Health Law Daily Wrap Up, FALSE CLAIMS ACT—D. Mass.: Government granted leave to file second motion for partial summary judgment in FCA/AKS lawsuit, (Aug 6, 2025)

By Jeffrey H. Brochin, J.D.

The fact that the Government did not explicitly state a “false certification” theory in its Complaint was of little impact where factual allegations put the Provider on notice of the claim asserted and the grounds upon which it rested.

A federal District Court in Massachusetts has granted the Government’s “Motion for Leave to File a Second Motion for Partial Summary Judgment and to Reopen Discovery on a Limited Basis” in a False Claims Act (FCA) lawsuit brought against Regeneron Pharmaceuticals, Inc. (Regeneron or Provider). Although the original Complaint was based on a “2010 Amendment” theory of AKS liability, a subsequent federal court opinion regarding the applicable standard for asserting a “false certification” theory of liability prompted the Government to request leave to file a subsequent motion as well as for leave to reopen discovery. Given the court’s broad discretion as to granting or denying such motions, the court granted the motion after finding that the “false certification” theory was just a different pathway to the same AKS-based FCA claim (United States of America v. Regeneron Pharmaceuticals, Inc., No. 1:20-cv-11217-FDS (D. Mass. Aug. 4, 2025)).

Donations to CDF. The United States (Government) brought suit against Regeneron, manufacturer of the drug Eylea, alleging that Regeneron improperly funneled millions of dollars to the Chronic Disease Fund (CDF)—a purportedly independent charitable foundation—to subsidize patient copays for Eylea. According to the government, the purpose of the payments was to induce physicians to increase prescriptions of the drug at the expense of the Medicare Part B program. Among other things, the Government asserted that the contributions to the foundation were not motivated by a charitable purpose, but rather, Regeneron employees solicited and received Eylea-specific data from CDF and improperly used that data to determine the specific amounts Regeneron would contribute, and their purpose in doing so, according to the Government, was to increase sales of Eylea.

The Government’s Amended Complaint alleged that Regeneron’s actions violated the AKS and caused the submission of false claims for payment to Medicare in violation of the FCA. Following the First Circuit’s decision on an interlocutory appeal, the Government moved for leave to file a second motion for partial summary judgment on the issues of falsity, materiality, and causation under a “false certification” theory of FCA violation, and, requested that discovery be reopened on a limited basis to allow it to produce evidence related to those issues.

Two theories of FCA liability. Two theories of FCA liability based on violation of the AKS pertained to the alleged scheme: the “false certification” theory and the “2010 amendment” theory. Under the false-certification theory, FCA liability lies when a provider falsely represents AKS compliance on a federal agency form, and the Government must show that the misrepresentation of AKS compliance was material to the government’s payment decision. On the other hand, the 2010 amendment does not require any representation—implied or express—of AKS compliance, rather, it is the AKS violation itself that renders the claim false.

Clarification of applicable standard. During the pendency of the instant litigation, the Sixth and Eighth Circuits issued opinions addressing the meaning of the term “resulting from a violation” in the 2010 amendment. Informed by that recent precedent, the court reconsidered its prior holding on causation under the 2010 amendment and held that, indeed, the Government must prove that the underlying AKS violation was a but-for cause of the false claim. However, in October 2023, the court certified for interlocutory appeal that portion of its order that addressed the causation standard applicable to claims for violation of the AKS and FCA under the 2010 amendment to the AKS. On February 18, 2025, the First Circuit issued its opinion on the matter, affirming the court’s ruling that to treat an AKS violation as a false or fraudulent claim under the FCA, the government must prove that the AKS violation was a but-for cause of the false claim.

The First Circuit issued its mandate on April 14, 2025, prompting the Government to request leave to file its instant motion for partial summary judgement and to reopen discovery on a limited basis.

Issues of waiver and prejudice. As to the objection that the Government had waived its right to raise a new theory of liability, the court noted that although a new theory of liability may not normally be raised at this stage of the litigation after close of discovery (due to prejudice to the opposite party), here, the procedural circumstances of the Government’s motion differed in significant ways: First, the Government was simultaneously seeking to reopen discovery on a limited basis to allow for the production of evidence uniquely applicable to a false-certification theory, and it was seeking leave to initiate a new round of complete briefing on that theory, and not raising a new theory in the course of a summary judgment-process that was already underway; and, second, the false certification was not an “unpleaded” theory, rather, the facts alleged in the Complaint were sufficient to state a plausible claim under a false-certification theory. Therefore, Regeneron was on notice that such a theory was a potential pathway for proving the Government’s claim.

The fact that false certification was never explicitly stated as a theory of liability in the Complaint was of no great impact because as the court observed, ‘it is factual allegations, not legal theories, that must be pleaded in a complaint.’ Although under ordinary circumstances, had the Government sought to switch theories after the court’s ruling on summary judgment, its prior course of conduct may indeed have risen to the level of “misleading,” however, here, the court’s reconsideration of the causation standard under the 2010 amendment, and the First Circuit’s subsequent confirmation of that change, amounted to a critical shift in the applicable law.

Reopening discovery. As to reopening discovery, the court noted that the Government requested a very limited reopening, and it represented that it only sought to reopen discovery so that it might produce evidence, and that it would do so within 30 days. Furthermore, Regeneron might also wish to take additional discovery, and in the interest of fairness the court might decide to reopen discovery to both parties, restricted to evidence directly relevant to the additional elements required to be proved under a false-certification theory.

Based on the forgoing, the court granted the Government’s motion as to leave to file its second motion for partial summary judgement and to reopen discovery.

The case is No. 1:20-cv-11217-FDS.

Judges: Saylor, F.

Attorneys: Charles B. Weinograd, U.S. Attorney's Office, for the U.S. Alec P. Harris (Faegre Drinker Biddle & Reath LLP) for Regeneron Pharmaceuticals, Inc.

Companies: Regeneron Pharmaceuticals, Inc.

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