Free Notice of Removal - District Court of California - California

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Timothy T. Scott (SBN 126971) [email protected] Geoffrey M. Ezgar (SBN 184243) gezgar@sidley.~orn Paul L. Yanosy (SBN 233014) [email protected] Ryan M. Sandrock SIDLEY AUSTIN LLP 555 California Street San Francisco, California 94104 Telephone: (415) 772-1200 Facsimile: (415) 772-7400 Paul E. Kalb, M.D. SIDLEY AUSTIN LLP 1501 K Street, N.W. Washington, D.C. 20005 Telephone: (202) 736-8000 Facsimile: (202) 736-871 1 11 12 13 14 15 16
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Nina M. Gussack Andrew R. Rogoff PEPPER HAMILTON LLP 3000 Two Logan Square Eighteenth and Arch Streets Philadelphia, PA 19103-2799 Telephone: (215) 981-4000 Facsimile: (202) 981-4750 Attorneys For Defendant ELI LILLY AND COMPANY

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UNITED STATES DISTRICT COURT NORTHERN DISTRICT OF CALIFORNIA STATE OF CALIFORNIA ex rel. JAYDEEN VICENTE and JAYDEEN VICENTE Individually, Plaintiffs, v. ELI LILLY AND COMPANY, Defendant.
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Case No. NOTICE OF REMOVAL

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NOTICE OF REMOVAL
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TO THE CLERK OF THE ABOVE-ENTITLED COURT: PLEASE TAKE NOTICE that defendant Eli Lilly and Company, Inc. ("Lilly") hereby removes to this Court the above-captioned case, originally filed in the Superior Court of California in and for the City and County of San Francisco, on federal question grounds pursuant to 28 U.S.C.

$5 1331, 5 1367, and 1441(b).
As explained in detail below, this Court has original jurisdiction under 28 U.S.C.

5 1331 in

this case because Plaintiffs expressly allege violations of, and "liability under," the federal False Claims Act, 31 U.S.C

5 3729.

See Compl. 17 64,210-21 1 & p.43. In addition, and independent of

Plaintiffs' claims under the federal False Claims Act, this Court also has jurisdiction of Plaintiffs' state law claims for violation of the California False Claims Act under 28 U.S.C.

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1331 because

those claims "necessarily depend [I on resolution of a substantial question of federal law." Franchise Tax Board v. Construction Laborers Vacation Trust, 463 U.S. l,27-28 (1983); Grable & Sons Metar Prods., Inc. v. Darue Eng'g & Mfg., 545 U.S. 308 (2005). In support of removal, Lilly states as follows: 1, This action was originally filed on May 11,2007 under seal in the Superior Court of

the State of California in and for the City and County of San Francisco, captioned as State of California ex. rel. Jaydeen Vicente and Jadeen Vicente Individually, Plaintiffs, v. Eli Lilly and Company, Defendant, Case Number CGC-07-463338. 2. 3. On July 10,2007, the State of California declined to intervene in this action. Plaintiffs served Lilly with a copy of the Complaint and Summons on August 22,

2007. This Notice of Removal is timely, having been filed within thirty (30) days of service. See 28 U.S.C.

5 1446(b).
4. This action involves allegations regarding the FDA-approved medicine ZyprexaB,

which allegations are also made in multidistrict litigation captioned In re Zyprexa Products Liability Litigation, MDL No. 1596, pending before the Honorable Jack B. Weinstein in the United States District Court for the Eastern District of New York. Similar Zyprexa-related suits against Lilly by several States are already pending in MDL No. 1596. 2
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5.

Lilly intends to file shortly a Motion to Stay All Proceedings Pending Transfer by the

Judicial Panel on Multidistrict Litigation ("JPML"), asking this Court to stay this action pending its transfer to MDL No. 1596. A stay will conserve the Court's and the parties' resources and prevent inconsistent rulings on global issues that arise repeatedly in actions involving Zyprexa. For this reason, courts in more than 100 other cases have granted stays pending transfer of Zyprexa-related actions to MDL No. 1596 6. True and correct copies of the Civil Case Cover Sheet, Proof of Service of Summons,

State of California's Notice of Election to Decline Intervention Pursuant to Government Code Section 12652(c)(8)(D)(ii), Confidential Cover Sheet - False Claims Action, Civil Case Cover Sheet, Notice to Plaintiff of Case Management Conference, Stipulation to Alternative Dispute Resolution, and Judicial Mediation Program and Alternative Dispute Resolution (ADR) Information Package, Service of Process Summary Transmittal Form, Confidential Cover Sheet - False Claims Action, Proof of Service of Relators' Statement on the Office of the Attorney General in Sacramento, Proof of Service of Relators' Statement on the Office of the Attorney General in San Francisco, Proof of Service of Complaint For Damages [Under Seal]; Civil Case Cover Sheet; Confidential Cover Sheet - False Claims Action; Confidential Cover Sheet - False Claims Action on the Office of the Attorney General in Sacramento, and Complaint for Damages served on Lilly are attached hereto as Exhibit A. Exhibit A constitutes all process, pleadings or orders served on Lilly as of the date of filing this Notice of Removal. 7. Lilly will be filing a true and correct copy of this Notice of Removal with the

Superior Court of California in and for the City and County of San Francisco and will serve the same sn all parties of record pursuant to 28 U.S.C. fj 1446(d).

THE COMPLAINT
8. Plaintiffs' Complaint alleges that Lilly illegally promoted the drug ZyprexaB for

ndications not approved by the United States Food and Drug Administration ("FDA") in violation )f the Federal Food Drug and Cosmetic Act, 21 U.S.C.

$9 301 et seq. ("FDCA"),

and federal

.egulations promulgated thereunder. See, e.g., Compl. 17 37-51, 54-63.

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9.

The Complaint further alleges that Lilly violated the federal Medicare and Medicaid

Anti-Kickback Statute, 42 U.S.C.

5 1320, et seq. ("AKS"),

by allegedly paying to physicians "illegal

remuneration" in the forms of "'speaker fees,' honoraria, unrestricted educational grants and other gratuities as quidpro quo for volume prescription writing of Zyprexa" to patients. Compl. 77 198
(p. 40,42)', 192-201 (pp. 38-40), 202-21 1 (pp. 43-44).2

10.

Plaintiffs surmise that, a result of Lilly's alleged violations of federal law - including

Lilly's alleged "off-label" promotion of Zyprexa in violation of the FDCA and its alleged illegal payments to physicians and others in violation of AKS - false claims for reimbursement were submitted to both the federal Medicare and state Medicaid programs. See, e.g., Compl. 7 50 (alleging that numerous allegedly false claims were submitted to the "MedicaidlMedicare programs for reimbursement"). 11. According to Plaintiffs' Complaint, these claims were "false" because federal law

precluded reimbursement of claims that did not meet the federal definition of "covered outpatient drug" and each of the individual uses for which the drug was prescribed (and a claim for reimbursement submitted) was not "approved by the FDA, or supported by one of the three specifically identified compendia." Compl. 7 39 (citing 42 U.S.C.A.

$5 1396r-8, 1396(k)(3),

1396(k)(6) & 1396(g)(l)(b)(i)). Plaintiffs contend that the alleged submission of these claims that were not eligible for reimbursement constitutes "[plredicate Acts Giving Rise to Liability Under the State and Federal False Claim Acts." Compl. at p.43 (underline added, bold in original). 12. Based on these allegations (which are incorporated by reference in each of Plaintiffs'

Causes of Action), the Complaint purports to allege the following four counts, entitled: (1) First Cause of Action, California False Claims Act, California Government code

5 12650 et seq.; (2)

Second Cause of Action, Conspiracy to Submit False Claims in Violation of the California False Claims Act, California Government Code

5 1265l(a)(3); (3) Third Cause of Action, Violation of

The Complaint contains two different versions of paragraphs 194-208 (pp. 39-44). Citations to both paragraph ind page therefore have been included where necessary to eliminate any confusion. Lilly denies all of Plaintiffs' allegations of wrongdoing.

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1 2

Business & Professions Code

5 17200; and (4) Fourth Cause of Action, Violation of Business &

II Professions Code 5 17500. treble damages, civil penalties and fines, attorney fees, and costs of I I1 13. Plaintiffs seek I
suit.

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FEDERAL QUESTION JURISDICTION

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A.
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This Court Has Original Jurisdiction Over Plaintiffs' Federal False Claims Act Claims
Title 28 U.S.C.

5 1441(b) provides in pertinent part:

Any civil action of which the district courts have original jurisdiction founded on a claim or right arising under the constitution, treaties or laws of the United States shall be removable without regard to the citizenship or residence of the parties. 15. Although Plaintiffs have arthlly avoided enumerating or captioning their federal

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False Claims Act allegations as one of their four Causes of Action, Plaintiffs' Complaint expressly alleges liability under the federal False Claims Act. See Compl. at p. 43 (alleging that

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ill^ is liable

"[ulnder the State and Federal False Claim Acts") (emphasis added); 7 210 (alleging "Lilly's liability

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$5 3729(a)(l) and (a)(2) of the Federal False Claims Act . . . .") (emphasis added); 7 21 1 (alleging "Lilly's conduct is also punishable under . . . the Federal False Claims Act") (emphasis added); 7 64 (citing federal False Claims ~ c t ) . ~
under 16. Because Plaintiffs expressly allege violations of the federal False Claims Act, this Court has federal question jurisdiction over those claims, and Plaintiffs' entire Complaint is properly removable to this Court. See 28 U.S.C. state law claims).

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5 1367 (providing supplemental jurisdiction over all related

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The fact that Plaintiffs' federal False Claims Act claims are procedurally improper or wholly without merit does not defeat removal jurisdiction. See Schwarzer, Tashima & Wagstaffe, California Practice Guide - Federal Civil Procedure Before Trial §2:700 at 2D-48 (The Rutter Group 2007) ("If plaintiff is asserting a federal claim (whether or not meritorious), defendant has the right to a federal forum. Removal is therefore proper even if plaintiffs federal claim is meritless") (citing Barraclough v. ADP Automotive Claims Services, 81 8 F, Supp. 13 10, 1312 (N.D. Cal. 1993) ("A plaintiff should not be permitted to effectuate remand by pointing out the flaws in her own compliant, in effect arguing for dismissal of that claim.")).

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B.

Plaintiffs' California False Claims Act Allegations Necessarily Depend on Resolution of Disputed and Substantial Federal Questions

17.

Independent of Plaintiffs' federal False Claims Act claims, this Court also has

federal-question jurisdiction over Plaintiffs' state law Claims for violation of the California False Claims Act (the First and Second Causes of Action) under 28 U.S.C. $ 1331 and the principles set forth in Grable, 545 U.S. 308. 18. The United States Supreme Court's decision in Grable held that federal question

jurisdiction did not require the plaintiff to have asserted a violation of a federal statute providing a private parallel right of a ~ t i o n Rather, under Grable, a case asserting only state law causes of .~ action is removable if it raises a substantial federal question, "actually disputed and substantial, which a federal forum may entertain without disturbing any congressionally approved balance of federal and state judicial responsibilities." See Grable, 545 U.S. at 3 14-320. 19. As more fully explained below, Plaintiffs' claims require construction and application

~f three areas of federal law: (1) the FDCA, 21 U.S.C. $ 301, et seq. and implementing federal regulations which govern approval of new drugs and regulate prescription drug manufacturers' ~romotional statements, including all aspects of warnings in labeling and advertising; (2) the federal Medicare and Medicaid Anti-Kickback Statute, 42 U.S.C. $ 1320, et seq. ("AKS"), which prohibits :ertain remuneration with respect to the sale of prescription drugs; and (3) federal Medicaid law, which determines the drugs for which a State can decline to pay, see 42 U.S.C. :d)(4). 20. In In re Zyprexa Prod. Liab. Litig., 375 F. Supp. 2d 170 (E.D.N.Y. 2005), the

$9 1396r-8(d)(B),

'ederal court held that it had federal question jurisdiction over virtually identical state law claims by ,ouisiana involving Lilly's marketing of Zyprexa and Louisiana's payments for Zyprexa and under ts Medicaid program. The court found that references in the complaint to federal funding provisions md laws and allegations related to marketing for non-FDA approved uses demonstrate "a core of

Grable limited Merrell Dow Pharmaceuticals Inc. v. Thompson, 478 U.S. 804 (1986), to the extent Merrell low implied or held that a federal cause of action was required to remove a pharmaceutical product liability case.

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substantial issues" that were federally oriented. Id. at 172-73; see also West Virginia v. Eli Lilly ana Company, 476 F. Supp. 2d 230 (E.D.N.Y. 2007) (denying motion to remand in action by Mississippi involving substantially same allegations). 2 1. Similarly, in a case involving Medicaid drug pricing, this Court in County o S a n ~ a f

Clara v. Asrra USA, Inc., 40 1 F. Supp. 2d 1022 (N.D. Cal. 2005) invoked federal question jurisdiction under Grable because the plaintiffs state law claims against pharmaceutical manufacturers for allegedly overcharging plaintiff for Medicaid drugs presented substantial questions of federal law. Id. at 1031. In concluding that Medicaid drug pricing issues merited federal jurisdiction, the court observed that one measure of evaluating substantiality is "the importance of the federal issue." Id. at 1027. The court noted that "[ulnder this approach, the following issues have been found to be substantial: those that directly affect the functioning of the federal government, those in an area reserved for exclusive federal jurisdiction, and those that impacl

a complex federal regulatory scheme." Id.
22. Because Plaintiffs' claims in this case, like those in Grable, In re Zyprexa, West

Virginia and County o Santa ~ l a r a , 'will necessarily involve the resolution of disputed and f substantial federal questions in the context of three complex and inter-related federal regulatory schemes, this Court has federal question jurisdiction
1.

Plaintiffs' Right to Relief Requires Resolution of Disputed and Substantial Issues Under the FDCA

23.

At the heart of this case are claims based on alleged violations of the FDCA by Lilly,

in particular, that Lilly illegally promoted Zyprexa for various uses that are allegedly "off-label" and

Although other federal courts have recently declined to exercise removal jurisdiction in Zyprexa-related false :laims suits, those cases are all distinguishable because, unlike Plaintiffs' allegations herein, the plaintiffs in those cases iid not allege violations of the federal False Claims Act. See Alaska v. Eli Lilly & Co., 2006 WL 2168831 (D. Alaska 'uly 28,2006); Utah. v. Eli Lilly & Co., 2007 WL 2482397 (D. Utah Sept. 4,2007); South Carolina v. Eli Lilly & Co., !007 WL 2261693 (D. S.C. Aug. 3,2007). The Utah decision is further distinguishable because, unlike in this case, here were independent state-law bases for deciding plaintiffs state False Claims Act claims, which relied on state-law lefinitions of, for example, "medically necessary." See, e.g., Utah, 2007 WL 2482397 at *4 (noting that plaintiffs :laims were based in part on two provisions of Utah law and concluding that "[gliven these multiple bases, resolution of the state false claims act cause of action] does not hinge solely on a federal question.") Here, however, the Complaint loes not allege any cognizable standard of California law as a basis for its claims under the California False Claims Act. tather, resolution of Counts I and I1 will turn entirely on disputed and substantial federal questions. See, fl 17-37.

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not "medically accepted indications," both concepts defined according to federal law, thereby causing harm to ~ a l i f o m i a .For example, the Complaint alleges that by illegally marketing Zyprex; ~ for off-label uses, Lilly caused physicians and pharmacies to request Medicaid reimbursement for uses for which Zyprexa was not eligible under the Medicaid Program. Compl. 1 49-50. The same 1 basic allegations were made by the States of Louisiana, West Virginia and Mississippi against Lilly with respect to Zyprexa. See In re Zyprexa Prods. Liab. Litig., 375 F. Supp. 2d 170 (E.D.N.Y. 2005); West Virginia v. Eli Lilly and Company, 476 F. Supp. 2d 230 (E.D.N.Y. 2007); Hood v. Eli Lilly and Company, 2007 WL 1601482 (E.D.N.Y. June 5,2007). Lilly disputes these allegations, including specifically the allegation that it violated the FDCA by marketing the drugs for uses that are not medically necessary or indications that are not medically accepted. 24. As a currently marketed prescription drug, Zyprexa is subject to extensive regulation

by the FDA. The FDCA requires the FDA to ensure that "drugs are safe and effective" for their intended uses, 21 U.S.C.

5 393(b)(2)(8), in part by "promptly and officially reviewing clinical

research and taking appropriate action on the marketing of regulated products." 21 U.S.C.
tj 393(b)(l). The Commissioner of the FDA has the authority to promulgate regulations to enforce

the FDCA, which are codified in the Code o Federal Regulations, 21 C.F.R. tj 1, et seq. See f 21 U.S.C. 25.

5 371(a).
Promotional claims to physicians about Zyprexa are regulated by the FDA to ensure

that the claims are in compliance with the FDCA and FDA implementing regulations. Of particular relevance, the FDA reviews promotional materials to assure that they do not create new "intended uses" for which adequate directions are, in the absence of FDA approval of the drug for that use, lacking, thereby violating Section 502(f)(l) of the FDCA, 21 U.S.C.

5 352(f)(l).

The FDA also

reviews promotional labeling to assure that it does not recommend or suggest conditions of use that would make the drug an "unapproved new drug" under section 505(a), 21 U.S.C.

5 355(a), the

iistribution of which in interstate commerce would violate federal law. Detailed regulations
Promotion for non-FDA approved uses is "a promotion that violates the [FDA's] strictures on off-label narketing." Unitedstates ex rel. Franklin v. Parke-Davis, Div.of Warner-LambertCo., 2003 W L 22048255, at *2 (D. Mass. Aug. 22, 2003).

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implementing these general provisions, as well as a general statutory prohibition against labeling tha. is false or misleading "in any particular," appear in 21 C.F.R. $ 201 and 202. See also 21 C.F.R. $$ 3 10 and 3 14 ("new drug" and "new drug" approval requirements). 26. As an integral part of this comprehensive statutory and regulatory scheme governing

the content of promotional claims, the FDA has crafted a number of rules and policies expressly allowing manufacturers to engage in the non-promotional dissemination of information to physicians about new drugs and new uses of approved drugs. FDA regulations expressly permit scientific exchange by manufacturers and their representatives about investigational new drugs and investigational uses of approved new drugs. See 21 C.F.R. 312.7(a). The FDA has also recognized that manufacturer dissemination of scientific information - through reprints of medical journal articles, support of CME, and responses to unsolicited requests for information - is not only allowed but entirely appropriate and, indeed, a necessary corollary of the agency's long-standing policy of non-interference in physician decisions to prescribe approved drugs off-label as part of medical practice. See, e.g., 59 Fed. Reg. 59,820, 59,823 (Nov. 18, 1994) ("The agency has recognized the need among health care professionals for peer review and dissemination of the latest significant scientific data and information on drugs an devices in scientific journals."); 21 C.F.R.

5 3 12.7 (pre-

approval promotion ban "is not intended to restrict the full exchange of scientific information concerning the drug, including dissemination of scientific findings in scientific or lay media."). Taken together, the content regulatory provisions of the FDCA and FDA regulations describe above, and the various policies established by FDA to facilitate scientific exchange about off-label uses, comprise a careful federal system balancing the scientific informational needs of physicians and the public interest in assuring that commercial communications are truthful and non-misleading. And above and beyond this, the courts have made clear that another source of federal law - the Constitution - limits the government's ability to restrict the dissemination of truthful non-misleading information concerning their products. See, e.g., Washington Legal Found. v. Friedman, 13 F. Supp. 2d 51 (D.D.C. 1998), vacated on other grounds, Washington Legal Found. v. Henney, 128 F. Supp.

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2d 11 (D.D.C. 2000). Allegations regarding any specific communication must be resolved with reference to this carefully balanced complex of federal law. 27. The FDA's responsibility to regulate prescription drugs sold in the United States, an

to enforce laws with respect to such drugs, inclusive of the precise content and format of prescriptic drug labeling (e.g., the instructions, warning, precautions, adverse reaction information provided b j manufacturers, and marketing materials), is plenary and exclusive. See 21 U.S.C. $ 301, et seq. 28. Plaintiffs have made alleged violations of federal law a critical element of one or

more of its claims against Lilly. Accordingly, Plaintiffs' claims regarding the safety, labeling, promotion and marketing of Zyprexa necessarily raise substantial federal questions by requiring the Court to interpret the meaning of the FDCA and its implementing regulations.

2.
29.

Plaintiffs' Right to Relief Requires Resolution of Disputed and Substantial Issues Under the AKS

Plaintiffs' False Claims Act claims also require resolution of disputed and substantia

issues under the federal AKS because they require resolution of whether specific items of remuneration allegedly paid by Lilly would constitute a violation of the federal kick-back prohibitions. For example, while Plaintiffs allege at paragraph 198 of the Complaint that Lilly allegedly paid kick-backs in the form of "speaker fees,' honoraria, unrestricted educational grants and other gratuities as quidpro quo for volume prescription writing of Zyprexa," Plaintiffs zlsewhere acknowledge (Compl. 7 200, p. 40), as they must, that not every payment made to a physician violates AKS. To the contrary, the federal AKS only prohibits payments meant to 'induce" the recipient (1) to refer an individual to a person for the furnishing of or arranging for the hrnishing of any item or service for which payment may be made in whole or in part under a Federal health care program, or (2) to purchase or lease, order or arrange for or recommend mrchasing, leasing or ordering any good, facility, service or item for which payment may be made n whole or in part under a Federal Health care program. Compl. 7 192 (quoting 42 U.S.C. 7b(b)(2)(A) & (B)). 30. Although Plaintiffs conclude that such remuneration was, in fact, paid, thereby

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uesulting in false claims being filed with the government, Plaintiffs cannot dispute (and indeed 10
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allege) that at least the stated purposes of those payments were legitimate, including speaker fees, honoraria, and educational grants. Compl. 7 198 (p. 40,42) (alleging that "Lilly paid, and physician accepted, cash payments thinly-veiled as 'speaker fees,' honoraria, and . . . educational grants"). Calling them "thinly-veiled," however, only begs the question. In each instance, Plaintiffs must prove and the Court examine the individual circumstances of the payment and services provided to determine if there was a violation of the AKS. Furthermore, there are statutory exceptions and regulatory safe harbors under the federal AKS that expressly protect certain payments, including payments provided by pharmaceutical manufacturers to both physician and non-physician service providers, that comply with the safe harbor requirements. Indeed, depending on the circumstances of the payments and the services provided, the personal services safe harbor, 42 C.F.R.

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1001.952(d), may in fact insulate as a matter of law many of the payments Plaintiffs allege were improper. Determination of the alleged impropriety of these payments thus involves an analysis of complex federal statutes and regulations.

3 1.

California's Health & Safety Code 55 119400-02 (also cited by Plaintiffs) does not

provide an alternative and independent state law basis for imposing False Claims Act liability. Unlike the AKS, the California statutes do not impose any substantive limits on remuneration to health care providers; rather, as Plaintiffs' allegations make clear, they merely require manufacturers to establish compliance programs which implement a self-imposed and self-defined '"specific annual dollar limit on gifts, promotional materials, or items or activities" that the manufacturer may provide to medical or health care professionals."' Compl. 7 206 (p. 41) (quoting Calif. Health & Safety Code 5 119402(c)-(d)). Plaintiffs do not allege that Lilly failed to adopt such a compliance policy or failed to adhere to the policy it adopted. Moreover, nothing in that compliance policy is in any way tied to a claim for reimbursement, which is, of course, a necessary element for liability under the California False Claims Act.

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3.

Plaintiffs' Right to Relief Requires Resolution of Disputed and Substantial Issues Under Federal Medicaid Law

32.

Plaintiffs' claims also raise disputed and substantial questions of federal law under

the Social Security Act because they depend upon the interpretation and application of federal statutory provisions governing a State's reimbursement for prescription medicines. Plaintiffs'

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Complaint admits as much. See Compl. 137 (alleging that "[flederal statutes and regulations restrict the drugs and drug uses that the federal and state governments will pay for Medicaid programs."). In particular, the Complaint alleges that, under federal law, reimbursement of Medicaid claims is limited to "covered outpatient drug[s]," defined as "those drug[s] prescribed to treat medically excepted [sic] indications." Compl. 7 39 (citing 42 U.S.C.

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8 1396(k)(3). According to the

Complaint, federal law further defines a "medically accepted indication" as "any use approved by the FDA, or supported by one of the three specifically identified compendia." Compl. 7 39 (citing 42 U.S.C.A. $ 1396(k)(6)). 33. These federal definitions and rules are indispensable to Plaintiffs' state law causes of

action for violation of the California False Claims Act. For example, Plaintiffs allege that

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"[wlhether the use of a drug is medically necessary was material to Medicaid's decision to reimburse for prescription" (Compl. 142), however, "[ulse of Zyprexa, for example, for dementia, or for anxiety or depression in the elderly is not supported by the compendia as medically safe and effective, and therefore should not have been covered by the State of California's Medicaid programs." Compl. 1 42-43. 1 34. The federal Medicaid program authorizes federal grants to states to provide medical

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assistance to low income individuals. 42 U.S.C.

8 1396, et seq. "Although participation in the

program is voluntary, participating States must comply with certain requirements imposed by the Act and regulations promulgated by the Secretary of Health and Human S e ~ i c e s . " Wilder v.

Virginia Hosp. Ass 'n, 496 U.S. 498, 502 (1990).
35. Federal law requires the States, subject to certain narrow exceptions, to reimburse

FDA-approved prescription drugs of any manufacturer that has entered into and complies with a 12
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rebate agreement with the Secretary of Health and Human Services, 42 U.S.C. $ 1396r-8(d)(4)(B). Thus, California is required under federal law to reimburse for drugs, such as Zyprexa, if the manufacturer complies with federal requirements. 36. The only time a state can exclude from its formulary (or preferred drug list) a covered

outpatient drug subject to a rebate agreement is "with respect to the treatment of a specific disease 01 condition for an identified population . . . if, based on the drug's labeling . . . the excluded drug does not have a significant clinically meaningful therapeutic advantage in terms of safety, effectiveness, or clinical outcome of such treatment for such population over other drugs included in the formulary and there is a written explanation (available to the public) of the basis for the exclusion." 42 U.S.C.

$ 1396r-8(d)(4)(D). Moreover, even a decision to require prior authorization must satisfy federallymandated requirements. 42 U.S.C. $$ 1396r-8(d)(4)(E), (d)(5). Thus, every step a state takes with regard to Medicaid coverage of an FDA-approved drug is subject to strict federal mandates.
4.

The Federal Interest in Providing a Forum

37.

The federal government has a strong interest in having a federal court decide several

of the issues in this case. Among these issues are (1) whether any conduct of Lilly, including the alleged marketing of Zyprexa for unapproved or non-medically necessary uses, violated any federal laws or regulations related to the labeling and marketing of drugs; (2) whether Lilly's alleged dissemination of information about such uses was protected by the First Amendment of the United States Constitution; (3) whether the federal AKS prohibited certain payments made by Lilly to physicians for, inter alia, speaker fees, honoraria, and educational grants; and (4) whether federal Medicaid law permitted reimbursement for the uses in which Zyprexa was prescribed. 38. Plaintiffs' claims may be vindicated or defeated only by construction of federal

statutes and regulations. The availability of a federal forum to protect the important federal interests at issue is therefore consistent with Grable, and determination by a federal court of the substantial and disputed federal issues that lie at the heart of this case would not "disturb any congressionally approved balance of federal and state judicial responsibilities." Grable, 545 U.S. at 3 14.

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WHEREFORE, Lilly notices the removal of this case to the United States District Court for the Northern District of California pursuant to 28 U.S.C. Dated: September 2 1,2007

$8 1331, 1367, & 1441, et seq.

SIDLEY AUSTIN LLP

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Attorneys For Defendant ELI LILLY AND COMPANY

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PROOF OF SERVICE I am employed in the County of San Francisco, State of California. I am over the age of 18 and not a party to the within action. My business address is Sidley Austin LLP, 555 California Street, San Francisco, California 94104.

1

On September 21 ,2007, I served the foregoing document(s) described as NOTICE OF REMOVAL on all interested parties in this action as follows (or as on the attached service list): (U.S. MAIL) I served the foregoing document(s) by U.S. Mail, as follows: I placed true copies of the document(s) in a sealed envelope addressed to each interested party as shown above. I placed each such envelope for collection and mailing at Sidley Austin LLP, San Francisco, California. I am readily familiar with the Firm's business practice for collection and processing of correspondence for mailing. Under that practice, the correspondence would be deposited in the United States Postal Service on that same day in the ordinary course of business, with postage thereon fully prepaid. (U.S. EXPRESS MAIL) I served the foregoing document(s) by Express Mail, as follows: I placed true copies of the document(s) in a sealed envelope addressed to each interested party as shown above. I placed each such envelope for collection and mailing at Sidley Austin LLP, San Francisco, California. I am readily familiar with the Firm's practice for collection and processing of correspondence for mailing via Express Mail. Under that practice, the Express Mail would be deposited in the United States Postal Service on that same day in the ordinary course of business, with Express Mail postage thereon fully prepaid. (FACSIMILE) I caused the foregoing document(s) to be served by facsimile transmission from facsimile machine number (415) 772-7400 to the interested party at the facsimile telephone numbers shown. Each transmission was reported as complete and without error. A transmission report was properly issued by the sending facsimile machine for each interested party served. (FEDERAL EXPRESS) I served the foregoing document(s) by Federal Express as follows: I placed true copies of the document(s) in a sealed envelope addressed to each interested party as shown above. I placed each such envelope for collection and mailing at Sidley Austin LLP, San Francisco, California. I am readily familiar with the Firm's practice for collection and processing of correspondence for mailing via Federal Express (an express service carrier which provides overnight delivery). Under that practice, the sealed, addressed envelope(s) are delivered to an authorized courier or driver authorized by Federal Express the same date they are collected and processed, with all charges paid. (HAND DELIVERY) I caused the docurnent(s) to be delivered by hand by a courier service to the addressee(s) shown above unless otherwise noted. (E-MAIL) I caused the document(s) to be delivered by e-mail to each interested party as shown above. (LEXIS NEXIS) I caused the document(s) to be delivered by e-mail by Lexis Nexis File & Serve to each interested party as shown above. I declare under penalty of perjury under the laws of the State of California that the above is true and correct. Executed on September 2 1, 2007, at San Francisco, California. By: Gabriela Rodriguez
PROOF OF SERVICE

6 7 8

25

26

11

11

Case 3:07-cv-04911-CRB

Document 1

Filed 09/21/2007

Page 16 of 50

SERVICE LIST
Nancy Hirsh, Esq., State Bar No. 49091 (By Hand Delivery and U.S. Mail) Mark E. Burton, Jr. Esq., State Bar No. 178400 Rachel Abrams, Esq., State Bar No. 2093 16 HERSH & HERSH A Professional Corporation 60 1 Van Ness Avenue, 2080 Opera Plaza San Francisco, CA 94102-6388 (415) 441-5544 Mark Zahner, Chief Prosecutor, State Bar No. 137732 Brian V. Frankel, Supervising Attorney General, State Bar No. 116802 1455 Frazee Road, Suite 3 15 San Diego, CA 92 108 (619) 688-6065 Edmund G. Brown, Jr., Attorney General of the State of California Office of the Attorney General 1300 "I" Street P.O. Box. 944255 Sacramento, CA 94244-2550

PROOF OF SERVICE
F1 1471964v.l

Case 3:07-cv-04911-CRB

Document 1

Filed 09/21/2007

Page 17 of 50

Case 3:07-cv-04911-CRB
AnORNEY OR PARTY WITH(XTr ATTORNEY IN; le Bar

Document 1
m d &sr)

Filed 09/21/2007

Page 18 of 50
CMFOR

CALIFORNIA STATE BAR

COURr USE ONLY

NANCY HERSH, ESQ. HERSH 6 HERSH A Profes~ionalCorp. 6 0 1 Van Ness Avenue, Sulte 2080 san Prancisco, CA 94102-6396
TELEPHONEMI

49091

A ~ ~ ~ R NFE ~ R Y

r ) laintiff m
CAUFORNIA COUNTY OF
SAN

f

4 1 5 ) 441-5544

FAX NO

SUPERIOR COURT

FRANCISCO

M A G f= U
AUG 2 8 2007

co cout2bySuperiorCourt

SmEm ADDRESS 400 M ~ A l l i ~ t e trr e e t s MILHQADDRESS San Francisco, CA 94102 C l P l AND Z P CODE I
WHNAME

MAY 1 1 2007

Unlimited J u r i s d i c t i o n

CASENAME

VICENTE v. ELI LILLY AND COMPANY
Complex Cam Designation
CASE NUMBER

CIVIL CASE COVER SHEET
Unlimited (Amount demanded exceeds $25,000) Limited (Amount demanded is $25,000 or less)

0Counter
1

0Joinder

CGC-07-4633 38
JUDGE. MPT:

Filed wrth flrst appearance by defendant (c~I. Rules of court, rule 3.402)

&ems 1-5 below must be completed (see instructions on page 2).
1. Check one box below for the case type that best describes this case: Auto Tort Contract

0Auto (22) 0Uninsuredmotorist (46)
0 0
I

Other PVPWD (Personal InjuryIProperty DernagelWrongM Death) Tort Asbestos (04) Product liability (24) condemnation (14) 1dilmalpractice(45) Wrongful eviction (33) Other PlPDNYD (23) Non-PVPWWD(Other) Tort Other real propeny (26) Business rorthnfair business practice (07) Unlawful Detainer Commercial (31) civil rights (w) Residential (32) Defamation(13) Fraud (16) Drugs (38) )Intellectualproperty (19) Judicial Review Professionalnegligence (25) Asset forfeiture (05) I mPVPDMID twt (35) = Pelition r : arbitration award (1 1) e Ernployment WWlit of mandate (02) . , Wrongful termination (36) 1 judicial review (39) Other employment (15)

0Breach 0ColMons (09) 0Insurance coverage (18) 01 r connacr (37) Real Properly 0l i n e n t domaidlnverse
0 0 0

(06)

Provisioneily Complex Civii Litigation (Cal. Rules of Court, rules 3.400-3.403) AntitrwVTrade regulation (03) Construction defect (10) MaMasstort (40)

0

0 0 Icwities litigation (28)

Environmenta~oxic (30) ton Insurance coverage claims arising from the above listed provisionally complex case rypes (41) Enforcement d Judgment Enforcement of judgment (20) Miscellaneous Civil Complaint

0

I I 0

0

0 0

0 0 0 0 0

I RlCo (27)

0

Other complaint (not specfiedabve) (42) Miscellaneous Civil Petition Parbiershipand corporate governance 121) Other petition (not speciried above) (43)

2 This case .

is not complex under rule 3.400 ot the California Rules of Court. If the case is complex. mark the is factors requiring exceptional judicial management: d. l g e number of witnesses Large number of separately represented parties a.

I
,
I

Extensive motion practice raising difficuh or novel e. issues that wilt be timeconsuming to resolve c. Substantial amount of documentary evidence 1 . 3. Type of remedies sought (check all that apply): b.

I I

0 -

u Coordination with related actions pending in one or more courts
in other counties. states. or countries. or in a federal court )Substantial postjudgment judicial supervision

a. monetary b. nonrnonetary; declaratory or injunctive relief c. punitive 4. Number of causes of action (specify): 4 5. This case is is not a class action suit. 6. If there are any known related cases, file and serve a notice of related c a s e . m a p 6 j q CM-015.) Date:

0

0

I

May 11, 2007
RACHEL NNAME) (TYPE OR PRINT 3S -

1

(A - &

/
NEY FOR PARTY)

ATURE

!

I
Form A m l e d lor Mandaloly Use Ju&c~al Council of C2zlrbrn.a CMI)IO [Rev J a n u q 1.2W7l

ClVlL CASE COVER SHEET
4010

Cd. Rules 01 C m n . N k 3.2% 3 400-3 W standards ol J dm Admlmsnalon. 5 19 u ! l u t w m u N n b ca wv

Case 3:07-cv-04911-CRB

Document 1

Filed 09/21/2007

Page 19 of 50
POS-010
FOR COURT USE ONLY

a.

A ~ N E oR PARW VffTHOVT ATTORNEY ( a e Sa Y Nm:

.

r nvmber, andJdr*crs)

-

NANCY RERSH, ESQ. HERSH 6 HERSH, A P r o f e s s i o n a l Corp. 601 Van Ness Avenue, S u i t e 2080 San F r a n c i s c o , CA 94102-6396
TELEPHONE NO.

7
-4

1
I

( 4 15 ) 441-5544

FAX NO (optma-

E-MAIL ALORESS (OpDaulJ.

ATIORNEYFOR(NY~~J.

Plaintiff COUNTY O SAN FRANC1SCO F 400 Mcalister Street San Francisco, CA 94102

SUPERIOR COURT OF CALIFORN
STREErADDRESS
MAIUNGADORESS.

MAY 2 1 2087

CITY ANDaP

CODE

BR~HWE-

Unlimited Jurisdiction JAYDEEN VICENTE ELI LILLY AND COMPANY
U I S E NUMBER

PLAINTIFFIPETITIONER: DEFENDANTlREsPoNDENT:

CGC-07-463338
Ref. No a F~leo N:

I
a.

PROOF OF SERVICE OF SUMMONS

(Separate prmf o service is required for each party sewed.) f
1. At the time of service I was at least 18 years of age and not a party to this action. 2. Iserved copies of:

Kl

sum-

b. complaint c. [ Alternative Dispute Resolution(ADR) package
d. e. f. Civil Case Cover Sheet (served in complex cases only)

0 cross-complaint
-

3. a

Confidential Cover Sheet-Complaint ; Confidential Coverzheet Co er S eet-Civil C Party sewed ,spxvname o~party s ~ o w on3ocuments sewed): Tt%orney as n eneral of California
other (specify documents):

b.

0Person (other than the party in item 3a) Sewed on behalf of an entity or as an authorized agent (and not a person
under item 5b on whM substituted setvice was made) (specify name and relationship to the party named I? item 3a)r

4. Addresswherethepartywassetved: 1300 "I" Street, P.O.

Box 944255, Sacramento, CA

94244-2550
5.
l served the party (check proper box) by personal service. I personally delivered the documents listed in item 2 to the party o person authorized to r (2) at (time): receive service of process for the party (1) on (date):

0

b.

by substituted service. On (date): at (time): Ileft the documents listed in itern 2 with or in the presence of (name and title or relationship to person indicated in item 3): (1)

0(business) a person at least 18 years of age apparently in charge at the offtce or usual place of business
of the person to be served. I informed him w her of the general nature of the papers.

(2)

0(home) a competent member of the household (at least 18 years of age) at the dwelling house or usual
place of abode of the party. Iinformed him or her of the general nature of the papefs.

(3)

0 (physical address unknown) a person at least 18 years of age apparently in charge at the usual mailtng
address of the person to be sewed, other than a United States Postal Service post office box. I infwmed him w her of the general nature of the papers.

(4)

0 1 thereafter mailed (by first-class. postage prepaid) copies of the documents to the person to be served

(5)

1

at the place Were the copies were left (CodeCiv. Proc.. § 415.20 . I mailed the documents on or a dedaration of mailing is attached. (date): from (tip): 1 attach a declaration of diligence stating actions taken first to attempt personal setvice.

d

Pa*
F m Adoplpd tOT MahamyUse Judioal Cwnoi olC&lkmla POS-010 [Rev .!a,WJOi ! 2W3

1d 2

PROOF OF SERVICE OF SUMMONS
4010

Code d Clvit Prrwedwe, 5 417 10

MacForms (509) 5354382

Case 3:07-cv-04911-CRB

Document 1

Filed 09/21/2007

Page 20 of 50

EFENDANT~RESPONDENT:

E L I LILLY AND COMPANY

CGC-07-463338

5 c. .

0 by mail and acknowledgment of receipt of service. Imailed the documents listed in item 2 to the party. to the
address shown in item 4, by firstclass mail. postage prepaid, ( I ) on (date): (2) from (city):

0with two copies of the Notice and Acknowledgment of Receipt and a postage-paid return envelope addressed to me. (Aflach completed Notice and Acknowledgement of Receipt.) (Code C . Proc.. 5 415.30.) N (4) 0to an address outside California with return receipt requested. (Code CiV. Proc., ! 415.40.) j
(3)
d.

a by by
0

c e r t i f i e d m a i l , r e t u r n r e c e i p t r e q u e s t e d , pursuant t o Government Code § 1 2 6 5 2 ( c ) ( 3 )

other means ( s p e c 6 means of seMce and authofjzingcode section):

0Altimnal page describingsenrice is attached.
6. The "Notice to the Person Served" (onthe summons) was completed as follows: as an individual defendant. a. b. as the person sued under the fictitious name of (specify):

d.

C I

I I -pant.
OII O ~ I W H ispec*): of under thel f gil o n w o Code of C i Procedure section:

n 416.10 (corporation) a 416.20 (defund corporation)
n 416.30 (joint st&
I 416.50 (public entity) 7

0415.95 (business organization. fmm unknown) I 3 416.60 (minor)

companylassociation)

a416.70 (ward or conservatee)
0416.90 (authorizedperson) C] 415.46 (occupant) D other.

0416.40 (associationcf partnership)
7. Person who served papers a. Name: Judy Olasov b. Address: 601 Van Ness Avenue, S u i t e 2080, c. Telephonenumber: ( 4 1 5 ) 4 4 1 - 5 5 4 4 d. The fee for service was: $ 0e. lam:

.

San Francisco, CA

94102

-

(1)

" I (3)

not a registered California process server. exempt from registration under Business and ProfessionsCode section 22350(b). a registeredCalifornia process server: (i) owner ( employee independent contractor. (ii) RegistrationNo.: (iii) County:

0

0

8.

I declare under penally of perjury under the laws of the State of California that the foregoing is true and m e c t .

9.

) Iam a California sheriff or marshal and Ic e t i i that the foregoing is true and conect.
May 21, 2007
JUDY OLASOV
( W E Of PERSONWHOSERVED PAPERSSHERIFF CX3 hlPRSWL) (SIGNIITURE !

Date:

DOS-010 [Rev January 1.2W)7]

PROOF OF SERVICE OF SUMMONS

Pap.2of2

MacForms (509) 5354382

4010

Case 3:07-cv-04911-CRB

Document 1

Filed 09/21/2007

Page 21 of 50

Complete Items 1.2, and 3 Also complete . J 4 if Restricted Delivery I deslred. t m s Print your name and address on the reverse so that we can return the card to you. Attach this card to the back of the mallplece, or on the front If space permits.
1. A k k t Addressed t: o

C. Date of DeJtvery

Office of the Attorney General 1300 "I" Street P.O. Box 944255 Sacramento, CA

M

Registered

I

o-u.u

0 Return Recelpl for Merchandfae
C.O.D.

Inswed Mall

4. Restricted Delivery? (Extra Fee)

Yes

2. ANcle Number ~ ~ l r

o

m

~

c

a

~

7 0 0 q 0550 0 0 0 0 1512 4932
-

k ~ o r m 1. February 2004 381

Domestic Return Receipt

1M59502-M-lMO

Case 3:07-cv-04911-CRB

Document 1

Filed 09/21/2007

Page 22 of 50

1 EDMUND G. BROWN JR. Attorney General ofthe State of California 2 MARKZAHNER Chief Prosecutor State Bar No. 137732 BRIAN V. FRANKEL Supervising Deputy Attorney General State Bar No. 116802 1455 Frazee Road, Suite 3 15 San Diego, CA 92 108 Telephone: (619) 688-6065 Fax: (619) 688-4200 Attorneys for STATE OF CALIFORNIA

SUPERIOR COURT OF CALK~ORNIA
COUNTY OF SAN FRANCISCO CASE NO. CGC-07-463338

THE STATE OF CALIFORNIA, ex rel. JAYDEEN VICENTE and JAYDEEN VICENTE Individually, Plaintiffs,

STATE OF CALIFORNIA'S NOTICE OF ELECTION TO DECLINE INTERVENTION PURSUANT TO GOVERNMENT CODE SECTION 12652(c)(8)@)(ii)
NO HEARING REQUIRED Dept: 2 12 Trial Date: None Set Action Filed: May I 1,2007

ELI LILLY AND COMPANY, Defendants.

[FILED UNDER SEAL Pursuant to Government Code sections 12652 subdivision (c)(2) and and California Rules of Court, rule 243.61

23
24 25

1
1
11 1

TO THE SUPERIOR COURT, STATE OF CALIFORNIA:
PLEASE TAKE NOTICE that pursuant to Government Code section 12652(~)(8)(D)(ii),the Attorney General of the State of California elects to decline intervention in this matter.

26 27 28

I//

/I

State of California's Notice of Election to Decline Intervention

Case 3:07-cv-04911-CRB

Document 1

Filed 09/21/2007

Page 23 of 50

In accordance with the provisions of California Government Code section 12652(f)(I), the Attorney General of the State of California requests that he be served with copies of all future pleadings filed in this action. Dated: July 1 , 2 0 0 7 . Respectfully submitted,

EDMUND G. BROWN JR. Attorney General of the State of California MARK ZAHNER Chief Prosecutor BRIAN V. FRANKEL Supervising Deputy Attorney General

By BRIAN V. FRANKEL Supervising Deputy Attorney General Attorneys for STATE OF CALIFORNIA

L, 1.FJ&

State of California's Notice of Election to Decline Intervention

Case 3:07-cv-04911-CRB

Document 1

Filed 09/21/2007

Page 24 of 50

DECLARATION OF SERVICE BY U.S. MAIL
Case Name: THE STATE OF CALIFORNIA, ex rel. JAYDEEN VICENTE and JAYDEEN VICENTE v. ELI LILLY AND COMPANY Case No.: CGC-07-463338

1

I am employed in the Office of the Attorney General, which is the office of a member of the California State Bar at which member's direction this service is made. I am 18 years of age or older and not a party to this matter; my business address is: 110 West "A" Street, Suite 1100, San Diego, California 92 101.
On July 9.2007, I served the attached STATE OF CALIFORNIA'S NOTICE OF ELECTION TO DECLINE INTERVENTION by placing a true copy thereof enclosed in a sealed envelope with postage thereon fully prepaid, in the United States Mail at San Diego, California, addressed as follows:

Nancy Hersh, Esq. Hersh & Hersh, APC 601 Van Ness Avenue, Ste. 2080 San Francisco, CA 94102-6388 Counselfor Relator

I declare under penalty of perjury under the laws of the State of California the foregoing is true and correct and that this declaration was executed on July 9,2007, at San Diego, California.

Shakira N. Anderson Declarant

State of California's Notice of Election to Decline Intervention

Case 3:07-cv-04911-CRB

V - r r v

" A Y V A C ~ ~ A U L Y

. Document. 1

.-

U L I U I ~Y~ U

. . - . ... .. .. . Filed 09/21/2007.-..... Page 25 of 50 .. r / u a o wuu
~ Q .

it-,"

CONFIDENTIAL
hVWiNEV/Nanv, u k h r n u m b r . onds-. w

MC-QSO
FWI CWRT USE ONL r

NANCY EIERSH. ESQ., SBN 49091 E R S H & HERSH.A Professional Corporation ,601Vn Ness Avame, Suite 2080 a

San Francisco, CA 941024386
TELEPHONENO.:
~WAILADDR~~S toeman:

415441-55&
PIPWKTIFG
-.

FAX K).~ D P B ~ H I ) :

ENDORSED
$30 Francrsco Cuuny Superior COU

nnonrrmrorc.

aanm f

d

:

SUPERIOR COURT OF CALIFORNIA. COUNTY OF STRFST~DDRW 400 McAllister Street
MAUNG ~ O D R E ~ ~ .

SAN FRANCISCO

anworrPcwe
BR*W
WMP

San Francisco. CA 94102 Unlimited ~u&diction
[UNDER SEAL1

II GT ,JRDON
1

PARK-U. clerk1
I

PWMIFF:

I

I
I

DEFENDAKT:
-

[UNDERSEAL]

UBE NWEER:

CONFIDENTIAL COVER SHEET-FALSE CLAIMS ACTION

IFISTRUCTIOHS: Thla chril action is brought under the False Claims Act, Gavemment Code section 12650 et seq. The documents filed In this case aro under seal and are confidential pursuant to Government Code section 12652(c).

Seal to expire an (date):

July 10,2007
UNLESS:
(1) Matlon to extend time Is

This Confidential Cover Sheet must be a m e d to the caption page of the complaint and to any other paper filed in this case until the seal is lifted.
You should check with the court to determine whether papers filed in false Clalrns Act cases must be filed at a particular location.
1. The document to which this cover sheet is affked Is:

pendlng: or (2) Extanded by court order

a. b.
C.

0Complaint for damagss for violation 0f.W Falae Claim Ad Cidl Cese Cover Sheet (form 98Z.Z(b](l)) 0Motion for an axtansion af time to Intervene

d.
e. f.

0Oder extending time to intervene (qeci@date arderexpires): 0I e r order (desuibe): 0

I ~ d a v ior other dourmentin support qlhe mution for an extension of time t

g. [Notica from ths Attnrney General of edditional prosecuting authority that may have access to the file h. Other (desm'be):

2. This ~ o n f i d 8 n h l ' ~ o vSheel end the attached docurnant must each be separately file-stamped by the clerk of the court. er
Date:

May 11,2007
CONFIDENTIAL COVER SHEET

Form 4dool.a h r Mandalan ~1.a 1WIW C~omdi Calbmb a1 MO O ; p a r I ~ L U P Y zooq 1.

FALSE CLAIMS ACTION

Case 3:07-cv-04911-CRB

Document 1

Filed 09/21/2007

Page 26 of 50

Case 3:07-cv-04911-CRB

Document 1

Filed 09/21/2007

Page 27 of 50

CASE NUMBER: CGC--, . '53338 (UNDER SEAL)VS. UNDEr >EAL

NOTICE TO PLAINTIFF
A Case Management Conference is set fol

DATE:
TIME:

OCT-12-2007 9:OOAM

PLACE:

Department 212 .
400 ~ c ~ l l i s tStreet er San Francisco, CA 94102-3680

All parties must appear and comply with Local Rule 3.

CRG 3.725 requires the filing and service of a case management statement form CM-1I 0 no later than 15 days before the case management conference.
However, it would facilitate the issuance of a case management order without an appearance at the case management conference if the case management statement is filed, served and lodged In Department 212

twenty-five (25) d a y before the case management
1

. Plaintiff must serve a copy of this notice upon each party to this action with the summons and complaint Proof of service subsequently filed with this court shall so state. .
ALTERNATIVE DISPUTE RESOLUTION POLICY REQUIREMENTS
IT IS THE POLICY OF THE SUPERIOR COURT THAT EVERY CIVIL CASE PARTICIPATE IN EITHER MEDIATION, JUDICIAL OR NONJUDICIAL ARBITRATION, THE EARLY SEITLEMENT PROGRAM OR SOME SUITABLE FORM OF ALTERNATNE DISPUTE RESOLUTION

PRIOR TO A MANDATORY SfZITLEMENT CONFERENCE OR TRIAL, (SEELOCAL RULE 4)

Plaintiff must serve a copy of the Alternative Dispute Resolution Information Package on each defendant along with the complaint. All counsel must discuss ADR with clients and opposing counsel and provide clients with a copy of the Alternative Dispute Resolution Information Package prior to filing the Case Management Statement.
[DEFENDANTS: Attending the Case Management Conference does not take the

place of filing a written response to the compiaint. You must file a written

response with the court within the time limit required by law. See Summons.]

Superior Court Alternative Dispute Resolution Coordinator 400 McAllister Street, Room 103 San Francisco, CA 94102 (415) 55 1-3876 .
See Local Rules 3.6, 6.0

C and 10 D re stipulatior; t o cornmissloner: acting as tempoianr judpes

I

Case 3:07-cv-04911-CRB

Document 1

Filed 09/21/2007

Page 28 of 50

SUPERIOR COURT OF CALIFORNIA COUNTY OF SAN FRANCISCO
400 McAllister Street, SM Franclsca, CA 94102-451 4

Case No.

Plaintiff

ST1PULATJON TO ALTERNA11VE DISPUTE RESOLUTION
Defendant

The parties hereby stipulate that this action shall be submllted to the tollowlng alternative dibpute rasolutlon process:

17
0

IJ

Private MedlatSon 0 Blndlng artjltretion Non-binding judicial arbitration BASF Early Settlement Program Other ADR process (describe)

Medlatlon Servlces of BASF ... O
Judge

Judlclal Mediation

Judge

Plalntlff(s) and Defendant@)further agree as follows:

Name of Party Sapulatlng

Name of Party or Attorney Executing Stipulation
Cmssdefendant

Signature of Party or Attorney

D

Plafntiff

Delandant

Dated:

Name of Party Stlpuiatlng
Plaintiff
Defendant

Name of Party or Attorney Executing Stipulation
Cmsadeiendant

Signature of Party or Attorney

-

Dated.

Name of Party Stipulating

Name of Patty or Anomey ErecuUng Stipulation
Cress-defendant
Dated:

Signature of Party or Allornay

0

Plaintiff

Defendant

a

'

Additional signatum[s) m c h e d

STIPUrLLTION TQ ALTERNAThrE D:SPUTE RESOLUTION

Case 3:07-cv-04911-CRB

Document 1

Filed 09/21/2007

Page 29 of 50

Superior Court of.California
.

.

County of San Francisco

Judicial Mediation Program
Introducbg a new court alternative dispute resolution program that provides judicial mediation of complex civil cases
'

The Judicial Mediation program offers mediation of complex civil litigation by a San Francisco Superior Court judge familiar with the area of the law that is the subject of the controversy. Cases that wl be conslddered for participation in the program il include, but are not limited to professional malpractice, construction, employment, insurclnce coverage disputes, m s torts and complex commercial litigation. Judicial as mediation offers civil litigants the opportunity to engage in earIy mediation of a case shortly after fihg the complaint in m effort to resolve the matter before substantial funds are expended This program may also be utilized at anytime throughout the litigation process. The panel of judges currently patticipating in the program includes:
The Honorable David L Ballati . The Honorable Aune Bouliane The Honorable Ellen Chaitin The Honorable John 3. Conway T e Honorable Robert L.Dondero h T h e Honorable Ernest H.Goldsmith The Honorable Cuds B. A. Karnow .The Honorable PaGck J. Mahoney

The Honorable Tomar Mason The Honorable James J. McBride The Honorable Kevin M. M c C e y The Honorable John E Munter . The Honorable Ronald Evans Quidachay The Honorable A James Robertson, l l The Honorable Mary E. Wiss

Parties interested in judicial mediation should file the Stipulation to Alternative Dispute Resolution form attached to this packet indicating a joint request for inclusion in the program and deliver a courtesy copy to Dept. 212. A preference for a specihc judge may be indicated. The couk Alternative Dispute Resolution Coordinator will facilitate assignment of cases that qualify for the program.
'

Note: Space is limited. Submission of a stipulation to judicial mediation does not guarantee inclusion in the program. You will receive written notification from the court as to the outcome of your application.

Superior Cokt Alternative Dispute Resolution
400 McAllistcr Street, Room 103, San Francisco, CA 94 102

(415) 551-3876

Case 3:07-cv-04911-CRB

Document 1

Filed 09/21/2007

Page 30 of 50

Alternative Dispute Resolution (ADR) Information Package

Alternativer o Trial t

Here are some other way! t o resolve a tivil dirpute.
The plaintiff must serve a copy of the ADR information package on each defendant along with the complaint. (CRC20I. .9(c))

Superior Court of California County of San Francisco

Case 3:07-cv-04911-CRB

Document 1

Filed 09/21/2007

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Did you know that most clvll lawsuits settle without a trial? And did you know that there are a number of ways to reeolve chriidisp%es without having to sue 'somebody?
These alternatives to a lawsuit are known as alternative dispde resolutions (ADR). The mast common forms of ADR are medlatlon, arbitration and case evaluatlon. 'There are a number of other kinds of ADR as well.

In ADR, trained, impartial persans decide disputes or help parties decide dCsputes themselves. These persons are called neutrals. For example, In mediation, the neutral Is the medlator. Neutrals normally are chosen by the dlsputlng parties or by the court. Neutrals can help paGties resolve disputes without having tb g o to . .
couh
ADA is not new, A D R i s available in many communities through dlspute resolution programs and private neutrals.

Advantages of ADR
ADFi can have a number of advantages over a lawsuit.`
ADR can be speedier. A dispute often can be resolved in a matter ofmonths, even weeks, through ADR, while a lawsuit can take years, ADR can save mGney. Court costs, attorneys fees, and expert fees can b e
saved.

1

.

ADR can permft more participation. The partlas may have more chances'to tell thelr side of the story than in court and may have more control over the outcome.
ADR can be flexible. The parties can choose the ADR process that is best for them. For example, in medlatlon the parties may decide how to resolve thelr
dispute,

ADR can be cooperative. This means that the parties having 'a dispute rnay work together with the neutral to resolve the dlspute and agree to a remedy that makes sense to them, rather than work agalnst each other.

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ADR can reduce stress. There are fewer, If any, court appearances. And because ADR can be speedier, and save money, and because the parties are normally cooperative, ADR is easier on the nerves. The parties don't have a lawsuit hanging over their heads for years.

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ADR can be more satlsfylng. For all the above reasons, many p.eople.have reported a high degree of satisfactlon with ADR.
Because of these advantages, many parties choose ADR to resolve a dispute,. instead of filing a lawsuit Even when a lawsuit.has been filed, the court can refer the dispute t o a neutral before the parties' position harden and the lawsuit. becomes costly. ADR has been used to resolve disputes even after a trial, when the result is appealed.

Disadvantages of ADR

! ADR may not be suitable for every dispute.
If ADR is blnding, the patties normally glve up most cout3 protections, including a decision by a judge or jury under formal rules of evidence and procedure, and review for legal error by an appellate court.
*

Thers generally is less opportunity t o flnd out about tho other side's case with ADR than with litigatlon. ADR may not he effective if It takes place before the parties have sufficient infoPmation to resolve the 'dispute. '
The neutral may charge a fee for his ar her services.

If a dispute is not resolved through ADR, the parties may have to put time and money into both ADR and a lawsuit.
Cawsuits must be brought within speclfled periods of time, known as statutes oflirnitatlon. Parties must be careful not to let a statute of [Imitations run out while a dlspute is i n an ADR process.

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NATIONAL REGISTERED AGENTS, INC.
SER MCE OF PROCESS SUMMARY TRANSMXlTAL FORM

-ro:

MICHAEL J. HARRINGTON ELI LlLLY AND COMPANY ClLLY CORPORATE CENTER INDIANAPOLIS, IN 462850000

SOP Transmittal #

CA51043

(800)767-1 553 - Telephone (609) 7 16-0820 - Fax

Defendant: El-l LlLLY AND COMPANY
(F~ti~y Scr\,cd)

Enclosed herewith are lcaal documents received on behalf of the above captioned entity by National Registered Agents, Inc. or its Affiliate in CALIFORNIA on this 22 day of August , 2007 . The following is a summary ofthe document(s) the State of received:
1.
I-

Title of Action: Plaintiff and Defendant Under Seal (See Package) Document(s) sewed:

2.

x Summons
X - Complaint - Petition

$ M.J. HARR!NGTON
- Subpoena
- Third Party Complaint - Demand for Jury Trial - Injunction

- Garnishment
3.
4.
5.

Default Judgement

- Notice of - Mechanics Lien - Other:

AUG 2 4 'SUUc
.-

,.

I

.

... ..... . .

Court of Jurisdiction1 San Francisco County Superior Court, Unlimited Jurisdiction Case & Docket Number: CGC-07-463330 Amount Claimed, if any: Method of Service (selmone):

K - Personally served by. K Process Server - Delivered Via: -Certified Mail
(Eavclopc mclorcd)

- Deputy Sheriff

- Regular Mail
(Envclopccrrloscd)

-U. S Marshall -Facsimile

- Other (Explain):

6. 7.
8.

Date and Time of Service: 812212007 4:17:27 PM PST (GMT -8) Appearance/Answer Date: 30 Days Plaintiffs Attorney:
TclcphnrNumbr)

Nancy Hersh 8 Hersh. A Professional Corporation 601 Van Ness Avenue Suite 2080 San Francisco. CA 94102 (415 ) 441-5544

9. Federal Express Airbill # 790812034891
10. Call Made to: Not required

1 1. Special Comments: Confidential Civil Cover Sheet - False Claims Action
NATIONAL REGISTERED AGENTS, INC. Copies To: FAX: 3172766221 MICHAEL J. HARRINGTON LlLLY CORPORATE CENTER

Transmitted by: Joan Petty INDIANAPOLIS, IN 46285-0000
The information contained in this Summary Transmittal Form is provided by National Registered Agents, Inc. for informational purposes only and should not be considered a legal opinion. It is the responsibility of the parties receiving this form to review the legal documents forwarded and to take appropriate action.

ORIGINAL

,.
.' *

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--- "*.. . -----Case 3:07-cv-04911-CRB "
~6

*-*

mne-*.-,..

08/22/2007

WED 12:16

FAX 4,

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.>wr--

J

FAK U . P p k M J

C w L r D a n S S S (CWunhx

~mnrtmporr.

plrr~nrP

0 ~ ? H @~Z-W: R

I

[UNDER SEAL]

1
f4BE NLWBER:

I

CONFIOENTLAL COVER SHEET-FALSE CLAIMS ACTION
I
I

-Jr
July 10,2007 UNLESS:

. I

I

INSTRUCTIONS: Thls chril action its brought under the False Clalms Acf Government Code section 12650 et seq. The documents filed In this case are under seal and are corttidentlal pursuantto Government Coda section
12852(c).

Seal to expire on (date):
(1)Motlon to extend time Is

Thls Confidential Cover Sheet must be amed to the caption page of the complaint and to any other paper flled in this case until the seal I8 lifted.

pending; or (2)Extended by court order

You should check with the court to determine whether papers filed in ~ s l s e Clalms Act cases must be tiled at a particular location.
1. The document co which this a v e r sheet is afflvsd la: a, Cornpbintfor damagss for violation of.the Falee Cleims Act b. Civi! Csse Cover Sheet (form gBZ2(b)(i)) c. Mobon for an axtansion of time to Intefyane d. 0 Aff~davit other document in support of the motion for an extension of time or e. 0 Order extending time to intervene (sped9 dale order expires): f. Other order (desuibeJ:

1 7 1 7

0

g.

0Notice from the Attorney General of additional prnsecuting authority that may have access to the file
Other (describe);

h.

2. This krnlsdentie1.Coversheet and h e attached document must each be separately fil&stamped by the clerk of #e couh

Date:

May 11,2007
PSD* 1 ar 1

F m 4dDDbd Cw Hmd* . . 0
l a d & touna d totbn~a McaaD pw, l O F w y 9, Y l q

CONFIDENTIAL COVER SHEET

FALSE ClAlMS ACTION

E 1aWr.k Cd.erru u COWI ~nsa8lm.67a

am. a-

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NANCY HERSH, ESQ., State Bar No. 49091 MARK E. BURTON, JR., ESQ., State Bar No. 1784