United States District Court, D. Massachusetts
UNITED STATES OF AMERICA ex rel. MELAYNA LOKOSKY, Plaintiffs,
ACCLARENT, INC., ETHICON, INC. and JOHNSON & JOHNSON, Defendants.
MEMORANDUM AND ORDER ON DEFENDANTS' MOTION TO
DISMISS (DKT. NO. 61)
L. CABELL, U.S.M.J.
Lokosky began working for Acclarent, Incorporated (Acclarent)
in 2007 as a sales representative. One of the products
Acclarent sold was a sinus related device known as the
Relieva Stratus MicroFlow Spacer (the “Spacer”).
The plaintiff alleges that Acclarent engaged in practices
which ultimately induced third parties to file false claims
for payment for the Spacer with government programs like
Medicare and Medicaid, and eventually terminated her for
complaining about it. Following the previous dismissal of
certain claims, the complaint asserts a claim for retaliatory
termination pursuant to the False Claims Act
(“FCA”), 31 U.S.C. § 3730(h), and a common
law claim for wrongful termination in violation of public
policy. The defendants move to dismiss the complaint for
failure to state a claim. (Dkt. No. 61). The plaintiff
opposes the motion. (Dkt. No. 74). For the reasons discussed
below, I find that the complaint states valid claims against
Acclarent but not against Ethicon, Inc. (Ethicon) or Johnson
& Johnson. Accordingly, the motion to dismiss is granted
in part and denied in part.
to the complaint, Acclarent, in order to receive clearance
for the Spacer, misrepresented to the FDA its intended use
and its similarity to previously cleared products. (Compl.
¶ 12). More specifically, the FDA cleared the Spacer as
an inert, non-drug delivering spacer to be placed in a
patient's sinuses for no more than 14 days as a healing
aid, but Acclarent's intended use for the device was to
deliver the steroid Kenalog-40 in an unproven and off-label
manner for 30 days or longer. (Id.). Kenalog-40 was
never approved for use in the paranasal sinuses or for
topical delivery through a sinus spacer. (Compl. ¶ 34).
In fact, Acclarent knew the Spacer provided no additional
benefits when used with the steroid Kenalog-40, and
consequently hid this data from the FDA. (Compl. ¶ 13).
Had Acclarent been truthful with the FDA, the Spacer never
would have been approved for the market. (Id.).
because Acclarent was not truthful, the FDA approved the
Spacer. (Compl. ¶ 14). Once it was cleared, Acclarent
never marketed the Spacer for its intended use. Instead,
Acclarent instructed doctors to use the Spacer with off-label
Kenalog-40 for more than 14 days. (Id.). By
concealing the intended combination of the Spacer and
Kenalog-40, and then uniformly marketing that off-label
combination to hospitals and physicians, Acclarent caused the
Spacer to be misbranded, and thus ineligible for federal
reimbursement. (Compl. ¶ 15).
2009, Johnson & Johnson announced that its subsidiary,
Ethicon, was acquiring Acclarent. (Compl. ¶ 17). Johnson
& Johnson immediately became concerned about the
off-label marketing of the Spacer and announced two months
later that it would cease all active marketing of the product
due to regulatory concerns. (Id.). Johnson &
Johnson also announced that they would destroy all
promotional material for the Spacer. (Compl. ¶ 64).
Despite this announcement, Johnson & Johnson still
manufactured, sold, and distributed the product. (Compl.
Acclarent trained its sales representatives to tell doctors
that the Spacer was specifically designed for use with
Kenalog-40. (Compl. ¶ 39). Acclarent employees knew that
saline solution would leak out of the Spacer in a matter of
hours or days, rendering pointless the insertion of the
Spacer for 14 days. (Id.). This same problem applied
to other drugs of similar viscosity, including antibiotics
and most forms of corticosteroids. (Id.). The
exception was Kenalog-40, whose viscosity was intended to
maximize the time the drug remained in the injection area.
(Id.). Use of the Spacer with Kenalog-40 is the only
use that Acclarent has ever investigated in living human
beings, and is the only use described in articles published
in medical journals. (Compl. ¶ 40-41). The Acclarent
sales force sold the device to physicians by insisting that
it be used with Kenalog-40. The plaintiff learned from other
sales representatives that physicians did not use the device
with saline and that this was representative of the way
physicians used the device around the country. (Compl. ¶
plaintiff joined Acclarent in June 2007 and was an
experienced medical device sales representative. (Compl.
¶ 65). She was one of the first sales representatives
trained to sell the Spacer, and was one of the top sellers of
the Spacer before the defendants stopped promoting the
product in March 2010. (Id.). When the defendants
stopped promoting the Spacer, sales representatives were told
that their sales quotas would be adjusted to account for the
lack of these sales, but in reality this did not occur and
sales representatives were unable to meet their sales goals.
(Compl. ¶ 66). As a result, sales managers began to put
pressure on sales representatives to promote the Spacer as
they had done before. (Compl. ¶ 67).
the defendants announced that they would no longer promote
the Spacer, the plaintiff was uncomfortable with its
off-label promotion and was relieved to no longer have to
sell it. (Compl. ¶ 68). But, in July 2010, one of the
plaintiff's supervisors told her that the company needed
to return to selling the Spacer. (Compl. ¶ 69). The
plaintiff informed her supervisor that she did not think it
was right to sell the product off-label and that she did not
want to do it. (Id.). The supervisor told her to
sell it anyway. (Id.).
August 2010 the plaintiff conspicuously posed questions at a
conference in the presence of in-house regulatory personnel
about how to handle inquiries from physicians about the
Spacer. (Compl. ¶ 70). Due to the plaintiff's
questions, the regulators decided to stay at the conference
an additional day, which in turn prevented the sales group
from realizing its plan to use the time to discuss in private
their plans to renew promotion of the Spacer. (Id.).
Acclarent subsequently put the plaintiff on an unrealistic
performance plan within 30 days of the sales meeting, and
terminated her on or about January 4, 2011. (Compl. ¶
Rule 12(b)(6) courts must apply the notice pleading
requirements of Rule 8(a)(2). Educadores Puertorriquenos
en Accion v. Hernandez, 367 F.3d 61, 66-67 (1st Cir.
2004). Under Rule 8(a)(2), a complaint need only include a
short and plain statement of the claim showing that the
pleader is entitled to relief and giving the defendant fair
notice of the grounds for the plaintiff's claim.
Conley v. Gibson, 355 U.S. 41, 47 (1957). Therefore,
“a Court confronted with a Rule 12(b)(6) motion
‘may dismiss a complaint only if it is clear that no
relief could be granted under any set of facts that could be
proved consistent with the allegations.'”
Educadores Puertorriquenos en Accion, 367 F.3d at 66
(citing Hishon v. King & Spalding, 467 U.S. 69,
that one is entitled to relief, the plaintiff must provide
“enough facts to state a claim to relief that is
plausible on its face.” Bell Atl. Corp. v.
Twombly, 550 U.S. 544, 570 (2007). “The
plausibility standard is not akin to a ‘probability
requirement, ' but it asks for more than a sheer
possibility that a defendant has acted unlawfully, ”
and is met when “the plaintiff pleads factual content
that allows the court to draw the reasonable inference that
the defendant is liable for the misconduct alleged.”
Ashcroft v. Iqbal, 556 U.S. 662, 678 (2009)
(quoting Twombly, 550 U.S. at 556). A court must
“accept as true all well-pleaded facts set forth in the
complaint and draw all reasonable inferences therefrom in the
pleader's favor.” Haley v. City of Boston,
657 F.3d 39, 46 (1st Cir. 2011) (quoting Artuso v. Vertex
Pharmaceuticals, Inc., 637 F.3d 1, 5 (1st Cir. 2011)).
However, the Court is “not bound to accept as true a
legal conclusion couched as a factual allegation.”
Id. at 678 (quoting Twombly, 550 U.S. at