United States v. Bayer Corp.

UNITED STATES of AMERICA, et al.,Ex rel. LAURIE SIMPSON Plaintiff/ Relator, v. BAYER CORPORATION; BAYER HEALTHCARE; PHARMACEUTICALS,INC.; BAYER HEALTHCARE, LLC; and BAYER AG, Defendants.

Civil Action No.: 05-3895 (JLL)

UNITED STATES DISTRICT COURT DISTRICT OF NEW JERSEY

Filed: August 30, 2013

August 28, 2013

NOT FOR PUBLICATION

OPINION

This matter comes before the Court by way of a motion to dismiss Plaintiff Laurie Simpson's ("Relator", "Simpson", or "Plaintiff")'s Seventh Amended Complaint (hereafter "Complaint") pursuant to Federal Rules of Civil Procedure 12(b)(1), 12(b)(6) and 9(b) filed by Bayer Corporation, Bayer HealthCare Pharmaceuticals, Inc., and Bayer HealthCare LLC (collectively "Bayer") (CM/ECF No. 116).¹ The Court decides the motion without oral argument pursuant to Federal Rule of Civil Procedure 78.

The Court has considered the parties' submissions, and for the reasons set forth below, denies the motion in part and grants the motion in part.

I. BACKGROUND²

Relator Simpson, a former employee of Bayer, brings this qui tam suit in connection with Defendant Bayer's alleged conduct in connection with two drugs, Trasylol³ and Avelox⁴. Specifically, "[t]his Complaint arises from Bayer's concealment of safety risks, unlawful marketing, and kickbacks associated with its illegal on and off-label promotion of the prescription drug Trasylol and the kickbacks associated with its illegal on and off-label promotion of Avelox." (Compl. ¶ 1).

Plaintiff was employed by Bayer from April 1998 through January 2005. (Compl. ¶ 78). Throughout that time she held various marketing and analytical positions, primarily related to the drugs Trasylol and Baycol. Id.

Plaintiff alleges that a substantial portion of Trasylol's use was "off-label," or "for a use other than the one approved by the FDA." (Compl. ¶ 91 n.10). Trasylol was associated with dangerous risks, "including hypersensitivity and anaphylaxis, heart attack, adverse graft patency and clotting, and renal dysfunction." (Compl. ¶¶ 93, 102, 111-14, 142, 148-49). Simpson further alleges that many of these risks were increased through off-label uses. Notwithstanding, Bayer allegedly downplayed these risks and promoted Trasylol as having various health benefits. (Compl. ¶¶ 99-100, 102-07, 109-10, 120, 129, 134, 152-55). Not only did Bayer allegedly market off-label uses, but Bayer allegedly paid kickbacks to increase use of Trasylol. (Compl. ¶¶ 127-82). After Simpsonleft Bayer, the FDA allegedly requested that Bayer suspend marketing of the drug, and it was recalled from the market in 2008. (Compl. ¶¶ 9, 11).

In addition, Bayer allegedly employed various kickback schemes to increase Avelox prescriptions by physicians. (Compl. ¶¶ 216, 218-51). Simpson alleges that she observed Bayer's promotional practices through her peripheral involvement with the drug's marketing. (Compl. ¶¶ 84-85).

Simpson also alleges that Bayer unlawfully retaliated against her for expressing concerns about Baycol and later about Trasylol, which included "harassment, discrimination, and other negative employment actions." (Compl. ¶ 261). Simpson allegedly expressed concern about the safety of Baycol to her managers. (Compl. ¶ 264). Bayer eventually withdrew Baycol from the market. (Compl. ¶ 268).

Simpson kept "voluminous files" which contained damaging documents. (Compl. ¶ 269). Multiple members of the senior management team expressed disappointment that Simpson kept those files in view of then-pending multi-district litigation concerning Baycol. (Compl. ¶ 271). One senior manager expressed anger to Simpson when she called attention to certain damaging documents not produced in related discovery. (Compl. ¶ 271). Simpson allegedly experienced overwhelming emotional distress as a result of assisting in the defense of Baycol suits while knowing that the drug caused avoidable patient deaths. (Compl. ¶ 272). As a result, Simpson had difficulty sleeping and frequent nightmares. (Compl. ¶ 273).

After Bayer withdrew Baycol from the market, Simpson was reassigned to work on Trasylol. (Compl. ¶ 275). Learning of Bayer's allegedly fraudulent and illegal marketing practices with respect to that drug allegedly exacerbated her emotionaldistress. (Compl. ¶ 277). Simpson allegedly complained to her supervisor that she would not participate in efforts to disguise as valid certain meetings that Simpson believed to be a cover for improper and illegal kickbacks to prescribers to boost Trasylol sales. (Compl. ¶¶ 278, 280). She also complained to other Bayer employees. (Compl. ¶ 279). Simpson alleges that as a result, she was barred from participating in team activities and her application for a project manager job was ignored. (Compl. ¶¶ 281-282).

As Bayer increased its off-label marketing of Trasylol, Simpson became more concerned and requested a meeting with her supervisor as well as Dean Slack, Director of the Strategic Analysis Department. (Compl. ¶ 286). During the meeting, Simpson allegedly expressed her view that certain aspects of Bayer's marketing, namely Cardiac Team Meetings were "fraudulent, promotional in nature, involved kickbacks, violated Bayer's Corporate Compliance policy, and were illegal." (Compl. ¶ 286). Despite allegedly speaking to an in-house attorney as well as Stan Horton, Director of Marketing for Trasylol, Plaintiff does not believe any actual changes were made. (Compl. ¶ 287). Instead, Simpson was allegedly excluded from the business planning process for Trasylol in favor of two unqualified members of the department. (Compl. ¶ 287). Bayer subsequently instituted a policy to address the allegedly illegal marketing efforts, which was ignored, while senior management again referred to the Cardiac Team Meetings as market research and proposed concealing safety information. (Compl. ¶¶ 288-90). All the while, Simpson continued to endure substantial additional stress. (Compl. ¶ 291).

In July 2004, Simpson learned that in lieu of her, a less qualified colleague was promoted into a newly created and unadvertised position. (Compl. ¶ 293). Simpson was informed that "they [i.e., Bayer] would have found a way to disqualify [her] even if shehad applied." (Compl. ¶ 293). Simpson continued to indicate to senior management that "she would not support, condone, or otherwise enable behavior she considered to be fraudulent." (Compl. ¶ 294). In August 2004, Mr. Horton, Director of Marketing for Trasylol, indicated that he needed a market researcher who was going to be "supportive." (Compl. ¶ 294). Simpson indicated that she was willing to be "supportive" but not inasmuch as that required lying or covering up what she considered to be fraudulent conduct. (Compl. ¶ 294). One month later, Simpson was notified that she was being terminated because of a workforce reduction. (Compl. ¶ 295). However, her job function was not eliminated; rather, a less qualified employee assumed that role. (Compl. ¶ 296). Simpson's supervisor stated that she felt Simpson was being terminated because she "stood up to Stan [Horton]." (Compl. ¶ 296). Simpson also indicated to a member of the Human Resources Department that her termination was illegal. (Compl. ¶ 297).

The operative Complaint contains 39 causes of action, which fall into the following general categories: (1) violation of the federal False Claims Act, 31 U.S.C. §§ 3729-3733 ("FCA"), through marketing and sales of Trasylol (Counts 1-8); (2) violation of the FCA due to the payment of kickbacks by Bayer to promote Trasylol and Avelox (Counts 9-12); (3) violations of a number of state and city false claims acts (Counts 13-25)⁵; and (4) employment related claims including workplace retaliation (Counts 36-37) and intentional infliction of emotional distress (Counts 38-39).

As pointed out by Bayer in its motion, Simpson has amended her complaint seven times. (Def.'s Mot. 2). The Government declined to intervene on February 19, 2010 (CM/ECF No. 16). No state or city has taken a position on intervention. (Def.'s Mot. 2).

Although the United States declined to intervene, it filed a Statement of Interest in connection with the instant motion on June 18, 2013. (CM/ECF No. 117). With previous permission from the Court, Bayer responded to the Government's Statement of Interest on June 28, 2013 (CM/ECF No. 125) and Plaintiff filed a response on July 8, 2013 (CM/ECF No. 126).⁶

II. LEGAL STANDARD

Unless otherwise noted, the applicable legal standard is one for a motion to dismiss for failure to state a claim under Federal Rule of Civil Procedurel2(b)(6).Federal Rule of Civil Procedure 8(a)(2) requires that a complaint set forth "a short and plain statement of the claim showing that the pleader is entitled to relief." For a complaint to survive dismissal, it "must contain sufficient factual matter, accepted as true, to 'state a claim to relief that is plausible on its face.'" Ashcroft v. Iqbal, 556 U.S. 662, 678 (2009) (citing Bell Atl. Corp. v. Twombly, 550 U.S. 544, 570, 127 S.Ct. 1955, 167 L.Ed.2d 929 (2007)). The plaintiff's short and plain statement of the claim must "give the defendants fair notice of what the . . . claim is and the grounds upon which it rests." Twombly, 550 U.S. at 545 (quoting Conley v. Gibson, 355 U.S. 41, 47, 78 S.Ct. 99, 2 L.Ed.2d 80 (1957)).

In evaluating the sufficiency of a complaint, a court must accept all well-pleaded factual allegations as true and draw all reasonable inferences in favor of the non-moving party. See Phillips v. County of Allegheny, 515 F.3d 224, 234 (3d Cir. 2008). "Factual allegations must be enough to raise a right to relief above the speculative level." Bell Atl. Corp. v. Twombly, 550 U.S. at 555 (2007). Further, "[a] pleading that offers 'labels and conclusions' or 'a formulaic recitation of the elements of a cause of action will not do. Nor does a complaint suffice if it tenders 'naked assertion[s]' devoid of 'further factual enhancement.'" Iqbal, 556 U.S. at 678 (citing Bell Atl. Corp. v. Twombly, 550 U.S. at 555, 557 (2007))....