United States v. Gilead Sciences, Inc.

Background

The Campies moved under Federal Rule of Civil Procedure 41(a)(2), which allows a court to approve a plaintiff’s voluntary dismissal subject to conditions. They sought to dismiss the federal case so they could pursue a narrower case in California state court. The proposed state case would include California retaliation claims and a California-only claim under a false-claims law. The Campies would no longer pursue the federal retaliation claim or the state and local false-claims claims other than the California claim.

At the hearing, the Campies agreed that the federal false-claims claim, federal retaliation claims, and non-California state and local false-claims claims could be dismissed with prejudice. They also agreed not to appeal dismissal of the federal false-claims claim and committed to filing the contemplated California case within two weeks of an order approving dismissal, provided California courts were accepting new filings.

Gilead’s Objections

Gilead argued that dismissal would cause “plain legal prejudice,” meaning prejudice to a legal interest, legal claim, or legal argument. It contended that the federal court would likely grant Gilead’s pending motion to dismiss the state and local false-claims claims, whereas a California state court might not dismiss the California claim. Gilead also argued that starting a new state case would delay resolution of a dispute that had already been pending for many years.

The court rejected these arguments. It found Gilead’s prediction about the federal motion to dismiss speculative. The court also stated that the legal standards for a federal motion to dismiss and a California demurrer were similar, and that the California court was equally equipped to address the merits of the California claims. The court found no convincing evidence that moving to state court would cause significant delay or practical prejudice.

Ruling and Conditions

The court granted the Campies’ motion for approval of a voluntary dismissal and imposed these conditions:

- The federal false-claims claim was dismissed with prejudice, and the Campies could not appeal that dismissal. - The federal retaliation claim was dismissed with prejudice. - The non-California state and local false-claims claims were dismissed with prejudice. - The Campies were required to file their California state action within two weeks of the order’s date, subject to the qualification concerning whether the California state court accepted filings. - The California retaliation claims and California false-claims claim were dismissed without prejudice.

The court relied on the Campies’ representation that their contemplated state-court action would not be based on new material facts or documents that had not already been disclosed in the federal litigation. It declined to impose Gilead’s other requested conditions, directed the Clerk to close the file, and stated that the order disposed of Docket No. 281. Judge Edward M. Chen signed the order on April 20, 2020.