Case 2:09-cv MCE-EFB Document Filed 04/03/15 Page 1 of 7

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1 Case :0-cv-000-MCE-EFB Document - Filed 0/0/ Page of 0 0 JOHN P. BUEKER (admitted pro hac vice) john.bueker@ropesgray.com Prudential Tower, 00 Boylston Street Boston, MA 0-00 Tel: () -000 Fax: () -00 DOUGLAS H. HALLWARD-DRIEMEIER (admitted pro hac vice) douglas.hallward-driemeier@ropesgray.com One Metro Center 00 th Street, NW, Suite 00 Washington, DC 000- Tel: (0) 0-00 Fax: (0) 0-0 Attorneys for Defendants SCHERING-PLOUGH CORP. AND MERCK & CO., INC. [Additional Counsel Listed in Signature Block] UNITED STATES OF AMERICA, ex rel. FRANK SOLIS, v. UNITED STATES DISTRICT COURT EASTERN DISTRICT OF CALIFORNIA PLAINTIFF, MILLENNIUM PHARMACEUTICALS, INC., SCHERING-PLOUGH CORP., and MERCK & CO., DEFENDANTS. CASE NO. :0-cv-00-MCE-JFM DEFENDANTS SCHERING-PLOUGH CORPORATION S AND MERCK & CO., INC. S MEMORANDUM OF POINTS AND AUTHORITIES IN SUPPORT OF ITS MOTION FOR RECONSIDERATION OR ALTERNATIVELY TO DISMISS PURSUANT TO RULE (b)() Date: May, 0 Time: :00 p.m. Assigned to: Hon. Morrison C. England, Jr. Location: Courtroom, th Floor RECONSIDERATION OR ALTERNATIVELY TO DISMISS PURSUANT TO RULE (b)()

2 Case :0-cv-000-MCE-EFB Document - Filed 0/0/ Page of 0 0 Pursuant to Fed. R. Civ. P. (b)() and Local Rule 0(j), Defendants Schering-Plough Corporation ( Schering ) and Merck & Company, Inc. ( Merck ) (collectively, Schering ) move for reconsideration of the decision the Court entered in this matter on March 0, 0, or, in the alternative, for dismissal of all claims alleged against them premised on their promotion of the drug Integrilin. As it has already determined, this Court lacks subject matter jurisdiction to hear these claims as alleged against Defendant Millennium Pharmaceuticals, Inc. ( Millennium ). For the same reasons that it dismissed these claims as alleged against Millennium, this Court should dismiss the claims alleged against Defendants Schering and Merck. In the Ninth Circuit, [r]econsideration is appropriate if the district court... committed clear error.... Sch. Dist. No. J, Multnomah Cnty., Or. v. ACandS, Inc., F.d, (th Cir. ); see also Darrin v. Bank of Am., N.A., No. :-CV-00-MCE, 0 WL, at * (E.D. Cal. May, 0) (England, J.) (allowing motion to reconsider where Plaintiff present[ed] a meritorious argument that the Court s prior decision applied incorrect legal standards ). Here, the Court committed clear error when it denied Schering s request for dismissal pursuant to Rule (b)() because the Court concluded that Schering had made its request for the first time in [its] reply brief. Mem. and Order (dated March 0, 0) [ECF No. ] (hereinafter /0/ Mem. and Order ), at & n.. Schering sought dismissal of all Integrilin claims on Rule (b)() grounds in its opening memorandum. See Defs. Schering-Plough Corp. s and Merck & Co., Inc. s Mem. of Points and Authorities (dated May, 0) [ECF No. -], at 0:- ( Quite apart from any of the foregoing arguments, for the reasons set forth in Millennium s Rule (b)() motion, which Schering hereby adopts, the Court lacks subject matter jurisdiction to hear the [Integrilin] claims asserted against Schering. ). Relator had a full and fair opportunity to respond to Schering s request for dismissal in his opposition, but said nothing to This Court deemed Millennium s joinder by footnote in Schering s earlier Rule (b)() Motion to be sufficient. See Mem. and Order (dated March, 0) [ECF No. 0] (hereinafter // Mem. and Order ), at & n. (citing footnote in Millennium s Rule (b)() and (b) Memorandum [ECF No. 0 at, n.] and stating: Because the arguments posed by the Motion apply equally to Millennium, and since there is no difference between Millennium s position with respect to the jurisdictional issue and that of Schering-Plough and Merck, the Court will deem the Rule (b)() motion to have been brought on behalf of all three Defendants ). RECONSIDERATION OR ALTERNATIVELY TO DISMISS PURSUANT TO RULE (b)()

3 Case :0-cv-000-MCE-EFB Document - Filed 0/0/ Page of 0 0 distinguish his claims against Schering from his claims against Millennium. See Opp. to Millennium Pharm., Inc. s Mot. to Dismiss Relator s Second Am. Compl. for Lack of Jurisdiction Pursuant to FRCP (b)() (dated June, 0) [ECF No. ]. The Integrilin claims pled against Schering and Merck should thus have been dismissed for the same reasons as the claims pled against Millennium. More fundamentally, as this Court has now stated on more than one occasion, Federal courts are courts of limited jurisdiction, and are presumptively without jurisdiction over civil actions. Mem. and Order (dated March, 0) [ECF No. ] (hereinafter // Mem. and Order ), at (citing Kokkonen v. Guardian Life Ins. Co. of Am., U.S., ()). Because subject matter jurisdiction involves a court s power to hear a case, it can never be forfeited or waived. Id. (citing United States v. Cotton, U.S., 0 (00)). Accordingly, lack of subject matter jurisdiction may be raised by either party at any point during the litigation, through a motion to dismiss pursuant to Federal Rule of Civil Procedure (b)(). Id. (citing Arbaugh v. Y&H Corp., U.S. 00, 0 (00) and Int l Union of Operating Eng rs v. Cnty. of Plumas, F.d 0, 0- (th Cir. 00)). Lack of subject matter jurisdiction may also be raised by the district court sua sponte. Id. (citing Ruhrgas AG v. Marathon Oil Co., U.S., ()). Indeed, courts have an independent obligation to determine whether subject matter jurisdiction exists, even in the absence of a challenge from any party. Id. (quoting Ruhrgas, U.S. at ). Accordingly, even if this Court continues to believe that Schering did not adequately raise the question of subject matter jurisdiction previously, Schering must be permitted to raise it now. As this Court has stated, there is no such thing as an untimely Rule (b)() motion. This Court has determined in two prior orders that the statutory bar, in effect at the time Relator s initial complaint was filed on November, 00, governs. // Mem. and Order at (citing // Mem. and Order). As amended in 00, that public disclosure bar precludes jurisdiction over a qui tam action based upon previously disclosed allegations, unless the party bringing the action qualifies as an original source[ ] of the information already disclosed. Id. (emphasis added). RECONSIDERATION OR ALTERNATIVELY TO DISMISS PURSUANT TO RULE (b)()

4 Case :0-cv-000-MCE-EFB Document - Filed 0/0/ Page of 0 0 The analysis set forth in this Court s March, 0 Memorandum and Order definitively demonstrates that the Integrilin claims asserted against Schering and Merck in Relator s Second Amended Complaint for Damages ( SAC ) are barred by the public disclosure bar and that this Court thus lacks jurisdiction to hear them. Not only is Schering s conduct placed in issue by each of the same six separate federal lawsuits that this Court found were the prior public disclosures that barred the claims against Millennium, but Schering is actually the named defendant in those lawsuits. Compare // Mem. and Order at, - with Def. Millennium Pharm., Inc. s Request for Judicial Notice Exs. - (dated May, 0) [ECF Nos. --] (hereinafter RJN ). Indeed, those complaints referred to Millennium as one of several parties with whom Schering co-promoted the subject drugs, including Integrilin. See RJN, Ex. at ; Ex. at ; Ex. at ; Ex. at ; Ex. at. And, here, the SAC alleges against Schering the very same kickback and off-label promotional scheme relating to Integrilin as it does against Millennium. In fact, the vast majority of the allegations from the SAC cited by the Court as markedly similar to the allegations of the prior complaints make no distinction at all between Schering and Millennium. Instead, they speak to conduct by Defendants. See // Mem. and Order at (citing SAC [ECF No. 0] -,, -, -00, 0, 0-0,,, -). It is on the basis of these very allegations that this Court has found that the prior federal lawsuits identify the same alleged kickbacks and also similar off-label use as identified by Relator in this proceeding in other words, that Relator s Integrilin claims were based upon these prior public disclosures. Id. at -. This Court has also already determined that Relator cannot qualify as an original source and, thus, is not permitted to bring these claims. Id. at -. The only possible difference between Schering/Merck and Millennium is that, [i]n September of 00, Defendant Millennium transferred its right to market Integrilin within the United States to Defendant Schering-Plough, thereby relinquishing any responsibility for the drug. // Mem. and Order at. Schering and its successor-in-interest Merck are, by contrast, alleged to have continued marketing and selling Integrilin after September 00, and to have gone on doing so after the public disclosures were made in 00. See, e.g., SAC RECONSIDERATION OR ALTERNATIVELY TO DISMISS PURSUANT TO RULE (b)()

5 Case :0-cv-000-MCE-EFB Document - Filed 0/0/ Page of 0 0 (lunch on August, 00) (last specific allegation in the SAC). However, this fact does not change the public disclosure bar analysis with respect to Schering and Merck. There are no allegations anywhere in the SAC that the purported scheme changed at any point in time. See generally SAC. The public disclosures the Court has identified were thus sufficient to put the government on notice of the entire course of the alleged scheme, not just the scheme to the extent it was allegedly implemented prior to the disclosures. Accordingly, the Ninth Circuit s decision in Project for Psychiatric Rights ex. rel. United States v. Matsutani, F. App x (th Cir. 0), is directly on point. Matsutani was a False Claims Act case predicated on allegations that defendants present[ed] claims to Medicaid for prescriptions of psychotropic drugs used on children and youth that are not for a medically accepted indication, and therefore not covered (legally reimbursable) under Medicaid. See Appellants Opening Br. at, Matsutani (No. 0-). The district court dismissed on public disclosure grounds. In their opening brief, appellants argued that the Public Disclosure Bar cannot be triggered by false claims occurring after the public disclosure. Appellants Br. at (emphasis added). The Ninth Circuit rejected this argument, reasoning that [r]elators suit concerns ongoing conduct, not specific and discrete time periods as in the precedent cited by appellants. The court went on to unequivocally state that the public disclosure bar applies to all claims at issue, including those made after the relevant disclosures. Matsutani, F. App x at (emphasis added). The same should be true here. The Tenth Circuit s decision in United States ex rel. Boothe v. Sun Healthcare Grp., Inc., F.d (0th Cir. 00), is similarly instructive. In that case, the Tenth Circuit held that the public disclosure bar warranted dismissal of a suit predicated on alleged misconduct between 000 and 00 because several similar qui tam suits were filed between and. The relator argued that the prior complaints d[id] not describe [the defendant s] practices as of 000-0, the period encompassed by [her] suit. Id. at. The court responded by expressly rejecting the contention that a time, place, and manner distinction is sufficient to escape the force of the public disclosure bar. Id. at. This is not a case in which a settlement shapes the nature of the information that was publicly available. See, e.g., RECONSIDERATION OR ALTERNATIVELY TO DISMISS PURSUANT TO RULE (b)()

6 Case :0-cv-000-MCE-EFB Document - Filed 0/0/ Page of In short, given that this Court has already determined that (i) [t]he 00 version of the statute unquestionably applies to actions filed in federal court like the six 00 lawsuits cited by Millennium, see // Mem. and Order at 0, (ii) the facts disclosed in these earlier public disclosures are substantially similar to Relator s Integrilin allegations in this case, id. at 0-, and (iii) Relator cannot qualify as an original source, id. at, the Integrilin claims should be dismissed as alleged against Schering and Merck too. See U.S.C. 0(e)()(A)-(B) (00). CONCLUSION For the foregoing reasons, the Second Amended Complaint should be dismissed, and Relator should be required to file a Third Amended Complaint that sets forth allegations and 0 claims that relate only to Schering s marketing of the drug Avelox. As with the combination use allegations that this Court previously dismissed on Rule (b)() grounds, the Integrilin allegations are substantially intertwined with the extensive factual narrative in the SAC s pages. See // Mem. and Order at. Accordingly, the only prudent course would be to dismiss the SAC and require Relator to file a Third Amended Complaint that eliminates all Integrilin allegations. Id. 0 United States ex rel. Kester v. Novartis Pharm. Corp., F. Supp. d, - (S.D.N.Y. 0). There can be no suggestion that, [w]hat the Government would have known [here] was that the allegations of wrongdoing were made and settled with a promise of future compliance. Id.; compare United States ex rel. Hoggett v. University of Phoenix, No. :0-cv-0, 0 WL (E.D. Cal July, 0) (England, J.). All but one of the six complaints on which Millennium relied was subsequently consolidated and later dismissed by the district court, and that dismissal was affirmed on appeal. See In re Schering Plough Corp. Intron/Temodar Consumer Class Action, F.d (d Cir. 0). Accordingly, there was never any settlement of most of the claims asserted in the 00 complaints. As this Court has noted in each of its prior Memoranda, Relator s complaints have contain[ed] allegations pertaining to another completely different drug, Avelox. See, e.g., // Mem. and Order at. RECONSIDERATION OR ALTERNATIVELY TO DISMISS PURSUANT TO RULE (b)()

7 Case :0-cv-000-MCE-EFB Document - Filed 0/0/ Page of 0 0 Dated: April, 0 Respectfully submitted, By /s/ John P. Bueker JOHN P. BUEKER (admitted pro hac vice) john.bueker@ropesgray.com Prudential Tower, 00 Boylston Street Boston, MA 0-00 Tel: () -000 Fax: () -00 DOUGLAS H. HALLWARD-DRIEMEIER (admitted pro hac vice) douglas.hallward-driemeier@ropesgray.com One Metro Center 00 th Street, NW, Suite 00 Washington, DC 000- Tel: (0) 0-00 Fax: (0) 0-0 LAURA G. HOEY (admitted pro hac vice) laura.hoey@ropesgray.com North Wacker Drive, nd Floor Chicago, IL 00-0 Tel: () -00 Fax: () -00 ROCKY C. TSAI (SBN ) rocky.tsai@ropesgray.com Three Embarcadero Center San Francisco, CA -00 Tel: () -00 Fax: () -0 Attorneys for Defendants SCHERING-PLOUGH CORP. AND MERCK & CO., INC. RECONSIDERATION OR ALTERNATIVELY TO DISMISS PURSUANT TO RULE (b)()