Petition for Writ of Certiorari — Biotronik, Inc., Petitioner v. United States ex rel. Sam Jones Company, LLC
Supreme Court briefMar 4, 2026
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No.
In the Supreme Court of the United States
BIOTRONIK, INC., PETITIONER,
v.
UNITED STATES OF AMERICA EX REL.
SAM JONES COMPANY, LLC
ON PETITION FOR A WRIT OF CERTIORARI
TO THE UNITED STATES COURT OF APPEALS
FOR THE NINTH CIRCUIT
PETITION FOR WRIT OF CERTIORARI
MEGAN MOCHO
TIMOTHY J. TAYLOR
HOLLAND & KNIGHT LLP
1650 Tysons Boulevard
Suite 1700
Tysons, Virginia 22102
703-720-8600
megan.mocho@hklaw.com
timothy.taylor@hklaw.com
STEVEN D. GORDON
Counsel of Record
HOLLAND & KNIGHT LLP
800 17th Street NW,
Suite 1100,
Washington, D.C. 20006
(202) 955-3000
steven.gordon@hklaw.com
COUNSEL FOR PETITIONER
MARCH 2026
i
QUESTION PRESENTED
The public disclosure bar of the False Claims Act
precludes qui tam suits whose allegations are
substantially the same as allegations or transactions
that already have been publicly disclosed.
The issue presented is whether a qui tam suit is
barred when public disclosures provide enough
information for the government to investigate the
alleged fraud without the relator’s assistance.
ii
PARTIES TO THE PROCEEDING AND
RULE 29.6 DISCLOSURE STATEMENT
Petitioner
(defendant-appellee
below)
is
Biotronik, Inc. Petitioner states that its parent
corporation is MS Holding II SE, a foreign entity.
No publicly held company owns 10% or more of the
stock of either Petitioner or its parent corporation.
Respondent (plaintiff-appellant below) is the
United States ex rel. Sam Jones Company, LLC.
RELATED PROCEEDINGS
United States ex rel. Sam Jones Company, LLC
v. Biotronik, Inc., No. 2:17-cv-01391, U.S. District
Court for the Central District of California.
Judgment entered January 4, 2023.
United States ex rel. Sam Jones Company, LLC
v. Biotronik, Inc., No. 23-55361, U.S. Court of
Appeals for the Ninth Circuit. Judgment entered
November 4, 2025.
iii
TABLE OF CONTENTS
Page
QUESTION PRESENTED ........................................ i
PARTIES TO THE PROCEEDING AND
RULE 29.6 DISCLOSURE STATEMENT ......... ii
RELATED PROCEEDINGS..................................... ii
TABLE OF CONTENTS ......................................... iii
TABLE OF AUTHORITIES ..................................... v
OPINIONS BELOW ................................................. 2
JURISDICTION ....................................................... 2
STATUTORY PROVISIONS INVOLVED ............... 2
STATEMENT ........................................................... 2
A. Legal Background ........................................ 2
B. Factual Background..................................... 5
C. Proceedings Below ....................................... 8
REASONS FOR GRANTING THE PETITION ..... 12
I.
The Decision Below Exacerbates The
Circuit Split On How To Apply The
Public Disclosure Bar ................................ 16
A. The evolution and application of
the bar .................................................. 16
B. The Ninth Circuit’s novel test ............. 21
II. The Circuit Court’s Novel Test Is
Flawed And Will Proliferate Parasitic
Qui Tam Actions That Congress
Sought To Eradicate .................................. 25
iv
A. The circuit court’s test mis-frames
the
issue
of
“substantial
similarity”
and
focuses
the
inquiry at too granular and
subjective a level .................................. 26
B. The circuit court’s approach
collapses the statutorily distinct
“substantially
similar”
and
“original source” inquiries ................... 33
CONCLUSION ....................................................... 40
APPENDIX A — OPINION OF THE
UNITED STATES COURT OF APPEALS
FOR THE NINTH CIRCUIT, DATED
SEPTEMBER 10, 2025 .................................... 1a
APPENDIX B — ORDER OF THE UNITED
STATES DISTRICT COURT FOR THE
CENTRAL DISTRICT OF CALIFORNIA,
DATED JANUARY 4, 2023 ............................ 29a
APPENDIX C — ORDER OF THE UNITED
STATES COURT OF APPEALS FOR
THE
NINTH
CIRCUIT,
DATED
NOVEMBER 4, 2025 ...................................... 54a
APPENDIX D — STATUTORY PROVISIONS
INVOLVED .................................................... 56a
APPENDIX E — THE NEW YORK TIMES
ARTICLES, DATED APRIL 2, 2011,
APRIL 2, 2011, APRIL 5, 2011, APRIL
20, 2011, MAY 31, 2011 ................................. 58a
v
TABLE OF AUTHORITIES
Cases:
Page(s)
Cause of Action v. Chi. Transit Auth.,
815 F.3d 267 (7th Cir. 2016) .......................... 35, 38
Dingle v. Bioport Corp.,
388 F.3d 209 (6th Cir. 2004) .................... 13, 25, 40
Foster v. PHH Mortg.,
No. 23-2297, 2024 WL 5103010
(7th Cir. Dec. 13, 2024)......................................... 39
Glaser v. Wound Care Consultants, Inc.,
570 F.3d 907 (7th Cir. 2009) .................... 13, 17, 18
Graham Cnty. Soil & Water Conservation Dist. v.
United States ex rel. Wilson,
559 U.S. 280 (2010) .....................3, 4, 13, 14, 26, 40
H.J. Inc. v. Nw. Bell Tel. Co.,
492 U.S. 229 (1989) .............................................. 28
In re Nat. Gas Royalties,
562 F.3d 1032 (10th Cir. 2009) ............................ 32
Kennard v. Comstock Res., Inc.,
363 F.3d 1039 (10th Cir. 2004) ............................ 20
Leveski v. ITT Educ. Servs., Inc.,
719 F.3d 818 (7th Cir. 2013) ................................ 21
Piacentile v. U.S. Oncology, Inc.,
No. 22-18, 2023 WL 2661579
(2d Cir. Mar. 28, 2023) ............................. 14, 18, 32
Schindler Elevator Corp. v.
United States ex rel. Kirk,
563 U.S. 401 (2011) .................................. 13, 15, 28
vi
United States ex rel. Absher v. Momence Meadows
Nursing Ctr., Inc.,
764 F.3d 699 (7th Cir. 2014) ................................ 20
United States ex rel. Advocs. for Basic Legal Equal.,
Inc. v. U.S. Bank, N.A.,
816 F.3d 428 (6th Cir. 2016) ................................ 22
United States ex rel. Boothe v.
Sun Healthcare Grp., Inc.,
496 F.3d 1169 (10th Cir. 2007) ............................ 18
United States ex rel. Doe v. Staples, Inc.,
773 F.3d 83 (D.C. Cir. 2014)................................. 27
United States ex rel. Feldstein v. Organon, Inc.,
364 F. App’x 738 (3d Cir. 2010)............................ 30
United States ex rel. Findley v.
FPC-Boron Emps.’ Club,
105 F.3d 675 (D.C. Cir. 1997)......................... 30, 31
United States ex rel. Fine v. Sandia Corp.,
70 F.3d 568 (10th Cir. 1995) ................................ 31
United States ex rel. Goldberg v. Rush Univ. Med.
Ctr.,
680 F.3d 933 (7th Cir. 2012) ................................ 23
United States ex rel. Grynberg v. Praxair, Inc.,
389 F.3d 1038 (10th Cir. 2004) ............................ 18
United States ex rel. Holloway v.
Heartland Hospice, Inc.,
960 F.3d 836 (6th Cir. 2020) .................... 17, 19, 27
United States ex rel. Jamison v.
McKesson Corp.,
649 F.3d 322 (5th Cir. 2011) ................................ 19
vii
United States ex rel. Kester v.
Novartis Pharm. Corp.,
No. 11 CIV. 8196 CM, 2015 WL 109934 (S.D.N.Y.
Jan. 6, 2015).......................................................... 31
United States ex rel. Lager v.
CSL Behring, L.L.C.,
855 F.3d 935 (8th Cir. 2017) .................... 14, 18, 31
United States ex rel. Marcus v. Hess,
317 U.S. 537 (1943) ................................................ 3
United States ex rel. Mateski v. Raytheon Co.,
816 F.3d 565 (9th Cir. 2016) ........................... 21-24
United States ex rel. Maur v. Hage-Korban,
981 F.3d 516 (6th Cir. 2020) ...............14, 18, 25, 27
United States ex rel. Moore & Co., P.A. v. Majestic
Blue Fisheries, LLC,
812 F.3d 294 (3d Cir. 2016) .................................. 34
United States ex rel. O’Connor v.
U.S. Cellular Corp.,
153 F.4th 1272 (D.C. Cir. 2025) ..................... 35, 36
United States ex rel. O’Connor v.
USCC Wireless Inv., Inc.,
128 F.4th 276 (D.C. Cir. 2025) ................. 14, 17-19,
.................................................................. 25, 27, 36
United States ex rel. Osheroff v. Humana Inc.,
776 F.3d 805 (11th Cir. 2015) .................. 17, 18, 20
United States ex rel. Osheroff v. Humana, Inc.,
No. 10–24486–cv–SCOLA, 2012 WL 4479072 (S.D.
Fla. Sept. 28, 2012) ............................................... 13
United States ex rel. Parikh v.
Citizens Med. Ctr.,
977 F. Supp. 2d 654 (S.D. Tex. 2013)..................... 9
viii
United States ex rel. Poteet v.
Bahler Med., Inc.,
619 F.3d 104 (1st Cir. 2010) ................................. 25
United States ex rel. Reed v.
KeyPoint Gov’t Sols.,
923 F.3d 729 (10th Cir. 2019) ....... 14, 18-20, 35, 37
United States ex rel. Schutte v. SuperValu Inc.,
598 U.S. 739 (2023) ................................................ 3
United States ex rel. Schweizer v. Canon, Inc.,
9 F.4th 269 (5th Cir. 2021) ................................... 20
United States ex rel. Smith v. Odom,
148 F.4th 1322 (11th Cir. 2025) ........................... 28
United States ex rel. Solis v.
Millennium Pharms., Inc.,
885 F.3d 623 (9th Cir. 2018) .......................... 14, 19
United States ex rel. Springfield Terminal Ry. Co. v.
Quinn,
14 F.3d 645 (D.C. Cir. 1994)..................4, 18, 27, 29
United States ex rel. Winkelman v.
CVS Caremark Corp.,
827 F.3d 201 (1st Cir. 2016) ..................... 14, 18, 37
United States ex rel. Winnon v. Lozano,
146 F.4th 1197 (D.C. Cir. 2025) ...................... 37-39
United States ex rel. Zizic v.
Q2Administrators, LLC,
728 F.3d 228 (3d Cir. 2013) .................................. 20
United States v. Alcan Elec. & Eng’g, Inc.,
197 F.3d 1014 (9th Cir. 1999) ........................ 14, 19
United States v. Corinthian Colls.,
652 F. App’x 503 (9th Cir. 2016) .......................... 32
ix
United States v. Markwood,
48 F.3d 969 (6th Cir. 1995) .................................. 33
United States v. Omnicare, Inc.,
903 F.3d 78 (3d Cir. 2018) .................................... 38
Statutes
28 U.S.C. § 1254(1)..................................................... 2
31 U.S.C. § 3730(a)–(b) .............................................. 8
31 U.S.C. § 3730(e)(4) ................................................ 4
31 U.S.C. § 3730(e)(4)(A) ...................... 3-5, 15, 16, 34
31 U.S.C. § 3730(e)(4)(B) ............................4, 5, 34, 37
31 U.S.C. § 3733(a)(1) .............................................. 33
42 U.S.C. § 1320a-7b .................................................. 9
42 U.S.C. § 1395nn..................................................... 8
Pub. L. No. 37-67, 12 Stat. 696 .................................. 3
Pub. L. No. 78-213, 57 Stat. 608 ................................ 3
Pub. L. No. 99-562, 100 Stat. 3153 ............................ 3
Pub. L. No. 111-148, § 10104(j)(2), 124 Stat. 119
(2010) ...................................................................... 4
Other Authorities
Brief Amicus Curiae of the United States, United
States ex rel. Advocs. for Basic Legal Equal., Inc. v.
U.S. Bank, N.A., No. 16-130 (Sup. Ct. Apr. 14,
2017) ...................................................................... 23
Complaint, United States ex rel. Bennett v. Biotronik,
Inc., No. 2:14-cv-2407 (E.D. Cal. Oct. 14, 2014),
Dkt. 1....................................................................... 7
x
Complaint, United States ex rel. Sant v. Biotronik,
Inc., No. 2:09-cv-03617 (E.D. Cal. Dec. 31, 2009),
Dkt. No. 85 ............................................... 5-7, 30, 31
Petition for Writ of Certiorari, United States ex rel.
Advocs. for Basic Legal Equal., Inc. v. U.S. Bank,
N.A., No. 16-130 (Sup. Ct. July 25, 2016) ............ 23
Second Amended Qui Tam Complaint, United States
ex rel. Sam Jones Company, LLC v. Biotronik, Inc.,
No. 2:17-cv-01391 (C.D. Cal. Mar. 25, 2022), Dkt.
No. 92 .......................................................8, 9, 38, 39
Amos Tversky, Features of Similarity, 84 PSYCHOL.
REV. 327, 340 (1977).............................................. 28
-1-
In the Supreme Court of the United States
NO.
BIOTRONIK, INC., PETITIONER,
v.
UNITED STATES OF AMERICA EX REL.
SAM JONES COMPANY, LLC
ON PETITION FOR A WRIT OF CERTIORARI
TO THE UNITED STATES COURT OF APPEALS
FOR THE NINTH CIRCUIT
PETITION FOR WRIT OF CERTIORARI
-2Biotronik,
Inc.
(“Biotronik”)
respectfully
petitions for a writ of certiorari to review the
judgment of the United States Court of Appeals for
the Ninth Circuit in this case.
OPINIONS BELOW
The opinion of the court of appeals (App., infra,
1a-28a) is reported at 152 F.4th 946. The order of
the district court (App., infra, 29a-53a) is unreported
but is available at 2023 WL 2993409.
JURISDICTION
The judgment of the court of appeals was
entered on September 10, 2025. A petition for
rehearing was denied on November 4, 2025. App.,
infra, 54a-55a. On January 22, 2026, Petitioner
timely sought an extension to seek certiorari, which
was granted on February 2, 2026, extending the time
to seek certiorari to March 4, 2026. The jurisdiction
of this Court is invoked under 28 U.S.C. § 1254(1).
STATUTORY PROVISIONS INVOLVED
Pertinent statutory provisions are reproduced in
the appendix to this petition. App., infra, 56a-57a.
STATEMENT
A. Legal Background
1. The False Claims Act (“FCA”) “permits private
parties [relators] to bring lawsuits in the name of the
United States—called qui tam lawsuits—against
those who they believe have defrauded the Federal
-3Government.”
United States ex rel. Schutte v.
SuperValu Inc., 598 U.S. 739, 743 (2023). The
original version of the Act, enacted during the Civil
War, had no limits on the types of information that
could form the basis of relators’ claims. See Act of
Mar. 2, 1863, Pub. L. No. 37-67, 12 Stat. 696. This
became problematic.
“In United States ex rel.
Marcus v. Hess, 317 U.S. 537 (1943), [this Court]
upheld the relator’s recovery even though he had
discovered the fraud by reading a federal criminal
indictment—a
quintessential
‘parasitic’ suit.”
Graham Cnty. Soil & Water Conservation Dist. v.
United States ex rel. Wilson, 559 U.S. 280, 294
(2010).
2. “Congress promptly reacted to [the Hess]
decision by amending the statute to preclude qui tam
actions ‘based upon evidence or information in the
possession of the United States, or any agency,
officer or employee thereof, at the time such suit was
brought.’” Id. (quoting Act of Dec. 23, 1943, Pub. L.
No. 78-213, 57 Stat. 608, 609).
This revision
stripped federal courts of jurisdiction over such suits.
3. In 1986, Congress again amended the FCA to
reinvigorate it. See False Claims Amendments Act
of 1986, Pub. L. No. 99-562, 100 Stat. 3153.
Congress altered the jurisdictional bar to preclude
claims “based upon the public disclosure of
allegations . . . in a criminal, civil, or administrative
hearing, in a congressional, administrative, or
Government Accounting Office report, hearing,
audit, or investigation, or from the news media.” 31
U.S.C. § 3730(e)(4)(A) (1988).
It created two
-4exceptions to this bar, providing that it did not apply
if the action is “brought by the Attorney General or
the [relator] is an original source of the information.”
Id. 1 These amendments sought to strike “the golden
mean between adequate incentives for whistleblowing
insiders
with
genuinely
valuable
information and discouragement of opportunistic
plaintiffs who have no significant information to
contribute of their own[.]” Graham Cnty., 559 U.S.
at 294 (internal quotations omitted) (quoting United
States ex rel. Springfield Terminal Ry. Co. v. Quinn,
14 F.3d 645, 649 (D.C. Cir. 1994)).
4. In 2010, Congress revised the public
disclosure provision.
It made the bar nonjurisdictional and provided that it would not apply
when dismissal is “opposed by the Government.”
Pub. L. No. 111-148, § 10104(j)(2), 124 Stat. 119, 901
(2010) (amending 31 U.S.C. § 3730(e)(4)). Congress
also reframed the standard for triggering the bar.
Instead of barring claims that are “based upon” a
prior public disclosure, the provision now bars
allegations that are “substantially the same” as
those that have been publicly disclosed. 31 U.S.C.
§ 3730(e)(4)(A).
Finally, Congress modified the
definition of an “original source” who is excepted
An original source was defined as “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.”
Id.
§ 3730(e)(4)(B).
1
-5from the bar by including individuals whose
knowledge “is independent of and materially adds to
the publicly disclosed allegations or transactions.”
Id. § 3730(e)(4)(B).
B. Factual Background
1. Biotronik sells cardiac rhythm management
(“CRM”) devices, electronic implants that monitor
and regulate heartbeats. Since 2009, Biotronik has
been the subject of qui tam actions and news articles
challenging the propriety of its marketing practices
for these devices.
2. In 2009, an employee named Brian Sant filed
a qui tam action against Biotronik, alleging that
since 2006 Biotronik made various improper
payments to induce physicians to use its devices.
The complaint alleged the provision of direct benefits
to physicians, such as meals and entertainment, as
well as indirect benefits. It alleged that “Biotronik
trains and instructs sales representatives, business
and marketing managers, and other Biotronik
employees and representatives to provide . . .
consulting jobs for physician family members . . . in
exchange for the physicians’ agreement to implant
Biotronik devices.” 2 It also alleged that “[s]ome
independent contractor sales representatives . . . use
their non-employee status to funnel even more
2 Complaint ¶ 2 (emphasis added), United States ex rel. Sant v.
Biotronik, Inc., No. 2:09-cv-03617 (E.D. Cal. Dec. 31, 2009),
Dkt. No. 85 [hereinafter, “Sant Complaint”].
-6kickbacks to physicians, in the form of . . . consulting
jobs for physician family members.” 3
3. In 2011, the New York Times published a
series of five articles describing Biotronik’s efforts to
secure sales through allegedly inappropriate
financial relationships with physicians. The articles
detailed various practices purportedly designed to
influence the implanting physician’s decision to
recommend a Biotronik CRM device over a
competitor’s device.
These practices included
providing benefits directly to physicians such as
lavish meals, entertainment, and sham consulting
arrangements, as well indirect benefits such as
hiring the physicians’ relatives.
The last article in the series specifically
described Biotronik’s alleged practice of providing
indirect benefits to physicians by hiring their family
members to increase device sales:
But the new law will not shed light on
what the Biotronik documents indicate
is a widely used industry practice: the
hiring by a device maker of a doctor’s
spouse or other relative. For example,
in plotting strategies to gain sales at
one California hospital, Biotronik
officials suggested that an implant
specialist, whose son and wife both
worked for a competitor, might be
3 Id. ¶ 23 (emphasis added).
-7wooed if Biotronik offered him
concessions “such as studies or even the
hiring of his son,” according to an
internal company report.
Another
company document discussed how the
revenues of a sales official sharply
dropped after his father, an implant
specialist, died unexpectedly in an
airplane crash.
App., infra, 87a (emphases added). Another article
noted that the U.S. Department of Justice had
“started a separate investigation last year into
Biotronik’s sales and marketing practices.” App.,
infra, 79a.
4. In 2014, the meals and entertainment
allegations contained in the Sant Complaint were
resolved by a $4.9 million settlement after the
United States intervened.
5. In October 2014, a different Biotronik
employee, Max Bennett, filed another qui tam action
alleging that Biotronik was providing direct and
indirect benefits to physicians, including nepotistic
hiring to induce sales. 4
4 See Complaint ¶ 58, United States ex rel. Bennett v. Biotronik,
Inc., No. 2:14-cv-2407 (E.D. Cal. Oct. 14, 2014), Dkt. 1 (alleging
that one doctor’s strategy was to “require some concessions
from Biotronik such as studies or even the hiring of his son”
(emphasis added)).
-8C. Proceedings Below
1. Relator Sam Jones Company, LLC (“Sam
Jones”) was formed by a current and a former
Biotronik employee to bring this action. It filed suit
in 2017, asserting claims under the FCA against
Biotronik, Cedars-Sinai Medical Center (“CedarsSinai”), and Dr. Jeffrey Goodman, a surgeon who
implanted Biotronik’s CRM devices at Cedars-Sinai.
The government investigated as required under the
FCA and declined to intervene, so the suit proceeded
as a relator action. See 31 U.S.C. § 3730(a)–(b).
The amended complaint alleged, among other
things, that, from 2008 onward, Biotronik engaged
in a “nationwide scheme” in which it hired and paid
remuneration to family members of physicians who
implanted Biotronik’s CRM devices or to those who
referred patients to physicians who implanted its
devices 5; that Biotronik hired Brian Goodman, the
brother of Dr. Goodman, as a sales representative
and paid him commissions to secure Dr. Goodman’s
business 6; and that several other physicians, located
primarily in California, were part of this
“nationwide” scheme to increase Biotronik’s sales. 7
It asserted that these activities violated the Stark
Law, 42 U.S.C. § 1395nn, and the Anti-Kickback
5 Second Amended Qui Tam Complaint ¶¶ 2, 108, 114, United
States ex rel. Sam Jones Company, LLC v. Biotronik, Inc., No.
2:17-cv-01391 (C.D. Cal. Mar. 25, 2022), Dkt. No. 92.
6 Id. ¶¶ 1, 3, 69, 148.
7 Id. ¶¶ 108-113.
-9Statute, 42 U.S.C. § 1320a-7b, resulting in the
submission of false claims. 8, 9
According to the complaint itself, its impetus
was the 2014 settlement of the Sant qui tam action.
That settlement led the Sam Jones principals to
suspect that Brian Goodman was selling all
Biotronik CRM devices implanted at Cedars-Sinai by
his brother Dr. Goodman. They reviewed Biotronik
sales invoices to confirm their suspicions and formed
Sam Jones to bring a qui tam action. 10 The Sam
Jones principals share the same qui tam attorneys
who represented Sant and Bennett. As noted by the
Justice Department press release accompanying the
Sant settlement, the relator there received a
payment of about $840,000.
The complaint alleged that Dr. Goodman chose
Biotronik’s CRM devices for his surgeries performed
at Cedars-Sinai; Cedars-Sinai purchased the devices;
and claims for reimbursement were submitted to
8 Id. ¶¶ 156-173.
9 “In the healthcare context, two laws that often serve as FCA
predicates are the [Anti-Kickback Statute] and Stark [Law].”
United States ex rel. Parikh v. Citizens Med. Ctr., 977 F. Supp.
2d 654, 662 (S.D. Tex. 2013). The Stark Law prohibits
physicians from referring their Medicare and Medicaid patients
to business entities in which the physicians or their immediate
family members have a financial interest. The Anti-Kickback
Statute prohibits offering or providing remuneration to induce
the purchase of goods or services paid for under a federal
health care program.
10 Second Amended Qui Tam Complaint, supra n.4, ¶¶ 20-21.
- 10 Medicare, Medicaid, and other health insurance
programs. Purportedly, Brian Goodman, as the
sales representative for Biotronik, would receive
commissions on those sales that varied with the
volume of CRM devices implanted by Dr. Goodman
and the volume of Dr. Goodman’s implant surgeries
performed at Cedars-Sinai.
2. The district court applied the public disclosure
bar and dismissed the complaint, concluding that
“the allegations of fraudulent nepotism in [Sam
Jones’s] [complaint] match-up to the ‘transaction’
disclosed in the [New York Times] article,” and that
the article “discloses sufficient facts implying that
Biotronik engaged in fraudulent nepotistic hiring
and compensation practices.” App., infra, 44a. The
court reasoned that, although the complaint
provided additional details, “both the article and the
[complaint] involve Biotronik as the main actor and
set-out the same core charge that Biotronik hired the
family members of physicians to induce those
physicians to implant Biotronik devices.” App.,
infra, 47a.
The district court found that the article “pointed
to the specific tactic of hiring family members of
physicians to increase the use of Biotronik devices in
surgeries.” App., infra, 49a. Thus, it alerted the
government to the specific areas of fraud alleged and
“put the government on notice to investigate the
fraud before the relator filed his complaint.” App.,
infra, 49a (internal quotations and citation omitted).
- 11 3. The Ninth Circuit reversed. It concluded that
the public disclosure bar did not apply because the
allegations in the complaint were not “substantially
the same as” the transactions previously disclosed.
It reasoned that, “[f]airly characterized, the
transactions described in Sam Jones’s complaint do
not merely repeat what the public already knew
about Biotronik’s tactics to increase its sales. When
viewed with the appropriate level of generality . . . ,
Sam Jones’s complaint provided genuinely new and
material information.” App., infra, 24a.
The appellate court described the complaint as
alleging FCA violations arising from “a three-way
compensation
arrangement”
whereby
Brian
Goodman recommended Biotronik’s devices to Dr.
Goodman and he implanted them, federal programs
paid for the devices, and Brian received a
commission from Biotronik on each sale. App., infra,
2a.
The circuit court held that the Sam Jones’s
allegations were not substantially the same as those
in the New York Times because the article
“mentioned hiring ‘a doctor’s spouse or other relative’
without indicating the position for which they might
be hired and without any suggestion of employing
family members as sales representatives who would
be compensated on a commission basis according to
the number of Biotronik devices implanted by their
family member doctor.” App., infra, 25a. The court
added that the article “said nothing about the Stark
Law or the Anti-Kickback Statute; it did not
explicitly state or even imply that Biotronik’s alleged
- 12 practice of hiring doctors’ relatives violates federal
law or constitutes an improper billing practice. The
article did not suggest that the government paid for
those devices with taxpayer dollars.” App., infra,
25a.
Repeating these distinctions, the court held that
“the article did not disclose the ‘critical mass of the
underlying facts . . . in the qui tam complaint.’”
App., infra, 26a. Rather, the article “suggested only
that Biotronik may have hired family members of
doctors in unspecified positions to increase its share
of the CRM market.” App., infra, 26a. “It did not
disclose that Biotronik paid commissions per device
or submitted claims to Medicare and Medicaid for
the cost of the CRM devices in violation of the Stark
Law or the Anti-Kickback Statute.” App., infra, 26a.
The court applied the same reasoning to all the
New York Times articles and the previous qui tam
complaints considered together. Collectively, they
did “not trigger the public disclosure bar because no
combination of those public documents disclosed the
three-way compensation arrangement central to
Sam Jones’s second amended complaint.” App.,
infra, 27a.
4. The court of appeals subsequently denied
Biotronik’s petition for rehearing en banc. App.,
infra, 54a-55a.
REASONS FOR GRANTING THE PETITION
The public disclosure bar precludes qui tam suits
predicated on allegations or transactions that
- 13 already have been publicly disclosed unless the
relator is an original source of the information. It
“strike[s] a balance between encouraging private
persons to root out fraud and stifling parasitic
lawsuits.”
Graham Cnty., 559 U.S. at 295.
“Information brought forward by relators in qui tam
suits is less useful to the government once
revelations about fraudulent conduct are in the
public domain because the government is already
aware that it might have been defrauded and can
take responsive action.” Glaser v. Wound Care
Consultants, Inc., 570 F.3d 907, 915 (7th Cir. 2009).
The decision below upsets the balance that
Congress has calibrated. This Court has emphasized
that the public-disclosure bar is “broad” and “widereaching.” Schindler Elevator Corp. v. United States
ex rel. Kirk, 563 U.S. 401, 408 (2011). Yet the
decision below sharply narrows it.
The Ninth
Circuit’s new test is contrary to the statutory text,
departs from this Court’s description of the bar’s
scope, and conflicts with the test used by most other
circuits. Review is necessary to bring uniformity to
this “most litigated of the[] restrictions” on qui tam
suits. United States ex rel. Osheroff v. Humana, Inc.,
No. 10–24486–cv–SCOLA, 2012 WL 4479072, at *4
(S.D. Fla. Sept. 28, 2012). Absent this Court’s
review, the Ninth Circuit’s novel test for applying
the bar will upset Congress’s careful design and
“multiply the number of parasitic qui tam actions
pursued by plaintiffs.” Dingle v. Bioport Corp., 388
F.3d 209, 215 (6th Cir. 2004) (citations omitted). In
other words, the Ninth Circuit’s error will unduly
- 14 restrict the scope of the bar and allow qui tam cases
to proceed that would be barred in other circuits.
The decision below creates a fissure in FCA
jurisprudence. Until the Ninth Circuit’s decision,
the bar was understood to apply when a prior
disclosure was “likely to put the Federal
Government on notice of a potential fraud.” Graham
Cnty., 559 U.S. at 291. This Court has not yet
articulated a more specific test, but the majority of
federal circuits to address the issue agree on one: the
“critical inquiry is whether the government had
enough information to investigate the case or
whether the information could at least have alerted
law-enforcement authorities to the likelihood of
wrongdoing.” United States ex rel. O’Connor v.
USCC Wireless Inv., Inc., 128 F.4th 276, 285 (D.C.
Cir. 2025) (cleaned up); see also United States ex rel.
Maur v. Hage-Korban, 981 F.3d 516, 524 (6th Cir.
2020); United States ex rel. Reed v. KeyPoint Gov’t
Sols., 923 F.3d 729, 744 (10th Cir. 2019); United
States ex rel. Lager v. CSL Behring, L.L.C., 855 F.3d
935, 944 (8th Cir. 2017); United States ex rel.
Winkelman v. CVS Caremark Corp., 827 F.3d 201,
209 (1st Cir. 2016); Piacentile v. U.S. Oncology, Inc.,
No. 22-18, 2023 WL 2661579, at *2 (2d Cir. Mar. 28,
2023) (per curiam).
The Ninth Circuit, too,
previously used this test. See, e.g., United States v.
Alcan Elec. & Eng’g, Inc., 197 F.3d 1014, 1019 (9th
Cir. 1999); United States ex rel. Solis v. Millennium
Pharms., Inc., 885 F.3d 623, 626 (9th Cir. 2018).
The district court applied the established test
and dismissed this case, but the Ninth Circuit
- 15 reversed by applying a novel inquiry: whether the
relator’s complaint “provided genuinely new and
material information” when its allegations are
“viewed with the appropriate level of generality.”
App., infra, 24a. The Ninth Circuit thus created a
circuit split as to the applicable test under the public
disclosure bar.
The Ninth Circuit’s new “materiality” test is at
odds with the “substantially the same” inquiry
specified by the statute. It is far more granular,
asking whether there is any “new and material
information” in the qui tam complaint rather than
whether they are the same in substance. This test
erodes the “broad scope” that Congress intended the
public disclosure bar to have. Schindler Elevator,
563 U.S. at 408. The use of this granular test will
often be outcome-determinative, as this case
illustrates. It enables qui tam complaints to survive
if they merely fill in the details of an alleged fraud
that already has been disclosed or identify federal
statutes that allegedly were violated by the publicly
disclosed scheme.
Moreover, this new test flouts the statutory text,
which reserves any inquiry into whether a complaint
“materially adds” to publicly disclosed information
for when the court considers the “original source”
exception to the bar. The FCA bars complaints
whose allegations are “substantially the same” as
previous disclosures “unless . . . the person bringing
the action is an original source of the information.”
31 U.S.C. § 3730(e)(4)(A) (emphasis added). In 2010,
Congress revised the “original source” exception to
- 16 include relators who have independent knowledge
that “materially adds” to publicly disclosed
information. It provided that the materiality of new
information in a qui tam complaint affects whether
the “original source” exception applies, not the initial
inquiry whether the complaint is “substantially the
same” as a prior disclosure. The Ninth Circuit’s test
for substantial similarity renders the “original
source” exception superfluous, upsetting Congress’s
finely tuned scheme.
Because the Ninth Circuit’s decision conflicts
with those of other circuits and the statutory
language, the Court should grant this petition and
reverse.
I.
The Decision Below Exacerbates The
Circuit Split On How To Apply The Public
Disclosure Bar.
A. The evolution and application of the bar
1. The public disclosure bar, as amended in 2010,
provides that “[t]he court shall dismiss an action or
claim . . . if substantially the same allegations or
transactions as alleged in the action or claim were
publicly disclosed.” 31 U.S.C. § 3730(e)(4)(A). The
question presented is how to determine when
allegations or transactions in a relator’s complaint
are “substantially the same” as previous disclosures.
The Court has not yet addressed this issue.
Previously, the public disclosure bar applied
when a relator’s complaint was “based upon” a public
disclosure. However, nine of the federal circuits,
- 17 including the court below, had construed the “based
upon” standard to encompass allegations that are
“substantially similar” to those publicly disclosed.
See Glaser, 570 F.3d at 915 (collecting cases).
Congress evidently revised the statutory language to
codify the “substantially the same” formulation as
the preferable test. See O’Connor v. USCC Wireless,
128 F.4th at 285 (the amendment “is best understood
as codifying the interpretation” adopted by most
circuits).
The “substantially the same” standard differs
from the previous “based upon” standard in one
respect. Some circuits had construed the “based
upon” formulation to cover qui tam complaints that
were “even partly based upon” public disclosures.
See United States ex rel. Holloway v. Heartland
Hospice, Inc., 960 F.3d 836, 851 (6th Cir. 2020). The
new formulation requires substantial, not simply
partial, overlap.
The “substantially the same” inquiry is the first
of two sequential inquiries the statute requires
before the public disclosure bar applies. Initially,
the court determines whether allegations or
transactions in a qui tam complaint are
substantially similar to public information. If so, the
bar applies unless the court determines that the
relator is an “original source.” As put by several
circuits, “whether the complaint’s allegations are
substantially the same as the publicly disclosed
allegations or transactions . . . [is] a quick trigger to
get to the more exacting original source inquiry.”
United States ex rel. Osheroff v. Humana Inc., 776
- 18 F.3d 805, 814 (11th Cir. 2015). “The majority [of
courts’] interpretation . . . treats the question of
whether a lawsuit is ‘based upon’ [substantially
similar to] a public disclosure as a ‘threshold
analysis . . . intended to be a quick trigger for the
more exacting original source analysis.’” Glaser, 570
F.3d at 920 (quoting United States ex rel. Grynberg v.
Praxair, Inc., 389 F.3d 1038, 1051 (10th Cir. 2004)).
2. The public disclosure bar “must be analyzed in
the context of [Congress’s] twin goals of rejecting
suits which the government is capable of pursuing
itself, while promoting those which the government
is not equipped to bring on its own.” Springfield
Terminal, 14 F.3d at 651.
In assessing whether allegations or transactions
in a qui tam complaint have already been publicly
disclosed, most circuits agree that “the operative
question is whether the public disclosures were
sufficient to set the government on the trail of the
alleged fraud without [the relator’s] assistance.”
Reed, 923 F.3d at 744 (internal quotation and
citation omitted). “[O]nce the government knows the
essential facts of a fraudulent scheme, it has enough
information to discover related frauds and the
purpose of qui tam litigation is fulfilled.” United
States ex rel. Boothe v. Sun Healthcare Grp., Inc.,
496 F.3d 1169, 1173 (10th Cir. 2007) (Gorsuch, J.)
(cleaned up); see also O’Connor v. USCC Wireless,
128 F. 4th at 285; Maur, 981 F.3d at 524 (quoting
Reed, 923 F.3d at 744); Lager, 855 F.3d at 944;
Winkelman, 827 F.3d at 209; Piacentile, 2023 WL
2661579, at *2. Indeed, the Ninth Circuit itself
- 19 previously has applied this test. See Alcan Elec. &
Eng’g, Inc., 197 F.3d at 1019 (the bar applies where
“the prior public disclosures contained enough
information to enable the government to pursue an
investigation against [the defendant]”); Solis, 885
F.3d at 626 (“[T]he prior public disclosure put the
government ‘on notice to investigate the fraud before
the relator filed his complaint.’” (citation omitted)).
Under this test, “‘[t]he government has enough
information to investigate the case’ when either ‘the
allegation of fraud’ or ‘its underlying factual
elements’ have been publicly disclosed.” O’Connor v.
USCC Wireless, 128 F.4th at 285 (citation omitted).
The public disclosures need not “allege any [FCA]
violations or even ‘any wrongdoing’; they need only
disclose ‘the material elements of the fraudulent
transaction.’”
Reed, 923 F.3d at 745 (citation
omitted). Further, the courts “recognize that the
government’s nose for fraud may be sensitive enough
to pick up the scent even if the public disclosures did
not ‘identify any specific [defendant],’” when the
problem has been identified and there is “an easily
identifiable group of probable offenders.’”
Id.
(citations omitted); accord United States ex rel.
Jamison v. McKesson Corp., 649 F.3d 322, 329 (5th
Cir. 2011) (“[P]ublic disclosures need not name
particular defendants so long as they . . . enabled the
government to readily identify wrongdoers through
an investigation.”).
Similarly, “a broader prior
disclosure bars a qui tam action based on a narrower
set of allegations stemming from the same fraud.”
Holloway, 960 F.3d at 851.
- 20 The Third and Seventh Circuits have not used
the “on the trail” verbiage but take essentially the
same approach to applying the public disclosure bar.
The Third Circuit held that the bar applies when the
defendants “were directly identifiable from th[e]
public disclosure.” United States ex rel. Zizic v.
Q2Administrators, LLC, 728 F.3d 228, 238 (3d Cir.
2013). And the Seventh Circuit applies the bar
when facts disclosing the fraud are in the public
domain. See United States ex rel. Absher v. Momence
Meadows Nursing Ctr., Inc., 764 F.3d 699, 708 (7th
Cir. 2014).
The Eleventh Circuit provides that “[s]ignificant
overlap between [the relator’s] allegations and the
public disclosures is sufficient to show that the
disclosed information forms the basis of th[e] lawsuit
and is substantially similar to the allegations in the
complaint.” Osheroff, 776 F.3d at 814. It has not
further explicated that test.
In contrast, the Fifth Circuit continues to apply
the “based upon” test despite the 2010 revision,
which replaced that language with the “substantially
the same” requirement. See United States ex rel.
Schweizer v. Canon, Inc., 9 F.4th 269, 275 (5th Cir.
2021). Its approach conflicts with the other circuits,
which recognize that “‘[a] relator need not have
learned of the basis for the qui tam action from the
public disclosure’ to trigger the public disclosure
bar.” Reed, 923 F.3d at 745 (quoting Kennard v.
Comstock Res., Inc., 363 F.3d 1039, 1044 (10th Cir.
2004)); accord Zizic, 728 F.3d at 237.
- 21 Finally, the Fourth Circuit has not yet
interpreted the “substantially the same” standard.
B. The Ninth Circuit’s novel test
1. The erroneous decision below has its roots in
earlier Ninth Circuit jurisprudence. In 2016, the
circuit court “address[ed] for the first time whether
[it] should approach the substantial similarity
question at a high or low level of generality, and
accordingly whether a complaint that is similar only
at a high level of generality triggers the public
disclosure bar.” United States ex rel. Mateski v.
Raytheon Co., 816 F.3d 565, 575 (9th Cir. 2016). It
reasoned that
[a]llowing a public document describing
‘problems’—or even some generalized
fraud in a massive project or across a
swath of an industry—to bar all FCA
suits identifying specific instances of
fraud in that project or industry would
deprive the Government of information
that could lead to recovery of misspent
Government funds and prevention of
further fraud.
Id. at 577. And it invoked the Seventh Circuit’s
observation that “viewing FCA claims ‘at the highest
level of generality . . . in order to wipe out qui tam
suits that rest on genuinely new and material
information is not sound.’” Id. (quoting Leveski v.
ITT Educ. Servs., Inc., 719 F.3d 818, 831 (7th Cir.
2013)).
The court concluded that the relator’s
complaint provided “genuinely new and material
- 22 information of fraud,” id. at 579, and that “none of
[relator’s] allegations are ‘substantially similar’ to
the prior public reports when viewed at the
appropriate level of generality,” id. at 580.
But even so, in contrast to the decision in this
case, the Mateski court coupled the foregoing
analysis with the established test. It held that the
government could not have investigated the fraud at
issue based on the public disclosures, which “merely
allege[d]
general
problems
involving
mismanagement,
technical
difficulties,
and
noncompliance with contract and policy directives.”
Id. at 579. “Even if . . . the prior public reports
provided ‘enough information to . . . pursue an
investigation’ into some fraud, . . . the prior reports
could not have alerted the Government to the
specific areas of fraud alleged by [the relator].” Id.
The court explained that “[the relator’s] allegations
differ in both degree and kind from the very general
previously disclosed information about problems
with [the large contract at issue].” Id. at 580.
2. The “level of generality” discussion in Mateski
soon was cited as evidence of a circuit split over the
test for determining whether qui tam allegations are
“substantially the same” as a public disclosure. The
Sixth Circuit affirmed the dismissal of a qui tam
complaint because prior public disclosures had “put
the government on notice of the possibility of fraud”
surrounding the transaction. United States ex rel.
Advocs. for Basic Legal Equal., Inc. v. U.S. Bank,
N.A., 816 F.3d 428, 431 (6th Cir. 2016). That relator
sought this Court’s review, contending that the
- 23 Seventh and Ninth Circuits had rejected the Sixth
Circuit’s “broad-brush approach” by holding that a
complaint is not barred when it is similar to a public
disclosure only at a high level of generality.11
Petition for Writ of Certiorari at 1, United States ex
rel. Advocs. for Basic Legal Equal., Inc. v. U.S. Bank,
N.A., No. 16-130 (Sup. Ct. July 25, 2016).
The Court invited the Solicitor General to file a
brief expressing the views of the United States. The
government responded that the different outcomes
between the circuits did “not result from the
application of competing legal standards, but simply
reflect[ed] the fact that many applications of the
public disclosure bar will depend upon a close
examination of the relevant facts.” Brief Amicus
Curiae of the United States at 10, United States ex
rel. Advocs. for Basic Legal Equal., Inc. v. U.S. Bank,
N.A., No. 16-130 (Sup. Ct. Apr. 14, 2017). 12
11 In support of this argument, the relator cited Mateski and
United States ex rel. Goldberg v. Rush University Medical
Center, 680 F.3d 933, 936 (7th Cir. 2012).
12 In addition, the government argued that the public disclosure
bar “is designed to protect the government’s interest in
preventing parasitic lawsuits,” and so its “authority to control
which cases are dismissed is generally sufficient to vindicate
the primary purpose of the public disclosure bar.” Id. This
argument was wide of the mark. The government’s authority
to dismiss qui tam cases does not safeguard the proper
application of the public disclosure bar. Congress created the
public disclosure bar in addition to authorizing the government
to intervene in and dismiss qui tam cases. It decided that both
limitations were necessary. The small number of qui tam cases
(footnote continued on next page)
- 24 Although the Ninth Circuit and Seventh Circuit
opined that the “substantially the same” standard
should not be applied at the highest level of
generality, they each also found that the government
could not have investigated the fraud at issue based
on the public disclosures. Thus, the cases’ different
outcomes could be attributed to their respective
facts. Without a clear circuit split in which the
divergent outcomes were driven by different legal
standards, this Court denied the petition for
certiorari.
3. The Ninth Circuit’s decision in this case,
however, goes a step further than Mateski and
creates a clear division between the circuits over the
test for assessing whether allegations in a qui tam
complaint are “substantially the same” as a public
disclosure. The application of these two different
tests will produce differing outcomes in like cases.
This case illustrates the point.
The Ninth
Circuit focused solely on whether the relator’s
complaint “provided genuinely new and material
information” when “viewed with the appropriate
level of generality.” App., infra, 24a. It ignored
whether the government could have investigated the
case based on the prior disclosures. This omission is
all the more glaring because the district court had
applied this established test and found that the
public disclosures “pointed to the specific tactic of
that the government actually has moved to dismiss confirms
Congress’s wisdom.
- 25 hiring family members of physicians to increase the
use of Biotronik devices in surgeries” and thereby
“alerted the Government to the specific areas of
fraud alleged.” App., infra, 49a. The circuit court
did not reject this conclusion; instead, it applied a
different “substantial similarity” test that produced
the opposite result on the same facts.
The Ninth Circuit’s novel test undermines the
rule that adding new details to what is already
known in outline is not enough to avoid the
“substantially the same” limitation. See O’Connor v.
USCC Wireless, 128 F.4th at 286; Maur, 981 F.3d at
526; United States ex rel. Poteet v. Bahler Med., Inc.,
619 F.3d 104, 115 (1st Cir. 2010). The decision
below enables relators “to avoid the public disclosure
bar by pleading their complaints with more and
more detailed factual allegations slightly different
from more general allegations already publicly
disclosed.” Dingle, 388 F.3d at 215.
II. The Circuit Court’s Novel Test Is Flawed
And Will Proliferate Parasitic Qui Tam
Actions
That
Congress
Sought
To
Eradicate.
The Ninth Circuit’s test misconstrues the issue
of “substantial similarity” and contravenes the
statutory text. It will authorize parasitic qui tam
suits that Congress sought to bar.
- 26 A. The circuit court’s test mis-frames the
issue of “substantial similarity” and
focuses the inquiry at too granular and
subjective a level.
1. The issue of “substantial similarity” turns on
whether the public disclosures provide enough
information “to put the Federal Government on
notice of a potential fraud.” Graham Cnty., 559 U.S.
at 291. By ignoring this question, the Ninth Circuit
incorrectly framed the issue and reached the wrong
conclusion.
The Ninth Circuit reasoned that the relator’s
complaint was not substantially the same as the
public disclosures because it “provided genuinely
new and material information” about the alleged
fraud. According to the court, the prior disclosures
“suggested only that Biotronik may have hired
family members of doctors in unspecified positions to
increase its share of the CRM market [but] did not
disclose that Biotronik paid commissions per device
or submitted claims to Medicare and Medicaid for
the cost of the CRM devices in violation of the Stark
Law or the Anti-Kickback Statute.” App., infra, 26a.
The court added that “no combination of those public
documents disclosed the three-way compensation
arrangement central to Sam Jones’s second amended
complaint.” App., infra, 27a.
This analysis mis-frames the issue of substantial
similarity. The public disclosure bar “focuses not on
the additional incriminating information a relator
supplies, but instead on whether ‘the quantum of
- 27 information already in the public sphere’ was
sufficient to ‘set government investigators on the
trail of fraud.’” United States ex rel. Doe v. Staples,
Inc., 773 F.3d 83, 87 (D.C. Cir. 2014) (quoting
Springfield Terminal, 14 F.3d at 654-55). The Ninth
Circuit addressed the wrong question by analyzing
whether the relator’s complaint “provided genuinely
new and material information.”
“Filling in details about an already disclosed
fraud is not enough to overcome” the threshold
“substantially the same” limitation. O’Connor v.
USCC Wireless, 128 F.4th at 286. By its terms, the
“substantially the same” standard does not require
that the disclosure include every detail. Where
“‘prior disclosure[s] put[] the government on notice of
the fraud alleged,’ adding ‘new details to describe
essentially the same scheme’” does not satisfy this
threshold test for escaping the bar. Maur, 981 F.3d
at 526 (quoting Holloway, 960 F.3d at 850-51). Here,
the allegations in the qui tam complaint are
substantially the same as the prior public
disclosures regardless of the purportedly “new and
material information” that the Ninth Circuit
perceived.
The “materially adds” inquiry is inherently more
granular than the “substantially the same” inquiry.
Congress recognized that a relator might have
knowledge that materially adds to public disclosures,
and it excepted such relators from the bar if they
meet the other requirements to be an “original
source.” But the Ninth Circuit collapsed these two
distinct inquiries into one by using the “materially
- 28 adds” test to decide the threshold substantially-thesame issue. Such a granular comparison will result
in the public disclosure bar being applied in far
fewer cases, thereby eroding the “broad scope” that
Congress intended the bar to have. Schindler, 563
U.S. at 408. The public disclosure bar “is not open
season . . . for would-be relators who have one piece
of a puzzle that is already largely complete.” United
States ex rel. Smith v. Odom, 148 F.4th 1322, 1330
(11th Cir. 2025).
The Ninth Circuit purported to calibrate its “new
and material information” standard by saying it
must be applied at “the appropriate level of
generality.” This qualification is meaningless. The
circuit court did not identify what level of generality
is appropriate or how that level is to be determined.
Nor could it do so because there is no abstractly
“correct” level of generality for assessing similarity. 13
Determining the similarity between allegations in a
complaint and a public disclosure is a contextdependent evaluation. See Amos Tversky, Features
of Similarity, 84 PSYCHOL. REV. 327, 340 (1977)
(“Like other judgments, similarity depends on
context and frame of reference.”).
The Ninth
Circuit’s caveat that the comparison must be made
As this Court noted in an analogous situation, “whether a
scheme exists depends on the level of generality at which
criminal activity is viewed.” H.J. Inc. v. Nw. Bell Tel. Co., 492
U.S. 229, 241 n.3 (1989). Yet “[t]here is no obviously ‘correct’
level of generality for courts to use in describing the criminal
activity alleged in RICO litigation.” Id. The same is true here.
13
- 29 at “the appropriate level of generality” adds nothing
to its standard for assessing whether a qui tam
complaint is “substantially the same” as a prior
public disclosure.
The test ends up being the
granular inquiry whether the complaint provides
any “new and material information” beyond that
contained in the public disclosure.
In contrast, analyzing whether public disclosures
were sufficient to set the government on the trail of
the alleged fraud establishes the relevant context
and thereby sets the correct level of generality. If a
public disclosure is insufficient to set the
government on the trail of the fraud alleged in the
complaint, then the similarity between the two is too
general or too limited for the bar to apply. But if the
public disclosure is sufficient to allow the
government to investigate the fraud alleged in a qui
tam complaint, then they are substantially the same
even if the complaint contains new and useful
information. The purpose of the bar is to “reject[]
suits which the government is capable of pursuing
itself.” Springfield Terminal, 14 F.3d at 651. The
on-the-trail test vindicates that purpose; the “new
and material information” test vitiates it.
2. Here, the public disclosures were more than
sufficient to set the government on the trail of the
alleged fraud without any need for the “new and
material” information provided by the qui tam
complaint. It is inconsequential that the complaint
added allegations that Biotronik’s actions violated
the Stark Law and the Anti-Kickback Statute and
explained that the government pays for CRM devices
- 30 with taxpayer dollars. A public disclosure need not
“allege violations of the particular federal statutes.”
United States ex rel. Findley v. FPC-Boron Emps.’
Club, 105 F.3d 675, 688 (D.C. Cir. 1997). The
“identification of one specific legal consequence of
the alleged fraud—the possible submission of false
claims to Medicare and Medicaid—does not change
the substantially similar nature of the underlying
allegations of fraud.” United States ex rel. Feldstein
v. Organon, Inc., 364 F. App’x 738, 742 (3d Cir.
2010). The government already knows that its
health insurance programs pay for pacemakers and
other CRM-device implants. It did not need the
relator’s input to understand whether the Stark
Law, the Anti-Kickback Statute, and the FCA could
be implicated if family members of physicians are
employed to increase sales of these devices. 14
Further, the Ninth Circuit reasoned that the
public disclosures had not “disclosed the three-way
compensation arrangement central to Sam Jones’s
second amended complaint.” App., infra, 27a. In
other words, the public disclosures identified
Biotronik but not Dr. Goodman and Brian Goodman,
nor did they reveal that Biotronik paid Brian
Goodman commissions per device sold. But this
Moreover, one of the public disclosures—the Sant
Complaint—alleged that Biotronik’s practices violated the
Stark Law and the Anti-Kickback Statute. Sant Complaint,
supra n.2, ¶¶ 7-8.
14
- 31 information was unnecessary for the government to
investigate the relationships between Biotronik and
physicians who implanted its devices. Device and
drug manufacturers commonly compensate their
sales representatives based on sales volume, and
both the New York Times articles and the Sant
Complaint had already alleged that Biotronik did so.
App., infra, 63a; Sant Complaint, supra n.2, ¶ 22.
The “three-way compensation arrangement” at issue
here could have been inferred from the public
disclosures that Biotronik hired family members of
physicians to increase its sales. Based on those
disclosures, the government could readily have
ascertained the details provided by the qui tam
complaint.
Likewise, the government did not need the
relator’s assistance to identify Dr. Goodman and
Brian Goodman. The public disclosure bar applies
where “the entities and transactions [at issue] were
easily identifiable” from a disclosure. Findley, 105
F.3d at 687 (citing United States ex rel. Fine v.
Sandia Corp., 70 F.3d 568, 572 (10th Cir. 1995)). A
public disclosure need only “provide enough
information about the participants in the scheme
such that the defendant is identifiable.” Lager, 855
F.3d at 944 (emphasis in the original) (quoting
United States ex rel. Kester v. Novartis Pharm. Corp.,
No. 11 CIV. 8196 CM, 2015 WL 109934, at *8
(S.D.N.Y. Jan. 6, 2015)). Public disclosures have
been found sufficient where they “provided specific
details about the fraudulent scheme and the types of
actors involved in it,” so that the government would
- 32 not “need to comb through myriad transactions
performed by various types of entities in search of
potential fraud.” In re Nat. Gas Royalties, 562 F.3d
1032, 1042 (10th Cir. 2009).
For example, the Second Circuit recently held
that the public disclosure bar was triggered by prior
allegations
that
several
pharmaceutical
manufacturers, including Amgen, were involved in a
kickback scheme and that their customers were
complicit in that scheme.
These disclosures
“provided notice to the government of the essential
elements of the kickback scheme such that it would
have been able to discover that U.S. Oncology—
which [was] ‘one of Amgen’s major customers,’ . . .
participated in it.” Piacentile, 2023 WL 2661579, at
*2 (cleaned up). And the Ninth Circuit itself held in
an earlier case that “[o]nce the allegations against
Corinthian [Colleges] were public, the government
had ready access to documents identifying [Ernst &
Young] as Corinthian’s auditor, so the allegations
against [Ernst & Young] were also subject to the
public disclosure bar.” United States v. Corinthian
Colls., 652 F. App’x 503, 505 (9th Cir. 2016) (per
curiam).
Here, as the district court noted, the public
disclosures “pointed to the specific tactic of hiring
family members of physicians to increase the use of
Biotronik devices in surgeries” and, in so doing,
“alerted the Government to the specific areas of
fraud alleged.” App., infra, 49a. Further, the
disclosures identified California hospitals as one
location where Biotronik used this tactic. Armed
- 33 with this information, the government could readily
have ascertained from Biotronik the identities of any
sales personnel related to physicians who implant
Biotronik CRM devices in California, along with
their compensation arrangements. 15 It could then
have determined whether those compensation
arrangements raise concerns under the Stark Law
and AntiKickback Statute.
B. The circuit court’s approach collapses
the statutorily distinct “substantially
similar” and “original source” inquiries.
1. Furthermore, the Ninth Circuit’s holding
contravenes the FCA’s text by conflating the
threshold question whether a complaint’s allegations
are “substantially the same” as public disclosures
with the materiality requirement of the subsequent
“original source” inquiry. The statute provides that
allegations that are “substantially the same” as
previous disclosures are barred “unless . . . the
person bringing the action is an original source of
15 The FCA authorizes the Department of Justice to issue civil
investigative demands to “any person” having information
“relevant to a false claims law investigation.” 31 U.S.C.
§ 3733(a)(1). “That person may be required to give oral
testimony, answer written interrogatories, produce documents,
or all of the above.” United States v. Markwood, 48 F.3d 969,
976 (6th Cir. 1995). “Congress intended the false claims [civil
investigative demand] to provide the Department of Justice
with a means to assess quickly, and at the least cost to the
taxpayers or to the party from whom information is requested,
whether grounds exist for initiating a false claim suit.” Id. at
979.
- 34 the information.”
31 U.S.C. § 3730(e)(4)(A)
(emphasis added). In 2010, Congress revised the
definition of an “original source” to include “an
individual who either”:
(i) prior to a public disclosure . . . has
voluntarily disclosed to the Government
the information on which allegations or
transactions in a claim are based, or
(2)[16] who has knowledge that is
independent of and materially adds to
the publicly disclosed allegations or
transactions, and who has voluntarily
provided the information to the
Government before filing an action
under this section.
31 U.S.C. § 3730(e)(4)(B) (emphasis and line breaks
added).
It “expanded the definition of ‘original source’ by
allowing a relator who ‘materially adds’ to the
publicly disclosed information to qualify.” United
States ex rel. Moore & Co., P.A. v. Majestic Blue
Fisheries, LLC, 812 F.3d 294, 297 (3d Cir. 2016).
Thus, under the statute’s text, the issue of
materiality does not arise in any form unless it has
already been determined that the qui tam complaint
is “substantially the same” as the disclosure.
16 So numbered in original.
- 35 “At first glance, establishing that a complaint
alleges ‘substantially the same’ fraud as one
previously disclosed, which is an essential element of
the public-disclosure bar, might seem to negate any
argument that the relator’s allegations ‘materially
add[]’ to prior disclosures, which is an essential
element of the second prong of the original-source
exception.” United States ex rel. O’Connor v. U.S.
Cellular Corp., 153 F.4th 1272, 1280 (D.C. Cir.
2025). Accordingly, the Seventh Circuit held that if
a relator’s allegations “are substantially similar to
those contained in the” public disclosures, her
allegations cannot “‘materially add[]’ to the public
disclosure[s].” Cause of Action v. Chi. Transit Auth.,
815 F.3d 267, 283 (7th Cir. 2016).
But this
construction “has the effect of collapsing the
materially-adds inquiry into the substantially-thesame inquiry.” Reed, 923 F.3d at 757. It “would
eliminate the second prong of the original-source
exception,” O’Connor v. U.S. Cellular, 153 F.4th at
1280-81, and “reduc[e] the second prong to
surplusage [which] cannot be right,” id. at 1281.
Therefore, the Seventh Circuit’s construction has
subsequently been rejected by all four circuits that
have addressed the issue. They have ruled that the
materially-adds inquiry is reserved for the “original
source” exception and is distinct from the
substantially-the-same inquiry. See id.
The Ninth Circuit has made the same mistake as
the Seventh Circuit by equating the secondary
materially-adds inquiry with the threshold
- 36 substantially-the-same inquiry. 17 Congress clearly
contemplated that “even if a complaint alleges a
fraud ‘substantially the same’ as one previously
disclosed, the allegations might still ‘materially add’
to the publicly available information.” O’Connor v.
U.S. Cellular, 153 F.4th at 1281. Thus, it is error to
make the existence of “new and material
information” the touchstone of whether a qui tam
complaint is substantially the same as public
disclosures.
Instead, whether a complaint
materially adds to public disclosures is addressed
through the original-source exception. As other
circuits have noted, that determination “must be a
separate inquiry from whether relators have brought
forward allegations that are ‘substantially the same,’
which triggers application of the public disclosure
bar.” O’Connor v. USCC Wireless, 128 F.4th at 288
n.6.
The correct test for the “substantially the same”
determination is the established one: whether the
public disclosures were sufficient to set the
government on the trail of the alleged fraud without
the relator’s assistance. This test allows for a
distinct “materially-adds” inquiry at the next step.
A public disclosure can be sufficient to set the
government “on the trail” of an alleged fraud yet
There is one significant difference between the mistaken
approaches taken by these two circuits. The Seventh Circuit
applied the correct substantially-the-same test but held that
this test also satisfied the distinct materially-adds test. It did
not import the materially-adds test into the threshold inquiry
as the Ninth Circuit does.
17
- 37 leave room for a relator’s allegations to add material
information. Whether there is room for a relator’s
complaint to “materially add” to a public disclosure
in a particular case depends on the level of detail in
the disclosure. See Reed, 923 F.3d at 756-57. “As
the level of detail in public disclosures increases, the
universe of potentially material additions shrinks.”
Winkelman, 827 F.3d at 211.
2. The Ninth Circuit’s approach renders the
second prong of the “original source” exception
superfluous. Any complaint that “materially adds”
to a public disclosure escapes dismissal on the
ground that it is “not substantially the same” as the
disclosure without further inquiry. But, as discussed
above, many such complaints actually will be
“substantially the same” as a public disclosure and
so should be barred unless the relator satisfies all of
the requirements that Congress mandated for an
“original source.”
Congress imposed three requirements on a
relator to qualify as an “original source” under the
second prong of the exception: (1) he must provide
information that “materially adds” to the public
disclosure; (2) his information must be “independent
of” the public disclosure; and (3) he must voluntarily
provide this information to the government before
filing the qui tam complaint.
31 U.S.C.
§ 3730(e)(4)(B).
All three conditions must be
satisfied for an action to avoid the public disclosure
bar. “The statute is explicit. The requirement is not
flexible. And failure to meet . . . these conditions is
fatal.” United States ex rel. Winnon v. Lozano, 146
- 38 F.4th 1197, 1210 (D.C. Cir. 2025). Yet the Ninth
Circuit’s flawed approach enables qui tam
complaints to survive if they satisfy the Ninth
Circuit’s materiality construct, without any
consideration of the exception’s other conditions.
This error significantly narrows the intended
scope of the public disclosure bar. Here, for example,
the relator does not satisfy the other two conditions
to qualify as an “original source” even if the qui tam
allegations “materially add” to the public disclosures.
First, the relator’s new information is not
“independent of” the public disclosure. “To satisfy
this requirement, a relator’s knowledge of the
alleged wrongdoing must not ‘derive [] from or
depend[] upon’ the public disclosure. Instead, the
relator must be ‘someone who would have learned of
the allegation or transactions independently of the
public disclosure.’” Cause of Action, 815 F.3d at 283
(citations omitted). Here the complaint alleges that
a public disclosure—the 2014 settlement of the Sant
qui tam action against Biotronik—led the Sam Jones
principals to investigate whether Brian Goodman
was selling Biotronik CRM devices implanted at
Cedars-Sinai by his brother Dr. Goodman. 18 Thus,
the relator’s knowledge is not independent of the
prior public disclosures.
See United States v.
Omnicare, Inc., 903 F.3d 78, 93 n.11 (3d Cir. 2018)
(relator who relied on a public disclosure does not
18 Second Amended Qui Tam Complaint, supra n.4, ¶ 20.
- 39 have information that is independent of that
disclosure).
Second, the complaint does not allege that the
relator voluntarily provided the material new
information to the government before filing the qui
tam complaint, as the statute requires. See Winnon,
146 F.4th at 1210 (affirming dismissal because the
relator “does not allege, with any specificity, that she
voluntarily provided the relevant information to the
government before . . . filing her qui tam suit”);
Foster v. PHH Mortg., No. 23-2297, 2024 WL
5103010, at *3 (7th Cir. Dec. 13, 2024) (per curiam)
(same). To the contrary, the complaint alleged that
the relator qualifies as an original source “by its
filing of this action on February 21, 2017,” which
“alerted the United States . . . of the allegations
against defendants[.]” 19
But such defects are inconsequential in the
Ninth Circuit so long as the relator can show that
his allegations “materially add” to the public
disclosure and thereby escape dismissal on the
ground that they are “not substantially the same” as
the disclosure. This case and others like it will
proceed although Congress has decreed that they
should not.
3. “It is . . . beyond cavil . . . that Congress
passed the public disclosure bar to bar a subset of
[qui tam] suits that it deemed unmeritorious or
19 Id. ¶ 27.
- 40 downright harmful.” Graham Cnty., 559 U.S. at 298.
Congress revised the bar in 2010 to better effectuate
the “balance between encouraging private persons to
root out fraud and stifling parasitic lawsuits.” Id. at
295. The Ninth Circuit’s decision, if left uncorrected,
will upset the balance struck by Congress and
“multiply the number of parasitic qui tam actions
pursued by plaintiffs.” Dingle, 388 F.3d at 215.
This Court should grant review to resolve the
circuit conflict over the correct test for deciding
whether the allegations in a qui tam complaint are
substantially the same as a public disclosure. The
Court should repudiate the circuit court’s novel test
that focuses on whether the complaint provides “new
and material information” when it is “viewed with
the appropriate level of generality.”
It should
reverse the judgment below to prevent the adverse
consequences that will flow from the Ninth Circuit’s
decision.
CONCLUSION
The petition for a writ of certiorari should be
granted.
- 41 MARCH 4, 2026
Respectfully submitted,
STEVEN D. GORDON
Counsel of Record
HOLLAND & KNIGHT LLP
800 17th Street NW
Suite 1100
Washington, D.C. 20006
202-955-3000
steven.gordon@hklaw.com
MEGAN MOCHO
TIMOTHY J. TAYLOR
HOLLAND & KNIGHT LLP
1650 Tysons Boulevard
Suite 1700
Tysons, Virginia 22102
703-720-8600
megan.mocho@hklaw.com
timothy.taylor@hklaw.com
HANNAH M. MALONEY
HOLLAND & KNIGHT LLP
98 San Jacinto Boulevard
Suite 1900
Austin, Texas 78701
512-467-4391
hannah.maloney@hklaw.com
COUNSEL FOR PETITIONER
APPENDIX
i
TABLE OF APPENDICES
Page
A P P E N DI X A — O P I N ION O F T H E
UNITED STATES COURT OF APPEALS
FOR THE NINTH CIRCUIT, DATED
SEPTEMBER 10, 2025 . . . . . . . . . . . . . . . . . . . . . . . . 1a
A PPEN DI X B — OR DER OF T H E
UNITED STATES DISTRICT COURT
FOR T H E CEN T R A L DIST RIC T OF
CALIFORNIA, DATED JANUARY 4, 2023 . . . . 29a
A PPEN DI X C — OR DER OF T H E
UNITED STATES COURT OF APPEALS
FOR THE NINTH CIRCUIT, DATED
NOVEMBER 4, 2025 . . . . . . . . . . . . . . . . . . . . . . . . .54a
APPENDIX D — STATUTORY PROVISIONS
INVOLVED . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 56a
APPENDIX E — THE NEW YORK TIMES
A RT ICLE S , DAT ED A PR I L 2 , 2 011,
APRIL 2, 2011, APRIL 5, 2011, APRIL 20, 2011,
MAY 31, 2011 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 58a
1a
Appendix
A
APPENDIX A — OPINION
OF THE
UNITED STATES
COURT OF APPEALS FOR THE NINTH CIRCUIT,
DATED SEPTEMBER 10, 2025
UNITED STATES COURT OF APPEALS
FOR THE NINTH CIRCUIT
No. 23-55361
D.C. No. 2:17-cv-01391-PSG-KS
UNITED STATES OF AMERICA ex rel.
SAM JONES COMPANY, LLC, RELATOR,
Plaintiff-Appellant,
v.
BIOTRONIK, INC.; CEDARS-SINAI MEDICAL
CENTER; JEFFREY GOODMAN, DR.,
Defendants-Appellees.
Appeal from the United States District Court
for the Central District of California
Philip S. Gutierrez, District Judge, Presiding
Argued and Submitted November 18, 2024
Pasadena, California
September 10, 2025
Before: Johnnie B. Rawlinson, Morgan B. Christen, and
Anthony D. Johnstone, Circuit Judges.
Opinion by Judge Christen
OPINION
2a
Appendix A
CHRISTEN, Circuit Judge:
Sam Jones Company, LLC appeals a district court
order dismissing its complaint alleging violations of the
False Claims Act, 31 U.S.C. § 3729, arising from a threeway compensation arrangement involving the sale of
implanted cardiac devices paid for by Medicare and other
public health insurance programs. The complaint alleges
that Biotronik, a manufacturer of cardiac rhythm devices,
hired Brian Goodman as a sales representative because
his brother, Dr. Jeffrey Goodman, was then implanting an
extremely high volume of cardiac devices at Cedars-Sinai
Medical Center in Los Angeles. According to the complaint,
Brian recommended Biotronik devices to his brother, who
implanted the devices at Cedars-Sinai, Cedars-Sinai billed
federal public health insurance programs for the devices,
and Biotronik paid Brian a commission on each sale. Sam
Jones alleges that this compensation arrangement violated
the Anti-Kickback Statute and the Stark Law. The district
court dismissed the action pursuant to the False Claims
Act’s public disclosure bar because the New York Times
had already reported that Biotronik used various financial
incentives to encourage physicians to use its cardiac
rhythm management devices rather than devices sold
by Biotronik’s competitors. We reverse in part, vacate in
part, and remand.
I.
A.
The False Claims Act (FCA) imposes civil liability on
anyone who “knowingly presents” a “fraudulent claim for
3a
Appendix A
payment” to the federal government. 31 U.S.C. § 3729(a)
(1)(A). The FCA allows private citizens, referred to as
“relators,” to bring qui tam actions on behalf of the
government. A relator in a successful FCA proceeding
receives a portion of any recovery from the action or
settlement that the court decides is reasonable, but in
any event, somewhere between fifteen and thirty percent
of any proceeds. § 3730(d). Once notified of the suit, the
statute requires the government to determine whether
to commit public resources to pursue the relator’s claims.
The government must investigate, § 3730(a), and, after
it completes its investigation, notify the court if it will
intervene in the relator’s suit. If the government declines
to intervene, the relator may proceed alone. § 3730(b)(4)
(B). Relators “have the requisite personal stake in the
outcome of the case to ensure that the issues are presented
sharply” because they: (1) must fund the prosecution of
the FCA suit; (2) receive a sizable bounty if they prevail
in the action; and (3) may be liable for costs if the suit is
frivolous. United States ex rel. Kelly v. Boeing Co., 9 F.3d
743, 749 (9th Cir. 1993).
The FCA does not allow every suit to go forward. For
example, Congress barred claims brought by relators
convicted of criminal conduct arising from a scheme
to defraud the government. § 3730(d)(3). Similarly, the
“first-to-file bar” prohibits relators from bringing qui
tam suits while another relator’s action involving the same
conduct is pending, § 3730(b)(5), and the “governmentaction bar” knocks out actions “based upon allegations
4a
Appendix A
or transactions which are the subject of a civil suit . . . in
which the Government is already a party,” § 3730(e)(3).
At issue here, the “public disclosure bar” requires
a court to dismiss an action in which a relator alleges
fraud that has already been disclosed in a qualifying
public document or proceeding. § 3730(e)(4)(A). If the
public disclosure bar applies, a relator may overcome it
by demonstrating that she was an “original source” of the
information. Id. An “original source” includes one who
has knowledge that “is independent of and materially
adds to the publicly disclosed allegations or transactions.”
§ 3730(e)(4)(B). In creating the public disclosure bar,
Congress sought “to strike a balance between encouraging
private persons to root out fraud and stifling parasitic
lawsuits.” Graham Cnty. Soil & Water Conservation Dist.
v. United States ex rel. Wilson, 559 U.S. 280, 295, 130 S.
Ct. 1396, 176 L. Ed. 2d 225 (2010).
B.
In 2011, the New York Times published a series of
articles chronicling Biotronik’s strategies to increase its
market share for cardiac rhythm management (CRM)
devices, including pacemakers and defibrillators. One
article, published June 1, 2011, focused on Biotronik’s
“success in developing relationships with doctors who, in
turn, can influence which brand of device a patient gets.”1
1. The district court and the parties refer to this article as
the May 31, 2011 article. The article was published online on May
31, 2011, but it appeared in the Business/Financial Desk section
in the newspaper on June 1, 2011.
5a
Appendix A
Barry Meier, Sales Tactics on Implants Raise Doubts,
N.Y. Times, June 1, 2011, at B1. The article outlined a
series of internal documents from Biotronik that “offer a
portrait of an implant industry where producers seek to
influence the brand of device that patients receive long
before a diagnosis.” Id. The article identified several
manufacturers as “big makers of implants like heart
devices and artificial joints . . . [who] have settled Justice
Department charges that they illegally promoted sales.”
Id. The article reported that the Department of Justice
sought to “reduce the role of corporate influence over
medicine through tactics like bogus or inflated consulting
deals with doctors.” Id.
According to the article, the Department of Justice
had been investigating Biotronik’s sales and marketing
practices since 2010. Id. The article reported that
Biotronik’s strategies included recruiting implant
specialists, and general cardiologists who refer patients
to implant specialists, as “consultants.” Id. Biotronik
allegedly paid referring cardiologists, called “feeders”
in Biotronik documents, $4,800 for each patient they
enrolled in Biotronik-financed studies. Id. The article
also mentioned a common industry practice used by
medical device manufacturers to increase sales: hiring
family members of implanting physicians or referring
cardiologists. Id. The article did not elaborate on the
position(s) in which family members might be employed
or the duties they might perform. The article opined
that this practice would not be uncovered by recently
6a
Appendix A
enacted legislation designed to increase transparency
in the financial relationships between pharmaceutical
and medical device manufacturers and physicians, and it
suggested that Biotronik’s practices fell within that gap:
[T]he new law will not shed light on what the
Biotronik documents indicate is a widely used
industry practice: the hiring by a device maker
of a doctor’s spouse or other relative. For
example, in plotting strategies to gain sales
at one California hospital, Biotronik officials
suggested that an implant specialist, whose son
and wife both worked for a competitor, might
be wooed if Biotronik offered him concessions
“such as studies or even the hiring of his son,”
according to an internal company report. 2
Id.
The New York Times article explained that Biotronik’s
share of the CRM market had grown from 1 to 5 percent
“in the last few years” and suggested the increase was
at least partly the result of incentives Biotronik paid to
2. Sam Jones asserts that this reference is to the Physician
Payments Sunshine Act (PPSA), 42 U.S.C. § 1320a-7h. The PPSA
requires makers of medical devices covered by Medicare to report
on an annual basis certain payments to “covered recipients.”
§ 1320a-7h(a)(1)(A). Physicians are “covered recipients” under the
statute, but family members of physicians are not. § 1320a-7h(e)
(6)(A).
7a
Appendix A
physicians. Id. As an example, the article reported that
four implant specialists in Las Vegas sharply increased
their use of Biotronik devices in mid-2008—about the
same time they became Biotronik consultants—and
that the cumulative cost of the Biotronik devices they
implanted skyrocketed to $16 million. Id. Another
California specialist quadrupled his use of Biotronik
devices after he became a consultant, increasing the cost
of the Biotronik CRM devices purchased for his patients
from $360,000 to $1.6 million over a 12-month period. Id.
As Biotronik’s market share increased, whistleblowers
began to step forward. Ex-employee relators brought
qui tam actions alleging Biotronik promoted off-label
uses for its devices, paid consulting fees to physicians for
referring patients to sham studies, paid “training” fees
to physicians for allowing Biotronik employees to observe
implant procedures, and supplied implant specialists
with a steady stream of sports tickets, gift cards, seats
to Broadway plays and operas, and extravagant dinners
and travel. See United States ex rel. Bennett v. Biotronik,
Inc., 876 F.3d 1011, 1014 (9th Cir. 2017); United States ex
rel. Sant v. Biotronik, Inc., No. 2:09-cv-03617, Dkt. 85
(E.D. Cal. Dec. 31, 2009).
The whistleblowers in Sant and Bennett alleged that
Biotronik violated two federal statutes: the Stark Law,
42 U.S.C. § 1395nn, and the Anti-Kickback Statute, 42
U.S.C. § 1320a-7b(b). The Anti-Kickback Statute makes
it illegal to offer, pay, or receive anything of value as an
inducement to generate business payable by Medicare
8a
Appendix A
or Medicaid. § 1320a-7b(b). The Stark Law prohibits the
submission of Medicare or Medicaid claims for certain
services performed as a result of patient referrals from
physicians who have improper “financial relationship[s]”
with an entity to which they refer patients. § 1395nn(a)(1).
The Sant and Bennett complaints alleged that a portion
of Biotronik’s profits came from claims submitted to
Medicare or Medicaid.
Plaintiff-Appellant Sam Jones is a limited liability
company established in 2017. It consists of two managing
members: Leo Williams and Mark O’Connor. Both
Williams and O’Connor previously worked for Biotronik
as cardiac device sales representatives—Williams from
2008 to 2011 and O’Connor from 2008 to 2014. As sales
representatives at Biotronik, Williams and O’Connor
worked directly with physicians. Their duties sometimes
included attending implant surgeries at Cedars-Sinai
Medical Center in Los Angeles. Williams and O’Connor
also attended Cedars-Sinai physician special events such
as family dinners and birthday parties. The two had access
to Biotronik’s pricing, marketing, and reimbursement
information for devices implanted at Cedars-Sinai.
Sam Jones filed suit in 2017 against Biotronik, Dr.
Jeffrey Goodman, and Cedars-Sinai (Defendants). The
complaint alleged six counts of unlawful billing under the
FCA and numerous violations of state statutes. One of
the FCA claims, Claim V, alleged that Biotronik offered
inducements to referring cardiologists and implanting
electrophysiologists that included dinners, conferences,
entertainment, paid expenses for travel, meals and
9a
Appendix A
lodging, free business development, consulting fees,
and payments for recruiting patients to participate in
Biotronik’s research. Sam Jones voluntarily dismissed
Claim V. Its remaining FCA claims are based only on
what the complaint describes as a “nationwide scheme”
of Biotronik “entering into financial relationships with
referring and implanting physicians throughout the
country by employing their close family members.” Sam
Jones’s complaint focused on one instance of Biotronik’s
alleged “nationwide scheme”: a three-way compensation
arrangement that paid commissions to Brian Goodman for
implant surgeries performed by Dr. Jeffrey Goodman at
Cedars-Sinai Medical Center. Specifically, the complaint
alleges that, from August 2008 and continuing through
2019:
[E]ach Defendant entered into written and
oral agreements involving the selection of
Biotronik’s CRM devices by Dr. Goodman
for the CRM implant surgeries he performed
at Cedars-Sinai, the purchase of Biotronik’s
CRM devices for Dr. Goodman’s surgeries by
Cedars-Sinai, the submission of a claim for
coverage to Medicare, Medicaid, other federal
health insurance programs or private insurance
companies for the device and associated health
care services, and the payment of commissions
to Biotronik employee Brian Goodman in
amounts that varied with the number of devices
his brother Dr. Goodman implanted.
The complaint alleges that Brian Goodman “lacked
the skills and abilit[ies] possessed by typical sales
10a
Appendix A
representatives that would justify the opportunities and
substantial commissions paid to top sales performers” and
that his previous employer, Medtronic, had terminated
him for poor performance selling CRM devices. The
complaint alleges that, despite this history, Biotronik
hired Brian Goodman as a sales representative—the same
position held by Williams and O’Connor—and paid Brian
Goodman fifteen to twenty percent sales commissions
on all Biotronik devices implanted by his brother. The
complaint alleges that the commissions Biotronik paid to
Brian for devices implanted by Dr. Goodman at CedarsSinai totaled over one million dollars.
The complaint asserts that in 2008, the year Brian
Goodman became a sales representative for Biotronik, Dr.
Goodman implanted zero Biotronik CRMs. In 2009, after
Brian was moved to his brother’s territory, Dr. Goodman
implanted one Biotronik device; in 2010 he implanted six,
in 2011 he implanted fifty-one and by 2015, Dr. Goodman
had allegedly implanted 443 Biotronik CRMs in total.
Sam Jones alleges that between 2013 and 2018, Medicare
paid for at least 692 Biotronik CRM devices implanted or
replaced by Dr. Goodman, and that when Brian Goodman
left Biotronik and returned to work at Medtronic, Dr.
Goodman ceased implanting Biotronik’s devices altogether
and started exclusively implanting Medtronic devices. The
complaint asserts that the government would not have
paid for these devices had it been aware of Defendants’
compensation arrangement because the arrangement
violated the Stark Law and the Anti-Kickback Statute. 3
3. The district court characterized Sam Jones’s claims
as being based on a “nepotistic hiring practice,” but that term
is not used in the complaint. Sam Jones does not allege that
11a
Appendix A
According to the complaint, as sales representatives
at Biotronik, Williams and O’Connor were required
to undergo annual code-of-compliance training and
were subjected to annual exams on the medical device
industry’s rules for avoiding illegal payments to physicians,
“including, specifically, the rule that they were not allowed
to work with their own immediate family members.”
Likewise, the complaint alleges that Cedars-Sinai was
required to certify its compliance with the Stark Law and
the Anti-Kickback Statute when it submitted claims for
payment to Medicare, and that Cedars-Sinai was aware
that these laws prohibited compensation arrangements
involving physician family members, but it “agreed to
look the other way” because it “stood to profit from the
CRM surger[ies].”
C.
The United States declined to intervene in Sam
Jones’s suit. Biotronik, Cedars-Sinai, and Dr. Goodman
subsequently filed motions to dismiss the complaint. The
district court granted the motions on the ground that the
New York Times article triggered the public disclosure
bar and Sam Jones failed to show that it could qualify for
the original source exception.
nepotism itself is unlawful. Its contention is that Defendants’
arrangement was unlawful because Brian’s compensation varied
with the number of Biotronik devices Dr. Goodman prescribed,
which served as an unlawful inducement that generated claims
paid by Medicare and Medicaid in violation of the Anti-Kickback
Statute and also constituted an improper financial relationship
that violated the Stark Law. See 42 U.S.C. §§ 1395nn(a)(1)(B),
1320a–7b(b)(1)(B).
12a
Appendix A
Sam Jones responded by filing a motion to alter or
amend the judgment pursuant to Federal Rule of Civil
Procedure 59(e). The motion argued that the district
court should have granted leave to amend the complaint
to include facts demonstrating Sam Jones qualified as
an original source. The district court denied the motion
as futile because it concluded that the facts Sam Jones
sought to add would not cure the other deficiencies in its
argument that it qualified as an original source. Sam Jones
appeals both the order dismissing the complaint and the
order denying its Rule 59(e) motion for leave to amend.
II.
This court has jurisdiction pursuant to 28 U.S.C.
§ 1291. We review de novo a district court’s order granting
a motion to dismiss, Lund v. Cowan, 5 F.4th 964, 968
(9th Cir. 2021), and review for abuse of discretion orders
denying Rule 59(e) motions, Brown v. Stored Value Cards,
Inc., 953 F.3d 567, 573 (9th Cir. 2020).
III.
A.
The public disclosure bar requires that courts dismiss
claims filed pursuant to the FCA if they are substantially
the same as allegations of fraud that have already been
publicly disclosed. § 3730(e)(4)(A). The parties’ dispute
boils down to whether the June 1, 2011 New York Times
article triggered the public disclosure bar. If it did not,
13a
Appendix A
there is no need to consider the original source exception
to the bar.4
We begin with the statutory text of the public
disclosure bar, which provides: “The court shall dismiss
an action or claim under this section, unless opposed by
the Government, if substantially the same allegations
or transactions as alleged in the action or claim were
publicly disclosed.” § 3730(e)(4)(A). The current version
of the public disclosure bar is a product of a century-old
series of amendments through which Congress has aimed
to incentivize relators to come forward with information
uncovering schemes to defraud the public fisc, while
still disallowing copycat suits that do little more than
repackage previously disclosed scams and attempt to
collect bounties for doing so. In interpreting the current
text of the public disclosure bar, we consider the historical
progression of amendments to the bar.
Coined the “Lincoln Law,” Congress originally
enacted the FCA to combat fraudulent schemes
perpetrated against the government during the Civil
War, after defense contractors sold the Union Army sick
4. Defendants offered five articles in support of their motions
to dismiss, but the district court relied solely on the June 1, 2011
article. Defendants also offered the Sant and Bennett complaints,
although they primarily rely on Sant. We took judicial notice of the
five articles and the Sant and Bennett complaints. The allegations
in Sant and Bennett concerned consulting fees paid to physicians
for referring patients, fees paid to physicians for referring patients
to participate in sham studies, as well as sports tickets and dinners
Biotronik provided to physicians. See Bennett, 876 F.3d at 1014.
Sam Jones’s original complaint contained comparable allegations,
but Sam Jones voluntarily dismissed them.
14a
Appendix A
horses and mules, faulty rifles and ammunition, and rancid
provisions. See Larry D. Lahman, Bad Mules: A Primer
on the Federal False Claims Act, 76 Okla. Bar J. 901, 901
(2005). As originally enacted, the FCA allowed relators
to file claims without regard to how they had discovered
the underlying fraud. As a result, the FCA’s promise of
bounty incentivized some relators to bring claims the
Supreme Court ultimately termed “parasitic,” because the
government already had reason to know about the fraud,
or in some cases, because the relators’ claims were copied
directly from government documents. Graham County,
559 U.S. at 294.
Private citizens did not heavily employ the FCA
until the New Deal and World War II, when a spike
in government spending created an abundance of
opportunities for contractors to defraud the government.
See Minn. Ass’n of Nurse Anesthetists v. Allina Health
Sys. Corp., 276 F.3d 1032, 1041 (8th Cir. 2002). In what is
now considered the quintessential parasitic suit, United
States ex rel. Marcus v. Hess, 317 U.S. 537, 63 S. Ct. 379,
87 L. Ed. 443 (1943), a relator read about contractors
collusively averaging prospective bids for government
projects in a publicly filed criminal indictment and copied
the allegations from that indictment directly into his
complaint. The Supreme Court concluded that the FCA
did not prevent a relator who “ha[d] contributed nothing
to the discovery of [the fraud]” from recouping the
bounty the statute promised him. Id. at 545. The Court
acknowledged the government’s “strong arguments of
policy against” permitting such piggy-back lawsuits but
explained that “the trouble with these arguments is that
they are addressed to the wrong forum. Conditions may
have changed, but the statute has not.” Id. at 546–47.
15a
Appendix A
Congress responded swiftly to Hess. As amended in
1943, the FCA barred qui tam suits that were “based upon
evidence or information in the possession of the United
States . . . at the time such suit was brought.” Act of Dec.
23, 1943, Pub. L. No. 78-213, 57 Stat. 608, 609 (codified
at 31 U.S.C. § 232(C) (1946)). This became known as the
“government knowledge bar.”
The government knowledge bar proved to be an
overcorrection.5 Graham County, 559 U.S. at 294. Courts
read the 1943 amendment as prohibiting all qui tam suits
based on information the government possessed, even
where the government knew of the fraud “only because
the relator had been decent enough to tell the government
about it.” Wang ex rel. United States v. FMC Corp., 975
F.2d 1412, 1419 (9th Cir. 1992), overruled by United States
ex rel. Hartpence v. Kinetic Concepts, Inc., 792 F.3d 1121
(9th Cir. 2015).
5. This overcorrection is best exemplified by United States
ex rel. Wisconsin v. Dean, 729 F.2d 1100 (7th Cir. 1984), where the
State of Wisconsin brought a qui tam suit based on Medicaid fraud
that it had already reported to the federal government pursuant
to the mandatory reporting requirements established under the
Social Security Act and its implementing regulations. See 42 C.F.R.
§ 455.17 (1980). Interpreting the 1943 amendment, the Seventh
Circuit held that the government knowledge bar deprived the
court of jurisdiction because the federal government technically
knew about the fraud before Wisconsin filed suit. Id. at 1102–04.
The Seventh Circuit acknowledged that Congress’s immediate
concern in enacting the 1943 amendment was to undo the havoc
wreaked by Hess, but observed that “the language and effect of
the . . . amendment in fact is much broader.” Id. at 1104. Within
months, the National Association of Attorneys General adopted a
resolution urging Congress “to rectify the unfortunate result of
the Wisconsin v. Dean decision.” S. Rep. No. 99-345, at 13 (1986).
16a
Appendix A
Congress amended the FCA again in 1986. This time,
Congress replaced the government knowledge bar with
the public disclosure bar, which precluded suits whose
claims were “based upon” previously disclosed fraudulent
schemes. 31 U.S.C. § 3730(e)(4)(A) (1986). Congress also
added the original source exception. This iteration of
the statute allowed suits involving allegations of fraud
that had been publicly disclosed if the relator qualified
as an “original source” of the information. § 3730(e)(4)
(A)–(B) (1986). Under the 1986 version of the FCA, an
original source was required to have both direct and
independent knowledge of the information upon which
their allegations were based. United States ex rel. Meyer
v. Horizon Health Corp., 565 F.3d 1195, 1202 (9th Cir.
2009), overruled in part by Hartpence, 792 F.3d at 1128
n.6. The Supreme Court has observed that “Congress
passed the 1986 amendments to the FCA ‘to strengthen
the Government’s hand in fighting false claims’” and “to
encourage more private enforcement suits.” Graham
County, 559 U.S. at 298 (quoting Cook County v. United
States ex rel. Chandler, 538 U.S. 119, 133–34, 123 S. Ct.
1239, 155 L. Ed. 2d 247 (2003)).
After disagreement arose between circuit courts over
the correct interpretation of the original source exception,
Congress amended the FCA a third time. Pub. L. No.
111-148, § 10104, 124 Stat. 119, 901 (2010); see, e.g., Wang,
975 F.2d at 1417–18. The 2010—and current—version of
the FCA’s public disclosure bar provides:
The court shall dismiss an action or claim under
this section, unless opposed by the Government,
17a
Appendix A
if substantially the same allegations or
transactions as alleged in the action or claim
were publicly disclosed—
(i) in a Federal criminal, civil, or
administrative hearing in which
the Government or its agent is a
party;
(ii) in a congressional, Government
Accountability Office, or other
Federal report, hearing, audit, or
investigation; or
(iii) 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.6
§ 3730(e)(4)(A).
6. The statute goes on to define an original source as
“an individual who either (i) prior to a public disclosure under
subsection (e)(4)(A), has voluntarily disclosed to the Government
the information on which allegations or transactions in a claim
are based, or [(ii)] who has knowledge that is independent of
and materially adds to the publicly disclosed allegations or
transactions, and who has voluntarily provided the information
to the Government before filing an action under this section.”
§ 3730(e)(4)(B).
18a
Appendix A
The 2010 amendment made several changes to the
FCA. Most pertinent to this appeal, instead of prohibiting
claims “based upon” a public disclosure, the bar now
prohibits suits in which the allegations are “substantially
the same” as those already publicly disclosed. The
2010 amendment does not provide guidance regarding
the degree of specificity required before a claim is
deemed “substantially the same” as a publicly disclosed
allegation. But at a minimum, replacing “based upon”
with “substantially the same” did not expand the scope
of the bar.
B.
We first consider whether the pre- or post-2010
version of the FCA applies to Sam Jones’s complaint. In
Sam Jones’s view, the 2010 amendment narrowed the
public disclosure bar. Biotronik counters that Sam Jones
misreads our precedent, and that our circuit’s analysis
remains the same under the 1986 and 2010 versions of the
statute. We agree with Biotronik. In previous cases, we
applied the version of the FCA in effect when the relator
filed the original complaint. See United States ex rel.
Mateski v. Raytheon Co., 816 F.3d 565, 569 n.7 (9th Cir.
2016); Amphastar Pharms. Inc. v. Aventis Pharma SA,
856 F.3d 696, 702 n.7 (9th Cir. 2017). Because Sam Jones
filed its original complaint in 2017, we apply the post-2010
version of the FCA, but the outcome of this appeal would
not turn on which version of the statute we apply.
In United States v. Allergan, Inc., 46 F.4th 991, 996
n.5 (9th Cir. 2022), we explained that the 2010 amendment
19a
Appendix A
“did not materially alter the elements required to meet
the public disclosure bar.” We reasoned that the 2010
amendment codified a consensus between our circuit and
most other circuit courts that had already interpreted
“based upon” narrowly to mean “substantially similar
to.” See Meyer, 565 F.3d at 1199 (interpreting “based
upon” to mean “substantially similar to”); United States
ex rel. Ondis v. City of Woonsocket, 587 F.3d 49, 57–58
(1st Cir. 2009) (substantially similar to); Glaser v. Wound
Care Consultants, Inc., 570 F.3d 907, 910 (7th Cir. 2009)
(substantially similar to); United States ex rel. Mistick
PBT v. Hous. Auth. of City of Pittsburgh, 186 F.3d 376,
386–88 (3d Cir. 1999) (substantially similar to); United
States ex rel. Findley v. FPC-Boron Emps.’ Club, 105
F.3d 675, 682–85, 323 U.S. App. D.C. 61 (D.C. Cir. 1997)
(substantially similar to), abrogated on other grounds
by United States ex rel. Davis v. District of Columbia,
679 F.3d 832, 400 U.S. App. D.C. 351 (D.C. Cir. 2012);
United States ex rel. Fine v. Advanced Scis., Inc., 99 F.3d
1000, 1006 (10th Cir. 1996) (interpreting “based upon”
to require “substantial identity”); United States ex rel.
McKenzie v. BellSouth Telecomms., Inc., 123 F.3d 935,
940 (6th Cir. 1997) (substantial identity), abrogated on
other grounds by United States ex rel. Rahimi v. Rite
Aid Corp., 3 F.4th 813 (6th Cir. 2021); Allina Health, 276
F.3d at 1045–47 (adopting majority reading).7 Because
we have concluded that the 2010 amendment merely
confirmed our pre-existing interpretation of the public
7. By 2009, all but one circuit held this majority view; the
Fourth Circuit alone interpreted “based upon” to mean “derived
from.” United States ex rel. Siller v. Becton Dickinson & Co. ex
rel. Microbiology Sys. Div., 21 F.3d 1339, 1348 (4th Cir. 1994).
20a
Appendix A
disclosure bar, our circuit precedent interpreting “based
upon” remains undisturbed, and is thus applicable here.
Silbersher v. Valeant Pharms. Int’l, Inc., 89 F.4th 1154,
1167 (9th Cir. 2024).
C.
The public disclosure bar applies if “substantially the
same allegations or transactions as alleged in the action or
claim were publicly disclosed . . . (iii) from the news media.”
§ 3730(e)(4)(A). The parties agree that the New York Times
article was public and “from the news media” within the
meaning of § 3730(e)(4)(A)(iii). The parties also agree
that the article discloses only a “transaction,” or “facts
from which fraud can be inferred,” not an “allegation” or
“direct claim of fraud.”8 See Silbersher, 89 F.4th at 1167
(quoting Mateski, 816 F.3d at 571). The only remaining
issue is whether Sam Jones’s allegations are “substantially
the same as” the transactions disclosed by the New York
Times article in 2011.
To bar a relator’s complaint, a public disclosure must
have revealed both the misrepresented state of affairs and
the true state of facts from which an observer could deduce
that fraud is afoot. United States ex rel. Springfield
Terminal Railway Co. v. Quinn, 14 F.3d 645, 654, 304
8. “An allegation of fraud is an explicit accusation of
wrongdoing.” Mateski, 816 F.3d at 571 (quoting United States ex
rel. Zizic v. Q2Administrators, LLC, 728 F.3d 228, 235–36 (3d
Cir. 2013)). “A transaction warranting an inference of fraud is one
that is composed of a misrepresented state of facts plus the actual
state of facts.” Id. (quoting Zizic, 728 F.3d at 235–36).
21a
Appendix A
U.S. App. D.C. 347 (D.C. Cir. 1994); United States ex rel.
Found. Aiding The Elderly v. Horizon W., 265 F.3d 1011,
1015 (9th Cir. 2001) (adopting Springfield Terminal’s
analysis to compare a relator’s complaint to a prior public
disclosure); see also Mateski, 816 F.3d at 571. When the
“critical mass of the underlying facts . . . in the qui tam
complaint have been disclosed,” the public disclosure bar
applies. Amphastar, 856 F.3d at 703.
Prior to Mateski, our cases fell “at the far ends of
the similarity spectrum,” with complaints that were
either “virtually identical” to or “completely different”
from the prior disclosures. Mateski, 816 F.3d at 573. In
Mateski, we addressed for the first time a case that “f[ell]
between the poles,” where the outcome depended on the
level of generality with which we viewed the prior public
disclosure. Id. at 575. We relied upon three Seventh Circuit
cases as benchmarks to guide our comparison: United
States ex rel. Baltazar v. Warden, 635 F.3d 866 (7th Cir.
2011), United States ex rel. Goldberg v. Rush University
Medical Center, 680 F.3d 933 (7th Cir. 2012), and Leveski
v. ITT Educational Services, Inc., 719 F.3d 818 (7th Cir.
2013). Mateski, 816 F.3d at 575–77.
Most per tinent to this appeal is the Seventh
Circuit’s decision in Goldberg. Goldberg arose after
a Department of Health and Human Services audit
indicated, and a report confirmed, that many of the 125
teaching hospitals affiliated with medical schools in the
United States were billing the federal government for
unsupervised work performed by medical residents.
680 F.3d at 933–34. Goldberg explained that Medicare
22a
Appendix A
pays teaching hospitals for residents’ work on a fee-forservice basis only when attending physicians supervise
them. Id. at 934. Technically, those payments are for
services rendered by the supervising physician; the cost
of educating residents is reimbursed through government
grants. Id. The Government Accountability Office (GAO)
report disclosed that because Medicare was paying for
the services rendered by absent faculty members, and
the cost of educating residents was reimbursed through
government grants, teaching hospitals that billed on a
fee-for-service basis for unsupervised services effectively
received double compensation. Id.
The relators in Goldberg alleged that a particular
hospital billed for residents’ ser v ices that were
inadequately supervised. Id. at 934–35. According to
the Goldberg complaint, a particular university allowed
faculty at a teaching hospital to supervise multiple
procedures simultaneously and then billed Medicare
as though the attending physician had supervised each
procedure. Id. at 935. Because Medicare regulations
permit reimbursement only when teaching physicians
are “present during all critical portions of the procedure
and immediately available to furnish services during
the entire service or procedure,” the relator in Goldberg
alleged that the supervising physicians had presented
fraudulent claims to the federal government. Id. (quoting
42 C.F.R. § 415.172(a)(1)).
The district court dismissed the claims pursuant
to the public disclosure bar, but the Seventh Circuit
vacated that decision. Id. at 934–36. It concluded that the
23a
Appendix A
public disclosure bar did not apply because the Goldberg
complaint alleged a materially different practice than the
one described by the GAO report. The Seventh Circuit
reasoned that “[u]nless we understand the ‘unsupervised
services’ conclusion of the GAO report and the HHS audits
at the highest level of generality—as covering all ways
that supervision could be missing or inadequate—the
allegations of these relators are not ‘substantially similar.’”
Id. at 936. The Seventh Circuit concluded that “boosting
the level of generality in order to wipe out qui tam suits
that rest on genuinely new and material information is
not sound.” Id.; see also Baltazar, 635 F.3d at 867–68
(holding public report disclosing that some chiropractors
submitted bills to Medicare for services that were not
covered, and “up-coded” claims for other services, did
not bar a qui tam suit against a particular chiropractor
who intentionally up-coded services); Leveski, 719 F.3d
at 823–27, 832 (holding school’s scheme to boost Higher
Education Act funding it received on a per-student
basis, by compensating recruitment representatives
based on the number of students they recruited, was not
substantially similar to a “more sophisticated, secondgeneration method of violating the HEA” in which the
school compensated financial aid administrators based on
the number of students they helped apply for financial aid).
In Mateski, we obser ved that “[t]he practical
consequence of adopting the Seventh Circuit’s approach
to defining substantial similarity is to allow relators who
provide the Government with genuinely new and material
information of fraud to move forward with their qui tam
suits.” Mateski, 816 F.3d at 579. We reasoned that holding
24a
Appendix A
otherwise would disincentivize relators from stepping
forward, and that allowing a public document describing
generalized fraud across a swath of an industry to bar all
FCA suits identifying specific instances of fraud “would
deprive the Government of information that could lead to
recovery of misspent Government funds and prevention
of further fraud.” Id. at 577. We apply the same rule here.
At the same time, we are mindful that in its many efforts
to fine-tune the FCA, Congress has consistently sought
to strike a balance between incentivizing whistleblowers
to uncover fraud and barring copycat claims that do not
add materially new information to facts that have been
previously disclosed.
Fairly characterized, the transactions described in
Sam Jones’s complaint do not merely repeat what the
public already knew about Biotronik’s tactics to increase
its sales. When viewed with the appropriate level of
generality described by the benchmarks in Goldberg,
Baltazar, and Leveski, Sam Jones’s complaint provided
genuinely new and material information. The New York
Times article reported that Biotronik aggressively sought
to sell more of its CRM devices by providing significant
financial incentives to doctors who prescribe them, and
to doctors who referred patients to other doctors who
prescribed them, but the specific strategies the article
described differ markedly from those alleged in the
operative complaint. The article identified per-patient fees
paid to cardiologists for enrolling patients in “unscientific
studies” that Biotronik allegedly designed “as a means
of funneling money to doctors.” The article identified
Biotronik’s alleged practice of retaining physicians as
25a
Appendix A
“consultants” and paying them thousands of dollars in
flat fees per month. It also mentioned hiring “a doctor’s
spouse or other relative” without indicating the position
for which they might be hired and without any suggestion
of employing family members as sales representatives who
would be compensated on a commission basis according
to the number of Biotronik devices implanted by their
family member doctor. The article said nothing about
the Stark Law or the Anti-Kickback Statute; it did not
explicitly state or even imply that Biotronik’s alleged
practice of hiring doctors’ relatives violates federal law or
constitutes an improper billing practice. The article did
not suggest that the government paid for those devices
with taxpayer dollars. The article briefly mentioned Max
Bennett, a former employee of Biotronik and relator in a
qui tam action, but it did not detail the allegations of his
suit. The article refers to hospitals and doctors in Tucson,
Arizona, Sacramento, California, and Las Vegas, Nevada,
but nowhere does it refer to any hospital or doctor in
Southern California.
Defendants argue that the public disclosure bar may
preclude a relator’s suit even where the disclosure fails
to identify the qui tam defendants. But the New York
Times article omitted much more than Dr. Goodman
and Cedars-Sinai’s identities. Further, the case law
Defendants rely upon involved disclosures that revealed
sufficient information to identify members of small and
finite groups of contractors positioned to replicate the
same fraud. United States v. Alcan Elec. & Eng’g, Inc.,
197 F.3d 1014, 1017–19 (9th Cir. 1999) (holding public
filing contained enough information to allow government
26a
Appendix A
to investigate narrow class of local electrical contractors
who conspired with IBEW Local 1547 to skim employee
wages in violation of federal law); see also United
States ex rel. Fine v. Sandia Corp., 70 F.3d 568, 571
(10th Cir. 1995) (holding public disclosure that revealed
two of the nine privately-operated laboratories under
the Department of Energy’s administrative oversight
misappropriated nuclear waste funds gave government
sufficient information to investigate the remaining seven).
By contrast, the compensation arrangement Sam Jones
describes could be replicated at every hospital in the
United States that accepts federal health insurance to
purchase medical devices. Defendants do not explain how
the sales commissions paid to Dr. Goodman’s brother
would have been readily identifiable from the invoices for
Biotronik’s devices.
In Goldberg, the GAO report disclosed only that
teaching hospitals were billing for unsuper vised
procedures and the relator identified a specific teaching
hospital that was billing for under-supervised procedures.
Similarly here, the New York Times article suggested only
that Biotronik may have hired family members of doctors
in unspecified positions to increase its share of the CRM
market. It did not disclose that Biotronik paid commissions
per device or submitted claims to Medicare and Medicaid
for the cost of the CRM devices in violation of the Stark
Law or the Anti-Kickback Statute. Because the article did
not disclose the “critical mass of the underlying facts . . .
in the qui tam complaint,” Amphastar, 856 F.3d at 703,
the public disclosure bar does not preclude Sam Jones’s
second amended complaint.
27a
Appendix A
D.
Defendants filed a motion for judicial notice of four
other New York Times articles and the complaints in
Sant and Bennett, which we granted. Even if we read
the June 1, 2011 article in combination with the other
New York Times articles, Defendants have not met
their burden of showing that the public disclosure bar
applies. The complaints in Sant and Bennett alleged that
Biotronik paid consulting fees to physicians for referring
patients, paid fees to physicians for referring patients to
participate in sham studies, and incentivized physicians
with sports tickets, travel, and expensive dinners. Sam
Jones’s original complaint included these allegations, but it
voluntarily dismissed those allegations from its operative
complaint. Thus, considered cumulatively, the articles
and the Sant and Bennett complaints do not trigger the
public disclosure bar because no combination of those
public documents disclosed the three-way compensation
arrangement central to Sam Jones’s second amended
complaint.
The district court did not reach any of Defendants’
other arguments for dismissal, and we do not reach them
in the first instance.9 See Silbersher, 89 F.4th at 1169. And
because the public disclosure bar does not apply, we do
9. Defendants also argued that the complaint should be
dismissed because: (1) the FCA’s government action bar applies;
(2) Sam Jones failed to meet the pleading requirements of Federal
Rules of Civil Procedure 8(a) and 9(b); (3) the applicable statute of
limitations partially bars Sam Jones’s claims; and (4) the related
state-law claims fail for various reasons.
28a
Appendix A
not reach the original source inquiry. Accordingly, Sam
Jones’s Rule 59(e) motion requesting leave to amend the
complaint is moot.
IV.
We reverse the district court’s order dismissing Sam
Jones’s action, vacate as moot the district court’s order
denying Sam Jones’s Rule 59(e) motion, and remand the
case for further proceedings consistent with this opinion.
REVERSED, VACATED, and REMANDED.
29a
Appendix
B UNITED STATES
APPENDIX B — ORDER
OF THE
DISTRICT COURT FOR THE CENTRAL DISTRICT
OF CALIFORNIA, DATED JANUARY 4, 2023
UNITED STATES DISTRICT COURT
CENTRAL DISTRICT OF CALIFORNIA
Case No. CV 17-01391 PSG (KSx)
CIVIL MINUTES – GENERAL
UNITED STATES EX REL.
SAM JONES COMPANY LLC
v.
BIOTRONIK INC. ET AL.
January 4, 2023
The Honorable Philip S. Gutierrez,
United States District Judge
Proceedings (In Chambers): Order GRANTING
Relator’s motion for voluntary partial dismissal;
GRANTING without leave to amend Defendants’
motions to dismiss; and DENYING as moot
Defendants’ supplemental motion to dismiss.
Before the Court are several motions. Defendants
Biotronik, Inc. (“Biotronik”), Cedars-Sinai Medical
30a
Appendix B
Center (“Cedars-Sinai”), and Dr. Jeffrey Goodman (“Dr.
Goodman”) (collectively, “Defendants”) filed motions to
dismiss the second amended complaint (“SAC”) filed by
qui tam relator The Sam Jones Company, LLC (“Relator”
or “Sam Jones”). See Dkts. # 94 (“Biotronik MTD”), 96,
97. Relator opposed, see Dkt. # 106 (“Opp. MTD”), and
Defendants replied, see Dkts. # 113, 114, 115. Relator also
filed an unopposed motion for voluntary partial dismissal
of certain claims pleaded against Biotronik in the SAC. See
Dkt. # 109. Defendants also joined in filing a supplemental
motion to dismiss based on the unsealing by this Court
of a separate qui tam action. See Dkts. # 119, 120, 121.
Relator opposed, see Dkt. # 125, and Defendants replied,
see Dkt. # 126.
Having considered the parties’ papers, the Court
GRANTS Relator’s motion for voluntary partial dismissal;
GRANTS without leave to amend Defendants’ motions to
dismiss; and DENIES as moot Defendants’ supplemental
motion to dismiss.
I.
Factual Background
This is primarily a qui tam action based on healthcare fraud allegedly perpetrated against the federal
government. See generally SAC. Relator Sam Jones brings
this action against Defendants for violations of the False
Claims Act (“FCA”), 31 U.S.C. § 3729 et seq., and related
state statutes, based mainly on an unlawful direct and
indirect compensation scheme between Defendants that
resulted in fraudulent insurance billing. See SAC ¶¶ 1–3,
61–107.
31a
Appendix B
Relator is a limited liability company formed to bring
this action and is made up of two managing members, Leo
Williams and Mark O’Connor. Id. ¶¶ 5–7. Williams worked
for Biotronik from 2008 to 2011 as a sales representative in
Los Angeles, California, and again from 2014 to present,
promoting Biotronik’s cardiac rhythm management
(“CRM”) products. Id. ¶ 6. O’Connor worked as a sales
representative in Los Angeles for Biotronik from 2008 to
2014 and also promoted Biotronik CRM products. Id. ¶ 7.
In 2014, after Biotronik entered into a $4.9 million
FCA settlement with the Department of Justice, Williams
and O’Connor suspected that Brian Goodman, a sales
representative for Biotronik, had taken on the role as the
sole representative for all Biotronik CRMs implanted at
Cedars-Sinai in Beverly Hills, California, by his brother
Dr. Goodman. Id. ¶¶ 1, 20. Williams and O’Connor initially
reviewed a sampling of Biotronik sales invoices to confirm
their suspicions. Id. ¶ 20. They then obtained copies of all
Biotronik sales invoices showing Brian Goodman as the
sales representative of credit for Dr. Goodman and obtained
copies of Biotronik’s medical device reporting forms for
each implant procedure up until mid-2014. Id. ¶ 21. While
Williams and O’Connor were aware that they may lose
business opportunities to market Biotronik’s devices at
Cedars-Sinai when Brian Goodman became a Biotronik
sales representative selling devices to his brother, it was
not until 2015 that either Williams or O’Connor knew and
understood the nature and extent of Defendants’ hiring
practices and compensation arrangements involving the
family members of physicians. Id. ¶¶ 22, 25–26.
32a
Appendix B
Williams and O’Connor purportedly uncovered a
nepotistic hiring scheme. See, e.g., id. ¶ 61. Starting on
or before August 2008, and continuing through 2019,
Biotronik, Cedars-Sinai, and Brian Goodman agreed to
participate in a three-way compensation agreement for
implant surgeries performed by Dr. Goodman at CedarsSinai’s hospital. Id. The agreement specified that Dr.
Goodman would choose Biotronik’s CRM devices for the
surgeries he performed at Cedars-Sinai, Cedars-Sinai
would purchase the devices, and a claim for coverage would
be submitted to Medicare, Medicaid, or other federal or
private health insurance programs. Id. ¶¶ 61–69. Brian
Goodman, the sales representative for Biotronik, would
receive commissions on those sales that varied with the
volume of CRM devices implanted by Dr. Goodman and
the volume of Dr. Goodman’s implant surgeries performed
at Cedars-Sinai. Id. ¶ 61.
One purpose of the compensation arrangement was to
induce Dr. Goodman to choose Biotronik’s devices among
a competitive market for CRM devices. Id. ¶¶ 70–71.
Another purpose of the compensation agreement was to
induce Dr. Goodman to refer his patients to Cedars-Sinai
for implantation of Biotronik’s devices. Id. ¶ 76. That
arrangement led to Dr. Goodman performing at least 678
implant surgeries at Cedars-Sinai from between 2009 and
2017, in which Biotronik devices sold by Brian Goodman
were implanted into each patient. Id. ¶¶ 77–93. This
practice, however, was not just confined to the Goodmans;
from as early as 2008, Biotronik allegedly implemented a
company-wide nepotistic hiring scheme. Id. ¶¶ 108, 114–24.
33a
Appendix B
Relator alerted the federal and state governments of
the alleged fraud through the filing of this action. Id. ¶ 27.
II. Procedural Background
On February 21, 2017, Relator filed its complaint
with the Court. See Dkt. # 1. On February 12, 2021, the
federal government and the State of California declined
to intervene in the case, but the federal government
permitted Relator to maintain the action. See Dkt. # 42.
Relator then filed a first amended complaint, see Dkt. #
68, followed by a second amended complaint (“SAC”), see
Dkt. # 92.
The SAC brings the following causes of action:
First Cause of Action: FCA: False or Fraudulent
Claims (31 U.S.C. § 3729(a)(1)(A)) – Stark Law – Direct
Compensation (against Biotronik and Goodman). SAC
¶¶ 156–61.
Second Cause of Action: FCA: False or Fraudulent
Claims (31 U.S.C. § 3729(a)(1)(A)) – Stark Law –
Indirect Compensation (against all Defendants). Id.
¶¶ 162–67.
Third Cause of Action: FCA: False or Fraudulent
Claims (31 U.S.C. § 3729(a)(1)(A)) – Anti-Kickback
Statute (“AKS”) Compensation Arrangement (against
all Defendants). Id. ¶¶ 168–73.
34a
Appendix B
Fourth Cause of Action: FCA: False or Fraudulent
Claims (31 U.S.C. § 3729(a)(1)(C)) – Conspiracy
(against all Defendants). Id. ¶¶ 174–76.
Fifth Cause of Action: FCA: False or Fraudulent
Claims (31 U.S.C. § 3729(a)(1)(A)) – AKS Other
Inducements (against Biotronik only). Id. ¶¶ 177–81.
Sixth Cause of Action: FCA: False or Fraudulent
Claims (31 U.S.C. § 3729(a)(1)(A)) – Stark Law –
Direct and Indirect Compensation (against Biotronik
only). Id. ¶¶ 182–86.
Seventh Cause of Action: California Insurance Frauds
Prevention Act, Cal. Ins. Code § 1871.7 et seq. (against
all Defendants). Id. ¶¶ 187–91.
Eighth Cause of Action: Illinois Insurance Claims
Fraud Prevention Act, 740 ILCS 92/1 et seq. (against
Biotronik only). Id. ¶¶ 192–201.
Remaining Causes of Action (9 through 38): State
False Claims Acts (against Biotronik only). Id.
¶¶ 202–06.
On May 9, 2022, Biotronik and the other Defendants
filed motions to dismiss the SAC. See Biotronik MTD;
Dkts. # 96, 97. And in support of its motion, Biotronik
asked the Court to take judicial notice of court records
and published news articles. See Dkt. # 95.
35a
Appendix B
On August 31, 2022, Relator filed an unopposed motion
for voluntary partial dismissal of certain claims against
Biotronik. See Dkt. # 109. Relator filed the motion because
of a settlement reached with Biotronik in another case,
United States ex rel. Bell v. Biotronik, Inc., CV 18-1895
PSG (KSx), which Relator claims resolves a portion of
the claims asserted against Biotronik in this case. See
Dkt. # 109, 1. Specifically, Relator requests that the
Court dismiss the Fifth Cause of Action with prejudice
for “covered conduct” claims and without prejudice for
“non-covered conduct” claims as well as the Remaining
Causes of Action (9 through 38) with prejudice for “covered
conduct” claims released in the agreement between
Biotronik and any Medicaid States. Id. For Relator, the
effect of the motion will be “to focus the remaining claims
in this action on the unlawful compensation arrangements
with physician family members.” Id. 6.
On October 21, 2022, Biotronik filed a motion for leave
to file a supplemental motion to dismiss, which the other
Defendants sought to join, based on the recent unsealing
of the Bell case. See Dkts. # 119, 120, 121.
III. Legal Standard
A.
Rule 12(b)(1)
Federal Rule of Civil Procedure 12(b)(1) provides for a
party, by motion, to assert the defense of “lack of subjectmatter jurisdiction.” This defense may be raised at any
time prior to final judgment, and the Court is obligated to
address the issue sua sponte. See Snell v. Cleveland, Inc.,
36a
Appendix B
316 F.3d 822, 826–27 (9th Cir. 2002); Valdez v. Allstate
Ins. Co., 372 F.3d 1115, 1116 (9th Cir. 2004). “If the court
determines at any time that it lacks subject-matter
jurisdiction, the court must dismiss the action.” See Fed.
R. Civ. P. 12(h)(3).
A Rule 12(b)(1) jurisdictional attack may be facial or
factual. See White v. Lee, 227 F.3d 1214, 1242 (9th Cir.
2000). In a facial attack, the challenging party asserts that
the allegations contained in a complaint are insufficient on
their face to invoke federal jurisdiction. See Safe Air for
Everyone v. Meyer, 373 F.3d 1035, 1039 (9th Cir. 2004).
By contrast, in a factual attack, the challenger disputes
the truth of the allegations that, by themselves, would
otherwise invoke federal jurisdiction. See id.
B. Rule 12(b)(6)
To survive a motion to dismiss under Federal Rule
of Civil Procedure 12(b)(6), a complaint must “contain
sufficient factual matter, accepted as true, to ‘state a
claim to relief that is plausible on its face.’” Ashcroft v.
Iqbal, 556 U.S. 662, 678 (2009) (quoting Bell Atl. Corp.
v. Twombly, 550 U.S. 544, 570 (2007)). In assessing the
adequacy of the complaint, the court must accept all
pleaded facts as true and construe them in the light most
favorable to the plaintiff. See Turner v. City & Cnty.
of S.F., 788 F.3d 1206, 1210 (9th Cir. 2015); Cousins v.
Lockyer, 568 F.3d 1063, 1067 (9th Cir. 2009). The court
then determines whether the complaint “allows the court
to draw the reasonable inference that the defendant is
liable for the misconduct alleged.” Iqbal, 556 U.S. at 678.
37a
Appendix B
However, “[t]hreadbare recitals of the elements of a cause
of action, supported by mere conclusory statements, do
not suffice.” Id. Accordingly, “for a complaint to survive
a motion to dismiss, the non-conclusory ‘factual content,’
and reasonable inferences from that content, must be
plausibly suggestive of a claim entitling the plaintiff to
relief.” Moss v. United States Secret Serv., 572 F.3d 962,
969 (9th Cir. 2009).
When a party alleges fraud, a heightened pleading
standard is applied. Federal Rule of Civil Procedure
9(b) requires a party to “state with particularity the
circumstances constituting fraud.” To plead fraud with
particularity, the pleader must state the time, place, and
specific content of the false representations. See Odom
v. Microsoft Corp., 486 F.3d 541, 553 (9th Cir. 2007).
The allegations “must set forth more than neutral facts
necessary to identify the transaction. The plaintiff must
set forth what is false or misleading about the statement,
and why it is false.” Vess v. Ciba-Geigy Corp. USA, 317
F.3d 1097, 1106 (9th Cir. 2003) (citation omitted) (cleaned
up). In essence, the defendant must be able to prepare
an adequate answer to the allegations of fraud. Where
multiple defendants allegedly engaged in fraudulent
activity, “Rule 9(b) does not allow a complaint to merely
lump multiple defendants together.” Swartz v. KPMG
LLP, 476 F.3d 756, 764 (9th Cir. 2007). Rather, a plaintiff
must identify each defendant’s role in the alleged scheme.
See id. at 765.
38a
Appendix B
IV. Discussion
Defendants raise several arguments for why the
SAC must be dismissed: (1) the government-action bar
applies; (2) the public-disclosure bar applies; (3) Relator
has failed to meet the pleading requirements of Federal
Rules of Civil Procedure 8(a) and 9(b); (4) the applicable
statute of limitations partially bars Relator’s claims; and
(5) related state-law claims fail and should be dismissed.
See generally Biotronik MTD. Most notably, Defendants
argue that Relator has failed to satisfy the pleading
requirements of Rules 8(a) and 9(b) and that the publicdisclosure bar applies.
The Court, however, need only address a few matters
to resolve the case. The Court first GRANTS Relator’s
unopposed motion for voluntary partial dismissal. See
Dkt. # 109. With that, the case is narrowed to FCA
claims based on the alleged nepotistic hiring scheme,
which the Court finds are barred by the public-disclosure
bar. The Court therefore need not determine the merits
of the government-action bar and so DENIES as moot
Defendants’ motion to file a supplemental motion to
dismiss. See Dkts. # 119, 120, 121. Finally, for the
remaining state-law claims, the Court declines to exercise
supplemental jurisdiction.
A.
False Claims Act
“Where an individual has information regarding a
fraud perpetrated on the Federal Government, the False
Claims Act (FCA), 31 U.S.C. § 3729 et seq., empowers that
39a
Appendix B
person – called a ‘relator’ – to bring a suit on the Federal
Government’s behalf.” United States ex rel. Bennett v.
Biotronik, Inc., 876 F.3d 1011, 1012 (9th Cir. 2017). “These
are called qui tam suits, and have been described as the
primary tool for combatting fraud against the federal
government.” Id. (citation omitted); see also United States
v. Allergan, Inc., 46 F.4th 991, 993–94 (9th Cir. 2022).
The FCA, however, contains a series of “bars” to
suit that and are “intended to prevent ‘parasitic’ or
‘opportunistic’ qui tam actions.” Allergan, Inc., 46 F.4th
at 994. The bar relevant here is the “public-disclosure
bar,” 31 U.S.C. § 3730(e)(4)(A).
i.
Public-Disclosure Bar
The “public-disclosure bar” prevents a relator from
alleging “fraud that has already been publicly disclosed,
unless the relator qualifies as an ‘original source.’” United
States ex rel. Mateski v. Raytheon Co., 816 F.3d 565,
569 (9th Cir. 2016). It “is intended to encourage suits by
whistle-blowers with genuinely valuable information,
while discouraging litigation by plaintiffs who have no
significant information of their own to contribute.” Id.
at 570.
The public-disclosure bar was first adopted in 1986,
and it was last modified in 2010. Allergan, Inc., 46 F.4th
at 996. The 2010 amendment transformed the bar from
a jurisdictional bar to an affirmative defense, altered
the requirements for the bar to be met, and modified
the definition of an “original source.” See Prather v.
40a
Appendix B
AT&T, Inc., 847 F.3d 1097, 1102–04 (9th Cir. 2017). The
amendment, however, is not retroactive, see id., and some
district courts have ruled that deciding which provision
applies depends on “when the underlying conduct
occurred.” United States ex rel. Carter v. Bridgepoint
Educ., Inc., CV 10-1401 JLS (WVG), 2015 WL 4892259,
at *2–3 (S.D. Cal. Aug. 17, 2015); see also United States
ex rel. Calva v. Impac Secured Assets Corp., CV 16-1983
JVS (JCGx), 2018 WL 6016152, at *4 (C.D. Cal. June 12,
2018). Here, although the underlying conduct spans both
pre- and post- amendment periods, see SAC ¶¶ 70–92,
the Court finds that under either version of the publicdisclosure bar, the outcome is the same.1
The 1986 version of the bar is triggered when three
conditions are met: “(1) the disclosure at issue occurred
through one of the channels specified in the statute; (2)
the disclosure was ‘public’; and (3) the relator’s action
is based upon the allegation or transaction publicly
disclosed.” United States ex rel. Solis v. Millennium
Pharms., Inc., 885 F.3d 623, 626 (9th Cir. 2018) (citation
omitted). The 2010 amendment most notably changed the
“based upon” language to “substantially the same,” but
the Ninth Circuit has explained that the change “did not
materially alter the elements required to meet the public
disclosure bar.” Allergan, Inc., 46 F.4th at 996 n.5; see also
Mateski, 816 F.3d at 569 n.7, 573 & n.14 (explaining that
“based upon” is equivalent to “substantially similar to”
1. For this reason, the Court need not decide the statute of
limitations argument raised by Defendants. See Biotronik MTD 25
(arguing that claims based on conduct before 2011 are time-barred
under 31 U. S.C. § 3731(b)(1)–(2)).
41a
Appendix B
and that “[t]h[e] substantial similarity concept has now
been codified in the 2010 version of the FCA”).
For purposes of this case, the remaining elements
are the same under both versions. The “news media” is a
channel of disclosure available under either version. See 31
U.S.C. § 3730(e)(4)(A) (1986) (specifying “the news media”
as channel of disclosure); § 3730(e)(4)(A) (2010) (same).
And the meaning of “allegation or transaction” remains
the same. An “allegation” “refer[s] to [a] direct claim[] of
fraud,” and a “transaction” “refer[s] to facts from which
fraud can be inferred.” Amphastar Pharms. Inc. v. Aventis
Pharma SA, 856 F.3d 696, 703 (9th Cir. 2017) (citation
omitted). “[W]hen a critical mass of the underlying facts
or of the allegations in the qui tam complaint have been
disclosed prior to the qui tam complaint being filed, the
public disclosure bar applies.” Id.
The Ninth Circuit has provided clarity on how to apply
the test. It has explained that if “X + Y = Z, Z represents
the allegation of fraud and X and Y represent its essential
elements.” Id. (citation omitted). “If the fraud allegations
Z are disclosed, the bar applies,” and “[i]f enough of the
underlying facts making up the elements of fraud are
disclosed, the bar applies.” Id. at 703–04 (cleaned up).
“In a fraud case, X and Y inevitably stand for but two
elements: the misrepresented facts X and the true facts
Y.” Id. at 704 (citation omitted) (cleaned up). The Ninth
Circuit has also explained how to understand substantial
similarity. “A prior disclosure and an allegation may be
substantially similar when the prior public disclosure put
the government on notice to investigate the fraud before
42a
Appendix B
the relator filed his complaint.” Solis, 885 F.3d at 626
(citation omitted). Also important to the inquiry is whether
the alleged fraud is “different in kind and in degree” from
the prior disclosure. Mateski, 816 F.3d at 578.
If the public disclosure applies, a court must then
determine whether the “original source” exception
applies. The 1986 version of the statute defines an
“original source” as an individual who (1) “has 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)(A) (1986); see also Solis, 885 F.3d
at 627–28. The first prong requires “knowledge that is
both direct and independent.” Amphastar Pharms. Inc.,
856 F.3d at 705 (citation omitted). “Direct” knowledge
requires a relator to “show that it had firsthand knowledge
of the alleged fraud, and that it obtained this knowledge
through its own labor unmediated by anything else.” Id.
(citation omitted) (cleaned up). “Independent” knowledge
requires a relator to show that she had “relevant evidence
of fraud prior to the public disclosure of the allegations.”
Id. (citation omitted).
The 2010 amendment, however, changes the definition
to include two types of “original sources.” An “original
source” may be an individual who “prior to a public
disclosure under subsection (e)(4)(a), has voluntarily
disclosed to the Government the information on which
allegations or transactions in a claim are based.” 31 U.S.C.
§ 3730(e)(4)(A) (2010). Or an “original source” may be
43a
Appendix B
someone who (1) “has knowledge that is independent of
and materially adds to the publicly disclosed allegations
or transactions,” and (2) “has voluntarily provided the
information to the government before filing an action.”
§ 3730(e)(4)(A) (2010). Courts have yet to fully flesh out
the scope of the amended version of the statute, but one
has noted that “materially adds” requires allegations to
provide more than “background information and details
relating to the alleged fraud – they must add value to what
the government already knew.” United States Hastings
v. Wells Fargo Bank, NA, Inc., 656 F. App’x 328, 331–32
(9th Cir. 2016).
Here, under either statutory version, the publicdisclosure bar applies, and Relator cannot show that it
qualifies as an “original source.”
a.
New York Times Article
Defendants ask the Court to take judicial notice of
several court records and published news articles to
support its public-disclosure and government-action bar
arguments. See Dkt. # 95. Most relevant here is the May
31, 2011, New York Times article by Barry Meier titled
Sales Tactics on Implants Raise Doubts. See Dkt. # 95,
Exh. 7 (“N.Y. Times article” or “article”). And the Court
will take judicial notice of that publication to determine
whether it triggers the public-disclosure bar. See United
States v. Orthopedic All., LLC, CV 16-3966 MWF (SKx),
2020 WL 6151084, at *4 (C.D. Cal. July 13, 2020) (taking
judicial notice of news articles because “[t]he Court may
take judicial notice of court filings and other matters of
44a
Appendix B
public record”); see also United States v. Kimberly-Clark
Corp., CV 14-08313 JAK (JPRx), 2017 WL 10439028, at
*3 (C.D. Cal. July 14, 2017).1
The Court finds that the article triggers the publicdisclosure bar. The article no doubt satisfies the first
two elements of the bar because the N.Y. Times is
a quintessential “news media” source that publicly
disseminates news articles. See Orthopedic All., LLC,
2020 WL 6151084, at *4 (ruling that news articles were a
public disclosure under both the pre- 2010 and post- 2010
versions of the statute). And the article satisfies the third
element because the allegations of fraudulent nepotism in
Relator’s SAC match-up to the “transaction” disclosed in
the article.
The article constitutes a “transaction” because it
discloses sufficient facts implying that Biotronik engaged
in fraudulent nepotistic hiring and compensation practices.
It explores the alleged conduct by players in the implant
industry “where producers seek to influence the brand
of device that patients receive long before a diagnosis.”
N.Y. Times Article 1. It also discusses industry sales
tactics, including “bogus or inflated consulting deals with
doctors,” and reports that the Justice Department has, in
recent years, investigated heart-implant manufacturers
and settled “charges that they illegally promoted sales.”
Id. Biotronik’s alleged involvement in that activity is a core
focus of the article. The article explains that “the Justice
1. The Court need not take judicial notice of other records
and publications referenced by Defendants in Dkts. # 95 and 114.
45a
Appendix B
Department has been investigating Biotronik’s sales and
marketing practices” but notes that Biotronik disclaims
any wrongdoing. Id. For example, included in the article
is a statement from Biotronik that “[t]he implication that
our contractual partnership with expert cardiologists is
simply to enhance sales is flatly wrong and unfair.” Id. The
article, however, goes on to describe internal Biotronik
documents that offer a possible explanation for Biotronik’s
market share increase other than better products: “the
company’s success in developing relationships with
doctors who, in turn, can influence which brand of device
a patient gets.” Id. One such tactic noted is the hiring of
a physician’s family member:
Under [a new] law, medical products companies
will have to disclose the fees they pay to
doctors for services like consulting or speaking
engagements. But the new law will not shed
light on what the Biotronik documents indicate
is a widely used industry practice: the hiring
by a device maker of a doctor’s spouse or other
relative. For example, in plotting strategies
to gain sales at one California hospital,
Biotronik officials suggested that an implant
specialist, whose son and wife both worked
for a competitor, might be wooed if Biotronik
offered him concessions “such as studies or even
the hiring of his son,” according to an internal
company report. Another company document
discussed how the revenues of a sales official
sharply dropped after his father, an implant
46a
Appendix B
specialist, died unexpectedly in an airplane
crash.
Id. 2.
That paragraph, read in context, is sufficient to
infer fraud. The article reveals that Biotronik had likely
engaged in unlawful nepotistic hiring practices to increase
device sales (alleged true facts), while publicly claiming
that its sales success was based on better products and
proper relationships with doctors (alleged misrepresented
facts). See id. 1–2. There are also references in the
article to investigations by the Justice Department into
allegations that heart-device manufacturers were involved
in illegal sales tactics aimed at convincing medical
providers to implant each manufacturer’s own medical
devices. Id. 1. It thus takes only a small inferential step to
conclude the article implies that Biotronik and colluding
medical providers were misrepresenting to the healthcare industry and federal government the reasons for
Biotronik-made devices being implanted into patients.
Indeed, Relator appears to agree that the news
articles from 2011 cited by Defendants “reveal the problem
of [sic] Biotronik engaged in past AKS violations” and
argue only that they are not substantially similar to the
allegations in the SAC. Opp. MTD 21. The Court finds,
however, that the “transaction” gleaned from the article
is substantially similar to the allegations in the SAC.
In the SAC, Relator alleges that Biotronik and the
other Defendants engaged in a nepotistic hiring and
47a
Appendix B
compensation practice and falsely represented compliance
with federal law to the government. For example, the SAC
alleges in part that Biotronik sought to induce Dr. Goodman
to choose Biotronik’s devices among a competitive market
for CRM devices by hiring his brother. Id. ¶¶ 70–71. It
also alleges that the compensation agreement was to
induce Dr. Goodman to refer his patients to Cedars-Sinai
for implantation of Biotronik’s devices. Id. ¶ 76. That
arrangement led to Dr. Goodman performing at least 678
implant surgeries at Cedars-Sinai from between 2009 and
2017, in which Biotronik devices sold by Brian Goodman
were implanted into each patient. Id. ¶¶ 77–93. That type
of arrangement was also a company-wide practice for
Biotronik. See id. ¶¶ 108–24 (providing specific examples
of arrangements between other physicians).
These allegations are substantially similar to what was
disclosed by the article. Solis helps to show why. There,
the court found substantial similarity where the same
actors, the same conduct, and the same risk were involved
in both the prior disclosure and relator’s complaint. Solis,
885 F.3d at 626. And while the complaint contained more
detail than the previous disclosure, the court explained
that both sets of allegations were “similar in kind, even
if slightly less so in degree,” and “[t]he prior disclosure
need not be identical with [the] allegations to bar [the]
claim.” Id. at 627 (citation omitted). Similarly here, both
the article and the SAC involve Biotronik as the main actor
and set-out the same core charge that Biotronik hired the
family members of physicians to induce those physicians
to implant Biotronik devices.
48a
Appendix B
And while the SAC does provide additional details
about the arrangement, such as how many devices were
implanted by Dr. Goodman and the specific names of
other physicians involved in the alleged fraud, the prior
disclosure and complaint need not be identical. Id. It is
enough that “[t]hey are close enough in kind and degree
to have put the government on notice to investigate the
alleged fraud before [relator] filed his complaint.” Id. The
article does just that by explaining Biotronik’s nepotistic
hiring practice and providing two specific examples:
Biotronik had a strategy to gain sales at a California
hospital by targeting a particular implant specialist and
his family members, and revenues of a Biotronik sales
official plummeted after his father, an implant specialist,
died. N.Y. Times Article 2.
Relator, pointing to Mateski, argues that substantial
similarity cannot be established on the facts here. Opp.
MTD 21–22. The court there found that previous disclosed
information about a government-contract project was
different “in both degree and kind” from a relator’s fraud
allegations, and thus not substantially similar, because of
the severe disparity in specificity between the two sets of
allegations. Mateski, 816 F.3d at 576–80. In contrast to
the precise examples of fraud in the relator’s complaint,
including false waivers, signoffs, certifications and the
use of prohibited materials and improper assembly
techniques, the prior public reports in that case “merely
allege[d] general problems involving mismanagement,
technical difficulties, and noncompliance with contract
and policy directives.” Id. at 578–79. The court thus held
that “[e]ven if . . . the prior public reports provided enough
49a
Appendix B
information to pursue an investigation into some fraud,
and even though the Government did in fact undertake
some investigation of VIIRS, the prior reports could not
have alerted the Government to the specific areas of fraud
alleged by Mateski.” Id. at 579.
The Court finds Mateski to be distinguishable. Unlike
in Mateski, here there is a disclosure of more than only
“very generalized problems,” id. The article did not simply
allege vague problems with Biotronik’s sales practices;
it pointed to the specific tactic of hiring family members
of physicians to increase the use of Biotronik devices in
surgeries. N.Y. Times Article 2. So unlike in Mateski,
the article’s disclosure and the SAC allegations are not
so different in both kind and degree. Rather, the article
“alerted the Government to the specific areas of fraud
alleged.” Mateski, 816 F.3d at 579; see also Solis, 885 F.3d
at 626 (holding that substantial similarity can be found
where “the prior public disclosure put the government on
notice to investigate the fraud before the relator filed his
complaint” (citation omitted)).
The Court thus finds that the public-disclosure bar
applies.
b.
“Original Source” Exception
Relator has failed to show that it can qualify as an
“original source” under either version of the publicdisclosure bar. It has failed to allege facts showing that
it had “independent” knowledge and that it voluntarily
50a
Appendix B
disclosed the information to the government before filing
suit.1
In the SAC, Relator provides specific details on the
investigation into Defendants’ alleged fraud but fails to
plead allegations showing it knew about the fraud before the
2011 article was published. The SAC states that Williams
and O’Connor worked for Biotronik beginning from 2008,
id. ¶¶ 6–7, but it was only after Biotronik entered into
a $4.9 million FCA settlement with the Department of
Justice in 2014 that Williams and O’Connor suspected that
Brian Goodman had taken on the role as Dr. Goodman’s
sole representative for all Biotronik CRMs implanted at
Cedars-Sinai. Id. ¶ 20. The SAC then explains how they
obtained copies of all Biotronik sales invoices showing
Brian Goodman as the sales representative of credit for
Dr. Goodman and obtained copies of Biotronik’s medical
device reporting forms for each implant procedure up until
mid-2014. Id. ¶ 21. Then it states that it was not until 2015
that either Williams or O’Connor knew and understood
the nature and extent of Defendants’ hiring practices and
compensation arrangements involving physician family
members. Id. ¶¶ 22, 25–26.
Those allegations make clear that neither Williams
nor O’Connor had knowledge of the purported fraud by
Biotronik and the other Defendants until at least 2014,
when Williams and O’Connor were put on the trail by
1. The parties argue about issues surrounding whether Sam
Jones can qualify as a relator and an adequate “original source,”
see Biotronik MTD 6–8; Opp. MTD 22, but whether Sam Jones
is a proper relator or not does not affect the outcome.
51a
Appendix B
Biotronik’s FCA settlement with the Justice Department.
Id. ¶ 20. The SAC thus shows that neither Williams nor
O’Connor had “independent” knowledge of the purported
fraud prior to the publication of the N.Y. Times article,
and so they cannot meet the “original source” exception.
Relator also cannot qualify as an “original source”
because the allegations clearly state that the disclosure
to the government happened when the suit was filed –
not before it was filed. Specifically, the SAC states that
“Relator is an original source by its filing of this action
on February 21, 2017. Relator’s filing alerted the United
States and representative States of the allegations against
defendants, and it ‘set the Government squarely on the
trial’ of the alleged fraud.” Id. ¶ 27. But to qualify as
an “original source” under either version of the statute,
a relator must show she “has voluntarily provided the
information to the Government before filing an action.” 31
U.S.C. § 3730(e)(4)(A) (1986); § 3730(e)(4)(A) (2010).
Thus, because the public-disclosure bar is triggered
and Relator cannot meet the “original source” exception,
Relator’s FCA claims fail, and the Court GRANTS
Defendants’ motions to dismiss.
B. State Law Claims
Relator’s remaining state law claims will also be
dismissed. The Court declines to exercise supplemental
jurisdiction under 28 U.S.C. § 1367 considering that all
the FCA claims have been dismissed. See § 1367(c)(3);
Calva, 2018 WL 6016152, at *8 (“Because the Court has
52a
Appendix B
dismissed Calva’s FCA claims either under Rule 12(b)(1)
or Rule 12(b)(6), the Court either must dismiss or declines
to exercise supplemental jurisdiction over Calva’s state
law claims.”).
C.
Leave to Amend
Relator asks for leave to amend if the Court finds the
SAC deficient. See Opp. MTD 35. Under Federal Rule of
Civil Procedure 15(a)(2), leave to amend should be freely
given “when justice so requires,” and the Ninth Circuit has
explained that the policy of granting leave is to be applied
with “extreme liberality,” Eminence Cap., LLC v. Aspeon,
Inc., 316 F.3d 1048, 1051 (9th Cir. 2003) (citation omitted).
But a court can deny leave to amend if amendment would
be futile. See Kroessler v. CVS Health Corp., 977 F.3d 803,
815 (9th Cir. 2020).
The Court believes that any amendment here would
be futile. Relator has alleged that it provided the federal
government with information about the fraud when the
suit was filed; but the statute requires providing the
necessary information to the government before filing
the action. Also, because Relator alleges that it learned
of the purported fraud starting in or after 2014 – after
the publication of the N.Y. Times article – it cannot
plead additional facts to show that it or its members had
“independent” knowledge.
The Court therefore DENIES leave to amend.
53a
Appendix B
V. Conclusion
For the foregoing reasons, the Court GRANTS
Relator’s motion for voluntary partial dismissal; GRANTS
without leave to amend Defendants’ motions to dismiss;
and DENIES as moot Defendants’ supplemental motion
to dismiss.
IT IS SO ORDERED.
54a
Appendix
C UNITED STATES
APPENDIX C — ORDER
OF THE
COURT OF APPEALS FOR THE NINTH CIRCUIT,
DATED NOVEMBER 4, 2025
UNITED STATES COURT OF APPEALS
FOR THE NINTH CIRCUIT
No. 23-55361
D.C. No. 2:17-cv-01391-PSG-KS
Central District of California, Los Angeles
UNITED STATES OF AMERICA ex rel.
SAM JONES COMPANY, LLC, RELATOR,
Plaintiff-Appellant,
v.
BIOTRONIK, INC.; CEDARS-SINAI MEDICAL
CENTER; JEFFREY GOODMAN, DR.,
Defendants-Appellees.
November 4, 2025
ORDER
Before: RAWLINSON, CHRISTEN, and JOHNSTONE,
Circuit Judges.
The panel unanimously voted to deny Appellee
Biotronik, Inc.’s petition for panel rehearing en banc. The
full court has been advised of the petition for rehearing
55a
Appendix C
en banc, and no judge of the court has requested a vote
on the petition. The petition for rehearing en banc (Dkt.
No. 93) is DENIED.
The motions for joinder to the petitionfor rehearing en
banc filed by Appellees Cedars-Sinai Medical Center and
Dr. Jeffrey Goodman (Dkt. Nos. 94 and 95) are DENIED
as untimely.
56a
Appendix
D
APPENDIX
D — STATUTORY
PROVISIONS INVOLVED
False Claims Act, 31 U.S.C. § 3730(e)(4)(A)–(B) (2010)
(4)(A) The court shall dismiss an action
or claim under this section, unless opposed
by the Government, if substantially the same
allegations or transactions as alleged in the
action or claim were publicly disclosed—
(i) in a Federal criminal, civil, or
administrative hearing in which the
Government or its agent is a party;
(ii) in a congressional, Government
Accou nt abi l ity Of f ice, or other
Federal report, hearing, audit, or
investigation; or
(iii) 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 parag raph,
“original source” means an individual who
either (i) prior to a public disclosure under
subsection (e)(4)(a), has voluntarily disclosed
to the Government the information on which
allegations or transactions in a claim are based,
or (2) who has knowledge that is independent
of and materially adds to the publicly disclosed
57a
Appendix D
allegations or transactions, and who has
voluntarily provided the information to the
Government before filing an action under this
section.
False Claims Act, 31 U.S.C. § 3730(e)(4)(A)–(B) (1986)
(4)(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, administrative, or Government
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 parag raph,
“original source” 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.
58a
Appendix
E YORK TIMES
APPENDIX E —
THE NEW
ARTICLES, DATED APRIL 2, 2011, APRIL 2, 2011,
APRIL 5, 2011, APRIL 20, 2011, MAY 31, 2011
The New York Times | https://www.nytimes.com/2011/04/
03/health/03implant.html
Tipping the Odds for a Maker of Heart Implants
By Barry Meier
April 2, 2011
Las Vegas is a city of few sure bets. But there are
overwhelming odds on one thing—the brand of heart
device that patients at a major hospital get.
Within the last few years, a little known company called
Biotronik has cornered the market on pacemakers
and defibrillators at the University Medical Center of
Southern Nevada, Last year, 250 of the 263 patients, or 95
percent, who had a heart device implanted at the hospital
center got one made by Biotronik.
The company’s hold at the hospital center is all the more
striking because its implants were not used there before
2008, and its national share of the heart-device market
barely exceeds 5 percent, according to industry estimates.
The devices’ sudden popularity was apparently not left to
chance. In mid-2008, Biotronik hired several cardiologists
who implant heart devices at the Las Vegas hospital as
consultants, paying them fees that may have reached as
high as $5,000 a month, company documents reviewed
by The New York Times indicate. Those doctors then did
59a
Appendix E
the rest. Meanwhile, the hospital’s chief executive said
she never asked during the hospital’s switch to Biotronik
whether those physicians had a financial connection to
the company.
A federal investigation is examining Biotronik’s marketing
and sales practices, according to a company e-mail. While
a lawyer for Biotronik confirmed the inquiry, he declined
to elaborate.
In recent years, payments to doctors from makers of
drugs and medical devices have come under intense
scrutiny because of concern that such ties can affect
physician practices. Under last year’s federal health care
law, companies like Biotronik will have to disclose by 2013
any payments to doctors for consulting and other services.
But interviews and dozens of Biotronik documents that
discuss the company’s sales tactics and doctor payments
offer a portrait of how a company seeks to win business,
and the eagerness of some doctors to serve in that effort.
In addition, the records provide a rare look at a central
player in these types of transactions: the sales officials
who promote implants by finding ways to flatter doctors
or fatten their wallets.
In general, doctors and device makers describe themselves
as partners in an effort to best serve the needs of patients.
But privately, sales personnel at Biotronik and one of its
distributors referred at times to physicians whom they
courted with a tone akin to disdain. One sales official,
for example, was said to hold “great influence” over a
60a
Appendix E
doctor. Doctors who failed to enroll patients in Biotroniksponsored studies were put on a “loser” list, another
document shows.
Yet another report offered this advice about winning one
doctor’s attention: “He loves his white wine and being
entertained.”
Executives of Biotronik, a German company whose
American subsidiary is based in Lake Oswego, Ore.,
declined to be interviewed for this article, citing the
ongoing Justice Department investigation. The company
referred w ritten questions to an outside law yer,
Christopher A. Myers, who declined to describe the
federal inquiry, other than to say that the company has
been told that it is a civil matter, rather than criminal.
A Justice Department spokesman said that it did not, as
a matter of policy, confirm or deny the existence of an
investigation.
Mr. Myers stated that Biotronik paid its consultants for
legitimate services and at rates comparable to those
of competitors. He added that Biotronik adhered to an
industrywide code of ethics. “Biotronik is committed to
maintaining a culture of compliance and ethics and has a
robust and active internal compliance program,” he wrote.
A heart device, which can cost up to $35,000, has among
the highest profit margins of any medical product, and
three big producers—Medtronic, St. Jude Medical and
Boston Scientific—dominate the industry.
61a
Appendix E
A New Competitor
Many of the records and e-mails reviewed involve a
Biotronik distributor called Western Medical, a company
that was founded in mid-2008 by Caesar Fonte, a former
top sales official at Boston Scientific. In 2006, Boston
Scientific entered the heart device business when it
acquired the Guidant Corporation, the company where Mr.
Fonte then worked. Several other Boston Scientific sales
officials also left in 2008 to join him at Western Medical.
Once there, they sought to persuade doctors they knew
from their days marketing Boston Scientific devices to
switch to Biotronik. In the process, some doctors got
Biotronik consulting deals.
The Times reviewed a number of documents that were
provided by a former Biotronik employee, Max D. Bennett.
Last April, Biotronik fired Mr. Bennett, claiming that
he, among other things, had falsified company records,
according to a company letter that Mr. Bennett showed
a reporter.
He stated that he was dismissed after br ing ing
inappropriate activities like payments to doctors to the
attention of Biotronik officials. His dispute with the
company is in arbitration, records indicate. Mr. Bennett
declined to say whether he had contacted the Justice
Department with his concerns.
Mr. Myers declined to comment about any proceedings
involving Mr. Bennett. But he questioned Mr. Bennett’s
62a
Appendix E
motivations, saying that he had investigated some of the
former employee’s claims and determined they were either
unfounded or could not be substantiated.
Other producers of heart devices have also faced recent
federal investigations over marketing practices. In
January, for example, St. Jude Medical paid $16 million
to settle federal charges accusing it of giving kickbacks to
doctors so that they would participate in medical studies
of the company’s product. In resolving the case, St. Jude
did not admit wrongdoing.
For their part, Biotronik officials have complained for
years that entrenched relationships between the bigger
producers, implant specialists and hospitals have stymied
the company’s sales growth. Meanwhile, Biotronik’s
competitors have disparaged its practices, company
documents claim. One Biotronik report complained:
“We were kicked out of two hospital contracts in the last
half of 2008 with our competition smearing Biotronik’s
reputation.”
For patients, the use of Biotronik devices by doctors who
were hired as consultants does not seem to have posed
safety issues. Several of those doctors said they switched
to Biotronik devices because they believed they were more
reliable and less prone to recalls than competitors’ models,
even though they had previously used those products.
Other experts said Biotronik’s devices offered nothing
unique.
63a
Appendix E
The three big producers employ sales officials who can earn
more than $300,000 annually in salary and commission on
device sales. But Biotronik, along with a small sales staff,
also markets its devices through distributors like Western
Medical that can recei
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