, the complaint alleges that:
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provide that payment may be withheld for fraud or misrepresentation, concealment of a

material fact, or receipt of a kickback in connection with furnishing treatment.         (ld. ¶¶

230-237.)    According to Relator, kickbacks run afoul of the FCA because Medicare

participants must certify compliance with the Anti-Kickback Act to receive payments for

prescriptions given to their Medicare patients.        (ld. ¶ 23.)    Alternatively, because the

Government would not have paid the claims had it known of the violation of a law, they

are false under an “implied certification” theory.   (ld. ¶ 31.)

        However, there are few details to support a conclusion that any hospital or doctor

 that received payments from Eisai as described above - assuming they constitute



        224. In order to be eligible for Medicare reimbursement, both hospitals
             and doctors are required to sign a Provider Agreement which states:
             “I agree to abide by the Medicare laws, regulations and program
             instructions that apply to [me]....I understand that payment of a claim
             by Medicare is conditioned upon the claim and the underlying
             transaction complying with such laws, regulations, and program
             instructions (including, but not limited to, the Federal anti­ kickback
             statute and Stark law), and on the [provider’s] compliance with all
             applicable conditions of participation in Medicare.

        225. Hospitals, but not physicians, are also required to submit a Hospital
             Cost Report with their submissions of requests for claims
             reimbursement.      It states: punishable by criminal, civil and
             administrative action, fine and/or imprisonment under federal law.
             Furthermore, if services identified in this report [were] provided or
             procured through the payment directly or indirectly of a kickback or
             where otherwise illegal, criminal, civil and administrative action,
             fines and/or imprisonment may result.

        226. The person signing the Hospital Cost Report must certify: “To the
             best of my knowledge and belief, [the Hospital Cost Report] is a
             true, correct and complete statement prepared from the books and
             records of the provider in accordance with applicable instructions,
             except as noted. I further certify that I am familiar with the laws and
             regulations regarding the provision of health care services, and that
             the services identified in this cost report were provided in
             compliance with such laws and regulations.
               Case: 13-10973     Date Filed: 06/11/2014    Page: 13 of 44


kickbacks - submitted a claim for reimbursement. As best the Court can tell, Dr. Foss,

whose role is otherwise described      as a speaker and director of off-label studies,

“prescribe[ed] Ontak off-label and ma[de] false and fraudulent claims to Medicare and

Medicaid.” (Compl. ¶ 256(a).) The Dana Farber Cancer Center and the M.D. Anderson

Cancer Center appear on a company report as having purchased Ontak, a purchase for

which Relator believes they sought reimbursement. (Id. ¶ 240.) Dr. Pinter-Brown was

paid for serving as a consultant; at one point in the Complaint, Relator refers to the fact

that she “made off-label Ontak claims to Medicare and Medicaid.” (Id. ¶ 249.) Finally,

the Complaint suggests that the most frequent lecturers were also the top off-label

prescribers.   (Compl. ¶¶ 156, 163).       As discussed below, without more, these

conclusory allegations are insufficient to assert that claims were actually submitted to

the Government for reimbursement.

       Similarly, with regard to off-label promotion - assuming this activity can render a

claim false - there are few allegations to support Relator’s assertion that doctors who

were persuaded by Eisai to prescribe medication off-label submitted claims to the

Government. With respect to the three doctors who were paid for speeches regarding

Ontak as described above - Drs. Heald, Pinter-Brown, and Foss - the Complaint is

conspicuously silent as to whether any prescribing doctor was in attendance or whether

any speaker caused any particular off-label claim to be submitted. The same is true of

Dr. Dang, who was allegedly hired as Eisai’s consultant and to conduct off-label studies,

and the hospitals that were paid to host off-label presentations. In sum, it is unclear

whether any doctor who attended any of those lectures, read any of those articles or
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studies, or spoke to Eisai’s consultants were persuaded to make off-label prescriptions

and to seek reimbursement for them.

       Nevertheless, the Complaint does provide limited discussion of submissions that

resulted from Eisai other promotional activities. Over a nine month period, Eisai sales

representatives made in-person sales calls to three doctors at Baptist Hospital, stating

that clinical data demonstrated that Dacogen was effective for an off-label indication and

leaving behind Eisai-sponsored studies and marketing materials. (Compl. ¶ 177.)

According to the Complaint, Baptist Hospital then used Dacogen for non-approved

uses. (Id. ¶ 177.) Relator alleges that Eisai “intended that [its] above-described

marketing practices would result in the submission of off-label claims to Medicare and

Medicaid” and that they “caused [the hospital] to submit false or fraudulent claims . . .

which were approved and paid by Medicare and Medicaid respectively.” (Id. ¶ 178.)

Relator makes verbatim allegations with respect to in-person sales calls by unspecified

“Eisai sales representatives” to two doctors at Memorial Regional Hospital, two doctors

at Sylvester Cancer Center, and two doctors at Boca Raton Community Hospital. (Id.

¶¶ 179-184.) Relator asserts that the promotions and other activities resulted in false

claims by roughly two dozen hospitals during the two-and-a-half year timeframe of the

Complaint and Relator provides approximate dollar figures based on his estimation. (Id.

¶¶ 57, 59, 256.)

       Relator also alleges that Eisai was directly involved in falsifying submissions.

Without specifying exactly who, where, when, or what statements were made, the

Complaint states that Eisai hired reimbursement specialists to coach physicians,

hospitals, and other medical providers on how to present off-label Ontak claims for
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reimbursement, including through telephone support.          (Compl. ¶¶ 241-42.)        For

instance, Eisai recommended that they provide an “off-label secondary diagnosis

code[]” on a Medicare claim form, such as diabetes. (Id. ¶¶ 241-246.)11 Through this,

Eisai intended and caused false claims for payment to be submitted to Medicare and

Medicaid. (Id. ¶¶ 243-45.)

       The most significant document Relator points to regarding false submissions is a

GOERS report, which was provided to Eisai’s sales representatives. This report shows

the number of units of Ontak that Eisai sold to 188 named providers, and lists their

addresses and reporting dates. (Compl. ¶¶ 59, 238, 240; Compl. Ex. G.) Although the

report provides little more than the provider’s name and the quantity of drugs each had

bought by a certain date (notably, it includes no billing information, such as dollar value

of the sales and how much was reimbursed by the Government}, he alleges that he

“was informed by managers that the providers listed in the GOERS report routinely bill

Medicare and Medicaid.” (Id. ¶ 240.) Based on his own experience, Relator estimates

that of his $5.5 million in sales of Ontak, twenty-five percent was later falsely or

fraudulently submitted to Medicare for reimbursement and two percent was submitted to

Medicaid.   (Id. ¶ 255.) He further estimates that 2,000 hospitals, oncology offices,




11
      Like other allegations, this claim fails to identify who was involved, what precisely
      was said at what time and in which location, or whether there were any specific
      instances where a prescriber followed Eisai’s guidance. Moreover, the Court is
      unsure how the statement furthers the scheme alleged. There is no allegation
      that using such codes reflected false diagnoses - that is, that the patient did not
      suffer from diabetes- and there is no explanation of how listing them rendered
      the claims more likely to be reimbursed.
              Case: 13-10973      Date Filed: 06/11/2014    Page: 16 of 44


 oncologists, and pharmacies submitted claims that involved off-label promotion or

 kickbacks. (Id. ¶ 59.)

              D.     Best Price Violations

       While all other allegations assert that Eisai engaged in conduct that caused false

 claims to be filed, Relator asserts one way in which Eisai made a false claim to the

 Government directly - falsely reporting pricing information. Medicare and Medicaid

 rebate programs ensure that pharmaceutical companies offer state governments

 reimbursement rates for drugs that are no greater than the rate charged to other entities

 (i.e., manufacturers must provide the Government with the “Best Price”). (Compl. ¶¶

 187-88.) As part of the agreement to provide such rebates, manufacturers must make

 quarterly reports that disclose pricing information for covered drugs, including the best

 price offered to any purchaser. (Id. ¶¶ 188-89, 191.) Relator contends that Eisai

 falsified information about its drug pricing to the Government with respect to Ontak,

 Dacogen, and two other drugs:       Aloxi, which is used to treat nausea caused by

 chemotherapy, and Fragmin, which is used to treat blood clots caused by cancer or

 heart conditions. (Id. ¶¶ 185-86.) Relator alleges that this conduct is actionable under

 the FCA. (Compl. ¶ 192.)

      These drugs were highly profitable to Eisai, but also faced stiff competition from

rival manufacturers making versions under their own name.               (Id. ¶¶ 194-96.)

Accordingly, Eisai gave prospective buyers aggressive discounts, which were approved

at the sales representative and management level, but not tracked centrally by Eisai.

(Id. ¶¶ 194, 196.) Eisai’s discounts were based on volume and bundling with other

drug sales. Relator was told by unnamed supervisors that Eisai’s best customers were
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allowed volume discounts that were not included on company price lists or information

sent to the Government. (Id. ¶ 201.) At a conference in 2008, Relator and other sales

representatives learned that Eisai planned to falsely report an increase in the cost of

Aloxi -     which would increase its average sales price -             and obtain a higher

reimbursement rate from Medicare and Medicaid. (Id. ¶¶ 204-05.) In reality, because

of discounts offered to physicians, the sales price was decreasing. (Id. ¶ 205.) At a

sales meeting in 2008, an Eisai sales representative named “Frank” told Relator that

“[n]obody else” but Jackson Memorial Hospital in Miami, Florida was getting a low price

on Fragmin. (Id. ¶¶ 207-08.) While he did not specify a price that Jackson paid or the

price Eisai reported to the Government, he mentioned that “[w]e are almost giving it

away.” (Id. ¶ 207.) And finally, two upper level Eisai managers launched a plan to

bundle Aloxi and Dacogen in order to “gain a formulary position at each institution

purchasing them.” (Id. ¶¶ 214-15.)

                 E.     Procedural History

          This case has a procedural history commensurate with the breadth and

 complexity of the allegations.      After his initial complaint, Relator filed an amended

 complaint on July 8, 2010 (DE 19). 12 On February 24, 2011, the Government filed a

 notice declining to intervene in this action, leaving Relator to prosecute this action on its

 12
          Additionally, while it does not involvethe issues currently before the Court, Keeler
          brought an action for retaliation under Florida’s Whistleblower’s Protection Act in
          state court sometime after filing his initial complaint under seal in this case. That
          action was removed to federal court and re-captioned Keeler v. Eisai Inc., No.
          10-cv-60959 (S.D. Fla.). Keeler and Eisai then reached a settlement of their
          claims that resulted in the dismissal of that action with prejudice. As part of the
          settlement, Keeler executed a release of claims against Eisai, but failed to
          disclose the existence of this qui tam action, which was still under seal. The
          Court previously ruled that Keeler’s qui tam claims can proceed because they
          were already pending at the time of the release and could only be dismissed with
          the consent of the Court and the Attorney General. (See DE 61.)
              Case: 13-10973      Date Filed: 06/11/2014      Page: 18 of 44


behalf. 13 The Court subsequently ordered that the complaint be unsealed and served

upon the Defendant (DE 25). The First Amended Complaint was dismissed by order

dated June 21, 2011 (DE 61). Relator filed a Second Amended Complaint on July 1,

2011 (DE 62) and a Third Amended Complaint on July 29, 2011. The Court had

warned Relator that he “will not be afforded any more opportunities to amend his

complaint.” (DE 85.)

       Based on the allegations described above, Relator essentially brings three

distinct claims. Count I alleges that Defendant’s promotion of off-label uses caused

doctors to prescribe drugs for off-label purposes and submit false claims for

reimbursement, violating the False Claims Act. Second, in that same Count, Relator

alleges that Eisai failed to provide the Government with “best prices” for Ontak,

Dacogen and two other drugs, Aloxi and Fragmin. Finally, Count II alleges that Eisai

paid prescribers to induce them to prescribe Eisai’s drugs and to submit claims for

reimbursement to Medicare and Medicaid, and also paid for physicians’ speeches and

for physicians to conduct off-label clinical trials. In so doing, Relator asserts that Eisai

violated the Anti Kickback Act, 41 U.S.C. §§ 52 et seq., and by extension, the FCA.14


13
       Although the United States declined to intervene in this suit, it filed a statement of
       interest in connection with the instant motion. The United States takes no
       position on “whether the relator has adequately plead[ed] facts that would state a
       cognizable claim under the FCA as properly interpreted” and “whether the relator
       has sufficiently plead[ed] elements of falsity, causation, or materiality.” (DE 110,
       at 2.)
14
       Counts I and II seek relief under § 3729(a)(1) and (a)(2) of the False Claims Act,
       as amended by FERA. Count II alleges that Eisai violated the Anti-Kickback Act,
       rendering false the claims of health care providers for purposes of the FCA.
       (Compl. ¶¶ 30.)
                Case: 13-10973      Date Filed: 06/11/2014     Page: 19 of 44


Because of this conduct, Relator also brings claims under various state anti-fraud

statutes (Counts III-XXXII). Eisai has moved to dismiss primarily on the ground that

Relator has failed to sufficiently state a claim.

       II.      LEGAL STANDARD

       To survive a Rule 12(b)(6) motion to dismiss, a plaintiff must plead sufficient facts

to state a claim that is “plausible on its face.” Ashcroft v. Iqbal, 

, 678

(2009) (quoting Bell Atlantic Corp. v. Twombly, 

, 570 (2007)). The Court’s

consideration is limited to the allegations presented. See GSW, Inc. v. Long Cnty., 

, 1510 (11th Cir. 1993). All factual allegations are accepted as true and all

reasonable inferences are drawn in the plaintiff’s favor. See Speaker v. U.S. Dep’t of

Health & Human Servs. Ctrs. for Disease Control & Prevention, 

, 1379

(11th Cir. 2010); see also Roberts v. Fla. Power & Light Co., 

, 1307 (11th

Cir. 1998). Nevertheless, while a plaintiff need not provide “detailed factual allegations,”

the allegations must consist of more than “a formulaic recitation of the elements of a

cause of action.” 

(internal citations and quotations omitted).

Additionally,   “conclusory   allegations,   unwarranted     factual   deductions   or   legal

conclusions masquerading as facts will not prevent dismissal.” Davila v. Delta Air Lines,

Inc., 

, 1185 (11th Cir.2003). The “[f]actual allegations must be enough to

raise a right of relief above the speculative level.” Watts v. Fla. lnt’l Univ., 

(11th Cir. 2007) (quoting 

).

       In addition to the requirements of Twombly, Iqbal, and Federal Rules of Civil

Procedure 8(a) and 12(b)(6), claims asserted under the False Claims Act (as well as

other fraud claims) are subject to the pleading standards of Federal Rule of Civil
              Case: 13-10973      Date Filed: 06/11/2014     Page: 20 of 44


Procedure 9(b). See United States ex. rel. Clausen v. Laboratory Corp. of Am., Inc. ,

, 1309-10 (11th Cir. 2002). 15 That rule provides that “[i]n allegations of

fraud or mistake, a party must state with particularity the circumstances constituting

fraud or mistake” but that “[m]alice, intent, knowledge, and other condition of mind of a

person shall be averred generally.” FED. R. CIV. P. 9(b). Rule 9(b) is satisfied if the

plaintiff pleads “(1) precisely what statements were made in what documents or oral

representations or what omissions were made, and (2) the time and place of each such

statement and the person responsible for making (or, in the case of omissions, not

making) same, and (3) the content of such statements and the manner in which they

misled the plaintiff, and (4) what the defendants obtained as a consequence of the

fraud.” Ziemba v. Cascade lnt’l, Inc., 

, 1202 (11th Cir. 2001) (quoting

Brooks v. Blue Cross & Blue Shield of Fla., Inc., 

, 1371 (11th Cir. 1997)).

       In the context of the False Claims Act, the complaint must set forth “facts as to

time, place, and substance of the defendant’s alleged fraud” and “the details of the

[defendant’s] allegedly fraudulent acts, when they occurred, and who engaged in them.”

(quotation omitted); accord United States ex rel. Sanchez

v. Lymphatx, Inc., 

, 1302 (11th Cir. 2010). “Underlying schemes and

other wrongful activities that result in the submission of fraudulent claims are included in

the ‘circumstances constituting fraud or mistake’ that must be pled with particularity

pursuant to Rule 9(b).” United States ex. rel. Karvelas v. Melrose-Wakefield Hosp., 360


15
       Based on the Eleventh Circuit’s FCA precedent, the Court rejects Relator’s
       suggestion that because he is pursuing a false claim and not a fraudulent claim,
       the pleading requirements applicable to fraud claims are not controlling. (See
       Opp’n at 9.) Accordingly, Relator is incorrect that he need not provide the “who,
       what, where, when” of fraud under that rule. (Opp’n at 9.)
              Case: 13-10973      Date Filed: 06/11/2014     Page: 21 of 

, 232 (1st Cir. 2004). As discussed herein, the Eleventh Circuit has recognized

that while these requirements of Rule 9(b) may, in practice, make it difficult for a qui tam

plaintiff to bring an action, they are necessary to prevent “[s]peculative suits against

innocent actors for fraud” and charges of guilt by association. 

(quoting United States ex rel. Cooper v. Blue Cross & Blue Shield of Fla., 

, 566-67 (11th Cir. 1994) (per curiam)).

       III.   DISCUSSION

       The Court previously found that Relator stated a claim under Rule 12(b)(6), but

that his claims were not pleaded with the degree of particularity required by Rule 9(b).

Significantly, Relator failed to describe specifically what Eisai did to cause false claims

to be submitted, omitted critical details of claim presentation, and did not describe how

the alleged kickbacks “crossed the line from legal conduct in compliance with federal

statutes to illegal kickbacks.” (DE 61.) 16 Now, despite having greatly expanded his

pleading and having crafted additional arguments to support his FCA claims, Relator’s

complaint - however prolix - fails to provide the requisite particularity to survive

dismissal. The Court addresses each of Relator’s claims in turn.




16
       In particular, Judge Ungaro, who presided over this action until it was transferred
       to the undersigned on September 8, 2011 (DE 99), held that “Plaintiff fails to
       identify with particularity a false claim that was presented to the government as a
       result of Defendant’s conduct. Plaintiff fails to identify who presented the claim,
       what it was for, when it was presented, and what specific conduct on the part of
       the Defendant caused the presentment of the claim.” (DE 61). For purposes of
       this order, the Court presumes that Relator’s claims are not subject to dismissal
       under Rule 12(b)(6).
             Case: 13-10973      Date Filed: 06/11/2014    Page: 22 of 44


             A.     Scheme to Promote Off-Label Uses

      The bulk of Relator’s complaint is focused on imposing liability under the FCA

due to Eisai’s scheme to promote off-label use of its pharmaceutical products. 17 Section

(a)(1) requires that the Defendant make or cause a claim to be made; that the claim was

false; that the falsity was known to the Defendant; and that payment was actually

sought from the Government. Under the FCA’s “cause to be submitted” language, a

defendant may be liable notwithstanding the fact that it was not the submitter of a claim

or that it was not in contractual privity with the government. United States v. Tauber

Extrusions, LP, 

, 835 (8th Cir. 2003) (quoting, inter alia, United States ex

rel. Marcus v. Hess, 

, 544-45 (1943)). According to the Complaint, Eisai

allegedly did this in four ways: (1) Eisai trained sales representatives to promote off-

label uses (providing incentives to do so), gave prescribers materials showing off-label

effectiveness, and marketed the spread; (2) Eisai paid consulting doctors to promote

such uses and to conduct off-label clinical studies; (3) Eisai gave medical facilities

grants and other payments for supporting Eisai’s promotion; and (4) Eisai ran

reimbursement programs to guarantee payment for off-label prescriptions to doctors.

      The Court need not delve into the myriad arguments made by the parties in their

extensive briefing since there are immediately apparent defects regarding the

circumstances of the fraud. 18 As to the fraud’s “who” and “where,” although Relator



17
      Keeler asserts that this is a “cause to be submitted’ case in which Eisai has
      caused providers to present claims for improper Medicare and Medicaid
      reimbursement, stemming from Eisai’s schemes.” (Opp’n at 12.)
18
      The parties’ prolific briefing does not focus on the central, threshold question for
      the Court - whether the claims properly plead the circumstances of the fraud.
      Rather than addressing the actual allegations of the Complaint, Plaintiff
       Case: 13-10973       Date Filed: 06/11/2014      Page: 23 of 44




concentrates on the standard of review, arguing that this Court need not adhere
to the Eleventh Circuit’s precedent applying Federal Rule of Civil Procedure 9(b)
to qui tam actions like this one. As noted above, the Court rejects that argument.
And for the reasons explained below, the Court declines to relax the pleading
requirements under the circumstances here.

For its part, Defendant seeks a ruling that no false claim is implicated as a matter
of law because even if Eisai promoted its drugs for off-label uses and they were
prescribed for an off-label use, the claims were still reimbursable. Cases
recognize that while off-label promotion is an illegal act under federal law, a
relator may not have standing to bring suit for it; a defendant is not subject to
FCA liability unless it seeks government compensation (or causes someone else
to seek compensation) for which it is not entitled. See United States ex rel.
Bennett v. Boston Scientific Corp., No. H-07-2467, 

, at *12
(S.D. Tex. Mar. 31, 2011) (collecting authority). Looking at the reimbursement
requirements of the government programs at issue, Defendant asserts that off­
label prescriptions are reimbursable if a physician determines that the use is
medically reasonable and necessary. See, e.g., 42 U.S.C. § 1395y(a)(1)(A).
Because of that statutory language and because the Court is not bound to accept
a plaintiffs assertions regarding legal conclusions, Defendant suggests that the
Court should find that the off-label allegations could never implicate a false claim.
However, other courts, including the Eleventh Circuit, have declined to address
this issue where, as here, Plaintiff fails to sufficiently articulate the details of the
fraud. See 

(assuming “arguendo that when a physician
writes an off-label prescription with knowledge or intent that the cost of filling that
prescription will be borne by the federal government, and when a claim is
ultimately submitted to the federal government to pay for that prescription, 31
U.S.C. § 3729(a)(1) may have been violated,” but dismissing the complaint for
failure to link promotion to submission of false claims); see also United States ex
rel. Carpenter v. Abbott Labs., Inc., 

, 410 (D. Mass. 2010).

While the Court ultimately does not reach the issue of whether Defendant’s
theory is correct as a matter of law, it notes that it would have difficulty accepting
that Relator’s allegations, as pleaded, satisfy the FCA’s falsity requirement.
Relator has not developed, in pleading or in argument, how the mere act of
promoting the subject drugs resulted in the submission of a claim containing a
false representation. See United States ex rel. Hess v. Sanofi-Synthelabo, Inc.,
No. 4:05CV570MLM, 

, at *10 (E.D. Mo. Apr. 21, 2006)
(requiring a relator basing a claim on a promotion scheme to allege “conduct
which was designed to present false information”); see also Nowak, 

at 345-46. For instance, he does not contend that a prescribing physician
falsely represented that the treatment was for an indicated condition when
seeking reimbursement from the Government. Similarly, he has not alleged that
a claim for reimbursement is the equivalent of a representation that the
requested service is covered, that submission of off-label claims runs afoul of any
              Case: 13-10973     Date Filed: 06/11/2014     Page: 24 of 44


specified receiving training and marketing materials advocating off-label use, he has

failed to properly demonstrate Eisai’s act of promotion. Relator has not alleged which

individuals at Eisai instructed him (or other sales representatives) to fraudulently

promote    off-label uses,   what those instructions      were, which     doctors sales

representatives contacted and induced to prescribe Eisai’s drugs, and what was said to

them to cause them to do so. There are no allegations that Eisai’s inducing statements

themselves were expressly false with the exception of one conclusory allegation that he

“was directed to tell physicians . . . that there were studies showing that CD-25

positive/negative made no difference in the treatment of patients, which was known to

be untrue.” (Compl. ¶ 93.) He has not alleged, for instance, that off-label studies Eisai

provided to physicians contained false data, that its representatives gave the impression

that the drugs were reimbursable when they were in fact not, or that Eisai

misrepresented the indications for which the drugs were approved. See Bennett, 

, at *26 (“Importantly, there is no allegation that the defendants concealed

or misstated the limits of the FDA’s approval on the use of the FlexView system.”).

      That same key information is lacking with respect to the speakers and lecturers

who allegedly were engaged to promote Eisai’s products. Notably, the Complaint is

completely silent as to the substance of their remarks and whether any plan participants


      of the certifications that prescribers make, or that the Government would not
      have reimbursed the claim had it known of the off-label nature of the use or the
      fact of the promotion. See United States ex rel. Polansky v. Pfizer, No. 04-cv-
      0704, 

, at *7-8 (E.D.N.Y. May 22, 2009) (citing authorities
      explaining the FDA’s position and concluding that “the entities to which
      reimbursement claims are made could hardly be understood to have operated on
      the assumption that the physician writing the prescription was certifying implicitly
      that he was prescribing [the subject drug] in a manner consistent with the
      Guidelines”).
              Case: 13-10973     Date Filed: 06/11/2014     Page: 25 of 44


were present. One example states in its entirety that “[i]n June 2007, Dr. Dang gave a

presentation at the University of Miami’s Sylvester Cancer Center. Dr. Dang’s

presentation was advertised as being on Ontak’s use in treating CTCL. Instead, Dr.

Dang lectured on his off-label use of Ontak.” (Compl. ¶ 149.) Or, “in October, 2008, Dr.

Franine Foss, a longstanding paid speaker of Eisai, spoke in south Florida at a dinner

program for physicians on the use of Ontak for treating peripheral T cell lymphoma.”

(Id. ¶ 153.) The Complaint makes other passing references to unnamed physicians

speaking about Eisai’s products at unspecified dates and locations. These allegations

fail to comply with the basic elements of pleading any fraudulent scheme. See, e.g.,

Sanofi-Synthelabo, Inc., 

, at *7 (“Plaintiff fails to allege the who, what,

when, where, and how regarding Defendant’s sales representatives allegedly promoting

the off-label uses of Elitek to doctors nor does he makes such allegations regarding

Defendant[ ] allegedly training its sales representatives in off-label uses of Elitek.”

(citation omitted)); Franklin v. Parke-Davis, 

, 50 (D. Mass. 2001)

(discussing promotion claim under Rule 9(b) where relator failed to specify who

“engaged in [the scheme to cause false submissions], where such conduct took place,

which [of defendant’s] personnel were involved, or any specific fraudulent statements

made to personnel”); see also United States ex rel. Butler v. Magellan Health Servs,

Inc., 

, 1216-17 (M.D. Fla. 1999) (noting that the “complaint fails to

refer to specific employees who may have been involved in submitting false claims”).

      Moreover, even if there were sufficient allegations of statements made by and to

physicians, Relator has failed to explain how the representations resulted in

prescriptions and requests for reimbursement. For instance, the Complaint does not tie
              Case: 13-10973       Date Filed: 06/11/2014     Page: 26 of 44


the efforts of Drs. Heald, Brown, Foss, and Dang - all of whom allegedly received

payment for lecturing on off-label uses or conducting off-label studies - to any claim

submitted by them or others. There is no allegation that a prescribing doctor who later

sought reimbursement attended those lectures or considered the studies. At no point

does Relator allege that any particular prescriber that is alleged to have submitted off­

label claims was actually aware of any of Eisai’s representations as communicated by

these doctors. The same is true of the named hospitals and institutions that received

money in exchange for research and lectures regarding Eisai’s drugs. For instance, the

University of Arizona is alleged to have received a grant in July 2007 (presumably for

allowing a presentation on off-label use of Ontak) (Compl. ¶ 150), but it is not one of the

institutions that is alleged to have submitted claims. Indeed, it is not mentioned again

anywhere else in the Complaint.

       Similarly, Relator has failed to plead with particularity that any claims for off-label

use were in fact submitted to the Government and reimbursed as a result of the

scheme, which is a requirement for an action based on off-label promotion under

Section (a)(1) and which deficiency scuttled the previous iteration of his Complaint. See

(requiring a plaintiff to link the fraudulent scheme to the

submission of false claims); United States ex rel. Atkins v. Mclnteer, 

,

1359 (11th Cir. 2006) (holding that a plaintiff must “provide the next link in the FCA

liability chain: showing that the defendants actually submitted reimbursement claims for

the services he describes”); Corsello v. Lincare, Inc., 

, 1013-14 (11th Cir.

2005) (affirming dismissal where complaint “did not allege that a specific fraudulent

claim was in fact submitted to the government”); 

(calling the
              Case: 13-10973       Date Filed: 06/11/2014     Page: 27 of 44


submission or presentment of a claim to the government the “sine qua non” of a False

Claims Act violation).

       Whether submission of the claim is sufficiently established is a different question

than whether the scheme has been sufficiently pleaded. See 

(“In short, Corsello provided the ‘who,’ ‘what,’ ‘where,’ ‘when,’ and ‘how’ of

improper practices, but he failed to allege the ‘who,’ ‘what,’ ‘where,’ ‘when,’ and ‘how’ of

fraudulent submissions to the government.”). The presentment requirement calls on

relators not only to describe details about how the schemes operated (however well that

might be pleaded), but to cite specific occurrences of actual fraud. 

, 1311-1312 & n.21. Thus, for at least some of the claims, a relator must provide

the following: “details concerning the dates of the claims, the content of the forms or

bills submitted, their identification numbers, the amount of money charged to the

government, the particular goods or services for which the government was billed, the

individuals involved in the billing, and the length of time between the alleged fraudulent

practices and the submission of claims based on those practices.” United States ex rel.

Karvelas v. Melrose-Wakefield Hosp., 

, 232-33 (1st Cir. 2004) (quoting

n.21).

       Illustrating this principle is the decision in Clausen (relied on for various points by

both sides), which involved allegations that a medical testing company submitted claims

for unnecessary tests to government programs, thereby violating the FCA. 

, 1306. Additionally, there were allegations of illegal kickback and

self-referral schemes that resulted in improper billing. 

The Eleventh Circuit

affirmed the district court’s dismissal of the complaint because the relator provided
              Case: 13-10973       Date Filed: 06/11/2014     Page: 28 of 44


details about the preparatory scheme, but failed to submit any bill, claim, or payment;

amounts charged by the defendant on what dates; or details of how the billing was

fraudulent. 

1311-12. It concluded that “nowhere in the blur of facts . . . can

one find any allegation, stated with particularity, of a false claim actually being submitted

to the Government . . . as to the plot’s execution, Clausen merely offers conclusory

statements, and does not adequately allege when - or even if - the schemes were

brought to fruition.” 

As the Fifth Circuit noted, “[t]he Clausen court made

plain its position that to plead a presentment claim, the minimum indicia of reliability

required to satisfy the particularity standard are the specific contents of actually

submitted claims, such as billing numbers, dates, and amounts.” United States ex rel.

Grubbs v. Kannenganti, 

, 186, 190 & n.32 (5th Cir. 2009) (commenting that

“[t]o require these details at pleading is one small step shy of requiring production of

actual documentation with the complaint” (citing United States ex rel. Pogue v. Diabetes

Treatment Ctrs. of Am., Inc., 

, 269 (D.D.C. 2002)). 19




19
       Although the Fifth Circuit in Grubbs criticized the stringent requirements of
       Clausen, subsequent cases decided by the Eleventh Circuit emphatically
       reaffirms the holding as binding precedent. Indeed, in Solvay- a promotion case
       - the relators were able to provide “a highly-compelling statistical analysis [that]
       renders inescapable the conclusion that a huge number of claims for ineffective
       off-label uses of [the subject drug] resulted from [the defendant’s illegal
       marketing] 

. However, even that evidence was
       deficient in that it did “not allege the existence of a single actual false claim.” 

we are unable to discern from the complaint a specific person or entity
       that is alleged to have presented a claim of any kind, let alone a false or
       fraudulent claim.”). To tie the promotion to false claims, relators must “identify
       specific persons or entities that participated in any step of this process” as well
       as “dates, times, or amounts of individual false claims.” 

Atkins, the
       relator could point to dates of services, name the patients that received the
              Case: 13-10973      Date Filed: 06/11/2014     Page: 29 of 44


      As applied to this case, Relator broadly alleges that Eisai engaged in “endemic,”

“nationwide,” and “systemati[c]” fraud by causing physicians and hospitals to submit

false claims for reimbursement under Medicare Part D. and Medicaid. (Compl. ¶¶ 53-

55, 255.) He also approximates the dollar amounts that hospitals purportedly received

in false claims during a time period covering three years, without any basis for his guess

or reference to any actual financial data of those hospitals. ( 

256). But

Relator never discusses or proffers a single false claim that was made to the

Government in the detail required by Clausen, nor has he submitted a copy of such a

bill or payment.   Instead, he proffers only conclusory assertions based on his own

speculation that claims were submitted. For these reasons, Relator’s claims based on a

promotional scheme are fatally deficient.

              B.     Kickback Allegations

       Relator’s kickback allegations present an independent ground for an FCA

violation, but also fail to meet the applicable heightened pleading standards. The

Complaint alleges that as part of the promotion of its drugs, Eisai paid doctors to speak

and write articles regarding off-label uses; paid doctors to conduct off-label studies; paid

hospitals, through grants and other mechanisms, to use Eisai’s drugs; and paid

providers guaranteed revenue through Eisai’s Oncology Reimbursement Program.

Those payments, the Complaint contends, constitute illegal kickbacks. Relator’s claim

implicates the FCA because he asserts that physicians receiving those payments

certified compliance with the anti-kickback laws on reimbursement forms. (Compl. ¶¶



       services, and identify the records that would prove his claim, but could not show
       that any claims were actually submitted to the 

.
              Case: 13-10973      Date Filed: 06/11/2014    Page: 30 of 44


224-226, 230-37.)     For instance, Medicare requires providers to sign a provider

agreement acknowledging that reimbursement is “conditioned upon the claim and the

underlying transaction complying with [Medicare] laws, regulations, and program

instructions (including, but not limited to, the Federal anti-kickback statute and Stark

law),” as well as other certifications. (Id. ¶¶ 224-226.) With respect to Medicaid, which

is a state-run program funded by the federal government, the Complaint asserts that

Eisai ultimately caused states to submit claims to the federal government for

reimbursement that falsely certified that the claims were in compliance with federal law.

(Id. ¶¶ 264.)20

       Courts have recognized that under an express certification theory, “[f]alsely

certifying compliance with the . . . Anti-Kickback Act[ ] in connection with a claim

submitted to a federally funded insurance program is actionable under the FCA.” United

States ex rel. Wilkins v. United Health Gp., Inc., 

, 312 (3d Cir. 2011)



20
       The anti-kickback regulations applicable to the Medicaid program state that:

              Whoever knowingly and willfully offers or pays any remuneration
              (including any kickback, bribe, or rebate) directly or indirectly,
              overtly or covertly, in cash or in kind to any person to induce such
              person -- (A) to refer an individual to a person for the furnishing or
              arranging for the furnishing of any item or service for which
              payment may be made in whole or in part under a Federal health
              care program, or (B) to purchase, lease, order, or arrange for or
              recommend purchasing, leasing, or ordering any good, facility,
              service, or item for which payment may be made in whole or in part
              under a Federal health care program, shall be guilty of a felony and
              upon conviction thereof, shall be fined not more than $25,000 or
              imprisoned for not more than five years, or both.

       42. U.S.C. § 1320a-7b(b)(2).
              Case: 13-10973        Date Filed: 06/11/2014    Page: 31 of 44


(quotation and citation omitted); see also 

(stating

that “a violation of the federal antikickback provision is not a per se violation of the FCA”

and that “[i]n order for the antikickback violation to be transformed into an actionable

FCA claim, the government must have conditioned payment of a claim upon the

claimant’s certification of compliance with the antikickback provision”            (citations

omitted)).

       Alternatively, an implied certification theory, which is also alleged, recognizes

that the FCA is violated where compliance with a law, rule, or regulation is a

prerequisite to payment but a claim is made when a participant has engaged in a

knowing violation. 

. So, for example, in McNutt v. Haleyville

Medical Supplies, Inc., 

(11th Cir. 2005), the Eleventh Circuit affirmed the

denial of a motion to dismiss finding that allegations of kickbacks can create FCA

liability where compliance with the Anti-Kickback Statute is a prerequisite for payment.

In particular, the alleged kickbacks in McNutt – which the Government

identified with “detailed facts” as well as “specific claims” that were submitted for

reimbursement – disqualified the defendants’ medical services from reimbursement

under the Medicare program, but the defendants nevertheless submitted claims for

reimbursement.     

The court concluded that “[w]hen a violator of

government regulations is ineligible to participate in a government program and that

violator persists in presenting claims for payment that the violator knows the

government does not owe, that violator is liable, under the [FCA], for its submission of

those false claims.” 

              Case: 13-10973      Date Filed: 06/11/2014     Page: 32 of 44


       It is important to note, however, that as with any basis for FCA liability, such

claims are subject to Rule 9(b)’s pleading requirements. Cf. 

n.20 (finding that relator stated a claim but declining to address whether it was pleaded

with particularity). Thus, the Court in Parke-Davis held that even if kickbacks are illegal,

dismissal was proper since the relator “failed to allege that physicians either expressly

certified or, through their participation in a federally funded program, impliedly certified

their compliance with the federal antikickback statute as a prerequisite to participating in

the federal 

. In particular, the complaint did not assert

that the defendant “caused or induced a doctor and/or pharmacist to file a false or

fraudulent certification regarding compliance with the anti-kickback statute.” 

the problem with Relator’s claims. Even assuming that the payments

alleged constitute illegal kickbacks, 21 the allegations that participants actually received

payments and falsely certified compliance - like the complaint in Parke-Davis and in

contrast to McNutt- are not sufficiently pleaded. As noted above, there are scarcely any

allegations that any doctor or facility that received such payments filed a claim for

reimbursement - and none that are pleaded with any degree of particularity.            With

respect to those few who did submit claims for reimbursement, there are no submission

allegations that can satisfy Clausen.     Thus, Relator fails to connect the scheme to

particular instances of fraud or misrepresentation. His allegations are insufficient to

support claims under Rule 9(b).




21
       Eisai contends that the payments at issue were not reciprocity for physicians’
       prescriptions of its drugs and that its rebate program falls under a statutory safe
       harbor exception that allows discount arrangements.
              Case: 13-10973      Date Filed: 06/11/2014     Page: 33 of 44


              C.     Best Price Violations

       Finally, the Court is compelled to reach the same conclusion with respect to

Relator’s FCA claims based on allegations of false best price submissions. As with

other claims, the linchpin of these allegations is not that Eisai violated any law requiring

it to provide the Government with the best price of its drugs or provided less in program

rebates than what was owed, but that it falsified information provided to the Government

and profited from it (although Relator confuses the two in the Complaint and in

argument). Section 3729(a)(1)(B) imposes liability on “any person who . . . knowingly

makes, uses, or causes to be made or used, a false record or statement material to a

false or fraudulent claim. Before the May 2009 amendment, the statute exposed a

person to damages if he or she “knowingly makes, uses, or causes to be made or used,

a false record or statement to get a false or fraudulent claim paid or approved by the

government.” 31 U.S.C. § 3729(a)(2) (2006).

       In this regard, the Complaint alleges that Eisai provided participants with

discounts that presumably did not factor into best price reports?22 It also alleges that

Eisai affirmatively and knowingly falsified information provided to the Government by

altering its reported prices. Because of this, Eisai presumably was able to charge the

Government more than it otherwise would have.             Again, as with Relator’s other

allegations, these claims are subject to Rule 9(b). See United States ex. rel. Foster v.

Bristol-Myers Squibb Co., 

, 825 (E.D. Tex. 2008).




22
       The Complaint also alleges that Eisai failed to instruct sales representatives that
       they could not provide prices to prescribers that were less than the best price
       offered to the Government. However, Relator does not tie this practice to a false
       price that was reported to the Government.
              Case: 13-10973      Date Filed: 06/11/2014      Page: 34 of 44


       Very briefly, the Complaint fails to allege with specificity what data was submitted

by Eisai to the Government that was false or fraudulent. The time periods alleged are

broad and often run from when Eisai acquired the rights to produce the drugs at issue

until Relator ended his employment. Nevertheless, there is not one description of a

single discount that was offered to a single provider. There is no discussion of any

particular pricing report and any assertions that discounts were not reported are

conclusory and unsupported by specific facts.          None of the allegations set forth

precisely what statements were made, when such statements were made, where such

statements were made, and who made them. See 

(citations

omitted). Relator’s best price violations thus fail to meet the 9(b) standard.

              D.     Relaxation of the 9(b) Standard

       Despite the infirmities of his complaint, Relator devotes the majority of his brief to

arguing against a heightened pleading standard. In particular, to the extent that his

Complaint is deficient, he asks the Court to apply a relaxed standard that would allow

him to proceed to discovery based upon his information and belief. He contends that as

an insider, he is able to proffer sufficient indicia of reliability that can excuse a lack of

particularity; that because he has alleged a far-reaching scheme, general discussions of

unlawful conduct are sufficient to establish his claim; and that the information needed to

properly plead his claim is exclusively in the hands of the Defendant, depriving him of

the ability to plead with particularity. Nevertheless, the Court concludes that relaxation

is not warranted here.

       First, it is true that some courts have recognized that information based on first­

hand knowledge can lend credibility to the relator’s claims and propel it over pleading
               Case: 13-10973     Date Filed: 06/11/2014    Page: 35 of 44


hurdles. For instance, in Hill v. Morehouse Medical Associates, Inc., No. 02-14429,

(11th Cir. Aug. 15, 2003)- a case upon which Relator heavily relies

(see Opp’n at 10-11) – the Eleventh Circuit allowed an FCA claim against a medical

services provider to proceed where the relator was a billing coder in the department

where the fraud occurred and possessed first-hand knowledge of the fraudulent conduct

(i.e., altering diagnosis codes to qualify for payment) based on her experience there.

Among other things, she was able to name some of the participants in the scheme,

describe the defendant’s practices in detail, recount the frequency of submission of

each type of claim, and identify the documents in the defendant’s possession that would

prove the fraud. Hill, 

, at *4-5. However, she could not recite the

names of patients or the dates that the claims were submitted, at least in part because

copying private records would violate laws regarding patient confidentiality. 

4-

5 & n.8. The Eleventh Circuit concluded that these were appropriate circumstances in

which 9(b)’s heightened pleading requirements could be relaxed. Therefore, the district

court’s dismissal was reversed notwithstanding the fact that Hill could not point to a

specific false claim.

       However, it is important to understand that the Court in Atkins later emphasized

that Hill was not binding precedent and stated that “Clausen supercedes Hill to the

extent that Hill is inconsistent with Clausen.” United States ex rel. Atkins v. Mclnteer,

, 1358 n.15 (11th Cir. 2006).            Thus, while the relator in Atkins

“cite[d] particular patients, dates and corresponding medical records for services that

he contend[ed] were not eligible for government reimbursement,” he was in the same

position as the relator in Clausen insofar as he “fail[ed] to provide the next link in the
              Case: 13-10973      Date Filed: 06/11/2014      Page: 36 of 44


FCA liability chain: showing that the defendants actually submitted reimbursement

claims for the services he describe[d].” 

       As this Court has concluded

previously, Relator has failed to proffer “facts as to time, place, and substance of the

defendant’s alleged fraud, specifically, the details of the defendants’ allegedly fraudulent

acts, when they occurred, and who engaged in them.” 

(citations and internal quotation omitted). 23 Accordingly, Relator’s claims must fail.


23
       A line of decisions from the Eleventh Circuit - Clausen, Corsello, Atkins, and
       Solvay - make clear that this court has an important gatekeeping function where
       FCA claims are involved. Significantly, in Clausen, the Eleventh Circuit held that
       “[w]e cannot make assumptions about a False Claim Act defendant’s submission
       of actual claims to the Government without stripping all meaning from 9(b)’s
       requirement of specificity or ignoring that the ‘true essence of the fraud’ of a
       False Claims Act action involves an actual claim for payment and not just a
       preparatory 

& n.21. It reasoned that Rule 9(b)
       serves not only to give defendants notice of the fraud charges, but also protects
       them from frivolous suits. The danger in FCA cases in particular - which gives
       the relator a share of any recovery obtained on behalf of the government - is that
       lowering the pleading requirements would allow plaintiffs without knowledge of
       the fraud to bring baseless actions, “learn the complaint’s bare essentials through
       discovery,” and extract settlements, all while damaging the defendant’s goodwill
       and reputation. 

& nn. 24-25 (citations omitted). In this case,
       Relator has made numerous attempts to bypass the pleading requirements, even
       making an unusual request to defer ruling on Eisai’s motion to dismiss until after
       discovery and summary judgment because of supposed discovery violations.
       Yet, “[i]f Rule 9(b) is to carry any water, it must mean that an essential allegation
       and circumstance of fraudulent conduct cannot be alleged in such conclusory
       fashion.” 

-13 & n.21.

       Indeed, the Clausen court was keenly aware of the hardship the decision might
       work upon relators given the circumstances in which such actions are brought.
       See 

It noted that the relator - a corporate outsider - might have
       needed to “work hard to learn the details of the alleged schemes” if that was
       even possible, but that “neither the Federal Rules nor the Act offer any special
       leniency under these particular circumstances to justify Clausen failing to allege
       with the required specificity the circumstances of the fraudulent conduct he
       asserts in his action.” 

Circuit spoke more to Rule 9(b)’s “policy
              Case: 13-10973      Date Filed: 06/11/2014     Page: 37 of 44


       Moreover, apart from the controlling decisions of Clausen and its progeny, the

Court is not persuaded that Relator’s complaint bears sufficient indicia of reliability that

would warrant relaxation. Unlike the relator in Hill, Relator summarily states that he has

“both personal and inside knowledge of Eisai’s corporate endorsement of its national

off-label marketing scheme of Ontak and Dacogen and other illegal conduct regarding

the Subject Drugs.” (Compl. ¶ 14.) But the basis for his knowledge underpinning his

claims is often absent. For example, there is no indication of how he knows that doctors

were paid to endorse off-label uses or the amount of money paid to them. Similarly, his

belief that false claims were actually submitted apparently rests on his knowledge that

doctors were sold drugs (as demonstrated through the GOERS report) and that

unknown people at Eisai told him that those providers participate in Government

programs. He concludes from this, but provides nothing to support, that they naturally

must have sought reimbursement for some or all of those prescriptions. (Id. ¶ 240.)

This gap illustrates Relator’s difficulty; he was only a salesman and had no personal

knowledge of what providers did after they were incentivized to prescribe Eisai’s drugs,

if that is true. The knowledge of that fact, however, is the crux of any FCA claim.

       Most concerning, however, is that many of the details that were required to have

been pleaded and should have been known to Relator are absent from the Complaint.

At the very least, as a salesman, Relator should be familiar with Eisai’s drug sales and

marketing program. But he is unable to plead with particularity what was told to him by


       underpinnings” again in Atkins (a case where the government declined to
       

. It reiterated that 9(b) prevents spurious lawsuits
       and counseled that courts must be principled in not giving a plaintiff a “ticket” to
       discovery absent a suitable basis. 

(quotation omitted).
              Case: 13-10973      Date Filed: 06/11/2014     Page: 38 of 44


Eisai employees and what he told doctors when he met with them. He states, for

example, that he “was directed” to make false statements about Ontak’s effectiveness,

but he cannot say who instructed him, when, or where. (Compl. ¶ 93.) And despite the

fact that the information was not protected, in contrast to Hill, Relator has no

documentation to illustrate the false nature of the claims. As Defendant observes, “[i]f

Keeler were a genuine whistleblower with information about actual fraud, it would not

have been difficult for him as a disgruntled former employee to satisfy these

requirements.” (Reply at 7.) Consequently, in light of the paucity of details, the Court

has no basis to find that Relator’s claims are more likely to be reliable rather than purely

speculative or as the court in Clausen warned, 

n.24.

       With that in mind, the remaining bases for relaxation are inapplicable. While the

broad nature of a scheme may make pleading each instance impractical, Relator has

not proffered representative samples of conduct and the Court must not lose sight of the

purpose underlying Rule 9(b). See United States ex rel Sanchez v. Lymphatx, Inc., 

, 1302-03 (11th Cir. 2010); United States ex rel. Bledsoe v. Cmty Health Sys.,

Inc., 

, 509-10 (6th Cir. 2007) (“We conclude that the concept of a false or

fraudulent scheme should be construed as narrowly as is necessary to protect the

policies promoted by Rule 9(b).”). In other words, a relator cannot segue into discovery

simply by filing prolix but unsubstantiated claims. Moreover, to rely on the assertion that

the information is exclusively in the hands of the defendant requires a relator to set forth

a detailed factual basis for that belief, details which are missing here. See 

n.25 (citations omitted).
              Case: 13-10973      Date Filed: 06/11/2014      Page: 39 of 44


       IV.    REMAINING STATE CLAIMS

       Relator’s remaining claims are brought pursuant to various states’ false claims

laws. Those claims are subject to the heightened pleading standard of Rule 9(b) and

based on the foregoing, are subject to dismissal. See United States ex rel. Rost v.

Pfizer, Inc., 

, 723, 731 (1st Cir. 2007) (affirming district court’s dismissal of

entire complaint, including counts brought under state statutes analogous to the FCA,

since “[t]he heightened pleading standard of Rule 9(b) generally applies to state law

fraud claims brought in federal court” (citations omitted)); Hopper v. Solvay Pharms.,

Inc., 

, 1363 (M.D. Fla. 2008), aff’d 

(11th Cir. 2009).

       V.     CONCLUSION

       In sum, Relator has failed to set forth a claim under even the minimal pleading

requirements recognized by long-standing and well-established FCA precedent. While

the repeated failure to cure deficiencies requires that this matter be brought to an end,

the Court nevertheless emphasizes how limited its review of the alleged conduct has

been and how many questions remain outstanding. Clausen and subsequent authority

speak to a critical policy consideration of filtering out frivolous or harassing claims that

are burdensome to defend against, balanced against the rights of litigants to access

courts and to pursue their claims without having to prove them at the outset of litigation.

Thus, we do not know if Mr. Keeler’s allegations are actually true – indeed, for purposes

of this motion, the Court has presumed them to be so to the extent they are properly

supported.

       It is similarly unknown whether another insider (with more knowledge of Eisai’s

activities) or the Government (with the benefit of claim submission records) could have

pursued this case. See 

n.17 (“We note, however, that the
              Case: 13-10973      Date Filed: 06/11/2014    Page: 40 of 44


government already possesses the claims - false or otherwise - a potential defendant

has submitted for payment. The government can, therefore, access those claims on its

own and evaluate any FCA liability that it believes should attach before determining

whether to bring suit or intervene . . . when the government brings an FCA action or

intervenes in a qui tam action, we may assume that it does not do so solely to use the

discovery process as a fishing expedition for false claims.”). And finally, there still may

be other allegations that fall outside the FCA ambit altogether; that is not to say that

Eisai may not be immune from action under other statutes by other parties. See

(“The False Claims Act does not create liability merely for a

health care provider’s disregard of Government regulations or improper internal policies

unless, as a result of such acts, the provider knowingly asks the Government to pay

amounts it does not owe.” (citation omitted)). What can be said is that Mr. Keeler has

had the chance to litigate his assertions of fraud but has been unable to posit a

sufficient link between Eisai, doctors, and Government programs to sustain a claim.

      In light of the foregoing, it is hereby ORDERED AND ADJUDGED as follows:

      (1)    Defendant’s Motion to Dismiss (DE 95) is GRANTED. The above-styled

             case is DISMISSED WITH PREJUDICE.

      (2)    Defendant’s Motion to Unseal (DE 197) is DENIED. Any and all other

             pending motions are DENIED AS MOOT.

      (3)    The Clerk is directed to CLOSE this case for administrative purposes.
             Case: 13-10973   Date Filed: 06/11/2014   Page: 41 of 44



        DONE AND ORDERED in chambers in Miami, Florida, this            day January,

2013.
                Case: 13-10973      Date Filed: 06/11/2014   Page: 42 of 44




                             UNITED STATES DISTRICT COURT
                             SOUTHERN DISTRICT OF FLORIDA

                              Case No. 09-22302-CV-WILLIAMS


UNITED STATES OF AMERICA, et al.,
ex rel. Michael Keeler,

      Plaintiffs,

vs.

EISAI, INC.,

      Defendant.



                                           ORDER

        THIS MATTER is before the Court on Relator’s Motion to Amend Order of

Dismissal under Rules 60(a) and (b) and Rule 59(e) (DE 236). The motion seeks three

things: (1) to clarify the Court’s January 31, 2013 Order of Dismissal to state that the

case is not dismissed with prejudice as to other parties in interest that might be able to

make out a claim; (2) to revise that Order to state that the dismissal is without prejudice

as to Mr. Keeler (since he may be able to join with others or the Government to provide

missing information necessary to form a claim); and (3) to allow Relator leave to file a

fourth amended complaint based on “rich,” newly-discovered of fraud that he obtained in

discovery and which “adds an extremely high indicia of reliability to Relator’s

allegations.”       Essentially, the motion is one for reconsideration and to amend the

Complaint.
               Case: 13-10973      Date Filed: 06/11/2014     Page: 43 of 44




       The Court has reviewed the motion and the record and concludes that under any

standard, Relator’s requests must be denied. As to the first, Relator has not shown how

he has been affected by the Court’s order to the extent it may affect other potential

plaintiffs or relators.   See Mot. at 5 (stating that the United States “should not be

prejudiced if a relator’s allegations are challenged under Rule 9(b)”).           As to the

remaining grounds - which raise similar issues - Relator has not shown that dismissal

with prejudice was not warranted. See Corsello v. Lincare, Inc., 

, 1014-

15 (11th Cir. 2005) (holding that trial court did not err in denying relator’s request to file

an amended complaint where there was a repeated failure to cure deficiencies in three

prior complaints).

       Finally, as Mr. Keeler acknowledges in his reply, he has neither attached a

proposed complaint for the Court to review in accordance with Local Rule 15.1 nor has

explained how his allegations would withstand the scrutiny required by Federal Rule of

Civil Procedure 9(b). In any event (and aside from the fact that, as Defendant sets

forth, this motion is a totally inappropriate vehicle for the relief requested), allowing Mr.

Keeler to use documents obtained in discovery to overcome pleading hurdles would

circumvent the purpose of Rule 9(b).        See, e.g., United States ex rel. Karvelas v.

Melrose-Wakefield Hosp., 

, 229, 231 (1st Cir.2004) (“[A] qui tam relator

may not present general allegations in lieu of the details of actual false claims in the

hope that such details will emerge through subsequent discovery.”). Indeed, in United

States ex. rel. Clausen v. Laboratory Corp. of Am., Inc., 

(11th Cir. 2002),

the Eleventh Circuit warned of a situation where “a plaintiff does not specifically plead
               Case: 13-10973     Date Filed: 06/11/2014      Page: 44 of 44




the minimum elements of their allegation, [and is able] to learn the complaint’s bare

essentials through discovery and may needlessly harm a defendants’ goodwill and

reputation by bringing a suit that is, at best, missing some of its core underpinnings,

and, at worst, are baseless allegations used to extract settlements.” 

n.24

(citation omitted).

       Accordingly, it is hereby ORDERED AND ADJUDGED that Relator’s Motion (DE

236) is DENIED. Although Relator suggests that he may seek to re-file the motion, he

is warned that having dismissed this action and denied reconsideration, the proper

avenue for challenging the Court’s rulings is an appeal. (See DE 256, at 1 (“[T]he Court

will need to see and evaluate Relator’s additional allegations and/or evidence in order to

determine if it is proper to vacate or modify its Order.”) Any further filings in this action

may result in the imposition of sanctions.

       DONE AND ORDERED in chambers in Miami, Florida, this              day of April, 2013.