United States Ex Rel. Duxbury v. Ortho Biotech Products, L.P.
Full Opinion (html_with_citations)
This appeal concerns the qui tam provisions of the False Claims Act (the âFCAâ), 31 U.S.C. § 3730, which allow whistleblowers (called ârelatorsâ) to bring certain fraud claims on behalf of the United States. 1 The relators in this case, the plaintiffs-appellants Mark Duxbury and Dean McClellan (together, the âRelatorsâ), *16 alleged that defendant-appellee Ortho Bio-tech Products, L.P. (âOBPâ) violated the FCA in unlawfully promoting the sale of its drug Procrit. The district court dismissed all of the Relatorsâ claims, and this appeal followed. After careful consideration, we affirm in part and reverse in part.
I. Background
A. The FCA
To provide context, we start with the statutory scheme. The FCA contains qui tam provisions that âsupplement federal law enforcement resources by encouraging private citizens to uncover fraud on the government.â Rost, 507 F.3d at 727. The qui tam provisions permit whistleblowers (known as relators) to bring certain fraud claims on behalf of the United States; in return, â[a] private relator is entitled to a portion of any proceeds from the suit, whether the United States intervenes as an active participant in the action or not.â Id. at 727.
âThe qui tam mechanism has historically been susceptible to abuse, however, by âparasiticâ relators who bring FCA damages claims based on information within the public domain or that the relator did not otherwise uncover.â Id. Accordingly, Congress has amended the FCA several times âto walk a fine line between encouraging whistle-blowing and discouraging opportunistic behavior.â See United States ex rel. S. Prawer v. Fleet Bank of Me., 24 F.3d 320, 324-26 (1st Cir.1994) (quoting United States ex rel. Springfield Terminal Ry. Co. v. Quinn, 14 F.3d 645, 651 (D.C.Cir.1994) (detailing the history of such amendments to the FCAâs qui tam provisions)).
As a result of these amendments, the FCA includes jurisdictional bars that limit a district courtâs subject matter jurisdiction over qui tam actions. Two of these bars are relevant to this action. The first, known as the âpublic disclosureâ bar, provides that a court does not have subject matter jurisdiction over any qui tam action that is âbased upon the public disclosure of allegations or transactionsâ concerning the alleged fraud, unless, among other things, âthe person bringing the action is an original source of the information.â 31 U.S.C. § 3730(e)(4)(A). A relator qualifies as an âoriginal sourceâ if (1) she has âdirect and independent knowledgeâ of the information supporting her claims and (2) she âprovided the information to the Government before filing an action.â Id. § 3730(e)(4)(B). The second, known as the âfirst-to-fileâ bar, provides that when a potential relator brings an FCA action, âno person other than the Government may intervene or bring a related action based on the facts underlying the pending action.â Id. § 3730(b)(5).
B. The Complaints
OBP distributes and promotes Procritâ the brand name for epoetin alfa â a drug approved by the FDA for use to treat anemia resulting from chemotherapy, chronic kidney disease, HIV infection, and blood loss from certain types of surgery. Both Relators were sales representatives for OBP who were responsible for the promotion and sale of Procrit in the Western United States. From 1992 to 1998, OBP employed Relator Duxbury, first as a Product Specialist and later as a Regional Key Account Specialist for OBPâs Western Division Oncology sales force. From 1992 to 2004, OBP employed Relator McClellan, also first as a Product Specialist but later as a Territory Manager for OBPâs Western Division Oncology sales force.
This appeal turns on a number of complaints filed by the Relators and other parties, which we discuss in some detail below.
*17 On November 6, 2003, Duxbury, but not McClellan, filed a complaint (the âOriginal Complaintâ) in the District Court for the District of Massachusetts. The Original Complaint contained allegations concerning OBPâs fraudulent reporting of the Average Wholesale Price (âAWPâ) of Procrit, a benchmark used by the Medicare program for reimbursement purposes. It was filed hot on the heels of a master consolidated complaint (the âMCCâ) filed in September 2002 in a multi-district litigation concerning the fraudulent reporting of AWP. See generally In re Pharm. Indus. Average Wholesale Price Litig., MDL No. 1456, No. 01-12257-PBS (the âAWP MDLâ). 2
The Original Complaint contained two counts, one alleging âsubstantive violationsâ of the FCA and the other a conspiracy count. (Compl. ¶¶ 47-55 (Count I); id. ¶¶ 56-60 (Count II)). In support of the counts, the Original Complaint alleged that OBP published a fraudulently inflated AWP for Procrit, which resulted in the filing of false claims for reimbursement with the Medicare program. (Id. ¶¶ 1, 29). The Original Complaint further alleged that OBP marketed the âspreadâ â the difference between the higher, fraudulent AWP and the lower, actual cost of Procrit â to induce medical providers to purchase Procrit. (Id. ¶¶ 23, 29). Thus, according to the Original Complaint, the âspreadâ not only caused the filing of false claims, but constituted an âillegal kickbackâ to health care providers. (Id. ¶¶ 23, 30).
The Original Complaint also alleged that OBP provided âfree samplesâ of Procrit as well as ânon-public financial inducements,â such as rebates, discounts, âunrestricted education grants,â and âphony drug studies.â (Id. ¶¶ 31, 34, 38, 40, 43). OBP allegedly used these inducements âto lower the providersâ net cost of purchasing Procrit,â and further âinflate[ ] the AWP,â as âthe value of these services was kept off the book, so as not [to] be reflected in the AWP.â (Id. ¶ 34; see also id. ¶¶ 32-33). The Original Complaint alleged that these inducements also constituted illegal kickbacks. (See id. ¶¶ 3, 45).
With respect to the âphony drug studies,â the Original Complaint alleged at Paragraphs 40 through 42 that OBP utilized âPhase IV Marketing Trialsâ to, among other things, âencourage the physician, clinic, or hospital to use the drug in a way which [wa]s inconsistent with its FDA approved indications and administration methods.â (Id. ¶ 40(c)). The Original Complaint referred specifically to a 1997 trial in which OBP allegedly
paid physicians to dose Procrit at 40,-OOOiu in a once per week dose instead of the FDA approved dosage of 10,000iu three times per week dosage in cancer-chemotherapy patients. The trial was very successful and the once per week dosage is now universally accepted among oncologists. The trialâs success also resulted in Medicare Part B paying for I0,000iu/week of Procrit in cancer chemotherapy patients instead of 30,000iu/week-an increase in 33% in payments for each Medicare Beneficiary receiving Procrit for treatment of their chemotherapy related anemia.
(Id.) (emphasis in original). The Original Complaint further alleged that â[t]he 40,-OOOiu dosage scheme was successful for Ortho and doctors, but Ortho ha[d] not received FDA approval for such dosage.â (Id. ¶ 41) (emphasis in original).
*18 On December 19, 2003, about one month after the filing of the Original Complaint, Kurt Blair, also a former OBP sales representative, filed a qui tarn complaint (the âBlair Complaintâ) against OBP in the District Court for the District of Colorado. The Blair Complaint contained two counts. Count I alleged that, beginning in 1998, OBP promoted âa dosing regimen of 40,-000 units once per weekâ even though it had not received approval from the FDA for such a high dosage. (Blair Compl. ¶¶ 22-27). Blair claimed that OBP promoted this unapproved, âoff-labelâ dosage through a variety of means, such as direct off-label marketing to medical professionals; influencing the results of purportedly independent clinical studies; and rebate programs offered to induce increased prescriptions of Procrit, among other things. (Id. ¶¶ 27, 28-79). Blair alleged that OBPâs promotion of this off-label use caused the filing of âfalseâ claims for reimbursement with Medicare and Medicaid, insofar as the providers sought reimbursement for ânonreimburseableâ uses. (Id. ¶¶ 88-91). Count II alleged that OBP caused the submission of false claims by, among other things, âpaying thousands of kickbacks to Medicaid and Medicare providers, causing the providers to write tens of thousands of prescriptions for Procrit that would otherwise not have been written.â (Id. ¶ 93).
As required under the FCA, both the Original Complaint and the Blair Complaint were filed under .seal to allow the United States time to review both complaints and decide whether to intervene. 31 U.S.C. § 3730(b)(2). 3 On March 23, 2004, the Blair district court allowed the governmentâs motion to partially lift the seal on the Blair Complaint in order to disclose it to Duxbury.
On July 18, 2004, Duxbury, through his counsel, provided a written disclosure of information (the âInformationâ) to the Department of Justice (the âDOJâ). The Information was sent in response to a April 6, 2004 letter by the DOJ summarizing the allegations in the Original Complaint and requesting further information. The Information stated that â[w]e believe the following paragraph describes a more important and damaging fraud identified in Mr. Duxburyâs complaint, which we described (see Complaint ¶¶ 40-42) but are not sure you have grasped based on your letter and the interview of Mr. Duxbury.â The âfollowing paragraphâ stated in part:
In 1997, [OBP] initiated an intentional scheme to promote an illegal, off-label dosage of Procrit for cancer patients that would increase sales and federal reimbursements by approximately a third. [OBP]âs scheme worked, and starting in around 1999 Medicare began reimbursing for Procrit at a one-third higher dosage than it had previously, without FDA approval for this dosage and contrary to the Medicare Actâs rules for reimbursement of cancer drugs. The injury to the Medicare program alone is in the hundreds of millions.
The Information then went on to discuss this âschemeâ in more detail. 4
*19 On July 12, 2005, after an investigation, the DOJ declined to intervene in the Original Complaint. On December 5, 2005, the Blair Complaint was voluntarily dismissed and subsequently unsealed in full.
On October 26, 2006, over OBPâs objection, the district court allowed Duxburyâs motion to amend the Original Complaint, and the next day, on October 27, 2006, both Relators filed a First Amended Complaint (the âAmended Complaintâ). The Amended Complaint added Relator McClellan as a party and alleged three counts, two of which are at issue on this appeal. 5 (Am.Compl. ¶¶ 3, 227, 249, 270).
Count I alleges that, beginning in December 1992 to the present, OBP engaged in a scheme to provide kickbacks to health care providers âto induce them to prescribe ProCrit.â (Id. ¶¶ 228-232). The kickbacks allegedly included âfree ProCrit, off-invoice discounts and cash in the form of rebates, consulting fees, educational grants, payments to participate in studies or trials, and advisory board honoraria.â (Id. ¶ 228). The Amended Complaint alleges that the kickbacks, among other things, âcaused providers and hospitals to submit false claims for payment to Medicare for ProCrit.â (Id. ¶¶229, 243-244).
Count III alleges that, beginning in 1997, OBP unlawfully promoted â[t]he administration of ProCrit at 40,000 units IX per week to oncology patients,â which âwas not approved by the FDA.â (Id. ¶¶ 131, 271, 273). Thus, the Amended Complaint alleges that OBPâs âinflated dosing scheme was a substantial factor causing the submission of false claims for payment for ProCrit,â insofar as OBP âcaused providers and hospitals to administer ProCrit to chemotherapy patients at 40,000 units IX/ week[], and in the absence of [OBPâs] scheme they would have administered ProCrit at 10,000 IU 3X/week.â (Id. ¶282).
C. The Dismissal of the Amended Complaint
On January 17, 2007, OBP moved to dismiss the Amended Complaint for lack of subject matter jurisdiction under Federal Rule of Civil Procedure 12(b)(1) and, in the alternative, for failure to plead fraud with particularity under Federal Rule of Civil Procedure 9(b). On January 28, 2008, the district court allowed OBPâs motion to dismiss with prejudice and entered judgment in OBPâs favor. See United States ex rel. Duxbury v. Ortho Biotech Prods., L.P., 551 F.Supp.2d 100 (D.Mass.2008).
As to Count I, the district court first held that the kickback claims were âbased uponâ a âpublic disclosure,â in this case the âallegationsâ contained in the MCC filed in the AWP MDL, which also alleged the use of illegal kickbacks. See id. at 105-08. The district court further held that Duxbury âqualifies as an original sourceâ for the kickback claims, but only for those claims that occurred during his period of employment, 1992 through 1998, since âhis direct knowledge of OBPâs activities only extends to the time he was employed by the company.â Id. at 109. Having established its subject matter jurisdiction, the court nevertheless dismissed the 1992 through 1998 kickback claims because the Amended Complaint failed to plead the claims with sufficient particularity under Rule 9(b). Id. at 115-16.
As to the kickback claims from 1998 to the present, the district court held that McClellan did not qualify as an âoriginal source,â as the Amended Complaint did not sufficiently allege that McClellan of *20 fered information concerning the kickback claims to the government prior to the filing of the Original Complaint. Id. at 109-10. Relatedly, and in the alternative, the district court found that, even if McClellan qualified as an original source, his claims were barred by the âfirst-to-fileâ bar because he asserted his kickback claims after the filing of the Original Complaint. Id. at 110.
As to Count III, the court dismissed the claims concerning âoff-labelâ promoting because they were barred by the âfirst-to-fileâ rule. Id. at 110-14. The district court first held that, even though Paragraphs 40 through 42 of the Original Complaint mentioned unlawful off-label promotion, the Original Complaint did ânot provide the essential facts regarding a widespread scheme to promote off-label uses of Procrit.â Id. at 114. Thus, the district court considered the Blair Complaint the â âfirstâ complaint to allege claims based upon OBPâs alleged off-label marketing of Procrit,â and accordingly dismissed the off-label promoting claims in Count III of the Amended Complaint. Id.
As no claims survived, the district court dismissed the Amended Complaint with prejudice as to the Relators. Relators now appeal.
II. Discussion
The district court dismissed a portion of Count I and all of Count III for lack of subject matter jurisdiction. Thus, â[w]e review the district courtâs determination that it lacked subject matter jurisdiction de novo.â Muskat v. United States, 554 F.3d 183, 194 (1st Cir.2009). Subject matter jurisdiction in this case is based on the allegations contained in the Amended Complaint. See Rockwell, 549 U.S. at 473, 127 S.Ct. 1397. Accordingly, âwe take as true all well-pleaded facts in the [Amended Complaint], scrutinize them in the light most hospitable to the plaintiffsâ theory of liability, and draw all reasonable inferences therefrom in the plaintiffsâ favor.â Fothergill v. United States, 566 F.3d 248, 251 (1st Cir.2009); see also id. at 251 n. 1 (noting that â[t]his standard applies to motions to dismiss for want of subject-matter jurisdiction that are adjudicated on the pleadings, in advance of jurisdictional discovery and without the taking of any evidence.â). â[W]e may affirm an order of dismissal on any ground made apparent by the record (whether or not relied upon by the lower court).â Aguilar v. U.S. Immig. & Customs Enf., 510 F.3d 1, 8 (1st Cir.2007).
The district court dismissed the remaining portion of Count I under Federal Rule of Civil Procedure 9(b) for failure to plead fraud with sufficient particularity. We similarly âreview de novo the district courtâs dismissal order for failure to comply with Rule 9(b).â United States ex rel. Gagne v. City of Worcester, 565 F.3d 40, 45 (1st Cir.2009).
A. Count I
The Relators contend that the district court erred in dismissing the kickback claims contained in Count I, which the court dismissed, in part, based on the âpublic disclosureâ bar, and, in part, based on Rule 9(b).
âThe threshold question in a False Claims Act case is whether the statute bars jurisdiction.â Rost, 507 F.3d at 727. The district courtâs dismissal of the kickback claims turns on the âpublic disclosureâ bar, set forth at 31 U.S.C. § 3130(e)(4). It provides:
(A) No court shall have jurisdiction over an action under this section based upon the public disclosure of allegations or transactions in a criminal, civil, or administrative hearing, in a congressional, *21 administrative, or [General] Accounting Office report, hearing, audit, or investigation, or from the news media, unless the action is brought by the Attorney General or the person bringing the action is an original source of the information.
(B) For purposes of this paragraph, âoriginal sourceâ means an individual who has direct and independent knowledge of the information on which the allegations are based and has voluntarily provided the information to the Government before filing an action under this section which is based on the information.
31 U.S.C. § 3730(e)(4)(A) & (B) (emphasis added).
As we discussed in Rost, analysis of the âpublic disclosureâ bar ârequires several inquiriesâ:
(1) whether there has been public disclosure of the allegations or transactions in the relatorâs complaint;
(2) if so, whether the public disclosure occurred in the manner specified in the statute;
(3) if so, whether the relatorâs suit is âbased uponâ those publicly disclosed allegations or transactions; and
(4) if the answers to these questions are in the affirmative, whether the relator falls within the âoriginal sourceâ exception as defined in § 3730(e)(4)(B).
507 F.3d at 728. On appeal, the Relators do not challenge the district courtâs holding that the kickback claims contained in Count I are âbased upon the public disclosure of allegations ... in a ... civil ... hearing,â in this case the allegations of illegal kickbacks contained in the MCC filed in the AWP MDL. Thus, we turn our attention to the fourth question, whether the Relators fall within the âoriginal sourceâ exception as defined in § 3730(e)(4)(B).
1. The âProvidedâ Language in the Original Source Exception
On appeal, OBP and the United States, appearing as an amicus, propose an alternative ground to affirm the dismissal of Count I. Under the FCA, an âoriginal sourceâ is defined as:
an individual who has [1] direct and independent knowledge of the information on which the allegations are based and [2] has voluntarily provided the information to the Government before filing an action under this section which is based on the information.
31 U.S.C. § 3730(e)(4)(B) (emphasis added). In determining whether the Relators qualified as original sources, the district court held that â[t]he plain language of the FCA only requires the relator to provide his information to the government prior to filing his action,â and that â[t]his unambiguous statutory language must guide the courtâs interpretation.â Duxbury, 551 F.Supp.2d at 109.
Both OBP and the United States argue that this was error, and contend that 31 U.S.C. § 3730(e)(4)(B) requires a relator to provide the information to the government before the public disclosure itself, not just before the filing of the relatorâs suit. As there is no allegation in the Amended Complaint that either McClellan or Duxbury provided any information concerning their kickback claims to the government prior to the public disclosure of the kickback allegations in the AWP MDL, both OBP and the government contend that we can affirm the dismissal of the kickback claims on this alternative ground. As explained in more detail below, and after a careful analysis of the FCA, we disagree, and conclude that the district courtâs interpretation is the correct one.
*22 We have not addressed the meaning of âprovided the information to the Government before filing an actionâ under § 3730(e)(4)(B), but the issue has divided the courts. The Fourth Circuit, consistent with the district court, has held that § 3730(e)(4)(B) ârequires only that the relator ... voluntarily provide the information to the government before filing his qui tarn action.â United States ex rel. Siller v. Becton Dickinson & Co., 21 F.3d 1339, 1351 (4th Cir.1994) (emphasis in original). The Second and Ninth Circuits have outlined a second approach, holding that the relator âmust have directly or indirectly been a source to the entity that publicly disclosed the allegations on which a suit is based.â United States ex rel. Dick v. Long Island Lighting Co., 912 F.2d 13, 16 (2d Cir.1990); see also United States ex rel. Wang v. FMC Corp., 975 F.2d 1412, 1419 (9th Cir.1992). The D.C. and Sixth Circuits have taken a third approach that stakes out a middle ground, holding that âan âoriginal sourceâ must provide the government with the information prior to any public disclosure,â but not requiring the relator to be the cause of the public disclosure. United States ex rel. Findley v. FPC-Boron Employeesâ Club, 105 F.3d 675, 690 (D.C.Cir.1997); see also United States ex rel. McKenzie v. BellSouth Telecomms., Inc., 123 F.3d 935, 942-43 (6th Cir.1997). OBP and the United States urge us to take this middle approach.
Although we are about to travel a well-trodden path, our first step remains the same. âOur first step in interpreting a statute is to determine whether the language at issue has a plain and unambiguous meaning with regard to the particular dispute in the case.â Robinson v. Shell Oil Co., 519 U.S. 337, 340, 117 S.Ct. 843, 136 L.Ed.2d 808 (1997). âThe plainness or ambiguity of statutory language is determined by reference to the language itself, the specific context in which that language is used, and the broader context of the statute as a whole.â Id. at 341, 117 S.Ct. 843.
By its terms, the âoriginal sourceâ exception only requires the relator to âprovide[ ] the information to the Government before filing an action under this section which is based on the information.â 31 U.S.C. § 3730(e)(4)(B). Section 3730(e)(4)(B) does not impose any other timing requirement. Nor does § 3730(e)(4)(A). Thus, like the Fourth Circuit and the district court below, we conclude that the plain terms of § 3730(e)(4)(B) begin and end the matter. See Robinson, 519 U.S. at 340, 117 S.Ct. 843 (âOur inquiry must cease if the statutory language is unambiguous and âthe statutory scheme is coherent and consistent.â â (quoting United States v. Ron Pair Enters., Inc., 489 U.S. 235, 240, 109 S.Ct. 1026, 103 L.Ed.2d 290 (1989))).
The government argues that the language of § 3730(e)(4)(B), when read in context, supports its view. Following the D.C. Circuit, the government points to the meaning of the terms âoriginal sourceâ itself, contending that a âsourceâ is defined as â[t]he originator or primary agent of an act, circumstance, or result.â Blackâs Law Dictionary 1522 (9th ed.2009) (using the example âshe was . the source of the information.â). Thus, a source cannot âoriginate]â information that has been publicly disclosed. The D.C. Circuit similarly found significance in âCongressâs decision to use the term âoriginal sourceâ rather than simply incorporating subparagraph (B)âs description into subparagraph (A).â Findley, 105 F.3d at 691.
However, we decline to rely upon the plain meaning of the terms âoriginal sourceâ when the statute defines the term at § 3730(e)(4)(B). It is only â[w]hen a word is not defined by statuteâ that we *23 âconstrue it in accord with its ordinary or natural meaning.â See Smith v. United States, 508 U.S. 223, 228, 113 S.Ct. 2050, 124 L.Ed.2d 138 (1993). In addition, we decline to attribute significance to Congressâs use of the terms âoriginal sourceâ rather than engraft the definition found at § 3730(e)(4)(B) into § 3730(e)(4)(A). Section 3730(e)(4)(A) sets forth two exceptions to the âpublic disclosureâ bar, (1) when the relator is an âoriginal sourceâ and (2) when âthe action is brought by the Attorney General.â Thus, setting forth the definition of one of these exceptions in a separate subparagraph, rather than shoehorning it into § 3730(e)(4)(A), avoids unnecessary confusion and does not imply anything further. Finally, had Congress intended to retain the plain meaning of âoriginal sourceâ and require relators to provide their information prior to the public disclosure, âit easily could have done so.â See Rost, 507 F.3d at 729 (rejecting argument that, for purposes of the meaning of âpublic disclosure,â âequates the government with the publicâ).
Typically, we end our review when âthe plain language of a statute unambiguously reveals its meaning, and the revealed meaning is not eccentric.â United States v. Meade, 175 F.3d 215, 219 (1st Cir.1999) (noting that, in such circumstances, âcourts need not consult other aids to statutory constructionâ). OBP and the government, however, argue that such an eccentricity would result.
Both OBP and the government primarily argue that interpreting the âprovidedâ language in § 3730(e)(4)(B) by its plain terms would conflict with the intent of Congress. See United States v. Am. Trucking Assân, 310 U.S. 534, 542, 60 S.Ct. 1059, 84 L.Ed. 1345 (1940) (âIn the interpretation of statutes, the function of the courts is ... to construe the language so as to give effect to the intent of Congress.â). Specifically, they argue that reading § 3730(e)(4)(B) by its plain terms would permit relators to bring suit based upon fraud that was already publicly disclosed, so long as the relator had âdirect and independent knowledgeâ of the fraud. For example, a relator who learns about fraud against the government in the Huffington Post would be permitted to bring a qui tam suit âbased uponâ that âpublic disclosureâ if she has âdirect and independent knowledgeâ of the fraud and provides that information to the government before filing suit, literally the day before filing. The same would be true if the âpublic disclosureâ resulted from a long-standing government investigation, where a relator would be entitled to bring suit so long as he or she had âdirect and independentâ knowledge of the public disclosure.
The D.C. Circuit concluded that, although the FCA provides financial incentives to provide information about fraud to the government, â[ojnce the information has been publicly disclosed, however, there is little need for the incentive provided by a qui tam action.â Findley, 105 F.3d at 691. The Sixth Circuit discusses this point in more detail, holding that requiring a relator to disclose his or her information to the government prior to the public disclosure at issue advances the twin goals of (1) alerting the government to potential fraud and (2) creating incentives to do so as early as possible. McKenzie, 123 F.3d at 942-43. As put by the Sixth Circuit,
[Tjhis approach furthers Congressâs ... goal in amending the FCA: â[T]o prevent âparasiticâ qui tam actions in which relators, rather than bringing to light independently discovered information of fraud, simply feed off of previous disclosures of public fraud.â Siller, 21 F.3d at 1347. Anyone who alerts the government and is a âtrue whistleblowerâ deserves any reward that may be obtained *24 by pursuing a qui tam action under the FCA. However, the individual who sits on the sidelines while others disclose the allegations that form the basis of her complaint should not be able to participate in any award. This would be contrary to the purpose of the statute.
Id. at 943; see also Wang, 975 F.2d at 1419 (âQui tam suits are meant to encourage insiders privy to a fraud on the government to blow the whistle on the crime. In such a scheme, there is little point in rewarding a second toot.â). Thus, both OBP and the government argue that requiring the relator to provide his or her information before the public disclosure corrects this problem and ensures that only productive suits are filed, that is, those suits in which a âtrue whistleblowerâ alerts the government of fraud not publicly disclosed.
After careful consideration of the arguments in favor of adopting the middle approach, we conclude that honoring the plain and unambiguous meaning of § 3730(e)(4)(B) would not conflict with the intent of Congress. Our decision is supported by our own review of the âlanguage, structure, and historyâ of § 3730(e)(4)(B) and the âpublic disclosureâ bar. See Rost, 507 F.3d at 728-29 (reviewing the language, structure and history of the terms âpublic disclosureâ in rejecting interpretation that conflicted with the plain meaning of the statute). As we have just discussed the language of § 3730(e)(4)(B), we turn to the structure and history of the statute.
i. Structure
The structure of the FCA mitigates many of the concerns that lead the D.C. and Sixth Circuits to adopt the middle approach and, in fact, demonstrates that the middle approach has the potential to prohibit productive suits. As an initial matter, the âfirst-to-fileâ rule already provides potential relators significant incentive not to sit on the sidelines. As we discuss in more detail below, âa goal behind the first-to-file ruleâ is to provide incentives to relators to âpromptly alert[ ] the government to the essential facts of a fraudulent scheme.â United States ex rel. Lujan v. Hughes Aircraft Co., 243 F.3d 1181, 1188 (9th Cir.2001). It is unclear why a relator would wait for a public disclosure and risk another relator bringing suit.
Moreover, the Supreme Courtâs recent decision in Rockwell, which interpreted the âdirect and independentâ knowledge requirement of the public disclosure bar, substantially undercuts the conclusion by the D.C. and Sixth Circuits that âlittle incentiveâ is necessary for suits brought after a public disclosure. In addressing the meaning of the âdirect and independent knowledgeâ requirement of the âoriginal sourceâ exception in § 3730(e)(4)(B), the Rockwell Court also addressed the meaning of the term âinformationâ found in both § 3730(e)(4)(A) and § 3730(e)(4)(B). It held that âinformationâ for purposes of both subparagraphs refers to the âinformation underlying the allegations of the relatorâs action,â not the information underlying the public disclosure. Rockwell, 549 U.S. at 472, 127 S.Ct. 1397. The Court noted:
Section 3730(e)(4)(A) bars actions based on publicly disclosed allegations whether or not the information on which those allegations are based has been made public. It is difficult to understand why Congress would care whether a relator knows about the information underlying a publicly disclosed allegation (e.g., what a confidential source told a newspaper reporter about insolid pondcrete) when the relator has direct and independent knowledge of different information sup *25 porting the same allegation (e.g., that a defective process would inevitably lead to insolid pondcrete). Not only would that make little sense, it would raise nettlesome procedural problems, placing courts in the position of comparing the relatorâs information with the often unknowable information on which the public disclosure was based. â Where that latter information has not been disclosed (by reason, for example, of a reporterâs desire to protect his source), the relator would presumably be out of court. To bar a relator with direct and independent knowledge of information underlying his allegations just because no one can know what information underlies the similar allegations of some other person simply makes no sense.
Id. at 471-72, 127 S.Ct. 1397 (emphasis added).
Rockwell clarifies that the information that the original source has âdirect and independent knowledgeâ of does not have to be the same as the information upon which the public disclosure is based. Thus, a public disclosure concerning governmental fraud resulting from a Huffing-ton Post article may be based on information that is different (to use the example in Rocktvell, âwhat a confidential source told a ... reporter about insolid pondcreteâ) than the information a relator may have in support of the same fraud (âthat a defective process would inevitably lead to insolid pondcreteâ). See id. The same would be true of an ongoing governmental investigation, where the information upon which the governmentâs public disclosures are based may be different from the information that the relator has in his possession.
But as a result of that clarification, Rockwell strongly suggests that situations can arise where the information upon which the public disclosure is based may be unavailable (such as a reporter protecting a source) or be of little value (if based on rumors), while a relator may have different information of the publicly disclosed fraud (such as eyewitness testimony, documents, etc.) of great significance. This has substantial plausibility when the public disclosure is based on the ânews media,â where sources may fear to come forward to serve as witnesses but others with âdirect and independent knowledgeâ may be so willing. Although in such a situation, the relator, in a technical sense, is not a âtrue whistleblower,â we disagree that such a relator does not âdeserve[] any reward that may be obtained by pursuing a qui tam action under the FCA.â See McKenzie, 123 F.3d at 942-43. Thus, the approach taken by D.C. and Sixth Circuits has the potential to bar productive suits.
ii. History
The history of the âpublic disclosureâ bar and the âprovidedâ language under § 3730(e)(4)(B) also does not require us to deviate from the plain meaning. The legislative history of the âpublic disclosureâ bar has been well rehearsed by this and other circuits. See, e.g., Prawer, 24 F.3d at 324-26; see also Findley, 105 F.3d at 679-81. We only discuss legislative history relevant to our inquiry here.
The âprovidedâ language in § 3730(e)(4)(B) was specifically enacted to â âcorreet[ ]â the holding of United States ex rel. Wisconsin v. Dean.â Findley, 105 F.3d at 691; see also Siller, 21 F.3d at 1354; FMC Corp., 975 F.2d at 1419 (âSeeking only to âcorrectâ opinions like Dean, Congress permitted one who publicly disclosed the information to bring a qui tam suit.â). Dean was a 1984 Seventh Circuit decision decided prior to the 1986 amendments that resulted in the current âpublic disclosureâ bar. The case concerned a previous jurisdictional bar, adopted in 1943, that barred relator suits *26 â âbased upon evidence or information in the possession of the United States ... at the time such suit was brought.â â Findley, 105 F.3d at 680 (omission in original) (quoting Act of December 23, 1943, 57 Stat. 608, recodified in 31 U.S.C. § 3730(b)(4) (1982) (superseded)). The 1943 jurisdictional bar provided no exception for when âthe relator was the , source of that information,â although such an exception was proposed. Id. âIn Dean, the Seventh Circuit was faced with the question of whether the State of Wisconsin should be allowed to act as a qui tam relator in a Medicaid fraud action where the State, in accordance with the federal regulations, had already reported the fraud to the federal court.â Prawer, 24 F.3d at 325 (citing United States ex rel. Wisconsin v. Dean, 729 F.2d 1100, 1102-04 (7th Cir.1984)). The Dean court answered in the negative, stating that â[i]f the State of Wisconsin desires a special exemption to the False Claims Act because of its requirement to report Medicaid fraud to the federal government, then it should ask Congress to provide that exemption.â 729 F.2d at 1106.
Congress obliged, and in 1986 Congress amended the FCA to â âencourage more private enforcement suits.â â Findley, 105 F.3d at 680 (quoting S.Rep. No. 93-345, at 23-24 (1986), reprinted in 1986 U.S.C.C.A.N. 5266, 5288-89); see also Rost, 507 F.3d at 730 (same). As emphasized by the Sixth Circuit, one goal of the amendments was to âprevent âparasiticâ qui tam actions in which relators, rather than bringing to light independently discovered information of fraud, simply feed off of previous disclosures of fraud.â McKenzie, 123 F.3d at 943 (quoting Siller, 21 F.3d at 1347).
But two additional changes are relevant here. The first was to abolish the âgovernment knowledgeâ regime entailed by the 1943 jurisdictional bar, which Congress concluded âproved too restrictive of qui tam actions, resulting in the under-enforcement of the FCA.â Rost, 507 F.3d at 729. Congress replaced the âgovernment knowledgeâ regime with one, as shown by the âpublic disclosureâ bar, focused on the âpublic disclosure of information given to the government.â Id. As put by the D.C. Circuit, âCongress thus changed the focus of the jurisdictional bar from evidence of fraud inside the governmentâs overcrowded file cabinets to fraud already exposed in the public domain.â Findley, 105 F.3d at 684. To replace the âgovernment knowledgeâ bar, Congress â âbroadened the universe of potential [qui tam] plaintiffs, with only four exclusionsâ enumerated in § 3730(e).â Rost, 507 F.3d at 730 (quoting United States ex rel. LeBlanc v. Raytheon Co., 913 F.2d 17, 19 (1st Cir.1990)).
The second was to reinstate the âoriginal sourceâ exception proposed, but not adopted, in 1943, so as to avoid the situation in Dean where a potential relator who .provided information to the government was not barred from bringing a qui tam suit. It is this second change that the âprovidedâ language sought to remedy, by allowing individuals to maintain suit and âprovide their information to the government.â As put by the Fourth Circuit:
To âcorrectâ Dean only required that Congress adopt language that would ensure that a plaintiff who had provided his information to the government would not be barred from bringing a qui tam action on the ground that the government already possessed the information. This it did in section 3730(e)(4)(B), by providing that a plaintiff who produces his independently-obtained information to the government is excepted from section 3730(e)(4)(A)âs jurisdictional bar.
Siller, 21 F.3d at 1354.
The second additional change provides a direct justification of the âprovidedâ lan *27 guage in § 3730(e)(4)(B), but it is the first that has been glossed over. Both the D.C. Circuit and the Sixth Circuit have focused on the concern with âparasiticâ suits, concluding that any such suit brought after a âpublic disclosureâ was necessarily âparasitic.â As noted above, we question that conclusion. But we also note that the 1986 amendments equally sought to end a regime that resulted in the âunder-enforcementâ of the FCA, one that rested too much on government notice to prevent fraud. As we have noted, Congress âamended the statute to âencourage more private enforcement suits.â â Rost, 507 F.3d at 730 (quoting S.Rep. No. 93-345, at 23-24). Although we have recognized that a âpublic disclosureâ regime has the benefit, one lacking in a âgovernment noticeâ regime, of providing âpublic pressureâ on the government to act, see Rost, 507 F.3d at 730, there also may arise situations when even that is not enough, and the government would benefit from suits brought by relators with substantial information of government fraud even though the outlines of the fraud are in the public domain.
The D.C. Circuit was quite explicit that its approach âmay on occasion prevent qui tarn lawsuits that may not be truly âparasitic.â â Findley, 105 F.3d at 685. However, we have rejected readings of the âpublic disclosureâ bar that âwould create a new exclusion not articulated in the textâ which would discourage âproductive private enforcement.â See Rost, 507 F.3d at 730. In Rost, we rejected an interpretation of âpublic disclosureâ under § 3730(e)(4)(A) to include self-disclosures made by a private party only to government agencies without further disclosure, as it would âreinstate exactly what Congress eliminated â the âgovernment knowledgeâ bar.â Id. Although the reading urged here would not return us to the âgovernment noticeâ regime, it is over-broad so as to prohibit cases that are âproductive private enforcement suits.â Thus, just as we eschewed reading an exclusion in Rost that' did not have textual support and resulted in discouraging âproductive private enforcement,â we similarly decline to do so here.
We conclude by emphasizing that we are cognizant of our institutional role and the limits of our competence in interpreting the FCA. As noted by the Fourth Circuit, in criticizing the approaches taken by the Second and Ninth Circuit:
It strikes us as especially inappropriate (not to mention frighteningly treacherous) to attempt, as these courts have done, to distill from such broad, generalized objectives, the answers to the kind of specific statutory questions that we herein address; fine calibrations are just not possible through the use of such crude instruments. This is particularly so in this context, given that, although we can perhaps divine from these abstract purposes a congressional intention to balance the need to encourage qui tarn actions against the need to prevent parasitic suits, we can discern virtually nothing as to precisely how Congress ultimately believed it achieved that balance. If the language of law is to have any meaning at all, then surely it must prevail over the kind of speculation that is entailed in such an enterprise as these courts have undertaken.
Siller, 21 F.3d at 1354-55. We agree. The FCA has many moving parts, so that any attempt by us to move one may upset others. Given the difficulty in determining the right âbalance,â we conclude that the better approach is to rely upon the plain and . unambiguous language of § 3730(e)(4)(B) in the absence of any clear direction to do otherwise.
*28 Thus, we reject OBPâs and the governmentâs contention that § 3730(e)(4)(B) requires an âoriginal sourceâ to provide his or her information before the public disclosure at issue. Instead, we will honor the plain and unambiguous terms of the statute, and hold that § 3730(e)(4)(B) only requires that a relator provide his or her information prior to the filing of the qui tam suit.
2. McClellan
The Relators contend that the district court erred in holding that McClellan failed to qualify as an original source. We disagree. As an initial matter, the Amended Complaint alleges that âRelator McClellan does not bring any new legal claims against [OBP], but rather adds additional supporting facts to the legal claims previously made [in the Original Complaint].â (Am.Compl. ¶ 28). Thus, the district court correctly concluded that McClellan was required, in order to qualify as an âoriginal source,â to provide his information prior to the filing of the Original Complaint, rather than the Amended Complaint. See Duxbury, 551 F.Supp.2d at 109.
Although the Amended Complaint alleges that â[b]oth Relators have direct and independent knowledge of information on which the allegations are based, and have provided such information to the United States before filing suit, as required by 31 U.S.C. § 3730(e)(4),â (Am.Compl. ¶ 16), the district court noted that Duxbury âproffered no support for this conclusory allegationâ and the district court refused to âreasonably infer it,â as âDuxbury did not move to add McClellan as a relator until October 2006.â Id. at 110. We agree.
McClellan counters that we are required to âtake as true all well-pleaded facts in [the] complaint[]â and âdraw all reasonable inferences therefrom in [his] favor.â See Fothergill, 566 F.3d at 251. However, we are under no obligation to credit McClellanâs conclusory allegations, which simply parrot the elements of the statute. See Rodriguez v. SK & F Co., 833 F.2d 8, 8 (1st Cir.1987) (per curiam) (affirming dismissal for lack of subject matter jurisdiction where âthe plaintiff has failed to allege grounds upon which to support either his conclusory allegation of diversity jurisdiction or federal question jurisdiction.â); cf. Ashcroft v. Iqbal, â U.S. -, -, 129 S.Ct. 1937, 1949, 173 L.Ed.2d 868 (2009) (in reviewing a motion to dismiss for failure to state a claim, âthe tenet that a court must accept as true all of the allegations contained in a complaint is inapplicable to legal conclusions. Threadbare recitals of the elements of a cause of action, supported by mere conclusory statements, do not suffice.â).
We also refuse to âreasonably inferâ McClellanâs allegation concerning disclosure. On appeal, McClellan points to a single allegation in the Original Complaint that he âhad over 400 Patient Trial Cards in his possession in one time.â (Compl. ¶ 39). This allegation does not support an allegation that he provided his information about the kickback claims prior to the filing of the Original Complaint. McClellan also points to the Information, which was provided to the government after the filing of the Original Complaint. The Information provides significant detail concerning the Relatorsâ off-label promotion claims, not its kickback claims, and thus the Information also provides no support for his allegation that he provided his information prior the filing of the Original Complaint.
For the above reasons, we hold that the district court did not err in holding that McClellan did not qualify as an âoriginal sourceâ under § 3730(d)(1), and thus affirm the dismissal of those kickback claims *29 attributable to McClellan. Accordingly, we do not need to address the district courtâs alternative ground for dismissing the claim, that those kickback claims attributable to Duxbury are barred by the âfirst-to-fileâ rule.
3. Duxbury
We finally address the dismissal of Duxbury claims under Rule 9(b). Duxbury seeks reversal. We agree.
In applying Rule 9(b), the district court held that the rule ârequires relators to âprovide details that identify particular false claims for payment that were submitted to the government.â â Duxbury, 551 F.Supp.2d at 114 (quoting Rost, 507 F.3d at 731) (emphasis added). This was error. In Rost, we noted a distinction between a qui tam action alleging that the defendant made false claims to the government, and a qui tam action in which the defendant induced third parties to file false claims with the government. 507 F.3d at 732 (noting that latter action is âin a different categoryâ than former). 6 In the latter context, we held that a relator could satisfy Rule 9(b) by providing âfactual or statistical evidence to strengthen the inference of fraud beyond possibilityâ without necessarily providing details as to each false claim. Rost, 507 F.3d at 733; see also United States ex rel. Grubbs v. Kanneganti, 565 F.3d 180, 190 (5th Cir.2009) (holding that FCA claims under Rule 9(b) âmay nevertheless survive by alleging particular details of a scheme to submit false claims paired with reliable indicia that lead to a strong inference that claims were actually submitted.â).
Similar to this case, Rost concerned allegations that âfalse claims were allegedly submitted by doctors who were allegedly induced and seduced by defendants into prescribing Genetropin for off-label uses to their patients, including federally insured patients.â Id. at 732. We acknowledged that âRostâs complaint amply describes illegal practices in which Pfizer allegedly engaged.â Id. However, â[a]s presently pled, the complaint d[id] not sufficiently establish that false claims were submitted for government payment in a way that satisfies the particularity requirement.â Id. at 733. We noted:
It may well be that doctors who prescribed Genotropin for off-label uses as a result of Pharmaciaâs illegal marketing of the drug withstood the temptation and did not seek federal reimbursement, and neither did their patients. It may be that physicians prescribed Genotropin for off-label uses only where the patients paid for it themselves or when the patientsâ private insurers paid for it. Rost did not plead enough to satisfy the concerns behind Rule 9(b).
Id.
Here, as in Rost, Duxbury does not allege that OBP itself submitted false claims to the government, but that, through OBPâs illegal kickbacks, false claims to the Medicare Program were filed by medical providers for reimbursement of Procrit purchases. However, unlike in Rost, Duxbury does more than âsuggest fraud was *30 possible.â Id. at 733. Duxbury sets forth allegations of kickbacks provided by OBP that resulted in the submission of false claims by eight healthcare providers in the Western United States: (1) St. Josephâs Hospital in Tacoma, Washington (Am. Compl. ¶ 211a); (2) Rainier Oncology of Puyallap, Washington (Am.Compl. ¶ 211b); (3) Memorial Clinic in Olympia, Washington (Am.Compl. ¶ 211c); (4) Western Washington Cancer Treatment Center (Am.Compl. ¶ 211d); (5) Mid Columbia Kidney Center in Kennewick, Washington (Am.Compl. ¶ 211e); (6) St. Peterâs Hospital in Olympia, Washington (Am.Compl. ¶ 21 If); (7) Memorial Clinic Oncology Group in Washington (Am.Compl. ¶ 211g); (8) Swedish Hospital in Seattle, Washington (Am.Compl. ¶ 211h). As to each, Duxbury provides information as to the dates and amounts of the false claims filed by these providers with the Medicare program. One such allegation is instructive:
In 1997-98 Western Washington Treatment Center in Olympia, Washington received more than $5,000 of free commercially packaged ProCrit from [OBP] under the direction of Robert Ashe so that Western Washington could submit the free product for reimbursement to Medicare under the false and fraudulent certification that the provider had paid for the product. [OBP] intended the free commercially packaged ProCrit to be a âcash equivalentâ âkickbackâ to Western Washington in order to induce the provider to purchase ProCrit and to administer ProCrit at the âoff-labelâ once a week dosing regimen. Western Washington was reimbursed by Medicare for the free commercially packaged ProCrit. As a result, [OBP] knowingly caused the presentation by Western Washington of these false claims to the United States Government.
(Am.Compl. ¶ 211d). Duxbury provides more specifics with respect to other medical providers. As to St. Josephâs Hospital, Duxbury alleges that the hospital submitted âapproximately 4,800 claims a month for Medicare reimbursementâ based upon OBPâs unlawful kickbacks. (Am.Compl. ¶ 211a).
Although a close call, Duxburyâs claims satisfy Rule 9(b) under this âmore flexible standard.â See Gagne, 565 F.3d at 46. Although Duxbury does not identify specific claims, he has alleged the submission of false claims across a large cross-section of providers that alleges the âthe who, what, where, and when of the allegedly false or fraudulent representation.â See Rodi v. So. New England Sch. of Law, 389 F.3d 5, 15 (1st Cir.2004) (quotation omitted); see also Rost, 507 F.3d at 731 (noting that Rule 9(b) requires a plaintiff to allege â âthe time, place, and content of an alleged false representation.â â (quoting Doyle v. Hasbro, Inc., 103 F.3d 186, 194 (1st Cir.1996))). In particular, Duxbury has identified, as to each of the eight medical providers (the who), the illegal kickbacks (the what), the rough time periods and locations (the where and when), and the filing of the false claims themselves.
Moreover, as to his (a)(2) claims, Duxbury has also alleged facts with respect to the medical providers he identifies that support his claim that OBP intended to cause the submission of false claims. See Allison Engine, 128 S.Ct. at 2126 (holding that an action under subsection (a)(2) requires a relater to allege âthat the defendant intended that the false record or statement be material to the Governmentâs decision to pay or approve the false claimâ); see also Gagne, 565 F.3d at 47 (affirming dismissal of an (a)(2) claim under Rule 9(b) where â[r]elators fail to connect the only falsity or fraud for which they provide any detailâ).
*31 With respect to Western Washington, Duxbury alleges that âWashington received more than $5,000 of free commercially packaged ProCrit from [OBP] ... so that Western Washington could submit the free product for reimbursement to Medicare under the false and fraudulent certification that the provider had paid for the product,â and that âWestern Washington was reimbursed by Medicare for the free commercially packaged ProCrit.â (Am. Compl. ¶ 211d) (emphasis added). The same is true of the other medical providers. See, e.g., id. ¶ 211a (â[OBP] intentionally failed to report these payments to the U.S. Government in order to keep secret the profit spread between the rate upon which Medicare reimbursed medical providers like St. Josephâs for ProCrit.â); id. ¶ 211b (âRanier Oncology ... was provided more than $20,000 of free commercially packaged ProCrit from [OBP] ... under the guise of running an unlawful mini-trial so that Rainier Oncology could submit the free product for reimbursement to Medicare under the false and fraudulent certification that the provider had paid for the product.â); id. ¶2110 (âMemorial Clinic ... was provided approximately $15,000 of free commercially packaged ProCrit from [OBP] so that Memorial Clinic could submit the free product for reimbursement to Medicare under the false and fraudulent certification that the provider had paid for the product.â); id. ¶ 211e (âMid Columbia Kidney Center ... submitted claims to Medicare and was subsequently reimbursed by Medicare approximately $75,000 for the administering of ProCrit to Mid Columbia Kidney Center patients.... [OBP] provided Mid Columbia Kidney Center with an âoff-invoiceâ rebate of 5-8% for the purchase of ProCrit. [OBP] intentionally failed to report those âoff-invoiceâ rebates in order to keep secret the âprofit spreadâ between the actual acquisition cost to the Provider and the Medicare reimbursement rate so that the Providers could benefit from the spread.â); id. ¶ 211f (âSt. Peterâs Hospital ... submitted claims to Medicare for approximately two million dollars of ProCrit. St. Peterâs contract with [OBP] provided St. Peterâs with an âoff-invoiceâ rebate of 14% for the purchase of ProCrit. [OBP] intentionally failed to report to the U.S. Government these âoff-labelâ rebates in order to keep secret the âprofit spreadâ between the actual acquisition cost to the Provider and the Medicare reimbursement rate so that the Providers could benefit from the spread.â); id. ¶ 21 lg (âMemorial Clinic Oncology Group ... purchased $750,000 of ProCrit. Memorial Clinic Oncology Groupâs agreement with [OBP] provided Memorial Clinic Oncology Group with an âoff-invoiceâ rebate of 5% for the purchase of ProCrit. [OBP] intentionally failed to report to the U.S. Government the âoff-invoiceâ rebates in order to keep the âprofit-spreadâ between the actual acquisition cost to the Provider and the Medicare reimbursement rate so that the Providers could benefit from the spread.â); id. ¶21111 (âSwedish Hospital ... was given cash in the form of a so-called âunrestricted educational grantâ in the amount of approximately $15,000 [which was a kickback]. Provider subsequently purchased over $100,000 of ProCrit of which approximately 50% was submitted for Medicare reimbursement.â).
Unlike in Rost, where the allegations gave rise to only speculation as to whether the alleged scheme caused the filing of false claims with the government, Duxbury has alleged facts that false claims were in fact filed by the medical providers he identified, which further supports a strong inference that such claims were also filed nationwide. We thus have allegations of âfactual ... evidence to strengthen the inference of fraud beyond possibility.â Rost, 507 F.3d at 733.
*32 Although we find that the factual evidence alleged here of the submission of false claims caused by OBP at a cross-section of medical providers, is sufficient in this context, â[w]e decline to draft a litigation manual full of scenariosâ of what allegations would be sufficient for purposes of Rule 9(b). LeBlanc, 913 F.2d at 20 (discussing âoriginal sourceâ exception). âSuffice it to say that we limit our holding to the facts.â Id. Accordingly, we conclude that Duxburyâs allegations pass muster for purposes of Rule 9(b).
Thus, we hold that the kickback claims attributable to Duxbury, from the years 1992 through 1998, satisfied Rule 9(b). As the district court has jurisdiction over these claims since Duxbury established himself as an âoriginal source,â we reverse the dismissal of these claims. 7
B. Count III
The Relators contend that the district court erred in dismissing the âoff-labelâ promotion claims contained in Count III. The district court relied upon the âfirst-to-fileâ bar, which provides that âno person other than the Government may intervene or bring a related action based on the facts underlying the pending action.â 31 U.S.C. § 3730(b)(5). The Blair Complaint, filed nearly a year before the Amended Complaint, also alleged a similar âoff-labelâ promotion claim. Accordingly, the district court examined whether the Original Complaint, filed a month before the Blair Complaint, sufficiently alleged an âoff-labelâ claim to be considered the first-filed complaint for purposes of the âfirst-to-fileâ bar. Duxbury, 551 F.Supp.2d at 110-11. After carefully considering the allegations contained in both complaints, the district court concluded that, despite some similarities, the Original Complaint did ânot provide the essential facts regarding a widespread scheme to promote off-label uses of Procrit.â Id. at 114 (emphasis added). We agree.
As the Ninth Circuit has noted, âa goal behind the first-to-file ruleâ is to provide incentives to relators to âpromptly alert[] the government to the essential facts of a fraudulent scheme.â Lujan, 243 F.3d at 1188. All courts that have addressed the issue have interpreted § 3730(b)(5) to bar âa later allegation [if it] states all the essential facts of a previously-filed claimâ or âthe same elements of a fraud described in an earlier suit.â United States ex rel. LaCorte v. SmithKline Beecham Clinical Labs., Inc., 149 F.3d 227, 232-33 (3d Cir.1998) (emphasis added); see also United States ex rel. Hampton v. Columbia/HCA Healthcare Corp., 318 F.3d 214, 217-18 (D.C.Cir.2003) (holding that â§ 3730(b)(5) bars any action incorporating the same material elements of fraud as an action filed earlierâ and ârejecting] another possible test, one barring claims based on âidentical facts.â â); Lujan, 243 F.3d at 1188-89 (following LaCorte, and rejecting an âidentical factsâ test). Under this âessential factsâ standard, § 3730(b)(5) can still bar a later claim âeven if that claim incorporates somewhat different details.â LaCorte, 149 F.3d at 232-33. We take the same approach.
The Relators contend that the Original Complaint, in particular, Paragraphs 40 *33 through 42, allege all of the âessential factsâ of the off-label promotion scheme. As the district court found, there are significant similarities between the âoff-labelâ promotion allegations contained in those paragraphs and the allegations in the Blair Complaint. Both allege that OBP did not have FDA approval for âa dosing regimen of 40,000 units once per week.â (Compare Original Compl. ¶¶ 40(c), 41; Blair Compl. ¶¶ 22-27). Both allege that OBP promoted this dosage in order to âincrease ... payments for each Medicare Beneficiary receiving Procrit for treatment.â (See Original Compl. ¶¶ 40(c), 41; Blair Compl. ¶¶ 22-27). And both allege that the higher dosage resulted in the filing of false claims with the government. See Duxbury, 551 F.Supp.2d at 113 (noting these similarities).
However, the Original Complaint and Blair Complaint differ in one crucial respect. As recognized by the district court, the Blair Complaint contained a number of allegations that discuss, in significant detail, OBPâs promotion of the âoff-labelâ use, and alleged such âpromotionâ efforts as
(1) direct off-label marketing to medical professionals; (2) influencing the results of purportedly independent clinical studies; (3) illegal payments to medical professionals in the form of âeducational grantsâ and âclerkships;â (4) payments to medical professionals for giving presentations on increased dosage of Procrit; or (5) attending consulting conferences sponsored by OBP which pushed increased dosage of Procrit; and (6) rebate programs offered to induce increased prescriptions of Procrit.
Id. at 113 (citing Blair Compl. ¶¶ 27, 28-79). By contrast, Paragraphs 40 through 42 of the Original Complaint only allege one method by which OBP promoted the âoff-labelâ use of Procrit, the use of âclinical trials,â and, in particular, an unnamed âPhase IV Studyâ that âresulted in Medicare Part B paying for 40,000iu/week of Procrit in cancer chemotherapy patients instead of 30,000iu/week â an increase in 33% in payments for each Medicare Beneficiary receiving Procrit for treatment of their chemotherapy related anemia.â (Compl. ¶ 40(c)). As this allegation fails to encompass the other allegations contained in the Blair Complaint concerning OBPâs âoff-labelâ promotion, it fails to allege the âessential factsâ of the âoff-labelâ promotion scheme contained in the Blair Complaint. In fact, the Original Complaint nowhere refers to a âoff-labelâ promotion scheme. Thus, we conclude that the Original Complaint cannot trump the Blair Complaint for purposes of the âfirst-to-fileâ rule.
On appeal, the Relators argue that the Information, which the Relators provided to the DOJ in response to its inquiries concerning the allegations contained in the Original Complaint, provided further allegations that covered the âessential factsâ contained in the Blair Complaint. We have previously held that, in reviewing a dismissal for lack of jurisdiction, âwe need not confine our jurisdictional inquiry to the pleadings, but may consider those other materialsâ in the district court record. Aguilar, 510 F.3d at 8. We decline to do so here. The âfirst-to-fileâ rule is âexception-free,â Lujan, 243 F.3d at 1187, and does not permit us to consider the Information, which was provided after the filing of the Blair Complaint. 8 Had Duxbury wanted to include the allegations contained in the Information, he had his *34 opportunity to do so when he filed the Original Complaint seven months earlier.
For the above reasons, the district court did not err in dismissing Count III.
III. Conclusion
For the foregoing reasons, we affirm the dismissal of all claims except those kickback claims attributable to Duxbury. For these latter claims, we reverse the dismissal and remand for further proceedings consistent with this opinion.
Affirmed in part, Reversed in part and Remanded.
. As we have previously noted:
"Qui tamâ comes from the phrase "qui tam pro domino rege quam pro se ipso in hac parte sequitur,â which translates as "who pursues this action on our Lord the Kingâs behalf as well as his own.â
United States ex rel. Rost v. Pfizer, Inc., 507 F.3d 720, 727 n. 4 (1st Cir.2007) (quoting Rockwell Int'l Corp. v. United States, 549 U.S. 457, 463 n. 2, 127 S.Ct. 1397, 167 L.Ed.2d 190 (2007)), overruled on other grounds by Allison Engine v. United States ex rel. Sanders, - U.S. -, 128 S.Ct. 2123, 170 L.Ed.2d 1030 (2008).
. For background concerning the AWP MDL, which is quite complex, see In re Pharm. Indus. Average Wholesale Price Litig., 230 F.R.D. 61 (D.Mass.2005); In re Pharm. Indus. Average Wholesale Price Litig., 491 F.Supp.2d 20 (D.Mass.2007).
. 31 U.S.C. § 3730(b)(2) provides in full:
A copy of the complaint and written disclosure of substantially all material evidence and information the person possesses shall be served on the Government pursuant to Rule 4(d)(4) of the Federal Rules of Civil Procedure. The complaint shall be filed in camera, shall remain under seal for at least 60 days, and shall not be served on the defendant until the court so orders. The Government may elect to intervene and proceed with the action within 60 days after it receives both the complaint and the material evidence and information.
(footnote omitted).
. Duxbury asserts that the Blair Complaint had not been disclosed to him prior to the submission of the Information.
. Count II of the Amended Complaint alleges that OBP engaged in a scheme to publish a fraudulently inflated AWP for Procrit. On June 27, 2007, the parties jointly stipulated to the dismissal of this count.
. Although this distinction resembles the distinction between "subsection (a)(1)â claims, which have a presentment requirement, and "subsection (a)(2)â claims, which do not, see Gagne, 565 F.3d at 44-45, our analysis in Rost applied equally to both (a)(1) and (a)(2) claims. See Rost, 507 F.3d at 731-32 (noting that relator there asserted both (a)(1) and (a)(2) claims); see also id. at 733 (rejecting a claim that (a)(2) claims should be treated differently, noting that "[o]ur analysis â which recognizes the role played by third parties other than Pfizer in submitting claims and making statements to the government â undermines Rost's § 3729(a)(2) argument as wellâ). Here, as in Rost, Duxbuiy asserts both (a)(1) and (a)(2) claims. (See Am. Compl. Count I).
. OBP urges other alternative grounds for affirming the dismissal of the Duxbury kickback claims. We deal with them briefly. OBP first claims the statute of limitations bars most of Duxbury's kickback claims. As the district court has not addressed the issue, we leave it to the district court to address it in the first instance. OBP also argues that the district court abused its discretion in permitting Duxbury to serve the Original Complaint outside the 120-month window mandated by Federal Rule of Civil Procedure 4(m) and D. Mass. Local Rule 4.1(b). We identify no abuse of discretion.
. We also note that the Information was produced after the Blair Complaint was made available to the Relator Duxbury, although the Relators contend that Duxbury had not yet received the Information.