Boston Scientific (NYSE:BSX) wants a federal appeals court to quash a whistleblower lawsuit filed against its Guidant subsidiary, invoking the "first-to-file" rule in arguing that the suit is barred because a previous, dismissed lawsuit brought essentially the same charges.
Heidi Heineman-Guta in November 2009 sued Guidant and its corporate parent, which paid $26 billion for Guidant in 2006, alleging that BSX cooked up a scheme to promote off-label uses for its cardiac rhythm management devices and ran a kickbacks scheme to bribe surgeons to use the devices, according to court documents.
The federal government declined to join the qui tam suit, unsealing it, and Heineman-Guta amended her complaint in January of this year in the U.S. District Court for Massachusetts, adding allegations of False Claims Act violations of the Anti-Kickback Statute and conspiracy.
Boston Scientific countered with a bid to have the case dismissed under the FCA’s so-called "first-to-file" rule, which blocks subsequent qui tam suits that allege substantially identical charges. In July the district court agreed, dismissing the case and prompting Heineman-Guta to appeal to the U.S. Court of Appeals for the 1st Circuit.
Boston Scientific argued this week that a previous case, filed by Elaine (then George) Bennett, brought nearly identical charges against it. That case was voluntarily dismissed in October 2011, shortly after the feds declined to join.
"Under this court’s precedent, a complaint bars a later filed action if it discloses the ‘essential facts’ of the same fraudulent scheme. Heineman-Guta does not dispute the district court’s conclusion that the Bennett complaint alleged a ‘nearly identical’ scheme to the first amended complaint or that ‘[a]lthough the FAC provides different and somewhat richer details, the Bennett Complaint exposed all of the essential facts of the scheme,’" according to the documents. "The added factual details in the first amended complaint – e.g., that physicians dined at Buddha Bar rather than some other restaurant, or were given tickets to The Producers and not some other show – do not provide any additional ‘essential facts’ that disclose a different scheme, or give the government notice of alleged fraud that it otherwise lacked."