Last week, in the In re Plavix decision, the Third Circuit addressed the question of whether relators can be added or substituted in an amended complaint and, in the process, weighed in on whether the first-to-file bar is jurisdictional. Widening an existing circuit split on the issue, the court held that the first-to-file bar is nonjurisdictional and that a first-to-file challenge must be brought in a motion to dismiss under Federal Rule of Civil Procedure 12(b)(6). The court also concluded that a substituted relator is not an intervening party under the False Claims Act and therefore may join the litigation in an amended complaint.
The FCA’s First-to-File Bar
The False Claims Act (FCA) provides that “[w]hen a person brings an action under [the FCA], no person other than the Government may intervene or bring a related action based on the facts underlying the pending action.”
Courts are split on whether the first-to-file bar is jurisdictional or nonjurisdictional. As the Third Circuit explains in the In re Plavix decision, the distinction matters because the plaintiff bears the burden of persuasion on jurisdiction, and jurisdictional challenges can be raised at any time. Additionally, defendants may sometimes submit evidence when challenging subject-matter jurisdiction. On the other hand, the defendant bears the burden to show that a complaint fails to state a claim under Rule 12(b)(6), and, on a motion to dismiss, the court must take the allegations in the complaint as true.
In re Plavix Marketing, Sales Practices & Products Liability Litigation
Three relators formed a partnership to bring a qui tam lawsuit, but eventually the partnership deteriorated. In the second amended complaint, one relator was substituted for another. The defendants filed motions to dismiss under Rules 12(b)(1) and 12(b)(6), arguing that the addition of a new partner was equivalent to a nonparty...
