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Glaxosmithkline LLC v. Cherokee Nation

United States District Court, D. Massachusetts

October 15, 2014

GLAXOSMITHKLINE LLC, Plaintiff,
v.
THE CHEROKEE NATION and TODD HEMBREE, Defendants.

MEMORANDUM & ORDER

INDIRA TALWANI, District Judge.

I. Introduction

The dispute in this case centers on a 2012 settlement agreement entered into by Plaintiff GlaxoSmithKline LLC ("GlaxoSmithKline" or "GSK") in connection with its plea in a criminal proceeding, United States of America v. GlaxoSmithKline, LLC, Criminal Action No. 12-10206-RWZ (D. Mass). GlaxoSmithKline now seeks a declaratory judgment that claims brought by the Cherokee Nation in the District Court of the Cherokee Nation were released by the settlement agreement. Presently at issue are GlaxoSmithKline's Renewed Cross-Motion for Summary Judgment [#61] and the Cherokee Nation's Cross-Motion for Summary Judgment [#64]. For the following reasons, GlaxoSmithKline's motion is DENIED and the Cherokee Nation's motion is ALLOWED.

II. Background

In 2012, GlaxoSmithKline and the United States entered into a settlement agreement (the "Settlement Agreement") relating to Avandia, a drug used to treat Type 2 diabetes. Pl.'s Statement Undisputed Material Facts Supp. Its Cross-Mot. Summ. J. ¶ 1 [#16] [hereinafter GlaxoSmithKline Facts]. The Settlement Agreement provides, in relevant part:

This Settlement Agreement ("Agreement") is entered into by and among the United States of America, acting through the United States Department of Justice and on behalf of the Office of Inspector General ("OIG-HHS") of the United States Department of Health and Human Services ("HHS"), the TRICARE Management Activity ("TMA"), the United States Department of Veteran [sic] Affairs ("VA"), and the United States Office of Personnel Management ("OPM") (collectively the "United States"), and GlaxoSmithKline LLC ("GSK"), through their authorized representatives. Collectively, all of the above will be referred to as "the Parties."
....
D. The United States alleges that GSK caused claims for payment for the Covered Drugs to be submitted to the Medicare Program, Title XVIII of the Social Security Act, 42 U.S.C. §§ 1395-1395kkk...; the Medicaid Program, Title XIX of the Social Security Act, 42 U.S.C.§§ 1396-1396w-5...; the TRICARE program, 10 U.S.C. §§ 1071-1110b; the Federal Employees Health Benefits Program..., 5 U.S.C.§§ 8901-8914; the Federal Employees Compensation Act Program, 5 U.S.C. § 8101, et. seq.; and caused purchases of the Covered Drugs by the Veterans Affairs Program, 38 U.S.C. § 1701-1743 (collectively, the "Government Health Care Programs").
E. The United States contends that it and the Medicaid Participating States have certain civil claims, as specified in Paragraph 2, below, against GSK for engaging in the following conduct at certain times between January 2000 and December 2010 (hereinafter referred to as the "Covered Conduct"):
(i) GSK promoted Avandia to physicians and other health care providers with false and misleading representations about Avandia's lipid profile, effect on cardiovascular biomarkers, and the overall safety of Avandia and as a result, GSK knowingly caused false or fraudulent claims for Avandia to be submitted to, or caused purchases by, one or more of the Government Health Care Programs....
....
(ii) GSK made false and misleading representations about Avandia's lipid profile, effect on cardiovascular biomarkers, and the overall safety of Avandia in labeling used during the promotion of Avandia to physicians and other health care providers in violation of the [Food, Drug and Cosmetic Act], 21 U.S.C. §§ 331(a) and 352(a), and through the sale and distribution of a misbranded product, GSK obtained proceeds and profits to which it was not entitled....
....
2. Subject to the exceptions in Paragraph 6 below (concerning excluded claims), in consideration of the obligations of GSK set forth in this Agreement, conditioned upon GSK's payment in full of the Settlement Amount, the United States (on behalf of itself, its officers, agencies, and departments) agrees to release GSK, together with its predecessors, current and former parents, direct and indirect affiliates, divisions, subsidiaries, successors, transferees, and assigns and their current and former directors, officers, and employees, individually and collectively, from any civil or administrative monetary claim that the United States has or may have for the Covered Conduct under the False Claims Act...; the Program Fraud Civil Remedies Act...; the Food, Drug and Cosmetic Act...; any statutory provision creating a cause of action for civil damages or civil penalties for which the Civil Division of the Department of Justice has actual and present authority to assert and compromise..., and common law claims for fraud, payment by mistake, breach of contract, disgorgement and unjust enrichment.
....
6. Notwithstanding any term of this Agreement, specifically reserved and excluded from the scope and terms of this Agreement as to any entity or person are ...

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