In a recent decision, Silbersher et al. v. Valeant Pharmaceuticals Int'l, Inc., 2025 WL 2052307 (N.D. Cal. July 22, 2025), a federal district court in California ruled that a relator's second amended complaint (SAC) warranted dismissal because it "lumps 'Defendants' together in an undifferentiated mass with respect to 'the circumstances constituting fraud.'"
Avid Qui Notes readers may recall that we have previously blogged about this case. The relator alleged that defendants had fraudulently obtained a patent for the drug Apriso, which enabled defendants to charge unlawfully inflated monopoly prices, including to government-funded health care programs in violation of the FCA. The Court of Appeals for the Ninth Circuit had previously ruled that the FCA's public disclosure bar did not apply. United States ex rel. Silbersher v. Valeant Pharmaceuticals Int'l, Inc., 89 F.4th 1154 (9th Cir. 2024), amending and superseding 76 F.4th 843 (9th Cir. 2023). Following the Ninth Circuit's decision, relator filed the SAC and defendants moved to dismiss.
The district court granted the dismissal under Fed. R. Civ. P. 9(b), finding the SAC replete with examples of relator "lump[ing]" defendants together "as a whole and without differentiation." The court ruled that relator's group pleading made it "impossible for defendants to know from these and the rest of the complaint's allegations the role each of them is said to have played in the alleged fraudulent scheme." The court also found that the SAC's "boilerplate assertions of concerted activity" fell short of the mark under Rule 9(b) because the SAC failed to provide a factual basis to support those assertions, including "spell[ing] out 'each [defendant's]' alleged participation in the fraudulent scheme." Finally, the court rejected relator's attempt to cure these deficiencies through "a barrage of extrinsic evidence" that invited the court to "look outside the SAC and make multiple inferences." In so doing, the court concluded: "[Relator] misunderstands his pleading obligations. It is for him as plaintiff to plausibly allege the facts and claims ... [h]e may not drop the ball on this requirement and then ask the Court or defendants to pick it up for him." Because the court "cannot say at this point that [relator] has no hope of fixing his complaint," it dismissed the SAC with leave to amend.
The district court's decision highlights the importance of Rule 9(b) as a gating mechanism in FCA cases to weed out those multi-defendant cases where relators have inappropriately grouped all defendants together without alleging facts as to how each participated in the purported fraudulent scheme. We will continue to monitor this case and other FCA cases addressing alleged pleading deficiencies under Rule 9(b).
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