MEMORANDUM
MARK A. KEARNEY, District Judge.
Qui tam Realtors Herbert J. Nevyas, M.D. and Anita Nevyas-Wallace, M.D. ("Relators") sued Defendant Allergan, Inc. ("Allergan") under the False Claims Act, 31 U.S.C. §3729 et seq. ("FCA") and analogous false claims and whistleblower statutes of various states and the District of Columbia. Relators allege Allergan induced physicians to prescribe Allergan products, in violation of the Anti-Kickback Statute, 42 U.S.C. §1320a-7b(b) ("AKS"), causing pharmacists to submit "false or fraudulent" claims to government healthcare programs in violation of the FCA. After oral argument and consideration of the extensive briefing, including from the United States, the Court granted in part and denied in part Allergan's motion to dismiss in our May 26, 2015 Order.
Disagreeing with our Order, Allergan now moves to certify the Court's May 26, 2015 Order for interlocutory review pursuant to 28 U.S.C. § 1292(b). We find Allergan's disagreement, even if characterized as "substantial," does not warrant piecemeal litigation through an interlocutory appeal. Allergan does not sufficiently demonstrate substantial grounds for a difference of opinion on the pharmacist certifications and scienter issues required for the "exceptional circumstance" of an interlocutory appeal.
I. Procedural History
Relators filed their Second Amended Complaint ("SAC") under seal on September 27, 2010. (ECF Doc. No. 15.) This Court unsealed the action in December 2013. (ECF Doc. No. 42.) The United States declined to intervene but remains a party in interest. On April 29, 2014, Allergan moved to dismiss the SAC for failure to state a claim upon which relief may be granted under Fed.R.Civ.P. 8 and 12(b)(6), and for failure to plead fraud with particularity under Fed. R. Civ. P. 9(b). (ECF Doc. No. 62.) After several rounds of briefing, we held oral argument on April 23, 2015.
Allergan moved to dismiss focusing on the falsity of pharmacists' certifications and the related question of Allergan's scienter under the FCA. On the "falsity" issue, Allergan, relying on a 2011 opinion from our Court of Appeals in US. ex rel. Wilkins v. United Health Group, Inc.,1 urged dismissal of the Relaters' claims because the FCA does not apply where pharmacists, unaware of Allergan's alleged scheme, certified compliance with the AKS, a material condition of payment under federal healthcare programs, when submitting claims for payment on prescriptions allegedly tainted by kickbacks between Allergan and prescribing physicians. On the "scienter" issue, Allergan argued Relators failed to adequately plead it "knowingly" caused the submission of false claims as submitted by pharmacists, and Allergan cannot have acted "knowingly" where it "adopted a reasonable interpretation" of the AKS and "related regulatory guidance." Our May 26, 2015 Order rejected these arguments finding, inter alia, Relaters' FCA claims are not foreclosed by Wilkins and Relators sufficiently alleged scienter at the motion to dismiss stage. (ECF Doc. No. 100.)
II. Analysis — Interlocutory Review Under 28 U.S.C. §1292(b)
Allergan seeks interlocutory review of the Court's decision on two issues:
I. "Whether, under [Wilkins,] a pharmaceutical company's alleged payment of kickbacks to prescribing physicians can render truthful certifications by pharmacists (who did not receive the alleged kickbacks) of their own compliance with the [AKS] "legally false" for purposes of the [FCA];" and
2. "Whether, under Safeco Insurance Co. of America v. Burr, 551 U.S. 47 (2007), based on the legal and regulatory guidance available during the period in question, it was objectively reasonable, or at least not reckless, to conclude that a pharmacist's truthful certification of compliance with the AKS could not be legally false for purposes of the FCA, such that Allergan lacked the requisite state of mind to violate the FCA as a matter of law."
Allergan's Motion at 2. (ECF Doc. No. 102-1.)
Interlocutory appeals should be reserved for "exceptional cases." Caterpillar Inc. v. Lewis, 519 U.S. 61, 74 (1996) (quotation marks and citation omitted). A district court may certify an order for interlocutory appeal where it is "of the opinion that such order:" (1) "involves a controlling question of law;" (2) "as to which there is substantial ground for difference of opinion;" and (3) "an immediate appeal from the order may materially advance the ultimate termination of the litigation." 28 U.S.C. § 1292(b); Katz v. Carte Blanche Corp., 496 F.2d 747, 754 (3d Cir. 1974).
The decision to certify an order for appeal under §1292(b) is within our discretion. Glaberson v. Comcast Corp., No. 03-6604, 2006 WL 3762028, at *12 (E.D. Pa. Dec. 19, 2006) (citation omitted); see also US. ex rel. Ga/mines v. Novartis Pharm. Corp., No. 06-3213, 2013 WL 4511626, *2 (E.D. Pa. Aug. 26, 2013) (citing Bachowski v. Usery, 545 F.2d 363, 368 (3d Cir. 1976)). It is appropriate only in "exceptional circumstances" and "[we] should be mindful of the strong policy against piecemeal appeals when exercising [our] discretion." Glaberson, 2006 WL 3762028, at *12 (citation omitted). The burden is on the party seeking certification to demonstrate "exceptional circumstances justify a departure from the basic policy against piecemeal litigation and of postponing appellate review until after the entry of a final judgment." Burlington v. News Corp., No. 09-1908, 2015 WL 158746, *3 (E.D. Pa. Jan. 12, 2015) (quoting Hall v. Wyeth, Inc., No. 10-738, 2010 WL 4925258, *1 (E.D.Pa. Dec. 2, 2010)).
Allergan argues all three factors for certification under § 1292(b) are met here but focuses its argument mainly on the second element, asserting there is "substantial ground for difference of opinion" on both the pharmacists certifications and scienter issues. The second element is met when the matter involves "one or more difficult and pivotal questions of law not settled by controlling authority." Hall v. Wyeth, Inc., No. 10-738, 2010 WL 4925258, *2 (E.D.Pa. Dec. 2, 2010) (citation omitted). "Substantial grounds for difference of opinion" may also exist "where there is genuine doubt or conflicting precedent as to the correct legal standard," "conflicting and contradictory opinions," or "the absence of controlling law on a particular issue." Id (citations omitted).
Even assuming this case involves a controlling question of law and an immediate appeal from the Order may materially advance the ultimate termination of this matter, Allergan has not sufficiently demonstrated there exists "substantial grounds for difference of opinion" on the pharmacist certifications and scienter issues.
A. Pharmacists' Certifications
Attempting to re-litigate the issue raised in its Motion to Dismiss, Allergan contends kickback-tainted claims submitted by innocent pharmacists cannot be "false" under the FCA. Allergan argues our Court of Appeals "has not yet definitively resolved" whether truthful certifications made by innocent pharmacists give rise to an FCA claim, and three decisions outside the Third Circuit create "conflicting and contradictory opinions" sufficient to establish "substantial grounds for difference of opinion."
We do not agree there is an absence of controlling law simply because our Court of Appeals has not addressed the specific factual scenario Allergan raises regarding certifications by innocent pharmacists. See e.g. Cuttic v. Crozer-Chester Med. Ctr., 806 F.Supp.2d 796, 805 (E.D. Pa. 2011) (citing Shaup v. Frederickson, No. 97-7260, 1998 WL 800321, at *3 (E.D.Pa. Nov. 17, 1998) ("If questions of first impression alone were sufficient to warrant certification for an immediate appeal, our Court of Appeals would be besieged with piecemeal interlocutory appeals.")).
We read Wilkins and US. ex rel. Schmidt v. Zimmer, Inc., 386 F.3d 235 (3d Cir. 2004) ("Schmidt") as guidance for the following principles:
• In Wilkins, our Court of Appeals recognized "Congress' expressly stated purpose that the FCA should `reach all fraudulent attempts to cause the Government to pay [out] sums of money or to deliver property or services.'" Wilkins, 659 F.3d at 306 (citation to Senate Report omitted);
• Compliance with the AKS is a condition of payment by government healthcare programs, and claims submitted in violation of the AKS are "false" for purposes of the FCA. Wilkins, at 313-314; Schmidt, 386 F.3d at 243; and
• Defendants who knowingly cause the submission of false claims may be liable under the FCA; the "knowledge and conduct of the defendant [is] what matter[s] and the outcome [does] not turn on whether the actual presenters were `duped' or participated in the fraudulent scheme." Schmidt, 386 F.3d at 243-244 (footnoted omitted).
Applying these principles, we found Relators adequately alleged Allergan induced physicians to write kickback-tainted prescriptions for its products filled by pharmacists and, as a natural consequence of the scheme, Allergan "caused to be presented" "false or fraudulent" claims to the United States. See May 26, 2015 Order at 2, n.l (ECF Doc. No. 100.) We find no support for the proposition our Court of Appeals has left unanswered the question of whether this type of conduct is actionable under the FCA.
Wilkins is not "contrary legal authority" to US. ex rel. Hutcheson v. Blackstone Med., Inc., 647 F.3d 377 (1st Cir. 2011) ("Hutcheson"). Allergan's argument hinges on one "but see" signal in the Wilkins opinion. The use of the "but see" signal simply acknowledged the First Circuit Court of Appeals declined to employ "judicially created categories of express and implied false certification." Wilkins, 659 F.3d at 306. We do not read this signal as "contrary legal authority" to Wilkins.2 Allergan failed to offer any decision by our Court of Appeals or any district court within this Circuit holding otherwise.
The three district court decisions cited by Allergan — Rost, Bailey, and Hutcheson3— do not create "substantial grounds for difference of opinion." The three cases are not "conflicting and contrary decision[s]" in the Third Circuit. To the contrary, we find our Court of Appeals' Schmidt decision supports FCA liability on any person who "knowingly presents, or causes to be presented, a false or fraudulent claim for payment or approval." 31 U.S.C. §3729(a)(l)(A) (emphasis added).4
A divergence of holdings among Rost, Bailey, and Hutcheson (D.Mass.) and Schmidt does not require "guidance" from our Court of Appeals. The First Circuit reversed Hutcheson (D.Mass.), which is no longer the law in that Circuit. In the wake of the First Circuit's reversal of Hutcheson (D.Mass.), we find questionable the validity of Rost for the proposition advanced by Allergan in its motion to dismiss.5 The 2010 amendment to the AKS through the Patient Protection and Affordable Care Act ("PPACA") superseded the Bailey case. While the PPACA does not apply retroactively, we find Congress, in amending the AKS, intended "to clarifY that a claim that includes items or services resulting from a violation of this section constitutes a false or fraudulent claim for purposes of [the FCA].'" Wilkins, 659 F.3d at 311 n. 19 (quoting 42 U.S.C. § 1320a-7b(g)) (emphasis added). Moreover, we do not agree with the import of Allergan's argument on this point, which we read to suggest its alleged conduct prior to the AKS amendment was lawful and cannot constitute a violation of the FCA.6 As explained here and in our May 26, 2015 Order, compliance with the AKS is a material condition of payment under federal health programs, false certification of compliance is actionable under the FCA, and defendants who "cause to be presented" false claims are liable under the FCA. This is entirely consistent with our reading of Schmidt, which pre-dates the amendment to the AKS, and Wilkins.7 Thus, we do not see Rost, Bailey, and Hutcheson (D.Mass.) — all decisions from outside this Circuit and, in any case, not valid authority even in their own Circuits now — creating "substantial ground for difference of opinion" in this Circuit.
Allergan's motion for certification attempts to re-litigate issues presented in its Motion to Dismiss. "Strong disagreement" with our Order and its application of the law to the facts alleged here does not constitute a "substantial ground for difference of opinion." Sobek, 2013 WL 3852795 at *1. This disagreement does not warrant an interlocutory appeal. See Mullen v. Norfolk Southern Ry Co., No. 13-6348, 2014 WL 2587017, *2 (E.D.Pa. June 9, 2014) (citation omitted); see also US. ex rel. Sobek v. Education Management, LLC, No. 10-131, 2013 WL 3852795, *2 (W.D. Pa. July 23, 2013) ("the Court is not persuaded that this case is so different that a piecemeal appeal should be permitted" and "the ultimate merits of [defendant's] arguments may benefit from the fuller evidentiary record developed during discovery.")
B. Scienter
We also find no "substantial ground for a difference of opinion" in this Circuit on the sufficiency ofRelators' pleading of Allergan's state of mind based on the Streck8 case or because our Court of Appeals "has yet to [address]" whether pharmacists' certifications are "false." We do not read the Streck decision to have "reached a conflicting outcome" with our May 26, 2015 Order on the sufficiency of Relators' pleading Allergan's state of mind.
In Streck, another judge in this District relying on Supreme Court precedent at the summary judgment stage dismissed claims for a certain period of time against defendants because, under the facts as alleged there, the court found "there was nothing that `warned' [defendants] away from the view [they] took'" on an interpretation of regulations calculating Average Manufacturer Price allegedly fraudulently reported to the Government. Streck, 894 F.Supp. 2d at 596 (quoting Safeco Ins. Co. of Am. v. Burr, 551 U.S. 47, 70 (2007)).
We found Relators alleged facts "plausibly showing" Allergan's required state of mind for an FCA claim. We cited to Relators' SAC alleging, inter alia, Allergan caused to be submitted false claims through its scheme to induce physicians to prescribe Allergan products; eye care physicians who received Allergan's illegal inducements directed referrals of patients in federally-funded health care programs to Allergan products in violation of the AKS and similar state statutes; when Allergan intentionally employed illegal kickbacks to promote its products, it knew or should have known pharmacists and physicians would routinely and necessarily file false and fraudulent claims with federal and state governments. See May 26, 2015 Order at 2 n.1 (ECF Doc. No. 100.) We found Relators made sufficient allegations to plausibly show Allergan acted with "knowledge," as defined by the FCA, to induce physicians through illegal kickbacks to write prescriptions for Allergan products which would, as a natural consequence of the scheme, cause those prescriptions to be presented for payment by government funded healthcare programs.
In Streck, the court found otherwise in a different fact pattern, focusing its consideration of the "regulatory framework in deciding whether there are sufficient facts to plausibly show Defendants had the required state of mind." Id., at 600 n.11. Although the court in Streck found that scienter was not sufficiently plead under the facts of that case, it does not create a "substantial ground for a difference of opinion" justifying an interlocutory appeal here. Relators have specifically pied knowledge; they have the ability in discovery to determine the extent, if any, of Allergan's knowledge of case law in other Circuits and the effect, if any, of applicable regulations.9
We find Allergan's interpretation of the law focuses on its state of mind, and is properly addressed after full development of the factual record. Allergan's reasonable interpretation of the law and applicable regulatory framework may well be a defense to liability, but it is not appropriate at the motion to dismiss stage when there are reasonable interpretations to the contrary. At any rate, Allergan's arguments do not present "exceptional circumstances [to] justify a departure from the basic policy against piecemeal litigation and of postponing appellate review until after the entry of a final judgment." Burlington, supra, 2015 WL 158746 at *3.
