Organon Raplon False Claims Act Action Dismissed by Judge Cavanaugh April 7, 2009

U.S. v. Organon, et al. (Case No. 07-2690, US Dist. Ct. NJ -- full-text opinion in PDF) brought by Dr. Jeffrey Feldstein was dismissed today, by Judge Cavanaugh -- after he essentially ruled that Dr. Feldstein was not the orginal, non-public source of the allegations of wrong-doing by Organon, in the marketing of its Raplon drug (since voluntarily withdrawn). Judge Cavanaugh read the text of the False Claims Act to conclude that it creates a jurisdictional requirement that the relator, or witness (here, Dr. Feldstein) be an "original, non-public source" of the relevant, complained-of facts (more background can be found here):

. . . .31 U.S.C. § 3730(e)(4)(A)(the “Public Disclosure Bar”) “provides that no court has jurisdiction over a FCA qui tam action that is based on certain public disclosures unless the action is brought by an ‘original source.’” United States ex rel. Mistick PBT v. Hous. Auth. Of the City of Pittsburgh, 186 F.3d 376, 378-9 (3d Cir. 1999) (quoting 31 U.S.C. § 3730(e)(4)(A)). Defendants argue that this Court lacks jurisdiction over this matter because Relator’s action is based entirely on prior public disclosures and Relator is not an original source of the information at issue. For this reason, Defendants assert that Relator’s Amended Complaint must be dismissed with prejudice pursuant to Fed. R. Civ. P. 12(b)(1) as barred by the Public Disclosure Bar. . . .

. . . .contrary to Relator’s assertion, all elements of his fraud do not need to be previously disclosed, rather, only the material elements need to be disclosed. Sandia Corp., 70 F.3d at 572; see also BioPort Corp., 270 F. Supp. 2d at 977 n.1. The specific factual elements regarding Medicare and Medicaid have not been previously disclosed but these elements are not material to the fraud allegedly perpetrated on the FDA by Organon, and this is the fraud that underlies Relator’s and the personal injury complainant’s claims. Therefore, the allegations in Relator’s Amended Complaint are “based upon” the “public disclosure” of “allegations” within the meaning of the FCA’s Public Disclosure Bar. 31 U.S.C. § 3730(e)(4)(A). . . .

. . . .The facts of record demonstrate that there has been a public disclosure of the information upon which Relator’s claims are based, and Relator is not an original source of this information. Therefore, Relator does not have standing to pursue this action, and Defendants Fed. R. Civ. P. 12(b)(1) motion is granted. . . .

Dr. Feldstein may appeal this ruling, but my current hunch is that he will return to exclusively relying on his pending New Jersey state law employment claims -- alleging retaliation, for whistle-blowing. We'll see, but this is mildly good news for Merck, as it removes at least one of the litigation uncertainties it will inherit -- if and when it takes Schering-Plough over, most likely sometime in 2010.