Sefen v. Animas Corp.

EHAB SEFEN, ex rel United States v. ANIMAS CORPORATION, ET AL.

CIVIL ACTION NO. 10-2971

UNITED STATES DISTRICT COURT FOR THE EASTERN DISTRICT OF PENNSYLVANIA

JUNE 13, 2014

MEMORANDUM

SURRICK, J.

Presently before the Court is Defendants Animas Corporation and Johnson & Johnson's Motion to Dismiss. (Defs.' Mot., ECF No. 24.) For the following reasons, Defendants' Motion will be granted.

I. BACKGROUND

A. Procedural History

Defendant Animas Corporation ("Animas") is a wholly-owned subsidiary of Johnson & Johnson with its headquarters located at 200 Lawrence Drive in West Chester, Pennsylvania. (Am. Compl. ¶ 5, ECF No. 6.) Animas manufactures insulin pumps for use by individuals with diabetes. (Id.) Defendant Johnson & Johnson is a New Jersey corporation headquartered at One Johnson & Johnson Plaza in New Brunswick, New Jersey. (Id.) Johnson & Johnson purchased Animas on February 18, 2006. (Id.) Plaintiff Ehab Sefen is a Pennsylvania resident. (Id. at ¶ 4.) Plaintiff was hired by Defendant Johnson & Johnson on June 18, 2007 as Senior Quality System Analyst for Animas. (Id.)

Plaintiff filed a Complaint, under seal, on June 17, 2010, pursuant to the Federal False Claims Act ("FCA"), 31 U.S.C. §§ 3729, et seq. On November 18, 2010, Plaintiff filed anAmended Complaint under seal, which added a second claim to the Complaint. (Am. Compl.) In his Amended Complaint, Plaintiff alleges that Defendants Johnson & Johnson and Animas continued to sell insulin pumps knowing they were not in compliance with the Food and Drug Administration ("FDA") regulations while falsely representing that they had corrected deficiencies previously identified by the FDA in a Warning Letter. (Id. at ¶ 26.) In addition, Plaintiff alleges that Animas terminated his employment in retaliation for lawful acts performed in furtherance of an FCA action. (Id. at ¶¶ 33-34.) Plaintiff sought judgment in the form of compensatory damages, punitive damages, emotional distress, attorney's fees, interest and costs, and injunctive relief as deemed necessary by the Court. (Id. at ¶ 34.)

Service of the Amended Complaint on Defendants was delayed to provide the United States an opportunity to decide whether to intervene in the action. See 31 U.S.C. § 3730(b)(2). On January 5, 2012, the United States filed a notice of election to decline intervention. (Notice of Election, ECF No. 13.)¹ On January 17, 2012, the Court entered an order unsealing the Amended Complaint and directing its service upon Defendants. (ECF No. 14.) Thereafter, on February 7, 2012, Plaintiff filed a notice of partial dismissal and stipulation without prejudice, which sought to eliminate his qui tam claim and proceed only with his retaliation claim under 31 U.S.C. § 3730(h). (ECF No. 15.) Plaintiff's request was granted and Count I of the Amended Complaint alleging violation of the FCA was dismissed. (Id.)

Upon the dismissal of Count I, the only remaining claim in the Amended Complaint isthat Defendants violated Section 3730(h) of the FCA by retaliating against Plaintiff in connection with Defendants' alleged false claims. (Am. Compl. ¶ 34.) Defendants' Motion to Dismiss, filed on June 29, 2012, seeks dismissal of the remainder of Plaintiff's Amended Complaint. (Defs.' Mot. ECF No. 24.) Plaintiff filed a Response to Defendants' Motion to Dismiss on August 15, 2012 (Pl.'s Resp., ECF No. 27), and on August 22, 2012, Defendants filed a Reply (Defs.' Reply, ECF No. 28).

B. Factual History²

Plaintiff was employed by Animas as a Senior Quality System Analyst from June 18, 2007 through March 10, 2008. (Am. Compl. ¶¶ 4, 24.) Plaintiff was responsible for ensuring Animas's electronic records complied with FDA regulations, overseeing the "Patient Complaint System" computer system, and assisting in Computer Systems Validation ("CSV") projects and corrective actions. (Id. at ¶ 4.) Plaintiff maintains that until the time of his firing, he received positive feedback from his supervisors regarding his job performance. (Id.)

Animas manufactures the OneTouch® Ping™, an insulin pump, which releases small amounts of rapid-acting insulin to keep blood glucose levels steady between meals and during sleep. (Id. at ¶¶ 5, 9.) The insulin pumps are medical devices pursuant to Section 201(h) of the Federal Food, Drug, and Cosmetic Act and are regulated by the FDA. 21 U.S.C. § 321(h). On February 24, 2005, Thomas D. Gardine, District Director of the Philadelphia District Office of the FDA, sent a Warning Letter (#5-PHI-03) to Animas. (Warning Letter, Am. Compl. Ex. A; Am.Compl. ¶ 10.) The Warning Letter stated that "the methods used in, or the facilities or controls used for" the manufacture of certain insulin pumps were "not in conformance with the Current Good Manufacturing Practice (CGMP) requirements for medical devices which are set forth in the Quality System regulation, as specified in Title 21, Code of Federal Regulations (CFR), Part 820." (Am. Compl. ¶ 11.) Deviations from the CGMP included, but were not limited to, the failure to adequately establish and maintain procedures for implementing corrective and preventive actions ("CAPAs"), to control the manufacture and sale of devices in conformity with specified requirements, and to establish and maintain procedures for rework. (Id.) In addition, the Warning Letter advised Animas to "take prompt action to correct these deviations" and warned that "[f]ailure to promptly correct these deviations may result in regulatory action being initiated by the Food and Drug Administration without further notice." (Warning Letter.)

According to Plaintiff, the FDA did not inspect Animas related to the insulin pump and waived immediate enforcement of all mandates and conditions cited in the Warning Letter based on Johnson & Johnson's acquisition of Animas and representations that all deficiencies would be corrected. (Am. Compl. ¶ 10.) In performing his duties as Senior Quality System Analyst, Plaintiff discovered that Animas had not corrected the aforementioned deficiencies as represented and that issues related to Animas's computer systems were more severe than the FDA had identified in its Warning Letter. (Id.)

On August 21, 2007, two months after beginning his employment with Animas, Plaintiff attended a meeting with the Information Technology Manager, Nadine Magic, and Project Manager, Joan Morrissey. (Id. at ¶ 14.) In discussing the validation of Animas's Patient Complaint System, Plaintiff articulated concerns about the appropriateness of the supportingdocumentation, which he felt was outdated. (Id. at ¶ 15.) Plaintiff objected to certifying that the documentation related to the Patient Complaint System was FDA compliant. (Id. at ¶ 16.) Morrissey pressured Plaintiff to use the documents as they had been drafted. (Id.) Later that day, Plaintiff met with Donna Pyne, an Animas employee in Quality Assurance and a Computer System Validation Specialist to explain his concerns with regard to the Patient Complaint System documentation. (Id.) Plaintiff asked Pyne to join the team handling the documentation. (Id.) Plaintiff and Pyne later met with Rita McIntyre, who was also Plaintiff's supervisor, to articulate their concerns. (Id. at ¶ 17.)

On September 14, 2007, Plaintiff attended another meeting with Magic, Morrissey, Pyne, and McIntyre. (Id. at ¶ 18.) At that meeting, Morrissey changed employees' roles and responsibilities without explanation. (Id.) Under the new alignment, Plaintiff's access to information was restricted. (Id.) In his new role and with his objections outstanding, Magic and the rest of the management team requested that Plaintiff incorporate and sign off on documents, certifying to their accuracy. (Id. at ¶ 19.) Immediately after the September 14, 2007 meeting, Morrissey threatened Plaintiff, stating "let things go or we will get someone else to do your job." (Id.) At another meeting, Morrissey told Plaintiff to "let things go, and we will get you back in the clique." (Id. at ¶ 20.) Thereafter, Plaintiff had a series of meetings with Human Resources ("HR") employees at which Plaintiff's responsibilities were reduced. (Id. at ¶ 21.) At one of those meetings, Magic told Plaintiff that he needed to "scale back his standards since the company is not a very large company like the ones he used to work for in the past, and the company did not have the resources to comply fully with FDA requirements in the same scale that he used to see in his past experience." (Id.) At a subsequent meeting, Morrissey told Plaintiff to "let things go orwe will get someone else to do your job." (Id. at ¶ 22.) These developments were inconsistent with the reassurances made to Plaintiff that he had excellent knowledge and that he was "the quality king in the company." (Id.) Morrissey continually asked Plaintiff to trust her and not to worry. (Id.) Plaintiff understood that he was being asked to let things go and sign documents with which he did not agree or face the loss of his job. (Id.) Meanwhile, Pyne declined to agree with the proposed plan being forced on Plaintiff and instead favored the proposal championed by Plaintiff. (Id. at ¶ 23.)

On October 26, 2007, Plaintiff contacted employees in Corporate Quality. (Id. at ¶ 24.) Eleven days later, during a meeting with Justine Smith and McIntyre, Plaintiff received a Performance Improvement Plain ("PIP") from HR. (Id.) Plaintiff contends that the PIP contained fabricated allegations, which served as a pretext for retaliation against him. (Id.) Plaintiff would later contact the Office of Compliance at the FDA, which followed up with an onsite inspection on February 5, 2008. (Id.) One month later, on March 10, 2008, Plaintiff's employment was terminated. (Id.)

II. LEGAL STANDARD

Generally, a party may not raise a defense based on a violation of the statute of limitations by motion. Robinson v. Johnson, 313 F.3d 128, 135 (3d Cir. 2002) ("Technically, the Federal Rules of Civil Procedure require that affirmative defenses be pleaded in the answer."...