UNITED STATES OF AMERICA ex rel. JOHN A. WOOD v. ALLERGAN

Background

John A. Wood brought this third action against Allergan, Inc. under the False Claims Act (FCA), a federal law concerning false or fraudulent claims for government payment, and under state-law counterparts. Wood alleged that Allergan participated in a kickback scheme lasting from 2003 through 2011. He also alleged that Allergan terminated him on July 6, 2010, in retaliation for protected activity under the FCA.

Wood’s first action was dismissed under the FCA’s first-to-file rule, which generally bars a related action while another action based on the same underlying facts is pending. The Second Circuit held that Wood could not fix that violation by amending his complaint and directed dismissal without prejudice. Wood then voluntarily dismissed a second action and filed this case on May 6, 2019.

Timeliness of the Federal Claims

Allergan moved under Federal Rule of Civil Procedure 12(b)(6), which permits dismissal when a complaint does not state a legally sufficient claim. Wood conceded that the FCA claims were untimely on their face because the alleged conduct occurred between 2003 and 2011 and the government knew facts material to the claims no later than July 26, 2010, when Wood filed his first action.

Wood argued that equitable tolling should extend the filing deadline. Equitable tolling is a doctrine that can extend a deadline when a person diligently pursues rights but an extraordinary circumstance prevents timely filing. Wood relied on the six-year period during which his complaint remained under seal while the government investigated and decided not to intervene.

The court held that the FCA’s time limits contain both a statute of limitations and a statute of repose. The statute of repose created an outer ten-year deadline running from the alleged violation, and the court held that this deadline was not subject to equitable tolling. The court also concluded that Wood was not entitled to equitable tolling of the shorter time limits because he was not prevented from filing a timely action. The court reasoned that Wood could have dismissed his first action and filed a new one after the earlier-filed cases were dismissed, and that his decision to continue litigating the first action was not an extraordinary circumstance.

The court therefore held that Wood’s primary FCA claims were untimely and GRANTED Allergan’s motion to dismiss those claims.

Retaliation Claim

The court separately considered Wood’s retaliation claim under 31 U.S.C. § 3730(h). It applied a three-year limitations period borrowed from the most closely analogous New York statute, making the claim due by July 6, 2013. The court rejected equitable tolling for the same general reasons and noted that the first-to-file rule did not apply to retaliation claims. The court GRANTED Allergan’s motion to dismiss the retaliation claim.

State-Law Claims and Disposition

After dismissing all of Wood’s federal claims, the court declined to exercise supplemental jurisdiction, meaning jurisdiction over related state-law claims. The court dismissed Wood’s state-law claims without prejudice to refiling in state court.

Judge Jesse M. Furman’s order granted Allergan’s motion to dismiss, dismissed Wood’s complaint, directed the Clerk of Court to close the case, and did not add a with-prejudice qualifier to the dismissal of the federal claims.