Ninth Circuit Panel Subtly Back-Pedals Prior Ruling on the Application of the Public Disclosure Bar in the False Claims Act Context
We previously wrote here regarding the Ninth Circuit’s decision in United States ex rel. Silbersher v. Valeant Pharmaceuticals Int’l Inc., 76 F.4th 843 (9th Cir. Aug. 3, 2023) (Valeant). Earlier this month, the same panel denied Valeant Pharmaceuticals’ petition for a rehearing en banc, but also issued a revised decision, significantly curtailing its original opinion.
Ninth Circuit Excludes Inter Partes Review Proceedings from Public Disclosure Bar and Greenlights Relator’s Qui Tam Claims Based on Patent Activity
In a recent decision, United States ex rel. Silbersher v. Valeant Pharmaceuticals Int’l Inc., 2023 WL 4940429 (9th Cir. Aug. 3, 2023) (“Valeant”), the Ninth Circuit ruled that the False Claims Act’s (“FCA”) public disclosure bar does not apply to inter partes review (“IPR”) proceedings—holding that, unlike patent prosecutions, IPRs are not a qualifying channel for disclosures under the bar. The panel also ruled that the qualifying disclosures the Valeant defendants did identify did “not disclose a combination of facts sufficient to permit a reasonable inference of fraud.” The panel’s decision reversed a district court’s conclusion that the bar did apply, greenlighting the relator’s lawsuit to proceed to its merits.
Ninth Circuit Construes Post-2010 Public Disclosure Bar to Include Facts Disclosed During a Patent Office Patent Prosecution
In United States ex rel. Silbersher v. Allergan, Inc., 2022 WL 3652967 (9th Cir. Aug. 26, 2022), the Ninth Circuit ruled that the FCA public disclosure bar, as amended in 2010, encompasses information provided to the U.S. Patent & Trademark Office (“PTO”) during a patent prosecution. Accordingly, a qui tam action premised entirely on materials obtained from PTO records is barred.
Government Narrowly Avoids Invalidation of All LCDs in the Ninth Circuit
A divided panel of the Ninth Circuit recently reversed a district court decision that held that local coverage determinations (“LCDs”) are valid only when issued through a 60-day notice-and-comment rulemaking process. Agendia, Inc. v. Becerra, No. 19-56516 (9th Cir. July 16, 2021). The impact of the district court’s ruling—and a spirited dissent from the Ninth Circuit majority opinion—would have been significant for healthcare enforcement actions, including under the False Claims Act. LCDs have never gone through notice-and-comment rulemaking. A decision that all LCDs are accordingly invalid would have undermined a number of False Claims Act cases premised on the use of LCDs to apply the “reasonable and necessary” standard for Medicare reimbursement. The Ninth Circuit is the first court of appeals to weigh in on this issue, however, and others may yet reach a different conclusion.
