United States District Court, D. Rhode Island
UNITED STATES OF AMERICA ex rel. ESTATE OF ROBERT GADBOIS, et al., Plaintiffs,
PHARMERICA CORPORATION, Defendant.
MEMORANDUM AND ORDER
J. MCCONNELL, JR., United States District Judge.
qui tam suit centers around allegations that
defendant PharMerica Corporation has violated provisions of
the Federal False Claims Act and various state analogues. The
original complaint brought by relator Robert Gadbois, since
deceased, was dismissed by this Court in 2014. Mem. &
Order, United States ex rel. Gadbois v. PharMerica Corp.
(Gadbois I), No. 10-471 (D.R.I. Oct. 3, 2014) (Lisi,
J.), ECF No. 53. The United States Court of Appeals for the
First Circuit vacated the decision and remanded for further
proceedings. United States ex rel. Gadbois v. PharMerica
Corp. (Gadbois II), 809 F.3d 1 (1st Cir. 2015).
case is now before the Court on two motions: the Estate of
Robert Gadbois' motion for leave to file its Third
Amended Complaint (ECF No. 64), and the Estate's motion
to strike PharMerica's response in opposition to the
Estate's motion for leave (ECF No. 72). For the reasons
set forth herein, the Court DENIES the Estate leave to file
its Third Amended Complaint, as supplementation would be
futile. The Court also DENIES as moot the Estate's motion
facts and posture of this matter have been extensively laid
out in this Court's prior decision, see Gadbois
I, slip op. at 2-13, in the First Circuit's opinion
in this case, see Gadbois II, 809 F.3d at 3-4, and
in the briefing by the parties on these motions. The Court
assumes the reader's familiarity with those details and
recites only what is relevant to the issues currently before
of 2009, Jennifer Denk, a pharmacist previously employed by
PharMerica in Pewaukee, Wisconsin, filed a qui tarn
action against PharMerica in the United States District Court
for the Eastern District of Wisconsin (the "Wisconsin
action"). She subsequently filed a first amended
complaint in January of 2010. Ms. Denk alleged that
PharMerica violated the False Claims Act by submitting
fraudulent claims for monetary payment through Medicare and
Medicaid, including for Schedule II through V controlled
substances. Pursuant to the governing statute, the Wisconsin
action was filed under seal. See 31 U.S.C. §
this time, the original relator in this action, Robert
Gadbois, worked as a pharmacist employed by PharMerica in its
Warwick, Rhode Island, pharmacy. In November of 2010, he
filed this qui tarn suit alleging that PharMerica
was engaged in schemes related to overbilling Medicaid and
Medicare Part D for controlled and non-controlled
medications. Mr. Gadbois alleged that these false claims
brought undue profit to PharMerica, and that these schemes
were prevalent beyond just PharMerica's Warwick pharmacy.
Mr. Gadbois' allegations reached Schedule II through V
of 2013, the United States intervened in the Wisconsin
action, and the next month, the complaint was unsealed. A few
months later in November, the United States declined to
intervene in Mr. Gadbois' action. The complaint in this
action was unsealed and ordered served on PharMerica. Shortly
thereafter, the State of Rhode Island, on behalf of itself
and other named states, similarly declined to intervene in
this action. Mr. Gadbois filed his second amended complaint
in February of 2014.
October 3, 2014, this Court dismissed Mr. Gadbois' second
amended complaint under the first-to-file bar of the False
Claims Act, 31 U.S.C. § 3730(b)(5).Gadbois
I, slip op. at 22-23. This Court held that Mr.
Gadbois' complaint alleged the same scheme as contained
in Ms. Denk's complaint, and that Mr. Gadbois'
allegations related to non-controlled medications were
insufficient to distinguish the claims. See Id. at
21-22. Specifically, this Court found that, "[b]y the
time Gadbois filed his initial complaint in this Court, the
United States Government had already been alerted to
Pharmerica's alleged fraudulent scheme on three
occasions: Denk's meeting with government officials and
Denk's filing of her original and first amended
complaints." Id. "Whether the medications
in question were controlled or non-controlled, the
prescription information required prior to their dispensing
was the same, and dispensing either category of medication
without a proper prescription disqualified it from
reimbursement by Medicare and/or Medicaid." Id.
Gadbois appealed the Court's ruling to the United States
Court of Appeals for the First Circuit. While that appeal was
pending, two crucial developments unfolded. First, the
Supreme Court decided Kellogg Brown & Root Services,
Inc. v. United States ex rel. Carter, which interpreted
the first-to-file bar as a temporal bar that dissolves when
the precluding suit is no longer "pending." 135
S.Ct. 1970, 1979 (2015). Second, the Wisconsin action was
settled and dismissed.
light of these events, the First Circuit held that the
jurisdictional bar underpinning this Court's order of
dismissal had "dissolved." Gadbois II, 809
F.3d at 6. Faced with a complaint originally dismissed for
want of jurisdiction, the Court of Appeals had a choice:
allow the original dismissal to stand and require Mr. Gadbois
to file a new action, or allow Mr. Gadbois to pursue
supplementation under Federal Rule of Civil Procedure 15(d)
to cure the jurisdictional defect. The First Circuit chose
the latter course, reasoning that to require dismissal and
refiling would be a "pointless formality."
Id. The Court of Appeals thus vacated the dismissal
and remanded the case for further proceedings.
six months later, on June 1, 2016, Mr. Gadbois died. His
Estate was substituted as relator, through Mr. Gadbois'
successor and the Estate's representative, Kristine
on the First Circuit's decision, the Estate sought leave
to file an amended and supplemental complaint in December of
2016. ECF No. 64. Briefing related to this
motion ensued over nearly the next year, including a motion
by the Estate to strike PharMerica's response in
opposition to the Estate's motion for leave to
supplement. ECF No. 72. In June of this year, the original
judge assigned to this case retired, and the matter was
reassigned to this Court.
STANDARD OF REVIEW
should "freely give leave" to amend a complaint
"when justice so requires." Fed.R.Civ.P. 15(a)(2).
In addition to amending a complaint, a plaintiff may
supplement her complaint "setting out any transaction,
occurrence, or event that happened after the date of the
pleading to be supplemented." Fed.R.Civ.P. 15(d). Courts
should allow supplementation "on just terms, " and
treat requests to supplement liberally. Gadbois II,
809 F.3d at 7 (comparing the Rule 15(d) standard to that of
the right to amend or supplement is not absolute, and such
motions should not be granted automatically. See Id.
Leave should be denied where the proposed revisions would be
futile. See id., Maldonado v. Dominguez, 137 F.3d 1,
11 (1st Cir. 1998). "Futility" means that the
complaint, as amended, fails to state a claim or leaves the
Court without subject-matter jurisdiction. See
D'Agostino v. ev3, Inc., 845 F.3d 1, 6 & n.3
(1st Cir. 2016). Where a proposed pleading would leave the
Court without subject-matter jurisdiction, the appropriate
standard of review is that of a motion to dismiss under Rule
12(b)(1). See Schock v. United States, 21 F.Supp.2d
115, 124 (D.E.I. 1998); cf. Hatch v. Dep't for
Children, Youth, & Their Families, 274 F.3d 12, 19
(1st Cir. 2001) (endorsing Rule 12(b)(6) standard where
amendment would be futile for failure to state a claim).
raises three primary arguments as to why supplementation
would be of no avail. Its opening argument is that the
proposed supplemental complaint does not relate back to the
date of the original complaint. If this is so, PharMerica can
take advantage of two defenses which have arisen since the
original complaint was filed. First, that this action is
barred because it is based upon allegations already subject
to a suit in which the Government is a party. Second, that
the suit is barred because substantially similar allegations
have been publicly disclosed, and because the Estate cannot
prove Mr. Gadbois was an original source of the information.
supplemental allegation central to the Estate's proposed
complaint is that the Wisconsin action has been settled. This
development, in conjunction with the Supreme Court's
decision in Kellogg, 135 S.Ct. 1970, has
"dissolved the jurisdictional bar" that caused this
Court to previously dismiss this action. Gadbois II,
809 F.3d at 6.
the jurisdictional bar no longer exists going forward, a
critical question is whether the supplemental complaint
relates back under Federal Rule of Civil Procedure
15(c). If the supplemental complaint does not
take the date of the original complaint, then PharMerica may
have several defenses that would render supplementation
futile. See Id. at 8 n.4 (citing U ...