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United States ex rel. Nargol v. Depuy Orthopaedics, Inc.

United States District Court, D. Massachusetts

April 11, 2016

UNITED STATES OF AMERICA ex rel. ANTONI NARGOL and DAVID LANGTON, Plaintiffs,
v.
DEPUY ORTHOPAEDICS, INC., DEPUY, INC., and JOHNSON & JOHNSON SERVICES, INC., Defendants.

MEMORANDUM AND ORDER ON RELATORS' MOTION FOR RECONSIDERATION

F. Dennis Saylor IV United States District Judge

This is a qui tarn action alleging the submission of false claims to government health-care programs for a defective hip-replacement device. Relators Dr. Antoni Nargol and Dr. David Langton, who are expert witnesses in two related MDL proceedings that involve a similar device, brought suit against defendants DePuy Orthopaedics, Inc., DePuy, Inc., and Johnson & Johnson Services, Inc.[1] The second amended complaint ("SAC") alleges that DePuy directly submitted and indirectly caused third parties to submit false claims for payments to government health-care programs for the Pinnacle metal-on-metal hip device ("Pinnacle MoM"). According to the SAC, the claims were false because DePuy made numerous misrepresentations to the FDA and surgeons concerning, among other things, the Pinnacle MoM's failure rates.

On February 1, 2016, the Court unsealed the SAC and granted DePuy's motion to dismiss the relators’ 168-page SAC for failure to plead a single false claim, either direct or indirect, with the particularity required by Fed.R.Civ.P. 9(b) and United States ex rel. Duxbury v. Ortho Biotech Prods., L.P., 579 F.3d 13 (1st Cir. 2009) (“Duxbury I”). In the same order, the Court also denied the relators’ informal and boilerplate request for leave to file a third amended complaint, on the basis of undue delay.

On March 1, 2016, the relators moved for reconsideration of the Court’s order pursuant to Fed.R.Civ.P. 59(e) and 60(b)(2) and renewed their request for leave to file a fourth complaint. Despite having three opportunities over the course of four years to satisfy long-established False Claims Act pleading standards, the relators now contend that in the twenty-eight days since the Court’s order, they have secured new, previously undiscoverable evidence of false indirect claims.

A motion for reconsideration on the basis of new evidence must be denied where the movant fails to provide a cogent reason for why the evidence was previously undiscoverable. If the evidence should have been discovered previously with appropriate diligence, the evidence is not considered “new.” After careful review of the added information in the proposed third amended complaint and the relators’ explanations for why it was previously undiscoverable, it appears that the information should have been discovered before the SAC was filed, even with only the most basic investigative diligence. Indeed, the information should have been discovered four years and three complaints ago.

Accordingly, and for the following reasons, the relators’ motion for reconsideration will be denied.

I. Background

The facts as alleged in the relators’ SAC are recited at length in the Court’s February 1, 2016 order. For purposes of understanding the issues involved in their motion for reconsideration, the following abbreviated statement of facts is provided.

On May 18, 2012, the relators filed the original qui tam complaint in this case under seal.[2] The Court granted the relators’ motion to file an amended complaint on December 2, 2013. On July 29, 2014, the government declined to intervene in this case after conducting its investigation.

On August 12, 2014, Judge Talwani unsealed the case going forward but granted the relators’ request to keep the first amended complaint under seal. The relators made that request, in part, because the first amended complaint incorporated confidential DePuy documents that the relators had access to through their work as expert witnesses in two related MDL actions. However, there were standing confidentiality orders in those two MDL actions that prevented the relators from using confidential documents for any reason outside the scope of their expert testimony. See In re: DePuy Orthopaedics, Inc. ASR Hip Implant Prods. Liab. Litig., No. 1:10-md-02197 (“ASR MDL”); In re: DePuy Orthopaedics, Inc. Pinnacle Hip Implant Prods. Liab. Litig., No. 3:11-md-02244 (“Pinnacle MDL”).

The relators moved to intervene in the ASR MDL in an effort to modify the confidentiality order. However, the presiding judge denied the relators’ motion, concluded that the relators had violated the confidentiality order, and specifically prohibited the relators from using any confidential information that they obtained through their role as expert witnesses in the present FCA case. (Def. Ex. A, Judge Katz Jan. 5, 2015 Order at 7-8) (“If the Court agreed with the intervenors’ request, these retained experts would be free to use the knowledge they obtain during this litigation for their own benefit [in the FCA case]. This result is unacceptable . . . .”).

With the first amended complaint tainted, this Court granted the relators’ request to file a second amended complaint devoid of any confidential information gleaned from the ASR MDL. That sealed SAC became the operative complaint on June 5, 2015. DePuy moved to dismiss the SAC for failure to meet the pleading requirements of Fed.R.Civ.P. 9(b) and 12(b)(6) on June 26, 2015. Instead of moving to amend, the relators opposed the motion, filed a sur-reply, and litigated the issue during a July hearing. On August 21, 2015, the relators moved to unseal the SAC, but again did not move for leave to amend.

On February 1, 2016, the Court granted DePuy’s motion to dismiss, concluding that the 168-page SAC failed to plead a single direct or indirect false claim with the particularity required by Rule 9(b) and Duxbury I. The Court also denied the relators’ informal request to file a fourth complaint on the basis of undue delay.[3]

On March 1, 2016, the relators moved for reconsideration and requested that the Court allow them to file a proposed third amended complaint. According to the relators, they have secured new, previously undiscoverable ...


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