United States: Amended FCA Complaint Cannot Cure A First-to-File Violation

Last Updated: August 24 2018
Article by Mackenzie A. Queenin

The Second Circuit Court of Appeals recently held that a False Claims Act (FCA) relator could not evade the FCA's first-to-file bar by filing an amended complaint after two earlier-filed FCA suits alleging similar conduct had been dismissed. United States ex rel. Wood v. Allergan, Inc., No. 17-cv-2191 (2d Cir. July 17, 2017). The FCA's first-to-file bar prohibits a relator from bringing a "related action" when an FCA lawsuit is "pending." In Wood, relator filed his complaint after two other FCA lawsuits covering substantially similar conduct had been filed. After the first two suits were dismissed, relator amended his FCA complaint. The Second Circuit reversed the district court, deciding that an amended complaint cannot cure a violation of the first-to-file bar, and remanded the case to be dismissed.

Case Background

Relator John Wood, a former Allergan, Inc. employee, filed an FCA complaint in the Southern District of New York against Allergan on July 26, 2010. He alleged that Allergan had engaged in a scheme to provide free medical products to doctors, in violation of the Anti-Kickback Statute, to persuade them to prescribe Allergan drugs to their cataract patients. Relator further contended that Medicare and Medicaid paid for these prescribed drugs.

When relator filed his FCA lawsuit under seal in June 2010, two FCA lawsuits alleging similar conduct were already pending, having been filed in October 2008 and January 2010. The 2008 and 2010 FCA lawsuits were unsealed and then dismissed in 2012 for failure to properly serve Allergan. Wood's FCA lawsuit was unsealed in March 2016, after the government declined to intervene. Relator then amended his complaint, for the third time, on May 23, 2016.

The District Court Declined to Dismiss Relator's FCA Lawsuit

Allergan moved to dismiss the case, arguing, among other things, that relator violated the FCA's so-called first-to-file bar in Section 3730(b)(5) of the FCA. The district court found that there was at least one pending related action when relator filed his FCA complaint. The court, however, denied the motion to dismiss, ruling that the first-to-file bar did not apply because there were no related pending suits at the time Wood filed his Third Amended Complaint, so relator's FCA claims could proceed. The district court also held that this provision is not jurisdictional.

The Second Circuit Decided That The First-To-File Bar Precludes Relator's Claim

The Second Circuit reversed the district court and held that the FCA bars a qui tam lawsuit that is filed while a prior, related FCA lawsuit is pending. Even if the first FCA lawsuit is dismissed, the second FCA lawsuit cannot escape the first-to-file bar by the filing of an amended complaint. As a result, the Second Circuit deemed relator's FCA lawsuit (filed while other related FCA lawsuits were pending) "incurably flawed" from the moment it was filed.

The Second Circuit noted that the FCA's first-to-file bar safeguards against "the danger of parasitic exploitation of the public coffers." It also stated that allowing amended complaints to cure claims otherwise precluded by the first-to-file bar could "disrupt the orderly operation of the FCA" and "make any statute of limitations obsolete" by effectively allowing for an "infinite series of claims."

The Second Circuit also explained that a purpose of the first-to-file bar is to promote the government's interest. Notably, at oral argument before the district court, the government supported relator Wood. But on appeal, the government urged dismissal of relator's FCA lawsuit, arguing that "[t]he plain text of the statute compels" that such actions be dismissed, which the court deemed a "significant consideration."

Having found that relator's first-to-file violation could not be cured by amending his complaint, the Second Circuit panel remanded the case to be dismissed without prejudice. The court declined to address relator's bid for equitable tolling of the FCA's statute of limitations, which, if successful, would allow him to file a new lawsuit.


The decision adds to a circuit split, discussed in the Second Circuit's decision. The D.C. Circuit dismissed an amended FCA complaint as blocked by the first-to-file bar. The First Circuit, however, recently reached the opposite conclusion on the same issue.

As a practical matter, multiple qui tam suits involving the same or "related" alleged conduct do occur, but since they are required to be filed under seal, relators may not be aware of similar cases when they file their lawsuit.

Where relators are aware of pending qui tam cases based on similar conduct, though it remains to be seen, the practical effect of the Second Circuit's decision may be that relators will now wait for dismissal before filing a suit based on the same or similar allegations, since filing an amended complaint will not cure a first-to-file defect in the Second Circuit (though these lawsuits will be subject to other legal challenges).

The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.

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