United States ex rel. Manieri v. Avanir Pharm., Inc.

UNITED STATES OF AMERICA, ex rel. KEVIN MANIERI, Plaintiff-Relator, v. AVANIR PHARMACEUTICALS, INC., Defendant.

CASE NO. 5:15-cv-0611

UNITED STATES DISTRICT COURT NORTHERN DISTRICT OF OHIO EASTERN DIVISION

July 28, 2020

JUDGE SARA LIOI

MEMORANDUM OPINION AND ORDER

Before the Court is the motion of plaintiff Kevin Manieri ("Manieri" or "plaintiff") for leave to file a second amended complaint. (Doc. No. 46 ["Mot."].) Defendant Avanir Pharmaceuticals, Inc. ("Avanir" or "defendant") filed its opposition (Doc. No. 48 ["Opp'n"]) and Manieri filed a reply (Doc. No. 49 ["Reply"].) For the reasons and in the manner set forth herein, plaintiff's motion is granted.

I. BACKGROUND¹

On March 27, 2015, Manieri filed a complaint, individually and on behalf of the United States of America, alleging that defendant Avanir had violated the False Claims Act, 31 U.S.C. § 3729, et seq. ("FCA"), and the Anti-Kickback Statute, 42 U.S.C. § 1320a-7b(b) ("AKS"). (Doc. No. 1, Complaint, ["Compl."] ¶ 1.) Manieri alleged that Avanir pays speaking fees to physicians around the country in exchange for their promise to prescribe a drug that Avanir sells as a treatment for a rare neurological condition. He alleged that this conduct led to the submission of false orfraudulent claims for prescriptions to Medicare patients written in 2013 and 2014. (Id. ¶¶ 2; 136-53.)

Manieri also alleged that he had been employed by Avanir from August to November 2014. (Id. ¶ 10.) He claimed his employment was terminated in retaliation for his objections to the illegal kickback scheme in conversations with Avanir's Vice President of Sales, Michael McFadden ("McFadden"). (Id. ¶¶ 154-61.)

Manieri's claims against Avanir relating to the submission of false claims, brought on behalf of the United States of America (which had intervened on September 26, 2019 (see Doc. No. 25), after first seeking nine (9) extensions of time to intervene), were resolved on October 24, 2019 by way of a settlement and joint stipulation of partial dismissal. (See Doc. No. 28.)

On December 17, 2019, Manieri filed his first amended complaint (Doc. No. 35, First Amended Complaint ["FAC"]),² wherein he again alleged that Avanir terminated his employment in retaliation for his objection to certain physicians' "participation in the speaker program as a means to unlawfully induce prescriptions of [the drug]." (Id. ¶ 6.) Despite that allegation in the introduction to the FAC, when Manieri described in detail the circumstances surrounding the termination of his employment, he alleged (exactly as he had in his initial complaint) that, during a meeting in Boston on November 17, 2014, another regional business manager ("RBM") complained to Manieri that some of the RBM's direct reports were not performing well. Manieri suggested that the RBM consider terminating the underperforming employees. (Id. ¶¶ 147-48; Compl. ¶¶ 131-32.) Another sales representative overheard Manieri's comment and disagreed;that representative subsequently passed on a complaint to Manieri's superior, VP of Sales McFadden. (FAC ¶ 149; Compl. ¶ 132.) A few days later, on November 21, 2014, during a phone call, McFadden reprimanded Manieri for his comment to the RBM and criticized his management skills—something McFadden had never done before. (FAC ¶ 150; Compl. ¶ 133.) Manieri further alleged that McFadden told him he had "'enough here to terminate you, but I'll give you an opportunity to resign.'" (FAC ¶ 151; Compl. ¶ 134.) "Mr. McFadden did not cite any reasons for the termination other than the suggestion [p]laintiff Manieri made to his direct report at the November 17 meeting." (Id.) Manieri then alleged: "As the result of this conversation, Avanir terminated [p]laintiff Manieri's employment on November 21, 2014." (FAC ¶ 152 (emphasis added).) Notably, for purposes of the instant request to amend a second time, the phrase in italics was not included in the initial complaint, but was added to the FAC filed on December 17, 2019. (See Compl. ¶ 135.)

Manieri then alleged, in count one, that McFadden's criticism of his management practices during the November 21, 2014 conversation was "pretext for retaliation for [his] opposition to Avanir's illegal kickback scheme[,]" and that "Avanir terminated [his] employment in retaliation for his opposition to Avanir's kickback scheme, in violation of 31 U.S.C. § 3730(h)." (FAC ¶¶ 165-66.) The corresponding allegations were in count four of the initial complaint. (See Compl. ¶¶ 158-59.)

Avanir filed a motion to dismiss the FAC, arguing that Manieri failed to sufficiently allege a claim for retaliation, having provided only "isolated and innocuous statements [that] do not come anywhere close to showing that [p]laintiff engaged in conduct protected by the FCA." (Doc. No. 45, Motion to Dismiss ["MTD"], at 224 (citing FAC ¶¶ 93, 99).) Avanir also argued that Manieri failed to allege that Avanir knew that he had engaged in protected conduct and, further, thatplaintiff's own complaint concedes the existence of a legitimate basis for his termination. (Id. at 225.)

On the day his response to the motion to dismiss was due, Manieri filed the instant motion for leave to file a second amended complaint to set forth more (and, as it turns out, different and sometimes inconsistent) factual detail around his alleged protected conduct and termination. He also sought (and was granted) an unopposed stay of the briefing on Avanir's motion to dismiss pending resolution of the motion for leave to file a second amended complaint. (See Doc. No. 47; Non-Document Order (3/19/2020).)

II. DISCUSSION

A. Legal Standard

Fed. R. Civ. P. 15(a)(2) provides that "[t]he court should freely give leave [to amend] when justice so requires." "Guided by that overarching principle, the district court may weigh the following factors when considering a motion to amend: undue delay or bad faith in filing the motion, repeated failures to cure previously-identified deficiencies, futility of the proposed amendment, and lack of notice or undue prejudice to the opposing party." Knight Cap. Partners Corp. v. Henkel AG & Co., KGaA, 930 F.3d 775, 786 (6th Cir. 2019) (citation omitted).

B. Rule 15 Analysis

Manieri does not explain why "justice . . . requires" that he be permitted to amend his complaint a second time in the manner that he suggests. He simply quotes the rule and asserts that "the thrust of [the Rule] is to reinforce the principle that cases 'should be tried on their merits rather than the technicalities of pleadings.'" (Mot. at 240 ¶ 4, quoting Moore v. City of Paducah, 790 F.2d 557, 559 (6th Cir. 1986).) Manieri claims he seeks leave to amend a second time "to include additional facts to support his claim of FCA retaliation." (Id. ¶ 8.)

Avanir opposes Manieri's motion, arguing that "[p]laintiff's new story regarding his termination directly contradicts" the allegations in the initial complaint and the FAC. (Opp'n at 261 (underlining in original).) In particular, Avanir argues that Manieri has consistently alleged that his termination resulted from his conversation with McFadden on November 21, 2014, wherein McFadden reported a complaint that had been lodged against him by a regional manager (Id. at 262, citing Compl. ¶ 133; FAC ¶ 149), and "criticized [plaintiff's] management skills[,]" (Id., quoting Compl. ¶ 133; FAC ¶ 150) (despite never having done so before), telling Manieri that McFadden "[had] enough here to terminate [Manieri], but ... [would] give [him] the opportunity to resign." (Id., quoting Compl. ¶ 134; FAC ¶ 151.) Thus, Avanir asserts, plaintiff "conceded ... that he was provided a legitimate basis for his termination[]" (Id. at 263), and he should not now (in order to buttress his retaliation claim) be permitted to delete all references to that complaint against him and/or to the conversation he had with McFadden wherein he was given that legitimate, non-retaliatory reason for his termination. (Id.)

In reply, Manieri argues that he seeks leave to amend "to reflect the facts most accurate to his claim." (Reply at 271.) He claims his proposed amendments "narrow the facts to those most relevant and correct previous inaccuracies." (Id. at 274.) Manieri further asserts that, by proposing to add facts relating to an October 10, 2014 telephone call with McFadden, he is "simply trying to address potentially resolvable concerns raised in Avanir's motion to dismiss[,]" in particular, by "includ[ing] additional facts to support his protected activity that were not in his initial complaint." (Id. at 275.) In addition, he proposes deletion of the allegations relating to McFadden's criticism of his management skills because those allegations are "incorrectly ... linked to termination" of his employment. (Id.) It is notable that Manieri offers no reason why his initial complaint and/orhis first amended complaint contained factual inaccuracies, omitted necessary supporting facts, or incorrectly linked facts to causes of action.

1. Undue Delay and Bad Faith

Avanir devotes considerable attention in its opposition brief to the fact that five (5) years have passed since the inception of this lawsuit. Manieri properly points out that this passage of time was largely due to the "unique procedural history of this case." (Reply at 271.) In particular, the Court notes that the United States of America sought nine (9) continuances as it ascertained whether or not to intervene, which it eventually did on September 26, 2019 (4½ years after the case was filed), followed by its dismissal a month later on October 24, 2019.

The considerable delay cannot be attributed to either remaining party and, in particular, not to Manieri. Therefore, this factor weighs in favor of granting the motion. Moore, 790 F.2d at 560 ("[D]elay alone, regardless of its length is not enough to bar [an amended pleading] if the other party is not prejudiced.") (internal quotation and citation omitted).

Avanir argues that it would be prejudiced if Manieri were permitted...