At Long Last, Court Grants DOJ's Granston Motion In Campie

Author:Mr Christian D. Sheehan
Profession:Arnold & Porter

Nearly a year ago, the Supreme Court denied certiorari in Gilead Sciences, Inc. v. United States ex rel. Campie after the government promised to seek a "Granston" dismissal—that is, move to voluntarily dismiss the case over relators' objections—on remand. On November 5, 2019, the district court granted the government's motion and dismissed relators' False Claims Act claims. See United States ex rel. Campie v. Gilead Sciences, Inc., No. 11-cv-941, 2019 WL 5722618 (N.D. Cal. Nov. 5, 2019).

In Campie, relators alleged that Gilead violated the FCA by seeking payment for an HIV medication that was made in China using non-FDA approved materials. The Ninth Circuit reversed the district court's dismissal, holding that relators adequately pleaded materiality despite the government's continued payment after learning of the alleged wrongdoing. Gilead petitioned for certiorari, and while the government in its CVSG brief supported the Ninth Circuit's narrow view of Escobar, it promised to dismiss the case on remand. The government explained that it conducted a "thorough investigation of [relators'] allegations and the merits thereof" and expressed concern that "both parties might file burdensome discovery and Touhy requests . . . , which would distract from the [FDA's] public-health responsibilities."

The case then returned to the Northern District of California. As we have written, the Ninth Circuit's decision in United States ex rel. Sequoia Orange Co. v. Gaird-Neece Packing Corp., 151 F.3d 1139 (1998), requires the government to show a "valid government purpose" and a "rational relation between dismissal and accomplishment of the purpose" to obtain dismissal. The government in Campie identified two government purposes: (1) "prevent[ing] [relators] from undermining the considered decisions of FDA and CMS about how to address the conduct at issue here," and (2) "avoid[ing] the additional expenditure of government resources on a case that it fully investigated and decided not to pursue," particularly since the FDA had "taken into account [relators'] claims in its regulatory oversight of Gilead and taken actions it deemed appropriate." Campie, 2019 WL 5722618, at *5. Relators did not dispute that these could be valid government purposes, but argued there was no factual basis to support them, relying on the same district judge's prior decision in United States v. Academy Mortgage Corp., No...

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