Silbersher v. Allergan plc

Background

Relator Zachary Silbersher asserted claims under the federal False Claims Act against two groups of defendants: the Allergan Defendants and the Adamas Defendants. He alleged that the defendants misled the United States Patent and Trademark Office into issuing invalid patents covering Namenda XR and Namzaric. According to the allegations described in the opinion, those patents helped preserve monopoly power and allowed the defendants to overcharge the federal government and the States through programs including Medicare and Medicaid.

The defendants had moved to dismiss, but the court denied those motions in its December 11, 2020 order. In this order, the defendants asked the court to certify that earlier order for immediate interlocutory appeal under 28 U.S.C. § 1292(b), and to stay the case either during the appeal or while the Ninth Circuit considered related decisions.

Certification for Immediate Appeal

Section 1292(b) permits a district court to certify a nonfinal order for immediate appellate review when the order involves a controlling question of law, there is substantial ground for difference of opinion, and immediate review may materially advance the end of the litigation.

The court agreed that the defendants had identified controlling legal questions concerning the False Claims Act’s public-disclosure bar. Specifically, the questions involved whether:

The court explained that, although the claims might still avoid the public-disclosure bar if Silbersher were found to be an original source, the court had not decided that issue. It nevertheless found that resolving the public-disclosure questions could materially affect the litigation. If the court’s conclusions were reversed, the claims could be barred, and the parties might otherwise incur unnecessary litigation expenses.

The court also found a substantial ground for disagreement because it had addressed difficult questions of first impression concerning recent False Claims Act amendments and had reached conclusions different from those reached by another judge in a prior related proceeding. Finally, the court found that immediate review could materially advance the litigation because discovery would impose a heavy burden and a Ninth Circuit decision could substantially reduce or eliminate that burden.

Stay and Disposition

The court separately considered whether to stay the case. It concluded that the relevant factors supported a stay, including the existence of serious questions concerning the appeal, the relative burdens on the parties, and the public interest in conserving judicial resources.

The court therefore granted the motion. It certified the December 11, 2020 order for immediate appeal and allowed defendants ten days to petition the Ninth Circuit for permission to appeal. The court also stayed the case pending the Ninth Circuit’s decision on that petition and any appeal the Ninth Circuit agreed to consider. The court vacated the February 5, 2021 hearing, continued the further case-management conference to June 4, 2021, and ordered the parties to file a joint case-management statement by May 28, 2021.