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Health Choice Alliance LLC ex rel. USA v. Lilly

United States District Court for the Eastern District of Texas, Texarkana Division

September 27, 2019, Decided; September 27, 2019, Filed

CIVIL ACTION NO. 5:17-CV-00123-RWS-CMC; CIVIL ACTION NO. 5:17-CV-00126-RWS-CMC

Opinion

ORDER

Health Choice Alliance LLC, on behalf of the United States of America and 31 States, filed the above-titled qui tam actions under 31 U.S.C. §§ 3729 and 3730(b)(1)—the False Claims Act—and various state false claim statutes. This Court referred the case to the United States Magistrate Judge pursuant to 28 U.S.C. § 636(b)(1) and (3) and the Amended Order for the Adoption of Local Rules for the Assignment of Duties to United States Magistrate Judges.

The United States (the "Government") moved to dismiss under 31 U.S.C. § 3730(c)(2)(A). Docket No. 192.1 In its Amended Report and Recommendation—Docket No. 241—the Magistrate Judge recommended granting the United States' Motion. Health Choice objected. Docket No. 243. The Court hereby ADOPTS AS MODIFIED the Magistrate Judge's Recommendations and OVERRULES Health Choice's objections. Also, the Court hereby DISMISSES WITH PREJUDICE Health Choice's claims on behalf of the United States, DISMISSES WITHOUT PREJUDICE Health Choice's claims on behalf of the 31 States and DISMISSES WITHOUT PREJUDICE the FCA claims as to the United States.

BACKGROUND

Health Choice alleges the Defendants knowingly induced the submission of false claims [*6]  for reimbursement to government healthcare programs using unlawful remuneration. See False Claims Act, 31 U.S.C. §§ 3729-33 ("FCA"). Specifically, Health Choice claims Defendants violated the Anti-Kickback Statute ("AKS"), 42 U.S.C. § 1320a-7b(b), and various state statutes through three alleged schemes: free nurse services, white coat marketing and reimbursement support services.

Initially, per 31 U.S.C. § 3730(b)(2), Health Choice filed its complaints under seal. Docket No. 1. But, after the Government declined to exercise its statutory right to intervene, § 3730(b)(2), those complaints were unsealed. Docket No. 9. Before Defendants answered, Health Choice filed its First Amended Complaints, which were dismissed without prejudice under Federal Rule of Civil Procedure 12(b)(6). Docket No. 164. Health Choice again amended its complaints, adding factual support. Docket No. 172. The Government now moves to dismiss all FCA claims with prejudice as to Health Choice and without prejudice as to the United States pursuant to 31 U.S.C. § 3730(c)(2)(A). Docket No. 192.

REPORT AND RECOMMENDATION

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2019 U.S. Dist. LEXIS 166553 *

HEALTH CHOICE ALLIANCE LLC, EX REL ON BEHALF OF UNITED STATES OF AMERICA AND 31 STATES (AR; CA; CO; CT; DE; DC; FL; GA; HI; IL; IN; IA; LA; MD; MA; MI; MN; MT; NV; NH; NJ; NM; NY; NC; OK; RI; TN; TX; VT; VA; WA); Plaintiff, v. ELI LILLY AND COMPANY, INC., VMS BIOMARKETING, COVANCE, INC., UNITED BIOSOURCE CORPORATION, HEALTHSTAR CLINICAL EDUCATION SOLUTIONS LLC, COVANCE MARKET ACCESS SERVICES, INC., Defendants.HEALTH CHOICE GROUP, LLC, ON BEHALF OF UNITED STATES OF AMERICA AND 31 STATES (AR; CA; CO; CT; DE; FL; GA; HI; IL; IN; IA; LA; MD; MA; MI; MN; MT; NV; NH; NJ; NM; NY; NC; OK; RI; TN; TX; VT; VA; WA; Plaintiff, v. BAYER CORPORATION, AMGEN INC., ONYX PHARMACEUTICALS, INC., AMERISOURCEBERGEN CORPORATION, LASH GROUP, Defendants.

Prior History: Health Choice Alliance v. Eli Lilly & Co., 2019 U.S. Dist. LEXIS 168614 (E.D. Tex., June 20, 2019)

CORE TERMS

magistrate judge, Recommendation, judicial review, unfettered discretion, qui tam, resources, argues, motion to dismiss, prosecutorial discretion, animus, objects, arbitrary and capricious, separation of powers, legislative history, arduous, merits, novo, rational relationship, prosecutorial, allegations, depositions, fraudulent, responded, survived, expend