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U.S. v. PURDUE PHARMA L.P. NO 14-2299

Decided: January 29, 2016

The Fourth Circuit agreed that the district court did not have jurisdiction over the claims and affirmed.

This case stemmed from a qui tam action under the FCA that Mark Radcliffe (“Radcliffe”), a former district sales manager for Purdue Pharma (“Purdue”), filed against Purdue, alleging that Purdue improperly labeled the drug OxyContin as having a higher pain potency, which in turn led doctors to prescribe it instead of the less expensive MS Contin. After bringing an action in 2010 that was dismissed and certiorari was dismissed in the Supreme Court, Radcliffe’s wife, joined by another employee filed this qui tam action. The district court dismissed on res judicata grounds, the 4th circuit remanded, and on remand, the district court dismissed the complaint. This appeal followed.

The Fourth Circuit began by examining the provisions in the FCA that permitted qui tam actions, and how the “public disclosure bar,” which states that courts can’t have jurisdiction over an “action under this section based upon the pre-2010 public disclose of the allegations or transactions in a criminal, civil, or administrative hearing unless the action is brought by the Attorney General or the person bringing the action is the original source of the information.” The Fourth Circuit then noted that it interpreted the phrase “based upon” to preclude actions “only where the relator has actually derived from a public disclosure the allegations upon which his qui tam action is based.” Although the plaintiffs argued that their allegations are not derived from a public disclosure, because they came by their knowledge of Radcliffe’s allegations from nonpublic sources, the court found that they did have knowledge from public sources. They compared the case at hand to the Siller case, and found that, unlike in that case, the plaintiffs learned of their knowledge of the case specifically due to their attorney’s involvement in Radcliffe’s prior action. Although they didn’t learn directly from public disclosures, their claims are based on the knowledge their attorney gained while representing Radcliffe, much like in the Doe case. Furthermore, the Court pointed out that the statutory purpose of the public disclosure bar supported the dismissal of the case. Therefore, the Fourth Circuit affirmed.

Full opinion

Jennie Rischbieter