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False Claims Act Statistics, News & Analysis

Franks and the False Claims Act? District Court Uses Familiar Fourth Amendment Remedy to Dismiss Deceptive FCA Case

An “elaborate series of falsehoods, misrepresentations, and deceptive conduct” perpetrated by a relator’s counsel culminated last Friday with dismissal of a relator’s False Claims Act complaint by the U.S. District Court for the District of Massachusetts. In U.S. ex rel. Leysock v. Forest Labs., Inc., No. 12-11354, 2017 WL 1591833 (D. Mass. Apr. 28. 2017), relator alleged off-label promotion of an Alzheimer drug, and to get over the Rule 9(b) “hump,” relied on a purported nationwide study of physician prescribing practices for the medication. The study results were featured prominently in the complaint – including details about particular physicians and patients. Turns out, however, that the “study” at issue was sponsored and directed entirely by relator’s counsel under false pretenses.

Relator's counsel retained a physician and former researcher from NIH to conduct the “study” and enlisted the aid of a research organization with a database of physicians to query; however, neither the lawyers nor the physician told the research organization that the purpose of the study was to gather evidence for litigation. Id. at *3. Participating doctors were enticed through cash payments and were told that they were participating in a “market research dementia study,” which would include a “brief survey regarding Dementia and [the treating physician’s] treatment practices.” Id. at *4–5. Physicians were also told that their responses would “only be used for research purposes” and that their “responses [would] be anonymous and aggregated,” and several of the physicians were explicitly told that the information provided would be kept “strictly confidential.” Id.

Concealed, of course, from the participants was the fact that their patients’ information would be displayed in an FCA complaint, describing in rather stunning detail the height, weight, age, gender, cognitive test results, and even complete pharmacy address for eight patients suffering from mild Alzheimer’s who were prescribed the medication. Relator also specifically identified 36 physicians, by name and office address, who responded to the “survey,” along with what purports to be a description of their prescribing practices. The relator successfully beat back a motion to dismiss in 2014 relying on the specificity provided by the study. U.S. ex rel. Leysock v. Forest Labs., Inc., 55 F. Supp. 3d 210 (D. Mass. 2014). Indeed, the court quoted the complaint’s inclusion of specific patient information in its published opinion. Id. at 219. Only after discovery began was the “market research study” ruse discovered.

The defendant moved to dismiss as a sanction for unethical attorney misconduct for using the study as a ruse to gather evidence. After distinguishing “investigator testing” cases, Leysock, 2017 WL 1591833, at *6–7, the court found the ethical rules had been violated and looked for analogous frameworks to determine the appropriate sanction since the case survived dismissal based on evidence gleaned from the tainted “study.”

The Fourth Amendment and Franks remedy for false statements in search warrant applications provided the basis for decision. In Franks v. Delaware, 438 U.S. 154 (1978), the Supreme Court held that where sufficient evidence exists that an affidavit supporting a search warrant contains deliberate falsehoods or was created in reckless disregard of the truth, the tainted portions of that affidavit must be set aside. Only if probable cause could be found on the remaining untainted portion would the search be sustained. Applying this familiar criminal rule to the FCA context, the district court excised the information in the complaint derived from the unethical investigation and found that the complaint thus-rectified did not withstand Rule 9(b) scrutiny, resulting in dismissal of the complaint.

While perhaps an unusual case, Leysock stands for the proposition that unethical or illegal evidence gathering by the relator (or presumably the government as well) in the course of investigating an FCA case may have serious later consequences.

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Crystal Y'Barbo Stapley

Crystal Y'Barbo Stapley Senior Associate

Daniel T. Wallmuth

Daniel T. Wallmuth Associate