United States of America ex rel. Uri Bassan v. Omnicare, Inc.

Background

This False Claims Act case began as a fraud lawsuit filed in the Southern District of New York by Relator Uri Bassan. The United States later investigated the complaint, filed its own complaint against Omnicare, Inc. and CVS Health Corp. in that district, and took over the litigation of Bassan's federal False Claims Act claims.

Omnicare and CVS moved under 28 U.S.C. § 1404(a) to transfer the case to the Southern District of Ohio. They argued that Omnicare's headquarters were outside Cincinnati, that Ohio was the center of the alleged corporate-wide schemes, and that Ohio would be more convenient for witnesses and the parties. They also argued that transferring the case would promote efficiency and the interests of justice because the court had not entered a scheduling order or decided discovery disputes and the motion was filed promptly, in their view.

The United States opposed transfer. It argued that the case concerned alleged dispensing practices at more than 140 Omnicare pharmacies in 47 states from 2010 through 2018, so Ohio was not the location of all or most operative facts. The Government also identified more than 60 witnesses in New York, compared with 11 witnesses connected to Omnicare's Ohio headquarters, and noted that CVS was headquartered in Rhode Island. It further argued that this court had overseen the investigation and litigation for years, had decided a motion to dismiss in the Government's favor, and had already begun discovery.

Legal standard

Section 1404(a) permits a federal district court to transfer a civil case to another district where it could have been brought when transfer would serve the convenience of the parties and witnesses and the interests of justice. The party seeking transfer bears the burden of presenting a strong case supported by clear and convincing evidence.

The court considered the plaintiff's choice of forum, witness convenience, the location of documents and other proof, the convenience of the parties, the location of the operative facts, the availability of compulsory process for unwilling witnesses, the parties' relative means, trial efficiency, and the interests of justice. No single factor controls, and transfer is generally inappropriate unless the balance strongly favors the defendant.

Court's analysis

The parties agreed that the case could have been brought in the Southern District of Ohio, so the court proceeded to the convenience and fairness factors.

The court gave no weight to the plaintiffs' choice of forum. Bassan did not reside in the district, and the Government was not uniquely located there. Even so, the other factors did not support transfer.

As to witnesses, the Government had identified 65 potential witnesses in New York, while the defendants emphasized 11 witnesses working at Omnicare's Ohio headquarters. The court recognized that the Ohio witnesses could be important but found that they were only part of a much larger case involving nearly 10,000 people with relevant knowledge, pharmacy employees, 147 pharmacies, and 3,242 facilities in 47 states. Because the witnesses were spread throughout the country, Ohio was not shown to be more convenient; this factor was neutral.

The court also rejected the argument that Ohio was more convenient for the parties merely because Omnicare was based there. Ohio was home to only one defendant, and Omnicare operated nationwide. The court found that the alleged false claims were geographically dispersed and that the alleged nationwide scheme was not centered only in Ohio. The location-of-operative-facts factor therefore weighed against transfer.

Trial efficiency and the interests of justice weighed decisively against transfer. The case had been pending in the Southern District of New York since 2015. The court had decided dispositive motions, was familiar with the case, and discovery was well underway, including discovery requests, a deposition notice, and document production under a protective order. The court also noted that Omnicare had long known where its headquarters were located and had waited until after losing its motion to dismiss before seeking transfer. The court concluded that transferring the case at that stage would be inefficient and that Ohio had no superior interests of justice claim in a case involving alleged effects across many states.

The parties agreed that the locations of documents and sources of proof, the availability of compulsory process, and the parties' relative means were neutral. The court agreed.

Disposition

The court held that the factors did not strongly favor the defendants and that several factors favored keeping the case in New York. Judge McMahon denied the defendants' motion to transfer the case. The clerk was directed to close the open motion at docket number 97. The opinion addressed venue and case-management considerations, not whether the underlying False Claims Act allegations were ultimately valid.

Classification rationale

This is a procedural order because the court decided only whether to transfer the case to another federal district. It did not decide the underlying False Claims Act claims on their merits.