Rule 9(b) of the Federal Rules of Civil Procedure: “In alleging fraud or mistake, a party must state with particularity the circumstances constituting fraud or mistake.” Many False Claims Act cases have been dismissed for failing to describe the violation with enough detail and particularity.
A 2024 decision by a 3-judge panel of the United States Court of Appeals for the Second Circuit discusses the 9(b) particularity rule in a case involving speaker fees paid to doctors to promote Gilenya which treats multiple sclerosis. The court held that whistleblower Camburn’s allegations gave rise to a strong inference “that Novartis (1) held certain “sham” speaker events with no legitimate attendees; (2) excessively compensated physician speakers for canceled events; and (3) selected and retained speakers to incentivize prescription-writing.”
Camburn provides “illustrative examples” of speaker events such as one on April 11, 2013 with one speaker presenting to two other speakers over a “lavish” steak dinner at a Florida restaurant with a tab totaling $1080. “Extravagant” meals are described at 211 York, a Zagat-rated bistro, and CHOPS II, a high-end steakhouse, with presentations only to colleagues and staff of their own practices. Dates, venues, and names of doctors and attendees were identified. According to the decision: “These details satisfy Rule 9(b).”
Camburn alleges, by name and location, three physicians Novartis paid for canceled events, including amounts paid ($20,000 to $22,000) in a two-year period and the value of claims submitted to Medicare Part D in the same period.
Camburn provides witnesses he alleges will provide testimony that managers instructed reps to offer speaker fees to doctors as financial incentive for Gilenya prescriptions. Doctors with a high-volume of Gilenya prescription or a high potential volume were allegedly offered speaker fees.
See the full decision below.