Case 2:05-cv DMC-JAD Document Filed 04/16/13 Page 1 of 36 PageID: 2775

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1 Case 2:05-cv DMC-JAD Document Filed 04/16/13 Page 1 of 36 PageID: 2775 MORGAN, LEWIS & BOCKIUS LLP (A Pennsylvania Limited Liability Partnership) 502 Carnegie Center Princeton, NJ Phone: (609) Fax: (609) Attorneys for Defendant AmerisourceBergen Corporation UNITED STATES DISTRICT COURT DISTRICT OF NEW JERSEY UNITED STATES OF AMERICA, et al., Plaintiffs v. EXPRESS SCRIPTS, INC., et al., Civil Action No. 05-CV-01714(DMC)(JAD) Document Electronically Filed Oral Argument Requested Motion Day: May 20, 2013 Defendants. BRIEF IN SUPPORT OF AMERISOURCEBERGEN CORPORATION S MOTION TO DISMISS THE THIRD AMENDED COMPLAINT PURSUANT TO FEDERAL RULES OF CIVIL PROCEDURE 12(b)(6) AND 9(b)

2 Case 2:05-cv DMC-JAD Document Filed 04/16/13 Page 2 of 36 PageID: 2776 TABLE OF CONTENTS Page I. INTRODUCTION... 1 II. RELATOR S FACTUAL ALLEGATIONS... 2 A. First DataBank s and McKesson s Implementation, Perpetration, and Concealment of Their Alleged Fraudulent Scheme... 3 B. ABC s Alleged Involvement in the First DataBank/McKesson Scheme Allegations That ABC Provided False Pricing Information to First DataBank Allegations That ABC Did Not Provide Pricing Information to First DataBank and Failed to Disclose That First DataBank Had Not Surveyed ABC s Prices Other Alleged Misconduct The Legal Claims Asserted Against ABC... 6 III. DISCUSSION... 7 A. The FCA Claims Are Insufficiently Pled Pleading Standards Relator Does Not Plead ABC s Involvement in the Alleged Scheme Either Plausibly or With Particularity... 8 a. ABC s Alleged Provision of False Prices to First DataBank Is Insufficiently Pled... 9 b. ABC s Alleged Failure to Correct or Disclose First DataBank s Misstatements Is Insufficiently Pled ABC s Other Purported Misconduct Is Insufficiently Pled Relator Fails To Allege Other Key Elements Of His Claims B. Relator s State-Law Claims Also Fail Relator Has Not Met the Prerequisites for Claims Under Delaware and New Mexico s False Claims Statutes (Ninth and Twenty- Second Counts) Relator s New Hampshire and Texas Claims Fail Because Those States Have Not Intervened (Twentieth and Twenty-Seventh Counts) Relator Cannot Pursue State FCA Claims for Conduct That He Alleges Occurred Before the State Statutes Under Which He Filed Suit Were Enacted i

3 Case 2:05-cv DMC-JAD Document Filed 04/16/13 Page 3 of 36 PageID: 2777 TABLE OF CONTENTS (continued) Page C. The Court Should Decline To Retain Supplemental Jurisdiction Over The State FCA Claims D. The TAC Should Be Dismissed With Prejudice IV. CONCLUSION ii

4 Case 2:05-cv DMC-JAD Document Filed 04/16/13 Page 4 of 36 PageID: 2778 TABLE OF AUTHORITIES CASES Page(s) Advanced Oral Technologies, L.L.C. v. Nutrex Research, Inc., No , 2011 WL (D.N.J. Mar. 21, 2011)...13 Albuquerque Bernalillo Co. Water Util. Auth. v. NMPRC, 229 P.3d 494 (N.M. 2010)...20 Allison Engine Co. v. U.S. ex rel. Sanders, 553 U.S. 662 (2008)...15 Ashcroft v. Iqbal, 556 U.S. 662 (2009)... passim Bell Atl. Corp. v. Twombly, 550 U.S. 544 (2007)... passim Berner v. Mills, 579 S.E.2d 159 (Va. 2003)...24 Christidis v. First Pa. Mortg. Trust, 717 F.2d 96 (3d Cir. 1983)...18 Cole v. Silverado Foods, Inc., 78 P.3d 542 (Okla. 2003)...24 Davis v. State Employees Retirement Bd., 725 N.W.2d 56 (Mich. Ct. App. 2006)...24 Direct Action for Rights & Equality v. Gannon, 819 A.2d 651 (R.I. 2003)...24 Eastern Enterprises v. Apfel, 524 U.S. 498 (1998)...22 Esposito v. I-Flow Corp., No. 10-cv-3883, 2011 WL (E.D. Pa. Oct. 24, 2011)...9 Foglia v. Renal Ventures Mgmt., LLC, 830 F. Supp. 2d 8 (D.N.J. 2011)...7, 18 Foglia v. Renal Ventures Mgmt., LLC, No (NLH)(AMD), 2012 WL (D.N.J. Sept. 26, 2012)...14 iii

5 Case 2:05-cv DMC-JAD Document Filed 04/16/13 Page 5 of 36 PageID: 2779 Fowler Props., Inc. v. Dowland, 646 S.E.2d 197 (Ga. 2007)...23 Graham Cty. Soil & Water Conserv. Dist. v. U.S. ex rel. Wilson, 130 S.Ct (2010)...22 Howard Hess Dental Laboratories Inc. v. Dentsply Int l, Inc., 602 F.3d 237 (3d Cir. 2010)...12 Howell v. Heim, 882 P.2d 541 (N.M. 1994)...24 In re Burlington Coat Factory Securities Litigation, 114 F.3d 1410 (3d Cir. 1997)...25 In re NAHC, Inc. Securities Litigation, 306 F.3d 1314 (3d Cir. 2002)...25 In re Rockefeller Ctr. Props. Secs. Litig., 311 F.3d 198 (3d Cir. 2002)...8, 10 Kehr Packages, Inc. v. Fidelcor, Inc., 926 F.2d 1406 (3d Cir. 1991)...1 Klein v. General Nutrition Cos., Inc., 186 F.3d 338 (3d Cir. 1999)...11 Kusner v. Hepburn, Willcox, Hamilton & Putnam, a Partnership of Attorneys, No , 2001 WL (E.D. Pa. Nov. 21, 2001)...25 Leder v. Shinfeld, 609 F. Supp. 2d 386 (E.D. Pa. 2009)...18 Logan v. Salvation Army, 809 N.Y.S.2d 846 (N.Y. Sup. Ct. 2005)...24 Massachusetts v. Schering-Plough Corp., 779 F. Supp. 2d 224 (D. Mass. 2011)...22, 24 Muhammad v. Weis, No , 2009 WL (E.D. Pa. Mar. 11, 2009)...9 Nelson v. Maverick Funding Corp., No (SRC), 2011 WL (D.N.J. Mar. 23, 2011)...9 Palladino v. VNA of S. N.J., No , 1999 WL (D.N.J. June 30, 1999)...17 iv

6 Case 2:05-cv DMC-JAD Document Filed 04/16/13 Page 6 of 36 PageID: 2780 Pietrangelo v. NUI Corp., No. Civ (GEB), 2005 WL (D.N.J. July 20, 2005)...9 Robinson v. Valladares, 738 N.E.2d 278 (Ind. Ct. App. 2000)...24 Santiago v. Warminster Township, 629 F.3d 121 (3d Cir. 2010)...12 Sikora v. Am. Can Co., 622 F.2d 1116 (3d Cir. 1980)...22 State ex rel. Hayling v. Correctional Med. Servs., Inc., 28 A.3d 1246 (N.J. Super. Ct. 2011)...24 State v. Hamilton, 164 P.3d 884 (Mont. 2007)...24 State v. Johnson, 595 A.2d 498 (N.H. 1991)...24 Taniguichi v. Ass n of Apt. Owners of King Manor, Inc., 155 P.3d 1138 (Haw. 2007)...23, 24 U.S. ex rel. Atkinson v. Pa. Shipbuilding Co., 255 F. Supp. 2d 351 (E.D. Pa. 2002)...12, 14, 18 U.S. ex rel. Atkinson v. Pennsylvania Shipbuilding Co., No , 2000 WL (E.D. Pa. Aug. 24, 2000)...16, 17 U.S. ex rel. Bauchwitz v. Holloman, 671 F. Supp. 2d 674 (E.D. Pa. 2009)...10, 11 U.S. ex rel. Budike v. Peco Energy, No , -- F. Supp. 2d --, 2012 WL (E.D. Pa. Sept. 14, 2012)...8, 12, 15 U.S. ex rel. Conrad v. GRIFOLS Biologicals, Inc., No , 2010 WL (D. Md. July 9, 2010)...19, 20, 21 U.S. ex rel. Digital Healthcare, Inc. v. Affiliated Computer Services, Inc., 778 F. Supp. 2d 37 (D.D.C. 2011)...25 U.S. ex rel. Foster v.bristol-myers Squibb Co., 587 F. Supp. 2d 805 (E.D. Tex. 2008)...21 U.S. ex rel. Godfrey v. KBR, Inc., 360 F. App x 407 (4th Cir. 2010)...18 v

7 Case 2:05-cv DMC-JAD Document Filed 04/16/13 Page 7 of 36 PageID: 2781 U.S. ex rel. LaCorte v. SmithKline Beecham Clinical Labs, 149 F.3d 227 (3d Cir. 1998)...8 U.S. ex rel. Lisitza v. Johnson & Johnson, 765 F. Supp. 2d 112 (D. Mass. 2011)...21 U.S. ex rel. Monahan v. Robert Wood Johnson Univ. Hosp. at Hamilton, Nos & , 2009 WL (D.N.J. May 7, 2009)...11 U.S. ex rel. Piacentile v. Novartis, No , slip op. at (E.D.N.Y. Feb. 8, 2011)...20 U.S. ex rel. Piacentile v. Sanofi Synthelabo, Inc., No , 2010 WL (D.N.J. Dec. 30, 2010)...15, 16 U.S. ex rel. Piacentile v. Wolk, No , 1995 WL (E.D. Pa. Jan. 17, 1995)...12, 14 U.S. ex rel. Pilecki-Simko v. Chubb Institute, 443 F. App x 754 (3d Cir. 2011)...12 U.S. ex rel. Quinn v. Omnicare Inc., 382 F.3d 432 (3d Cir. 2004)...15 U.S. ex rel. Repko v. Guthrie Clinic, P.C., 557 F. Supp. 2d 522 (M.D. Pa. 2008)...16 U.S. ex rel. Simpson v. Bayer Corp., No (JLL), 2012 WL (D.N.J. Aug. 21, 2012)...24, 25 U.S. ex rel. Streck v. Allergan, Inc., No , 2012 WL (E.D. Pa. July 3, 2012)... passim U.S. ex rel. Underwood v. Genentech, Inc., 720 F. Supp. 2d 671 (E.D. Pa. 2010)...14 U.S. ex rel. Wall v. Vista Hospice Care, 778 F. Supp. 2d 709 (N.D. Tex. 2011)...21 U.S. ex rel. Wilkins v. United Health Group, Inc., 659 F.3d 295 (3d Cir. 2011)...8, 14 U.S. ex rel. Wilkins v. United Health Group, Inc., No (RBK/JS), 2011 WL (D.N.J. Dec. 20, 2011)...14 U.S. ex rel. Williams v. Martin-Baker Aircraft Co., Ltd., 389 F.3d 1251 (D.C. Cir. 2004)...10, 11 vi

8 Case 2:05-cv DMC-JAD Document Filed 04/16/13 Page 8 of 36 PageID: 2782 U.S. v. Aguilon, 628 F. Supp. 2d 542 (D. Del. 2009)...15 U.S. v. Albinson, No , 2010 WL (D.N.J. Aug. 16, 2010)...16 U.S. v. Gericare Medical Supply Inc., No. Civ. A CB-L, 2000 WL (S.D. Al. Dec. 11, 2000)...17 Varvo v. Albers, No. 2:05CV321, 2006 WL (W.D. Pa. Aug. 31, 2006)...25 Wilson v. Triangle Oil Co., 566 A.2d 1016 (Del. Super. Ct. 1989)...19 STATUTES 2009 Del. Laws Ch Mass. Legis. Serv. ch. 159 (Mass. 2000) U.S.C. 3729(a)(1)... passim 31 U.S.C. 3729(a)(1)(A) U.S.C. 3729(a)(1)(B)...7, U.S.C. 3729(a)(1)(C)...7, U.S.C. 3729(a)(1)(G)...7, 15, U.S.C. 3729(a)(2)... passim 31 U.S.C. 3729(a)(3)... passim 31 U.S.C. 3729(a)(7)... passim 31 U.S.C. 3730(e)(4) U.S.C. 3731(b)(1)...10 Del. Code Ann. Tit. 6, 1202(4) (2000)...19, 20 Del. Code. Ann. Tit (b)(4)(b) (2000)...19 Del. Code Ann. Tit A(d)...20 Fraud Enforcement and Recovery Act, Pub. L. No , 123 Stat (2009)...7, 15, 16 vii

9 Case 2:05-cv DMC-JAD Document Filed 04/16/13 Page 9 of 36 PageID: 2783 Ga. Code et seq...23 H.B. 5300, 2005 Mont. Laws Ch Haw. Rev. Stat et seq...23 Ind. Code et seq...23 Mass. Gen. Laws Ann. ch. 12 5A-5O...23 Mich. Comp. Laws Ann (1)-(2) (2009)...22, 23 Mont. Code et seq...23 N.H. Rev. Stat. 167:61-b(VII)(a)...23 N.H. Rev. Stat. 167:61-c(II)(e) (2004)...20, 21 N.H. Rev. Stat. 167:61-c(II)(e)(2009)...21 N.J. Stat. 2A:32-C1 et seq...23 N.M. Stat et seq...23 N.M. Stat (B) (2004)...19 N.M. Stat (E)(2) (2004)...19 N.Y. State Fin. Law 187 et seq Okla. Stat et seq R.I. Gen. Laws et seq Texas Acts 2007, 80th Leg. Ch Tex. Hum. Res. Code (b) (1997)...21 Va. Code Ann Wis. Stat. Ann (15)...22 Wis. Stat. Ann OTHER AUTHORITIES Fed. R. Civ. P. 8(a)... passim Fed. R. Civ. P. 9(b)... passim viii

10 Case 2:05-cv DMC-JAD Document Filed 04/16/13 Page 10 of 36 PageID: 2784 Fed. R. Civ. P. 12(b)(1)...1 Fed. R. Civ. P. 12(b)(6)...1 S. Rep. No (2009)...15, 16, 18 John T. Boese, Civil False Claims & Qui Tam Actions 2.01(F)(1) (4th ed. 2011)...16 ix

11 Case 2:05-cv DMC-JAD Document Filed 04/16/13 Page 11 of 36 PageID: 2785 Defendant AmerisourceBergen Corporation ( ABC ) submits its Brief in Support of its Motion to Dismiss the Third Amended Complaint Pursuant to Federal Rules of Civil Procedure 12(b)(6) and 9(b) ( Complaint or TAC ). 1 I. INTRODUCTION Although the Complaint is voluminous, the insufficiency of its sparse allegations against ABC is readily apparent. ABC, a drug wholesaler, is alleged somehow to have participated in a scheme in which two other defendants, First DataBank and McKesson Corporation ( McKesson ), inflated the average wholesale prices ( AWPs ) for certain drugs thereby purportedly causing the government to pay too much on drug reimbursement claims and violating the False Claims Act ( FCA ). But the claims against ABC are far too conclusory to stand: ABC s supposed participation in the purported scheme is not even alleged with plausibility, let alone the particularity that is required for FCA claims. To the extent the Complaint bases its claims against ABC on allegations that ABC provided First DataBank with false information about its own drug pricing, those allegations are purely conclusory. Not a single fact is alleged about any false information ABC purportedly provided to First DataBank. Nor does the Complaint allege any of the who, when, what, or how particulars that Rule 9(b) requires to allege such a fraud. To the extent the Complaint alleges, in contradiction of the above, that ABC s purported fraud was actually one of nonfeasance that ABC failed to disclose that First DataBank did not survey wholesalers prices 1 ABC will also move to dismiss this action under Fed. R. Civ. P. 12(b)(1) for lack of subject matter jurisdiction under the jurisdictional bar of the False Claims Act, 31 U.S.C. 3730(e)(4), because the TAC s allegations against ABC are based upon public disclosures and Relator has failed to establish that he is the original source of information about the matters on which he bases those claims. ABC has filed separate briefs for each motion. See, e.g., Kehr Packages, Inc. v. Fidelcor, Inc., 926 F.2d 1406, (3d Cir. 1991) ( A plaintiff may be prejudiced if what is, in essence, a Rule 12(b)(6) challenge to the complaint is treated as a Rule 12(b)(1) motion. ). 1

12 Case 2:05-cv DMC-JAD Document Filed 04/16/13 Page 12 of 36 PageID: 2786 as it had represented it would do not a single fact is alleged to suggest that ABC had a duty to make such a disclosure to anyone. Finally, even if ABC s supposed participation in the other defendants scheme were sufficiently alleged, the Complaint fails sufficiently to allege (a) that any false claim was submitted; (b) that ABC took any action to cause a false claim to be submitted; (c) that ABC acted with the purpose of getting a fraudulent claim paid or approved by the government; (d) that ABC did not pay back money it was obligated to return to the government; and (e) key elements of any conspiracy. Relator s claims under state laws fail for these and additional independent reasons as well. Thus, the Complaint should be dismissed as to ABC. Because Relator has had ample time and opportunity to try to state a valid claim against ABC he filed this action more than eight years ago, joined ABC more than six years ago, and has amended his complaint three times the Complaint should be dismissed as to ABC with prejudice. II. RELATOR S FACTUAL ALLEGATIONS The lion s share of the Relator s 420-paragraph Complaint is devoted to describing an alleged fraudulent scheme implemented and perpetrated by defendants other than ABC. TAC 11. That scheme is alleged to have been carried out by First DataBank, a company that publishes information about the prices at which drugs were sold to retailers, and McKesson, one of the nation s largest drug wholesalers. Id. The Complaint also alleges that three pharmacy benefit manager defendants made efforts to profit from the First DataBank/McKesson scheme (efforts in which ABC is not alleged to have participated). Id , The TAC s attempt to allege that ABC was involved in the First DataBank/McKesson scheme consists of broad conjecture, rather than fact, that fails to describe a plausible basis that could support a claim against ABC. 2

13 Case 2:05-cv DMC-JAD Document Filed 04/16/13 Page 13 of 36 PageID: 2787 A. First DataBank s and McKesson s Implementation, Perpetration, and Concealment of Their Alleged Fraudulent Scheme The vast majority of the Complaint describes, at length, First DataBank s misreporting of the Average Wholesale Price, or AWP, that retailers paid for drugs, a benchmark that the federal government and many state governments used to calculate reimbursement for various prescription drug programs, and McKesson s participation in that alleged scheme. See, e.g., id , 70-79, It alleges that [i]n late 1999 and early 2000, the federal government concluded that drug manufacturers were reporting average wholesale prices [to First DataBank] for [approximately fifty] drugs that were higher than the actual prices charged by wholesalers. Id. 70. First DataBank reached an agreement with the federal government by which it agreed to use data collected by the government to calculate and publish new AWPs for the subject drugs, and to update the AWPs for those drugs every six months based on a survey of wholesalers, including McKesson and ABC. Id [S]ince at least 2000, however, First DataBank did not actually conduct surveys of wholesalers to determine AWP, as it had agreed, but instead relied almost solely on data provided to it by McKesson, and it made no attempt to determine whether the data provided by McKesson represented empirical prices that were charged anywhere in the marketplace by McKesson or any other wholesaler. Id. 15. McKesson is alleged to have been complicit in First DataBank s scheme to inflate the AWP. McKesson went about systematically inflating AWP on thousands of prescription drugs by reporting inflated markups and/or prices to First DataBank in order to influence the AWP reported by First DataBank. Id. 17. McKesson and First DataBank also allegedly concealed their fraudulent scheme to inflate AWPs, even from the pharmaceutical industry generally. See, e.g., id. 69, 113, 119, 124, 127, 132. The Complaint alleges that the scheme 3

14 Case 2:05-cv DMC-JAD Document Filed 04/16/13 Page 14 of 36 PageID: 2788 caused federal and state governments to overpay on drug claims because their reimbursement of drugs was tied to the AWP. Id B. ABC s Alleged Involvement in the First DataBank/McKesson Scheme The Relator seeks to impose liability on ABC, a drug wholesaler, based on allegations that it somehow participated in the alleged First DataBank/McKesson scheme. However, the allegations against ABC are contradictory as well as conclusory, and fail to state any claim against it. 1. Allegations That ABC Provided False Pricing Information to First DataBank The Complaint alleges that ABC was involved in the First DataBank/McKesson scheme because it allegedly provided First DataBank with false information about prices at which ABC sold drugs to retailers. However, those allegations are nothing more than conclusory labels: ABC is alleged to have provided First DataBank with false, inflated prices and/or fictitious markups over WAC [wholesale average cost] and fictitious pricing information, and to have artificially inflat[ed] [its] AWP and report[ed] the artificial prices to First DataBank. Id. 89, 90, 237. The Complaint does not specify any information that ABC purportedly provided to First DataBank, nor does it allege any facts to support its bald assertions that the unidentified information was false, let alone materially so. There is no allegation as to how, when or by whom any false information was submitted. The Complaint makes similarly conclusory allegations that false prices were reported by the Wholesaler Defendants, a term that is defined as including ABC, McKesson, and Cardinal Health, Inc. ( Cardinal ). See, e.g., TAC 138 ( the Wholesalers conspired with First DataBank to continue reporting fictitious prices and/or markups ); id. 145 ( the Wholesalers knowingly made false statements that they knew would cause First DataBank to publish false AWP 4

15 Case 2:05-cv DMC-JAD Document Filed 04/16/13 Page 15 of 36 PageID: 2789 values ). These Wholesaler allegations not only fail to differentiate among the three defendants, they like the allegations about ABC provide no factual support for the bare conclusions that ABC reported any fictitious prices or made any false statements. 2. Allegations That ABC Did Not Provide Pricing Information to First DataBank and Failed to Disclose That First DataBank Had Not Surveyed ABC s Prices In flat contradiction of its conclusory claims that ABC made false representations to First DataBank about its drug prices, the Complaint also alleges that ABC, as a Wholesaler Defendant, actually did not provide First DataBank with information about its drug prices. See TAC 144, 145, 243. Under this theory, ABC s involvement in the First DataBank/McKesson scheme is alleged to have consisted of permitting First DataBank to represent that the AWP information it published was based on surveys of wholesalers drug prices, when ABC purportedly knew that First DataBank had not surveyed wholesalers. This theory also appears to fault the Wholesaler Defendants, and therefore ABC, for failing to disclose to someone the Complaint does not say whom that First DataBank s representations about how it determined the AWPs it published were not correct. 2 Here too, the Complaint alleges no facts to support its bare claim that ABC knew that First DataBank had made any false representations at all, that ABC had any control over First 2 See TAC 144 ( Although the Wholesalers were well aware that First DataBank was in fact not conducting standardized periodic surveys of actual wholesale prices, they permitted First DataBank to represent the contrary, and furthermore, knowingly allowed (and indeed encouraged) third-party payors, including governments, to rely on [First DataBank s] Blue Book AWP. The national wholesalers thus knowingly concealed their actual prices, yet allowed First DataBank to use their names in representing that such surveys occurred, thereby helping to legitimize the surveys. ); id. 243 ( McKesson, Cardinal, AmerisourceBergen, and John Doe Corporations conduct, as alleged herein, was, upon information and belief, purposeful and deliberately fraudulent and misleading, with the intent and effect of affirmatively representing and/or implying that they were participating in First DataBank s surveys and/or that they were providing accurate and reliable AWPs, while omitting, hiding, and/or otherwise concealing the acts and practices complained of herein. ). 5

16 Case 2:05-cv DMC-JAD Document Filed 04/16/13 Page 16 of 36 PageID: 2790 DataBank or its statements, or that ABC had a duty to disclose anything to anyone about how First DataBank purportedly derived its pricing information. 3. Other Alleged Misconduct The TAC also alleges, upon information and belief, that ABC and the other Wholesaler Defendants falsely represented that using First DataBank would result in the least expensive prescription drugs and/or most reliable AWP. Id Not a single fact is alleged to support this bare allegation of purported misrepresentations by ABC not even the person or entity to whom purported representations were made, or how, when or by whom they were made. The TAC further alleges, also upon information and belief, that the Wholesalers encouraged their customers to use the AWP information published by First DataBank. Id But again, not a single fact is alleged suggesting what any Wholesaler, let alone ABC, purportedly did to provide such encouragement, nor identifying any customer who was purportedly encouraged. Finally, the TAC alleges that the defendants engaged in a conspiracy to inflate the AWPs of certain drugs, but yet again, identifies no facts that would support such a claim. See id. 130, The Legal Claims Asserted Against ABC The TAC claims that ABC violated four provisions of the FCA: 3729(a)(1)(knowingly presenting or causing to be presented to the government a false or fraudulent claim); 3729(a)(2)(knowingly making, using or causing to be made any record or statement to get a false or fraudulent claim against the United States paid or approved); 3729(a)(7)(knowingly making, using, or causing to be made or used a false record or statement to conceal, avoid, or decrease an obligation to pay or transmit money or property to the government); and 6

17 Case 2:05-cv DMC-JAD Document Filed 04/16/13 Page 17 of 36 PageID: (a)(3)(conspiring to get a false or fraudulent claim allowed or paid by the United States). 3 ABC is also alleged to have violated the False Claims Acts of various states, whose elements are similar to those of the federal FCA. TAC III. DISCUSSION A. The FCA Claims Are Insufficiently Pled 1. Pleading Standards To survive a motion to dismiss under Rule 8(a), the Relator must allege facts that, if accepted as true, are sufficient to state a claim to relief that is plausible on its face. Ashcroft v. Iqbal, 556 U.S. 662, 678 (2009) (quoting Bell Atl. Corp. v. Twombly, 550 U.S. 544, 570 (2007)). That standard is met only by factual allegations that allow[ ] the court to draw the reasonable inference that the defendant is liable for the misconduct alleged. Id. The factual allegations must be enough to raise a right to relief above the speculative level. Twombly, 550 U.S. at 555. Labels and conclusions or a formulaic recitation of the elements of a cause of action do not suffice. Iqbal, 556 U.S. at 678 (quoting Twombly, 550 U.S. at 555). 3 On May 20, 2009, Congress amended the FCA by enacting the Fraud Enforcement and Recovery Act ( FERA ). FERA re-designated 31 U.S.C. 3729(a)(1) as 31 U.S.C. 3729(a)(1)(A); 31 U.S.C. 3729(a)(2) as 31 U.S.C. 3729(a)(1)(B); 31 U.S.C. 3729(a)(3) as 31 U.S.C. 3729(a)(1)(C); and 31 U.S.C. 3729(a)(7) as 31 U.S.C. 3729(a)(1)(G), among other amendments. See Pub. L. No , 123 Stat (2009). By its terms, FERA applies to conduct on or after the date of enactment (which is May 20, 2009), with the exception of newly designated 3729(a)(1)(B) which applies to claims pending on or after June 7, Id. 4(f). Thus, to the extent any conduct alleged occurred after May 20, 2009, or for purposes of 3729(a)(1)(B) there were any claims pending on or after June 7, 2008, the FCA as amended in 2009 applies. For purposes of 3729(a)(1)(B) s retroactivity, claims pending refers specifically to a defendant s request for payment. See Foglia v. Renal Ventures Mgmt., LLC, 830 F. Supp. 2d 8, 15 (D.N.J. 2011) (citations omitted). For purposes of this brief, ABC uses the pre-fera numbering that Relator used in the TAC, unless specifically discussing post-fera claims. 7

18 Case 2:05-cv DMC-JAD Document Filed 04/16/13 Page 18 of 36 PageID: 2792 In this case, the Relator must meet an even higher pleading standard than plausibility under Iqbal and Twombly. Because he asserts claims under the FCA, he must plead his claims with particularity under Fed. R. Civ. P. 9(b). See U.S. ex rel. Wilkins v. United Health Group, Inc., 659 F.3d 295, 301 n.9 (3d Cir. 2011). To satisfy Rule 9(b), the Relator must allege the particulars of his claims, including the time, place, and substance of the defendant s alleged conduct. U.S. ex rel. LaCorte v. SmithKline Beecham Clinical Labs, 149 F.3d 227, 234 (3d Cir. 1998). The Third Circuit has held that Rule 9(b), at a minimum, requires a description of the who, what, when, where and how of the events at issue. In re Rockefeller Ctr. Props. Secs. Litig., 311 F.3d 198, 217 (3d Cir. 2002) (citations omitted). The requirements of 9(b) effectively prevent a claimant from searching for a valid claim after a civil action has been commenced. U.S. ex rel. Budike v. Peco Energy, No , -- F. Supp. 2d --, 2012 WL , at *9 (E.D. Pa. Sept. 14, 2012) (quoting 2 James Wm. Moore et al., Moore s Federal Practice 9.03[1][a] (3d ed. 2002)). Relator s allegations as to ABC do not come close to meeting even the Iqbal/Twombly plausibility standard, let alone the Rule 9(b) particularity standard. 2. Relator Does Not Plead ABC s Involvement in the Alleged Scheme Either Plausibly or With Particularity Although Relator purports to assert claims against ABC under four different sections of the FCA, all the claims turn, at least in part, on the same critical element: the assertion that ABC participated in First DataBank s fraudulent scheme to inflate AWPs. Relator posits contradictory theories to try to tie ABC to that scheme: (1) on the one hand, that ABC submitted false drug pricing data to First DataBank; and (2) on the other hand, that ABC did not submit drug pricing data to First DataBank, but failed to disclose First DataBank s purported fraud in publishing 8

19 Case 2:05-cv DMC-JAD Document Filed 04/16/13 Page 19 of 36 PageID: 2793 allegedly incomplete information. Because neither of these contradictory theories is sufficiently alleged, all the claims fail. 4 a. ABC s Alleged Provision of False Prices to First DataBank Is Insufficiently Pled In alleging that ABC provided false drug pricing information to First DataBank, the TAC asserts nothing more than conclusions. See TAC 89, 90, 237 (alleging that ABC provided false, inflated prices and/or fictitious markups over WAC [wholesale average cost], fictitious pricing information, and artificially inflat[ed] [its] AWP and report[ed] the artificial prices to First DataBank ). The TAC makes similarly conclusory allegations about purportedly false statements made by the Wholesaler Defendants, a term that is defined to include McKesson, ABC, and Cardinal. Id. 89, 90, 145, 237 (the Wholesaler Defendants reported fictitious prices and/or markups and knowingly made false statements that they knew would cause First DataBank to publish false AWP values ). 5 4 Contradictory factual allegations are entitled to little if any weight. See, e.g., Nelson v. Maverick Funding Corp., No (SRC), 2011 WL , at *4 (D.N.J. Mar. 23, 2011) (disregarding allegation that was conclusory and contradicted by other allegations). 5 In any event, Relator cannot meet his pleading burden by relying on group allegations such as those relating to the Wholesaler Defendants. Group allegations that do not differentiate among defendants do not give the defendants even fair notice of the conduct with which they are charged, and are therefore insufficient under Rule 8(a). See Muhammad v. Weis, No , 2009 WL , at *2 (E.D. Pa. Mar. 11, 2009) (Rule 8(a) violated by blanket allegations against entire groups of individual defendants that did not describe how each individual actor contributed to the alleged harm ); Pietrangelo v. NUI Corp., No (GEB), 2005 WL , at *10 (D.N.J. July 20, 2005) (complaint that lumps all of the defendants together does not satisfy even the liberal [pre-twombly] notice pleading standard of Rule 8(a) because it does not differentiate between the defendants ). And group allegations are obviously insufficient under Rule 9(b). See, e.g., Esposito v. I-Flow Corp., No. 10-cv-3883, 2011 WL , at *4 (E.D. Pa. Oct. 24, 2011) (dismissing fraud claim as insufficiently pled under Rule 9(b) where complaint generically lumps each individual defendant together as one entity by referring only to defendants collectively and therefore fails to provide notice of the precise misconduct with which defendants are charged in order to give them an opportunity to respond meaningfully ). 9

20 Case 2:05-cv DMC-JAD Document Filed 04/16/13 Page 20 of 36 PageID: 2794 None of those allegations nor anything else in the Complaint provides a single fact to flesh out these bare-bones conclusions as to ABC. There is no allegation, for example, of any price that ABC ever reported to First DataBank for any drug, or by how much any such price was purportedly inflated. Similarly, there is no identification of any drug whose pricing was falsely reported, 6 when any particular false pricing was submitted or who submitted such false price reports. For example, the allegation that the conduct of all three Wholesalers began [a]t least as of is patently insufficient to identify when ABC s alleged fraud occurred. TAC 138. Thus, it is clear that, as to ABC, the Complaint offers speculation and nothing more. Consequently, the Complaint also fails to provide the particularity Rule 9(b) requires to plead a claim that ABC reported false drug pricing information to First DataBank. Not only does the TAC fail to identify any of the information ABC purportedly provided to First DataBank the what element that Rule 9(b) requires it also fails to state when, where or how any such information was provided. See In re Rockefeller Ctr., 311 F.3d at 217. Even if such a group allegation could give ABC sufficient notice of this element as to its own conduct (and it cannot, see n.5 above), the time frame is far too broad to meet the particularity requirements of Rule 9(b). See U.S. ex rel. Williams v. Martin-Baker Aircraft Co., Ltd., 389 F.3d 1251, 1257 (D.C. Cir. 2004) (an open-ended time span... fail[s] to give [the defendant] sufficient information to allow for preparation of a response ). 7 And if these deficiencies were not enough to require 6 The only allegations in the TAC that even remotely touch on ABC s prices are in 92, which alleges that First DataBank received pricing data from ABC for some unspecified drug that reflected a markup over wholesale average price greater than approximately 5%, and in 130, which alleges that ABC changed to a 25% markup for some unspecified drug or drugs at some unspecified time. 7 To the extent Relator may claim that the relevant time period began prior to November 30, 2000, six years prior to the filing of the Second Amended Complaint, which first named ABC as a defendant, such claims are time-barred. See 31 U.S.C. 3731(b)(1); see also U.S. ex rel. Bauchwitz v. Holloman, 671 F. Supp. 2d 674, (E.D. Pa. 2009) (a violation is 10

21 Case 2:05-cv DMC-JAD Document Filed 04/16/13 Page 21 of 36 PageID: 2795 dismissal of the claims against ABC, the Complaint fails to identify any employee of ABC who was purportedly involved in the alleged fraud, and therefore lacks the who element that Rule 9(b) requires as well. 8 In sum, the allegations that ABC provided First DataBank with false drug pricing information offer no factual basis for any plausible inference that ABC ever reported any false drug pricing information to First DataBank, let alone the particularized factual basis required to plead such a claim. The allegations therefore cannot support any of the Relator s claims against ABC. b. ABC s Alleged Failure to Correct or Disclose First DataBank s Misstatements Is Insufficiently Pled Nor does the Complaint sufficiently plead even its contradictory theory that ABC did not provide any drug pricing information to First DataBank, and therefore fraudulently permitted First DataBank to represent falsely that the AWP information that it published was based on surveys of wholesalers drug prices, and/or failed to disclose First DataBank s fraud in publishing AWP information without surveying wholesalers. See TAC 144, 243. To the extent the claim seeks to impose liability on ABC for purportedly permitt[ing] First DataBank to make false statements, it lacks any plausible factual support. The TAC alleges no facts that suggest that ABC had any control over First DataBank. It also fails to allege any facts (as committed when the claim is filed). Relator cannot benefit from relation back or tolling because the Government did not intervene. See, e.g., U.S. ex rel. Monahan v. Robert Wood Johnson Univ. Hosp. at Hamilton, Nos & , 2009 WL , at *11 (D.N.J. May 7, 2009) ( The False Claims Act, which provides the applicable statute of limitations, allows the government s Complaint to relate back to the relator s claims. ); see also Bauchwitz, 671 F. Supp. 2d at ( [T]he three-year tolling provision in 3731(b)(2) does not apply in cases where the government does not intervene. ). 8 See Klein v. General Nutrition Cos., Inc., 186 F.3d 338, 345 (3d Cir. 1999) ( Fed. R. Civ. P. 9(b) requires, at a minimum, that the plaintiff identify the speaker of allegedly fraudulent statements. ); see also Williams, 389 F.3d at 1257 (dismissing complaint because it fail[ed] to identify with specificity who precisely was involved in the fraudulent activity ). 11

22 Case 2:05-cv DMC-JAD Document Filed 04/16/13 Page 22 of 36 PageID: 2796 opposed to conclusions) to suggest that ABC even knew that any statement by First DataBank was false. 9 And any such inference would also be undercut by the Complaint s allegations that, to avoid detection and to publicly conceal their scheme, First DataBank and McKesson took great pains at significant expense to hide their purported fraud, even from the pharmaceutical industry. See TAC 69, 113, 119, 124, 127, 132. To the extent the Complaint suggests that ABC failed to disclose First DataBank s purported fraud to anyone, that theory also fails. Claims of nonfeasance are not actionable unless a duty is owed to the government. U.S. ex rel. Atkinson v. Pa. Shipbuilding Co., 255 F. Supp. 2d 351, 406 (E.D. Pa. 2002); see also Budike, 2012 WL , at *14. This would be true even if ABC had benefitted financially from the alleged fraud. See, e.g., U.S. ex rel. Piacentile v. Wolk, Civ. A. No , 1995 WL 20833, *3-4 (E.D. Pa. Jan. 17, 1995) (defendant did not violate FCA even though he knew of alleged fraud and benefitted from it). Relator does not even claim that ABC owed anyone a duty of disclosure, and alleges no facts that could support such an assertion. Although Relator tries to buttress this theory by alleging that, at some unspecified time and in some unspecified way, the government enlist[ed]... McKesson and [ABC] to assist First DataBank in determining and reporting an AWP reflecting actual market prices, TAC 115, he provides no factual support for that assertion. Nor does such an assertion suggest that ABC would have a duty to inform the government if First DataBank did not avail itself of such assistance from ABC. 9 The element of knowledge must be pled with plausible factual support under Iqbal and Twombly. See, e.g., U.S. ex rel. Pilecki-Simko v. Chubb Institute, 443 F. App x 754, 760 n.17 (3d Cir. 2011); Santiago v. Warminster Township, 629 F.3d 121, 132 (3d Cir. 2010); Howard Hess Dental Laboratories Inc. v. Dentsply Int l, Inc., 602 F.3d 237, 258 (3d Cir. 2010). 12

23 Case 2:05-cv DMC-JAD Document Filed 04/16/13 Page 23 of 36 PageID: 2797 In sum, the Complaint fails to plead any facts that could plausibly support a claim that ABC engaged in fraud and violated the FCA by reason of nonfeasance. All of the FCA claims against ABC, therefore, necessarily fail. 3. ABC s Other Purported Misconduct Is Insufficiently Pled In an evident attempt to bolster its deficient claims, the TAC also alleges several other acts of purported misconduct by ABC upon information and belief. See TAC 236 ( upon information and belief, McKesson, Cardinal, ABC and other John Doe Corporations falsely represented that using First DataBank would result in the least expensive prescription drugs and/or most reliable AWP ); id. 142 (alleging upon information and belief that the Wholesalers encouraged their customers to use the AWP information published by First DataBank). Not a single fact is alleged to support either of these allegations of purported misrepresentations by ABC, let alone the particular facts required by Rule 9(b). It is also well established that [a]llegations made upon information and belief which are little more than conjecture and wishful thinking have little hope of salvaging an otherwise defective complaint. Advanced Oral Technologies, L.L.C. v. Nutrex Research, Inc., No , 2011 WL , at *4 n.6 (D.N.J. Mar. 21, 2011) (internal citations omitted). These allegations therefore cannot support Relator s claims. 4. Relator Fails To Allege Other Key Elements Of His Claims Even if Relator had sufficiently pled any of the alleged misconduct on which he rests his FCA claims against ABC (and he has not), the claims would fail because he has also failed to plead other necessary elements of those claims. First, although the submission of a false claim is an element of at least three of Relator s four FCA claims (the claims for violations of 3729(a)(1), (a)(2), and (a)(7) in the First, Second, and Third Counts of the Complaint), Relator has failed to plead adequately that any false claim 13

24 Case 2:05-cv DMC-JAD Document Filed 04/16/13 Page 24 of 36 PageID: 2798 was submitted. Courts within and outside this circuit have concluded that, to do so, the Relator must either plead examples of false claims that were actually submitted or use an alternative means of injecting precision and some measure of substantiation into [his] allegations of fraud. 10 See U.S. ex rel. Underwood v. Genentech, Inc., 720 F. Supp. 2d 671, 679 (E.D. Pa. 2010) (citations omitted); see also Foglia v. Renal Ventures Mgmt., LLC, No (NLH) (AMD), 2012 WL at *3 (D.N.J. Sept. 26, 2012). The pleading of examples of specific claims requires pleading the date, place or time of the fraud. See U.S. ex rel. Wilkins v. United Health Group, No , 2011 WL at *2 (citing Lum v. Bank of Am., 361 F.3d 217, (3d Cir. 2004)). The First, Second, and Third Counts fail because the TAC does not plead any example of a false claim, nor any facts to provide precision and substantiation for his bald assertion that such claims were submitted. Second, a claim under 3729(a)(1) (First Count) also requires both knowledge of a claim s falsity and some action by the defendant which causes the claim to be presented to the government. See Piacentile, 1995 WL at *4 (emphasis added). Mere inaction is not enough to constitute a violation of the False Claims Act. Id.; see also Atkinson, 255 F. Supp. 2d at (inaction does not constitute a violation under 3729(a)(1) or (a)(2) when defendant does not owe government a duty to disclose). The First Count fails because, in addition to its other deficiencies, the Complaint does not allege that ABC took any action that caused anyone to submit a false claim to the government, let alone acted knowingly in doing so. To the extent Relator s claim under 3729(a)(2) (Second Count) relies on ABC s purported nonfeasance, it 10 The Third Circuit has not yet ruled on whether, as courts in some other Circuits require, a plaintiff must plead specific examples of false claims at the pleading stage. See Wilkins, 659 F.3d at 308 (declining to decide whether, at pleading stage, plaintiff must come forward with at least one false claim). 14

25 Case 2:05-cv DMC-JAD Document Filed 04/16/13 Page 25 of 36 PageID: 2799 fails for the same reason. See U.S. ex rel. Budike, 2012 WL , at *14 (allegations that defendant knew about fraud insufficient to state claim under 3729(a)(1) and (2)). Third, to state a claim under 31 U.S.C. 3729(a)(2) (Second Count), the Relator also must allege, among other things, that the defendant had the purpose of getting a false or fraudulent claim paid or approved by the Government. Allison Engine Co. v. U.S. ex rel. Sanders, 553 U.S. 662, 668 (2008) (superseded by statute for claims submitted on or after June 7, 2008, Fraud Enforcement & Recovery Act of 2009 ( FERA ), Pub. L. No , 4, 123 Stat. 1617, (2009)). 11 The Complaint fails to articulate how ABC participated in the alleged scheme, and fails to allege that it did so knowingly and with the purpose of getting a false claim paid. That is true even if ABC was aware of the alleged fraud. See Budike, 2012 WL at *15. Fourth, Relator has failed to state a claim under 31 U.S.C. 3729(a)(7) (Third Count) for making or using a false record or statement to avoid an obligation to refund. 12 Such a claim requires the Relator to show that the defendant did not pay back to the government money or property that it was obligated to return. U.S. ex rel. Quinn v. Omnicare Inc., 382 F.3d 432, 444 (3d Cir. 2004). This means that the defendant must have had an existing legal obligation to give money or property to the government. U.S. ex rel. Piacentile v. Sanofi Synthelabo, Inc., 11 Section 3729(a)(1)(B), as amended by FERA, eliminates the requirements that (1) defendant intended to influence payment ( to get as interpreted by Allison Engine Co. v. U.S. ex rel. Sanders, 128 S.Ct. 2123, 2128 (2008)) and that (2) the Government must pay or approve the claim. See 31 U.S.C. 3729(a)(2) (2006); see also U.S. v. Aguilon, 628 F. Supp. 2d 542, 549 n.8 (D. Del. 2009). Because Relator failed to prove the remaining elements of this claim, the claim fails both pre-and post-fera. 12 For purposes of this case, FERA did not substantively change what Relator needs to plead for this claim. The language in (a)(1)(g) was changed so that a person is no longer required to conceal, avoid or decrease an obligation (31 U.S.C. 3729(a)(7)), as the prior act required, but only to make a false statement material to an obligation. S. Rep. No at 12. Because Relator has not pled that ABC owed any obligation to the government, this claim fails pre-or post-fera. 15

26 Case 2:05-cv DMC-JAD Document Filed 04/16/13 Page 26 of 36 PageID: 2800 No , 2010 WL , *9 (D.N.J. Dec. 30, 2010). Because Relator has not alleged that ABC owed the government an obligation to pay money or fraudulently concealed such an obligation, his 3729(a)(7) (Third Count) claim against ABC fails. Fifth, Relator has failed to state a claim for conspiracy under 31 U.S.C. 3729(a)(3) (Fourth Count), which requires allegations that: (1) the defendant conspired with one or more persons to get a false or fraudulent claim allowed or paid by the United States and (2) one or more of the coconspirators performed any act to get a false or fraudulent claim allowed or paid. U.S. ex rel. Repko v. Guthrie Clinic, P.C., 557 F. Supp. 2d 522, (M.D. Pa. 2008) (quoting U.S. ex rel. Atkinson, 255 F. Supp. 2d at 409). Conspiracy under 3729(a)(3) requires a specific intent to defraud the government. U.S. v. Albinson, No , 2010 WL , at *10 (D.N.J. Aug. 16, 2010). 13 Relator s scattering of the word conspiracy throughout a few paragraphs of his Complaint does not meet his burden of pleading a conspiracy. See, e.g., TAC 137, 138, 252. The mere assertion of an unlawful agreement is a legal conclusion that is not entitled to the assumption of truth. Iqbal, 556 U.S. at 680 (discussing Twombly, 550 U.S. at 555). At a minimum, Relator must describe the general composition of the conspiracy, some or all of its broad objectives, and defendant s general role in that conspiracy. U.S. ex rel. Atkinson v. 13 FERA eliminated the requirements that defendants conspire to defraud the Government and that the conspiracy involve getting a false or fraudulent claim allowed or paid, 31 U.S.C. 3729(a)(3) (2006), by removing the intent requirement read into the section by the Court in Allison Engine and just extend[ing] FCA liability to those who conspire to commit a violation of any substantive section of 3729(a). S. Rep. No at (2009), reprinted in 2009 U.S.S.C.A.N. 430, 439. Even post-fera, however, an intent to defraud the government remains a required element for a conspiracy claim under 3729(a)(1)(C). See, e.g., John T. Boese, Civil False Claims & Qui Tam Actions 2.01(F)(1) (4th ed. 2011) ( Because [amended 3729(a)(1)(C)] requires a person to conspire to commit violations of the FCA, the requirements for conspiracy under the common law an agreement, an act in furtherance and intent to defraud still apply to 3729(a)(1)(C).). 16

27 Case 2:05-cv DMC-JAD Document Filed 04/16/13 Page 27 of 36 PageID: 2801 Pennsylvania Shipbuilding Co., No , 2000 WL , *10 (E.D. Pa. Aug. 24, 2000) (internal quotation marks and citation omitted). The TAC falls short of this requirement, as it does not even allege that ABC entered an agreement with any of the other defendants, let alone one to defraud the government. Indeed, it is not even clear with whom ABC allegedly conspired. Compare TAC 137 (claiming that Cardinal, McKesson and ABC conspired) with TAC 252 (alleging that Defendants conspired ). Such inadequate and conclusory claims do not satisfy even Rule 8(a). See Atkinson, 2000 WL , *12 (dismissing conspiracy claim because [t]he complaint does not even make clear [whom] the plaintiff is alleging that [defendant] conspired with ). Relator s allegations that Cardinal, McKesson and ABC had consistent and uniform price increases, TAC 137, or that ABC and McKesson changed to a 25% markup for some unspecified drug or drugs at some unspecified time, id. 130, provide no support for his conspiracy claim either. Even if those allegations were anything more than the bare conclusions they obviously are, allegations that defendants engaged in a parallel course of conduct do not plausibly suggest that an unlawful agreement actually existed because such conduct may be explained by lawful, unchoreographed free-market behavior. Iqbal, 556 U.S. at 680 (discussing Twombly, 550 U.S. at ). Relator s FCA conspiracy claim thus fails to meet even Rule 8(a) s pleading requirement, and does not begin to approach the specificity required by Rule 9(b) Although the majority view outside the Third Circuit is that Rule 9(b) applies to such conspiracy claims, see, e.g., U.S. v. Gericare Medical Supply Inc., No. Civ. A CB-L, 2000 WL , *9 (S.D. Al. Dec. 11, 2000) (citing cases), the pleading standard for a 3729(a)(3) claim is not settled in the Third Circuit. Compare Palladino v. VNA of S. NJ., No , 1999 WL , *6 (D.N.J. June 30, 1999) (applying Rule 9(b) to conspiracy claim under FCA) with Atkinson, 2000 WL at *10 (concluding that plaintiff is required to allege the underlying fraud with particularity, but the allegations of the conspiracy need only 17

28 Case 2:05-cv DMC-JAD Document Filed 04/16/13 Page 28 of 36 PageID: 2802 Finally, even if the elements of a conspiracy claim were adequately pled, the claim must be dismissed because Relator s underlying fraud claims under 3729(a)(1) and (a)(2) cannot stand. If a relator fails to adequately plead the underlying FCA claims, his conspiracy claim fails as well. See, e.g., U.S. ex rel. Godfrey v. KBR, Inc., 360 F. App x 407, 413 (4th Cir. 2010). In addition, a reverse false claim, even assuming it was adequately pled, cannot be the basis for the conspiracy. See Atkinson, 255 F. Supp. 2d at Because Relator has failed to state a claim for a conspiracy, the FCA conspiracy claim should be dismissed. B. Relator s State-Law Claims Also Fail The claims the Relator asserts under various states False Claims Acts rely on the same allegations as his federal FCA claims. Rule 9(b) requires that the state claims, like the federal FCA claims, be pled with particularity. See, e.g., Foglia, 830 F. Supp. 2d at 13 (applying Rule 9(b) to allegations under the false claim statutes of New Jersey and Texas); Leder v. Shinfeld, 609 F. Supp. 2d 386, 396 (E.D. Pa. 2009); Christidis v. First Pa. Mortg. Trust, 717 F.2d 96, 99 (3d Cir. 1983). Because Relator s FCA claims do not meet the pleading requirements of either Rule 8(a) or 9(b), his state law claims are likewise deficient and should be dismissed. Relator s state law counts should be dismissed for the following independent reasons as well. satisfy the notice pleading standards of Rule 8 ) (internal quotation marks and citation omitted). Relator s conspiracy claim fails under either standard. 15 To the extent that Relator s allegations relate to claims submitted after May 20, 2009, a conspiracy may be based on violations of 3729(a)(1)(G). See 31 U.S.C. 3729(a)(1)(G); see also S. Rep. No , at 13 (2009), reprinted in 2009 U.S.S.C.A.N. 430, 440 (explaining intent to clarify that conspiracy liability can arise whenever a person conspires to violate any provisions in Section 3729 imposing FCA liability ). However, as discussed above, Relator failed to plead a claim under 3729(a)(1)(G), and therefore, failed to plead a conspiracy on such grounds. 18