Yandle denies transfer request in 'false claim' opioid suit alleging drug makers, CVS participated in kickback scheme

By Heather Isringhausen Gvillo | Apr 5, 2019

District judge Staci Yandle denied a request to transfer an opioid suit alleging drug makers and retailer CVS participated in a kickback scheme by providing free nursing and reimbursement support services.

In her March 28 order, Yandle concluded that the alleged kickback scheme occurred nationwide and the defendants failed to show that another docket would be more convenient. 

“The court concludes that defendants have failed to satisfy their burden of demonstrating that the balance of the relevant factors strongly favors transfer,” Yandle wrote. “Accordingly, CIMZNHCA’s choice of forum should not be disturbed. The motion is denied.”

Relator CIMZNHCA LLC, or NHCA, is a holding company of Venari Partners, doing business as National Health Care Analysis Group. 


Defendants UCB Inc., RXC Acquisition Company, Omnicare Inc., and CVS Health Corporation filed the motion to transfer to the U.S. District Court for the District of New Jersey on April 25, 2018. 

They argued that they conduct business throughout the country and “nothing in the complaint distinguishes the Southern District of Illinois from any other district in the United States.”

The defendants stated that CIMZNHCA is a “New Jersey-based entity formed to investigate and act as the relator for the matters alleged” in the complaint. Further, UCB is based in Georgia, RXC is based in Kentucky, Omnicare is based on Ohio, and CVS is based in Rhode Island.

“Given the locations of the parties and the lack of specific allegations tied to the Southern District of Illinois, the defendants move to transfer this case to relator’s home district, the District of New Jersey,” the motion stated.

The defendants argued that New Jersey provides a convenient location, ease of access to all parties, and favorable docket conditions.

Yandle wrote that the weight afforded to CIMZNHCA’s choice forum is deferred because the relator is suing on behalf of the United States and is a resident of New Jersey, not the Southern District of Illinois. 

However, she held that the defendants failed to establish that New Jersey is “clearly more convenient.”

She added that the remaining convenience factors do not support transferring the case, including the site of material events, location of parties and witnesses and location of potential sources of proof.

“Defendants’ corporate offices are geographically dispersed with none in New Jersey,” Yandle wrote. “Defendants concede that it is impossible to anticipate where witnesses and sources of proof might be located due to the nationwide allegations in the complaint.”

Further, Yandle noted that the Seventh Circuit has observed that “the ease of access to the sources of proof, easy air transportation, rapid transmission of documents and the abundance of law firms with nationwide practices, make it easy for cases to be litigated with little extra burden in any major metropolitan areas.”

In regards to the defendants’ argument that the New Jersey docket conditions are more favorable, Yandle concluded that “the fact that the median civil disposition time in this district is ‘longer’ is not compelling.”

Yandle wrote that both districts have equal knowledge of the laws at issue in the case and the nationwide complaint make any arguments relating to the relationship of the communities to the issues and the desirability to resolve controversies neutral. 

On March 29, Yandle also held a hearing on U.S. attorney Nathan Stump’s motion to dismiss the suit for allegedly wasting the government’s time. She took the motion under advisement at this time.

Stump moved to dismiss the suit on Dec. 17, along with 10 other false claim suits filed in eight districts. 

Stump wrote that the allegations conflicted with important policy and enforcement prerogatives of federal health care programs. 

The claims “would undermine common industry practices the federal government has determined are, in this particular case, appropriate and beneficial to federal health care programs and their beneficiaries,” Stump wrote. 

Stump alleges that attorneys in the fraud section of the civil division of the Department of Justice spent 1,500 hours investigating claims implicating more than 73 million prescriptions written by hundreds of thousands of physicians for millions of beneficiaries. The hours spent investigating the claims didn’t include the time of other government attorneys,law enforcement agents, investigators and auditors. 

NHCA filed a response on Jan. 22, arguing that the government "oversimplified and mischaracterized the relator's allegations" when it asserted the support service activities amounted to "nothing more than 'assisting physicians with the completion of insurance documents such as benefit verifications and prior authorization forms.'"

“Far from absolute, the power of the Executive Branch is subject to the system of checks and balances spelled out in the Constitution. Relator respectfully requests that the court scrutinize the government’s representations to ensure that the government’s motion does not reflect an overreach by the Executive Branch – or the biases, whims, or inertia of government officials or government lawyers," the response states. 

NHCA is represented by Richard Burke of Highland Park, who is a former class action lawyer at Tom Lakin’s Wood River firm, and Lance Gould of Beasley Allen Crow Methvin Portis & Miles PC in Montgomery, Ala.

NHCA filed the suit under seal in the U.S. District Court for the Southern District of Illinois on June 20, 2017. 

Burke sought to recover treble damages from alleged unlawful marketing schemes, plus civil penalties and restitution to the U.S. and 27 states. 

Burke wrote that since 2011, UCB provided free services to providers to induce them to recommend Cimzia – a drug that works to prevent inflammation that may result from an overactive immune system. 

He argued pharmacies continued to submit claims to Medicare and Medicaid that were tainted by kickbacks, and providers didn’t necessarily prescribe Cimzia because they believed it would help their patients.

UCB is represented by W. Jason Rankin of HeplerBroom LLC in Edwardsville.

RXC is represented by Luke G. Maher of Norton Rose Fulbright in St. Louis.

CVS and Omnicare are represented by Julie Fix Meyer of Armstrong Teasdale in St. Louis. 

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Organizations in this Story

Armstrong Teasdale Beasley Allen Crow Methvin Portis & Miles PC HeplerBroom LLC Norton Rose Fulbright U.S. District Court for the Southern District of Illinois

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