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In the
Supreme Court of the United States
Docket No. 21-1967
__________________________
UNITED STATES EX REL. KEEGAN MASON,
Petitioner,
v.
SOUTH AMERICAN METROPOLITAN CLINICS, INC.,
Respondents.
__________________________
On Writ of Certiorari to the United States Court of Appeals for the Fifteenth Circuit
BRIEF FOR PETITIONER
Team 3014
Attorneys for Petitioner
i
QUESTIONS PRESENTED
1. Whether 31 U.S.C. § 3730(b)(5) of the False Claims Act (“FCA”) establishes a rule of
subject matter jurisdiction where Congress does not establish a clear intent to
characterize it as jurisdictional in either the plain language or context of the statute.
2. Whether the certification of a medical opinion can be false under the False Claims
Act when a provider submits a claim for a procedure that is not reasonable or
necessary to receive reimbursement from Medicare, or whether the relator must
show the certification was objectively false beyond their own medical expertise as
demonstrated by further evidence.
ii
TABLE OF CONTENTS
STATEMENT OF JURISDICTION ................................................................................................................. 1
OPINIONS BELOW .......................................................................................................................................... 1
RELEVANT PROVISIONS .............................................................................................................................. 1
STATEMENT OF THE CASE .......................................................................................................................... 3
STATEMENT OF THE FACTS ......................................................................................................................... 3
PROCEDURAL HISTORY ................................................................................................................................. 6
SUMMARY OF THE ARGUMENT ................................................................................................................. 7
STANDARD OF REVIEW .............................................................................................................................. 10
ARGUMENT ..................................................................................................................................................... 11
I. PETITIONER FILED A DISTINCT CLAIM THAT CANNOT BE BARRED BY THE FIRST-TO-FILE RULE................................................................................................................................................... 11
A. The Court Must Adopt the Identical Facts Test as Intended by the Legislature. ................. 11 B. Even if the Court Adopts the Material Elements Test, Petitioner’s Claim Does Not Trigger
the First-to-File Bar Because her Claim Arises from Entirely Different Facts than Cobb’s. ....... 13 C. No Matter Which Test Applies, Barring Petitioner’s Claim Under the First-to-File Rule
Runs Contrary to Congressional Intent and Public Policy. .................................................................. 21
II. THE DISMISSAL OF COBB’S COMPLAINT RENDERED IT INSUFFICIENT TO PRECLUDE PETITIONER’S CLAIM UNDER THE FIRST-TO-FILE BAR. ....................................... 24
A. By Failing to State a Claim, Cobb’s Action Lacked Legal Ability to Preclude Petitioner’s
Later Claim. .................................................................................................................................................... 24
III. EVEN IF THE FIRST-TO-FILE RULE APPLIES TO PETITIONER’S CLAIM, THE COURT RETAINS SUBJECT MATTER JURISDICTION OVER IT BECAUSE CONGRESS DID NOT CLEARLY STATE THAT THE RULE PRESENTS A COMPLETE JURISDICTIONAL BAR. 31
IV. CERTIFICATIONS OF MEDICAL OPINIONS CAN BE FALSE UNDER THE FEDERAL CLAIMS ACT; HOWEVER, EVEN UNDER A MORE STRINGENT APPLICATION OF FALSITY, PETITIONER MEETS THE STANDARD. ................................................................................................... 38
CONCLUSION ................................................................................................................................................. 51
iii
TABLE OF AUTHORITIES
Cases
Anchor Prop. & Cas. Ins. Co. v. Trif, 46 Fla. L. Weekly D 267 at 24 (2021) ..........................41
Arbaugh v. Y & H Corp., 546 U.S. 500, 516, 126 S. Ct. 1235, 1245 (2006) ...................... 33, 35
Campbell v. Redding Med. Ctr., 421 F.3d 817, 824 (9th Cir. 2005) ........................... 22, 24, 25
Doyle v. Hasbro, Inc., 103 F.3d 186, 194 (1st Cir. 1996) ........................................................26
Ebeid v. Lungwitz, 616 F.3d 993 at 998 (9th Cir. 2010) .........................................................39
Foster v. United States, 303 U.S. 118, 120 (1938) ............................................................ 11, 32
Gonzalez v. Thaler, 565 U.S. 134, 144, 132 S. Ct. 641, 650 (2012) ........................................38
Henderson v. Shinseki, 562 U. S., at 428, 435 (2011) .............................................................36
Kellogg Brown & Root Services, Inc. v. United States ex rel. Carter, 135 S. Ct. 1970, 191 L.
Ed. 2d 899 (2015) ....................................................................................................... 8, 27, 29
Omnicare, Inc. v. Laborers Dist. Council Contr. Indus. Pension Fund, 575 U.S. 175 at 185-
191 (U.S. 2015)............................................................................................................... 41, 42
Patsy v. Bd. of Regents, 457 U.S. 496, 536, 102 S. Ct. 2557, 2578 n.4 (1982)........................21
Sebelius v. Auburn Reg’l Med. Ctr., 568 U.S. 145, 153, 133 S. Ct. 817, 824 (2013) ...... passim
Smith v. Clark/Smoot/Russell, A JV, 796 F3d 424, 430 (4th Cir. 2015).................................29
U.S. ex rel. Conner v. Salina Reg'l Health Ctr., Inc., 543 F.3d 1211, 1217 (10th Cir. 2008). 47
U.S. ex rel. Druding v. Druding, 952 F.3d 89 (3d. Cir. 2020) ......................................... passim
U.S. ex rel. Swift-Freeman v. Bon Secours Baltimore Health Sys., 2008 U.S. Dist. LEXIS
132574 (D. Md. 2008) ...........................................................................................................39
U.S. v. Univ. of Phx., 461 F.3d 1166 at 1174 (9th Cir. 2006) ........................................... 10, 40
United States ex rel. Boise v. Cephalon, Inc., 159 F. Supp. 3d 550, 558 (E.D. Pa. 2016) .. 8, 27
United States ex rel. Gadbois v. PharMerica Corp. ................................................................28
United States ex rel. Hagood v. Sonoma Cty. Water Agency, 929 F.2d 1416, 1420 (9th Cir.
1991) ............................................................................................................................. 8, 9, 25
United States ex rel. Hampton v. Columbia/Hca Healthcare Corp., 355 U.S. App. D.C. 23,
318 F.3d 214, 217 (2003)......................................................................................................14
iv
United States ex rel. Hayes v. Allstate Ins. Co., 853 F.3d 80, 86 (2d Cir. 2017) ...................34
United States ex rel. Lujan v. Hughes Aircraft Co. ................................................................25
United States ex rel. Poteet v. Medtronic, Inc., 552 F.3d 503, 516 (6th Cir. 2009) ....... passim
United States ex rel. Springfield Term. Ry. Co. v. Quinn, 14 F.3d 645, 649 (D.C. Cir. 1994)
........................................................................................................................................ 12, 23
United States ex rel. St. John LaCorte v. SmithKline Beecham Clinical Labs., Inc., 149 F.3d
227, 232-33 (3d Cir. 1998) ....................................................................................... 11, 12, 14
United States ex rel. Taxpayers Against Fraud v. GE, 41 F.3d 1032, 1035 (6th Cir. 1994) .21
United States ex rel. Todd Heath v. AT&T, Inc., 416 U.S. App. D.C. 289, 297-98, 791 F.3d
112, 120-21 (2015) ................................................................................................................34
United States ex rel. Williams v. NEC Corp., 931 F.2d 1493, 1499-500 (11th Cir. 1991) .....35
United States ex rel. Wood v. Allergan, Inc., 246 F. Supp. 3d 772, 799 (S.D.N.Y. 2017) .....29,
30, 31
United States ex. Rel. Karvelas v. Melrose-Wakefield Hospital, 360 F.3d 220, 226-31 (1st
Cir. 2004) .............................................................................................................................26
United States v. AseraCare, Inc., 938 F.3d 1278 (11th Cir. 2019). ................................ passim
United States v. Care Alternatives, 952 F.3d 89, 96 (3d Cir. 2020), cert. denied, 141 S. Ct.
1371, 209 L. Ed. 2d 119 (2021). ...........................................................................................48
United States v. Kwai Fun Wong, 575 U.S. 402, 408-09, 135 S. Ct. 1625, 1631 (2015) ... 9, 32,
37
United States v. Mckesson Corp., 2021 U.S. Dist. LEXIS 28744 at 7 (N.D. Cal. 2021) ........39
United States v. Millenium Labs., Inc., 923 F.3d 240, 248 (1st Cir. 2019) ............................34
United States v. Sanofi-Aventis U.S. LLC (In re Plavix Mktg.), 974 F.3d 228, 232 (3d Cir.
2020) ............................................................................................................................... 34, 36
Universal Health Serv.s Inc., v. U.S. ex rel. Escobar, 136 S. Ct. 1989 at 1993 (U.S. 2016) ..40
Walburn v. Lockheed Martin Corp., 431 F.3d 966, 972 (6th Cir. 2005) ......................... passim
Winter ex rel. U.S. v. Gardens Reg’l Hosp. & Med. Ctr., Inc., 953 F.3d 1008 (9th Cir. 2020)
...................................................................................................................................... passim
v
Statutes
28 U.S.C. § 1331 .................................................................................................................................... 1
31 U.S.C. § 3729 ............................................................................................................................ 46, 50
31 U.S.C. § 3729(a)(1) ............................................................................................................... 2, 11, 43
31 U.S.C. § 3730(b)(5) ................................................................................................................. passim
31 U.S.C. § 3730(e)(4) ............................................................................................................. 26, 28, 39
31 U.S.C. §§ 3729 - 3733 ...................................................................................................................... 1
Other Authorities
AMERICAN BAR ASSOCIATION, 10th National Institute on the Civil False Claims Act and Qui Tam Enforcement, B-9 (2014). ...................................................................................... 52, 58
Center for Medicare and Medicaid Services, Local Coverage Determination for Wound Care,
L37228, (2020), https://www.cms.gov/medicare-coverage-
database/view/lcd.aspx?LCDId=37228 ................................................................................19
Centers for Medicare & Medicaid Services, NHE Fact Sheet, https://www.cms.gov/Research-
Statistics-Data-and-Systems/Statistics-Trends-and-
Reports/NationalHealthExpendData/NHE-Fact-Sheet (Dec. 16, 2020, 4:15 PM). ............52
Centers for Medicare and Medicaid Services, Medicaid Facts and Figures, (January 30,
2020), https://www.cms.gov/newsroom/fact-sheets/medicaid-facts-and-figures. ................23
Daniel R. Levinson, “Medicare Payments for Surgical Debridement Services in 2004” Dep’t
of Health and Human Serv., May 2007, 1, available at https://oig.hhs.gov/oei/reports/oei-
02-05-00390.pdf ...................................................................................................................19
James B. Helmer, Jr., American Bar Association Administrative Law and Regulatory
Practice Section, The False Claims Act: Whistleblower Litigation, (2021) at 463, 464 ....34,
35, 45
Larry M. Eig, Statutory Interpretation: General Principles and Recent Trends, Cong. Rsch.
Serv.s (Sept. 24, 2014), https://sgp.fas.org/crs/misc/97-589.pdf. .........................................53
Legislative Intent (Statutory Intent), Bouvier Law Dictionary, (The Wolters Kluwer
Bouvier Law Dictionary Desk Edition, 2012) .....................................................................25
NCD for Hyperbaric Oxygen Therapy § 20.29 (12/18/2017) available
at https://www.cms.gov/medicare-coverage-database/view/ncd.aspx?ncdid=12&ver=3. .19,
20, 21
vi
S. Rep. No. 110-507, pt. 1 (2008). ................................................................................ 48, 51, 53
S. Rep. No. 99-345,(1986), reprinted in 1986 U.S.C.C.A.N. 5266, 5290 ................. 7, 14, 25, 35
Scott Glass, Is the False Claims Act's First-to-File Rule Jurisdictional? 118 Columbia L.
Rev. 2361, 2373 ........................................................................................................ 37, 39, 43
1
STATEMENT OF JURISDICTION
The United States District Court for the District of Lincoln had federal question
jurisdiction over this claim pursuant to 28 U.S.C. § 1331 because it arises under the federal
False Claims Act. See 28 U.S.C. § 1331 (2019) and 31 U.S.C. §§ 3729 - 3733. On appeal,
the United States Court of Appeals for the Fifteenth Circuit had jurisdiction under 28
U.S.C. § 1331 as well. See id. § 1331. This Court has federal question jurisdiction under 28
U.S.C. § 1331. See id. § 1331.
OPINIONS BELOW
The United States District Court for the District of Lincoln denied Respondent’s
motion to dismiss for lack of subject matter jurisdiction per Fed. R. Civ. P. 12(b)(1) but
granted Respondent’s motion to dismiss for failure to state a claim per Fed. R. Civ. P.
12(b)(6). R. at 19. On appeal, the United States Court of Appeals for the Fifteenth Circuit,
reviewing de novo, affirmed the District Court’s decision to dismiss Petitioner’s holding that
the District Court did not have subject matter jurisdiction to hear the case. Id. at 25. The
Court of Appeals further held that the District Court should not have reached the issue of
falsity under the False Claims Act because 31 U.S.C. § 3730(b)(5) denied the court subject
matter jurisdiction. Id. at 23, 25.
RELEVANT PROVISIONS
This case centers around provisions within the False Claims Act (“FCA”). 31 U.S.C.
§§ 3729 - 3733. In particular, the case concerns the interpretation of 31 U.S.C. §
3730(b)(5), commonly referred to as the “first-to-file” rule, which states that “no person
other than the Government may intervene or bring a related action based on the facts
underlying pending action.” Additionally relevant to this case is 31 U.S.C. § 3729(a)(1),
2
which states in pertinent part that “any person who knowingly presents, or causes to be
presented, a false or fraudulent claim for payment” may be found liable for certain acts
under the FCA.
3
STATEMENT OF THE CASE
STATEMENT OF THE FACTS Respondent, Southern American Metropolitan Clinics Inc., (“SAM Clinics”),
specializes in treating chronic wounds and operates fourteen centers within the State of
Lincoln, making it the largest “for-profit” provider of wound care services within the
state. R. at 2. In addition to treating patients with non-surgical interventions, SAM
Clinics also performs selective and surgical debridement and Hyperbaric Oxygen (“HBO”)
therapy. Id. at. 3. Under the Center for Medicare and Medicaid Services (“CMS”)
guidelines, selective and surgical debridement are reimbursable so long as at least one
condition specified by the guidelines is present. Id. In contrast, the CMS guidelines for
HBO therapy require that “[t]he use of HBO therapy is covered as adjunctive therapy only
after there is no measurable signs of healing for at least 30 days of treatment with standard
wound therapy and must be used in addition to standard wound care.” Id. at 6. HBO
therapy may also be paid for by Medicare and Medicaid; however, treatments will only be
reimbursed if the wound is classified as Wagner Grade III or higher, has not positively
responded to standard wound therapy, and is provided in conjunction with standard wound
care procedures. Id. at 3-6. In total, Medicare reimbursements account for seventy-five
percent of SAM Clinics’ overall revenue. Id. at 2.
Petitioner, Keegan Mason, is a Clinical Nurse Specialist (“CNS”) who began working
at SAM Clinics when she relocated to the State of Lincoln two years ago. Id. at 4. Due to
her previous work experience, Ms. Mason is familiar with the CMS requirements for
reimbursement and has both diagnosed and ordered HBO therapy in the past. Id. In her
current role at SAM Clinics, Ms. Mason is allowed to supervise HBO therapy but cannot
personally diagnose or order such treatments. Id. Additionally, she attends to patients at
4
several SAM Clinic facilities within Lincoln, including Washington City and other nearby
satellite clinics. Id.
SAM Clinics started providing wound care services when it opened in 1967, but
experienced significant expansion within the past ten years. Id. at 2. In January of 2019,
SAM Clinics hired its current CEO, John O’Keefe. Id. at 4. Just a month later, in February
2019, Petitioner noticed an increase in the number of HBO therapy treatments performed
at the clinics she supervises. Id. Petitioner pleaded that this increase in treatments was
“questionable” since factors such as the patients’ underlying diagnoses, responses to
conventional treatments, and Wagner grades of the wounds did not support the use of HBO
therapy. Id. Petitioner noticed that most of these patients were covered by Medicare and
Medicaid and knew that these treatments were certified as “medically necessary” under
CMS guidelines and therefore eligible for reimbursement. Id. at 5. Petitioner grew
concerned after hearing discussions about clinic management “pushing” physicians to meet
a “quota system.” Id. She also witnessed a physician change a wound’s Wagner grade after
meeting with O’Keefe. Id. When Petitioner confided in another CNS about her
observation, the CNS told her that it “was best to just do what they were told.” Id. A few
months later, on September 24, 2019, Petitioner overheard a SAM Clinic physician, Dr.
William Drake, and O’Keefe discussing the number of HBO therapy treatments the
physician performed. Id. Petitioner specifically heard O’Keefe say, “Got to keep those
numbers up,” to which Dr. Drake laughed and responded with, “I’m good. Almost got that
Tesla down payment.” Id. During this conversation, O’Keefe further stated, “Yep, CMS
approves, you get that fancy new car, and the patients are happy. It’s a win-win-
win.” Id. Also around this time, in October 2019, a plastic surgeon at SAM Clinics, Dr.
Elizabeth Cobb, alleged that she was fired by O’Keefe after he pressured her to perform and
certify a medically unnecessary surgical debridement to which she refused. Id.
5
In addition to these occurrences, Petitioner pleaded that at least four specific
patients’ diagnoses did not meet the CMS standards or match her observations regarding
their conditions. Id. at 7. In the case of the first patient, a physician, who originally
classified a wound as Wagner grade II and ordered that treatment did not include HBO
therapy, upgraded the wound to Wagner grade III after speaking with O’Keefe. Id. In the
case of the second patient, the CMS medical certification for their HBO therapy treatments
stated that their diagnosis was chronic refractory osteomyelitis, even though the
osteomyelitis responded to conventional treatments. Id. In the case of the third patient,
the severity of their wound resulted in a recommendation of amputation; however, they
underwent several HBO therapy treatments before the actual
amputation. Id. Additionally, when Petitioner asked a physician why they treated the
patient with HBO therapy, the physician responded with “talk to O’Keefe about
it.” Id. Lastly, in the case of the fourth patient, their medical certification classified their
wound as Wagner grade III even though they did not have a record of osteitis, abscess, or
osteomyelitis, which are required for a grade III classification. Id. Following these
experiences, Petitioner filed a complaint alleging that SAM Clinics certified and submitted
Medicare claims that they knew were medically unnecessary based on patients’ charts and
CMS criteria. Id. at 6. The complaint also referenced an affidavit from a medical expert
who held that the treatments identified by Petitioner contradicted CMS’s guidelines. Id. at
7. Overall, Petitioner claims that these facts show that SAM Clinics is involved in a scheme
to defraud Medicare by having physicians certify unnecessary HBO therapy treatments in
exchange payments based on the number of procedures they perform. Id. at 8. Petitioner
filed a qui tam action against SAM Clinics pursuant to these incidents on November 22,
2019. Id. at 1.
6
PROCEDURAL HISTORY
Petitioner filed this qui tam action under seal on November 22, 2019, alleging that
Respondent utilizes a sort of “quota system” that ignores the requirements of § 20.29 of the
National Coverage Determination for Hyperbaric Oxygen Therapy that HBO therapy be
medically necessary to receive reimbursement under Medicare and Medicaid. R. at 5 and
National Coverage Determination (NCD) for Hyperbaric Oxygen Therapy § 20.29
(12/18/2017) available at https://www.cms.gov/medicare-coverage-
database/view/ncd.aspx?ncdid=12&ver=3. Prior to Petitioner’s initial filing, Dr. Elizabeth
Cobb filed a qui tam action on October 14, 2019, alleging that one of Respondent’s locations
fired her for refusing to perform a medically unnecessary surgery in violation of the
FCA. R. at 5. Cobb’s action was promptly dismissed on January 20, 2020, for failure to
comply with the basic pleading requirements under Rule 9(b). Id. at 6. Petitioner’s claim
was unsealed on January 24, 2020. Id. at 1. Promptly thereafter, Respondent sought to
dismiss the case under Fed. R. Civ. P. 12(b)(1) and 12(b)(6). Id. at 1. Judge Garrett
Andrew of the United States District Court for the District of Lincoln denied the motion to
dismiss for lack of subject matter jurisdiction; however, granted the motion to dismiss
under Rule 12(b)(6) for failure to state a claim upon which relief can be granted. Id. at
19. Petitioner appealed to the United States Court of Appeals for the Fifteenth Circuit. Id.
at 20. In a 2-1 decision, the Fifteenth Circuit affirmed the District Court’s decision to
dismiss the case but held that the case should have been dismissed for lack of subject
matter jurisdiction, rather than failure to state a claim. Id. at 23, 25.
7
SUMMARY OF THE ARGUMENT
Petitioner requests this Court to reverse the Fifteenth Circuit’s judgement
dismissing the Petitioner’s claim for lack of subject matter jurisdiction because (1)
Petitioner’s claim is factually distinct from the earlier filed claim by Cobb, and (2) even if
the first-to-file rule does apply, Congress did not intend § 3730(b)(5) of the False Claims Act
to create an absolute jurisdictional bar. Furthermore, this Court should reverse the
District Court’s decision to dismiss Petitioner’s claim under Fed. R. Civ. P. 12(b)(6) because
the objective falsehood standard goes against Congress’ intention to encourage reports of “all
types of fraud, without qualification . . .” Winter ex rel. United States v. Gardens Reg'l Hosp. &
Med. Ctr., Inc., 953 F.3d 1108, 1119 (9th Cir. 2020). This Court has subject matter
jurisdiction over Petitioner’s claim and Petitioner has sufficiently demonstrated that she
meets the proper standard required by the FCA to demonstrate that Respondent’s medical
certifications were false.
First, § 3730(b)(5) of the FCA was intended only to bar claims that contain identical
facts to an earlier filed and still pending claim. S. Rep. No. 99-345,(1986), reprinted in 1986
U.S.C.C.A.N. 5266, 5290. Petitioner alleges facts concerning different patients, medical
procedures, and locations, along with far more detailed information stemming from her
personal experiences as a CNA at SAM Clinics. R. at 4-7. Although the Court should adopt
the identical facts test as intended by the legislature, even should it adopt a broader test,
Plaintiff’s claim remains factually distinct from Cobb’s. Some courts apply a material
elements test, which considers whether the two claims raise the same or significantly
similar allegations of fraud. United States ex rel. Poteet v. Medtronic, Inc., 552 F.3d 503,
516 (6th Cir. 2009). Again, Petitioner’s claim is distinct from Cobb’s because she raises
allegations of fraud pertaining to different medical procedures, patients, and locations. R.
at 4-7. Not only does she raise factually different allegations, but she also alleges a form of
8
coercion and pressure different than Cobb alleges. Id. Cobb’s action stems from a single
dispute of medical opinion regarding the medical necessity of a surgical debridement
procedure, whereas Petitioner’s action stems from a plethora of concerning events that put
the Government on notice of severe fraud. Id.
Second, even if Petitioner and Cobb allege similar acts of fraud, the fact that Cobb’s
action was dismissed for failure to state a claim prior to Petitioner’s claim being unsealed
should grant this Court jurisdiction over her claim. United States ex rel. Poteet v.
Medtronic, Inc., 552 F.3d 503, 516 (6th Cir. 2009) (“[I]n order to preclude later-filed qui tam
actions, the allegedly first-filed qui tam complaint must not itself be jurisdictionally or
otherwise barred.”); Walburn v. Lockheed Martin Corp., 431 F.3d 966, 972 (6th Cir. 2005)
(A legally infirm action cannot trigger the first-to-file bar.); United States ex rel. Boise v.
Cephalon, Inc., 159 F. Supp. 3d 550, 558 (E.D. Pa. 2016) (“[I]t would be unjust to require
relators to refile their claims even though their only procedural roadblock was
dismissed.”). Cobb’s claim was dismissed for failure to state a claim as required by Rule
9(b), and was therefore meritless from the start. R. at 2. A legally infirm claim should not
preclude later filed, and legally valid, claims under the first-to-file provision because such a
result is contrary to Congressional intent. United States ex rel. Hagood v. Sonoma Cty.
Water Agency, 929 F.2d 1416, 1420 (9th Cir. 1991). Furthermore, once an earlier filed
claim is no longer pending, as in no longer active, the first-to-file bar should not remain in
effect because the procedural roadblock has been removed. Kellogg Brown & Root Services,
Inc. v. United States ex rel. Carter, 135 S. Ct. 1970, 191 L. Ed. 2d 899 (2015). Under either
interpretation, since Cobb’s claim was dismissed for lack of merit, it can no longer bar
Petitioner’s claim under the first-to-file rule.
Third, Petitioner’s claim may be heard by this Honorable Court because a claim
brought in violation of the first-to-file rule does not require courts to dismiss such a claim
9
for lack of subject matter jurisdiction. This is because Congress did not clearly state that §
3730(b)(5) is a jurisdictional rule and as a result, the Supreme Court instructs courts to
treat the statute as nonjurisdictional. Sebelius v. Auburn Reg’l Med. Ctr., 568 U.S. 145,
153, 133 S. Ct. 817, 824 (2013) (“We inquire whether Congress has “clearly state[d]” that
the rule is jurisdictional; absent such a clear statement, we have cautioned, “courts should
treat the restriction as nonjurisdictional in character.”) (citation omitted). Because
Congress does not explicitly state an intention to render § 3730(b)(5) jurisdictional from
either the plain language of the statute or its context, this Court must treat it as
nonjurisdictional. A nonjurisdictional interpretation of § 3730(b)(5) leaves courts with more
leeway in hearing qui tam actions, which better accomplishes the purposes of the False
Claims Act. See United States v. Kwai Fun Wong, 575 U.S. 402, 408-09, 135 S. Ct. 1625,
1631 (2015) (“[A] litigant’s failure to comply with [a [jurisdictional] bar deprives a court of
all authority to hear a case[.]”). This leeway is precisely what Congress intended when it
amended the False Claims Act in 1986 to “repeal overly restrictive court interpretations” of
its provisions thereby allowing the public greater access to bring suit for the public
good. United States ex rel. Hagood v. Sonoma Cty. Water Agency, 929 F.2d 1416, 1420 (9th
Cir. 1991). A nonjurisdictional interpretation of the first-to-file provision would allow the
Court to hear Petitioner’s claim and allow future plaintiffs to rely on the finality of court
decisions without fear that defendants will seek to dismiss an action for lack of subject
matter jurisdiction on appeal. Because there is no clear statement from Congress to
interpret § 3730(b)(5) as jurisdictional, the Court must treat it as
nonjurisdictional. Sebelius v. Auburn Reg’l Med. Ctr., 568 U.S. 145, 153, 133 S. Ct. 817,
824 (2013). As a result, this Court may exercise jurisdiction over Petitioner’s claim.
For the above mentioned reasons, the Court has jurisdiction over Petitioner’s
claim. The Court must then turn its attention to Petitioner’s allegations of fraud. Under
10
the FCA, civil liability is imposed on any person who “knowingly presents, or causes to be
presented, a false or fraudulent claim for payment or approval.” 31 U.S.C. §
3729(a)(1)(A). A provider’s certification violates the FCA if they make “(1) a false statement
or fraudulent course of conduct, (2) made with scienter, (3) that was material, causing (4)
the government to pay out money or forfeit moneys due.” U.S. v. Univ. of Phx., 461 F.3d
1166 at 1174 (9th Cir. 2006). The FCA has not provided a definition for the term “false,”
and courts are split over which standard of falsity applies to false medical certification
claims. United States v. AseraCare, Inc., 938 F.3d 1278, 1297 (11th Cir. 2019). There are two
standards the court will consider in determining falsity: the common law, which determines a mere
medical opinion is sufficient as proof, and the objective falsehood standard, which requires actual
evidence. The common law standard of falsity best aligns with Congress’s intentions and the
statutory language of the FCA as Congress intended to reach all fraud. Even if the Court
were to require objective falsity be proven, the petitioner has met this requirement by using
her own medical expertise and reviewing patient files in determining the HBO therapies
were unreasonable and unnecessary per her and other medical expert opinions.
STANDARD OF REVIEW
The proper standard of review courts must apply for motions to dismiss is de
novo. Walburn v. Lockheed Martin Corp., 431 F.3d 966, 969 (6th Cir. 2005) (reviewing
dismissal of FCA claims for lack of subject matter jurisdiction). On appeal, the Court must
also accept all pleaded facts as true on appeal. See, e.g., Mohamad v. Palestinian Auth.,
566 U.S. 449, 452, 132 S. Ct. 1702, 1705 (2012).
11
ARGUMENT
I. PETITIONER FILED A DISTINCT CLAIM THAT CANNOT BE BARRED BY
THE FIRST-TO-FILE RULE.
If an action is properly brought under the qui tam provisions of the FCA, another
party may not file an action based on the same underlying facts of the first party’s action;
however, there is a jurisdictional split regarding the interpretation of a “related” action. 31
U.S.C. § 3730(b)(5). Courts apply two different tests that consider whether the two claims
(1) are based on identical facts and circumstances, or (2) allege the same material
facts. See, e.g., United States ex rel. St. John LaCorte v. SmithKline Beecham Clinical
Labs., Inc., 149 F.3d 227, 232-33 (3d Cir. 1998) (applying a material elements analysis);
United States ex rel. Poteet v. Medtronic, Inc., 552 F.3d 503, 516 (6th Cir. 2009) (holding
that later claims are barred even when they contain different details if they are based on
the same material elements). The Court should hold that the applicable interpretation of
relatedness is whether the actions are based on identical facts and circumstances because
that interpretation reflects Congress’s intent in enacting the legislation. Petitioner’s claim
is based on entirely different facts and circumstances than those alleged by Cobb. Under
either the identical facts or material facts test, Petitioner’s claim is not sufficiently related
to Cobb’s to merit application of the first-to-file bar.
A. The Court Must Adopt the Identical Facts Test as Intended by the Legislature.
Petitioner’s claim is so distinct from Cobb’s that she cannot be barred by the first-to-
file rule no matter which analysis the Court adopts. Nevertheless, the Court should apply
the identical facts test because that is what the legislature intended by enacting this
amendment. Foster v. United States, 303 U.S. 118, 120 (1938) (“Courts should construe
laws in harmony with the legislative intent and seek to carry out legislative
12
purpose”). When Congress first enacted this provision in 1986, its purpose was to serve as
“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.” United States ex rel. LaCorte v. SmithKline
Beecham Clinical Labs., 149 F.3d 227 (3d Cir. 1998) (quoting United States ex rel.
Springfield Term. Ry. Co. v. Quinn, 14 F.3d 645, 649 (D.C. Cir. 1994)). Speaking further on
its purpose, Congress notes that the first-to-file provision “is not meant to produce class
actions or multiple separate suits based on identical facts and circumstances.” S. Rep. No.
99-345, at 25 (1986), reprinted in 1986 U.S.C.C.A.N. 5266, 5290 (emphasis added). Rather,
in enacting § 3730(b)(5), Congress sought to prevent subsequent actions based on the
“identical facts and circumstances” stemming from the first filed action and that is the
standard that must apply. Id. Thus, the proper test is whether the claims contain identical
facts and circumstances, not whether they contain similar facts and circumstances.
In essence, the first-to-file jurisdictional bar serves the imperative function of
preventing duplicative claims filed after the due diligence of the original plaintiff. By
reserving jurisdiction for the first filed claim, individuals who learn of the alleged fraud as
a result of the earlier claim cannot capitalize on the whistleblower who acted promptly and
diligently. The purpose of the first-to-file provision is to bar duplicative claims, as in
identical claims. Id. Any expansion of its application is contrary to the legislature’s
purpose in enactment and harmful to potential plaintiffs. For example, the policy purpose
of the first-to-file rule would be undermined should a preceding claim allege a small,
isolated instance of potential fraud and consequently bar a later filed claim with specific,
detailed, allegations of widespread fraudulent practices against the same defendant, which
is precisely the issue here.
13
Under the identical facts test, Petitioner cannot be barred by Cobb’s earlier filed
claim because they do not allege identical facts and circumstances. Petitioner alleges
fraudulent practices pertaining to HBO therapy, whereas Cobb alleges fraudulent practices
pertaining to surgical debridement. R. at 5. Petitioner further alleges that these practices
are widespread throughout SAM Clinics and points to several specific instances of
fraudulent behavior conducted by various agents of the clinics. Id. at 5-7. On the other
hand, Cobb alleges only one instance of potentially fraudulent activity without enough
details to place the Government on notice of a truly fraudulent scheme. Id. at 5. Moreover,
Cobb does not detail Respondent’s method of pressuring physicians into certifying medical
necessity. Rather, she focuses on a dispute in medical opinion. Id. Another doctor
promptly rendered the medical procedure to the client Cobb refused to aid, and she does not
describe continuous pressure to falsely certify medical procedures as necessary like
Petitioner does. Id. The facts and circumstances these two claims allege are not at all
identical; a claim with identical facts to Cobb’s would allege the same medical procedure,
clinic location, and consequential termination. Petitioner, on the other hand, details a
series of fraudulent behavior pertaining to a different medical procedure, with different
Medicare reimbursement requirements, at multiple clinic locations. Id. at 4-
7. Consequently, Petitioner’s claim should not be barred under the identical facts test.
B. Even if the Court Adopts the Material Elements Test, Petitioner’s Claim Does Not
Trigger the First-to-File Bar Because her Claim Arises from Entirely Different Facts
than Cobb’s.
Although the Court should honor the legislature’s intended application of the rule, if
the Court adopts a different standard, Petitioner’s claim still cannot be barred by the first-
to-file rule because it is substantially different from Cobb’s claim. As mentioned, some
14
circuit courts stray from the identical facts test and instead apply a “material elements”
test. United States ex rel. LaCorte v. SmithKline Beecham Clinical Labs., 149 F.3d 227 (3d
Cir. 1998); United States ex rel. Poteet v. Medtronic, Inc., 552 F.3d 503, 516 (6th Cir.
2009). Under the material elements test, courts consider whether the “later allegation
states all the essential facts[,]” or material facts, stemming from the prior claim regardless
“if that claim incorporates somewhat different details.” SmithKline Beecham Clinical
Labs., 149 F.3d 227, 232-33; see also United States ex rel. Hampton v. Columbia/Hca
Healthcare Corp., 355 U.S. App. D.C. 23, 318 F.3d 214, 217 (2003) (rejecting the identical
facts test for the material facts test). The Sixth Circuit further elaborates that the test
must consider whether the “subsequent complaint raises the same or a related claim based
in a significant measure on the core fact or general conduct” alleged in the prior
claim. United States ex rel. Poteet v. Medtronic, Inc., 552 F.3d 503, 516 (emphasis
added). Regardless of which test applies, Petitioner’s claim arises from an entirely different
set of events and provides numerous allegations that are completely nonexistent in Cobb’s
claim. SmithKline Beecham Clinical Labs., Inc., 149 F.3d 227, 232. Moreover, the
essential facts alleged by Petitioner place the Government on notice of an entirely different
fraudulent scheme than Cobb’s claim. Id. (“once the government knows the essential facts
of a fraudulent scheme, it has enough information to discover related frauds”); see also
United States ex rel. Poteet v. Medtronic, Inc., 552 F.3d 503, 516.
In a case that illustrates the application of the material elements test, United States
ex rel. Poteet v. Medtronic, Inc. (“Poteet”), the Sixth Circuit considered whether two
competing complaints “allege[d] the same essential facts regarding the fraud against the
government” by the defendant. 552 F.3d 503, 517. There, a former employee filed a
wrongful termination suit against Medtronic, Inc. (“Medtronic”) and Medtronic Sofamor
Danek USA, Inc. (“MSD”) alleging that the company fired him for refusing “to comply with
15
his supervisors’ directives to pay illegal kickbacks and bribes to MSD physician customers
in exchange for their business.” Id. at 508. The employee’s initial complaint contained
specific allegations regarding the company’s practices to essentially bribe healthcare
providers “with extravagant travel arrangements, sham consulting agreements, and
company-sponsored "Think Tanks" to ensure their continued use of MSD
products.” Id. Nearly a year later, another former employee, John Doe, filed a qui tam
action alleging the same facts but naming ten physicians as additional
defendants. Id. Poteet filed a qui tam action more than two years after the initial
claim. Id. Like the earlier plaintiffs, Poteet filed his claim against Medtronic and MSD,
along with seventeen additional healthcare defendants, two of whom were named in an
earlier complaint. Id. Poteet similarly alleged that MSD “paid the defendant physicians
large amounts of money and provided them with lavish travel and recreational
opportunities” in exchange for their business and in violation of the FCA and the Anti-
Kickback statute. Id. at 509. In comparing Poteet’s claim to John Doe’s claim, the court
found that “[t]he only potentially significant differences between the two complaints is that,
with the exception of two overlapping physician defendants and Medtronic and MSD, the
complaints identify different physician defendants.” Id. at 517. Aside from the difference
in defendants, the claims both alleged the same essential facts that Medtronic and MSD
involved “providing monetary and in kind compensation to physicians” for their business
and filing “false or ineligible claims for Medicare and Medicaid
reimbursement.” Id. Despite the different defendants and time frames alleged within the
complaints, Doe’s claim effectively put the Government on notice of the essential facts
involving a potentially fraudulent scheme, thereby enabling it to “discover related
frauds.” Id. As a result, Poteet’s claim could not withstand the first-to-file bar.
16
Unlike the claims in Poteet, Petitioner alleges essential facts of a fraudulent scheme
not at all derivable from Cobb’s and is therefore not subject to the first-to-file
bar. Specifically, Petitioner’s claim alleges a fraudulent scheme involving: (1) a direct
violation of CMS guidelines regarding HBO therapy (2) spread across multiple clinic
locations (3) in which multiple agents of SAM Clinics both engaged in and promoted. R. at
4-7. Additionally, in contrast to Cobb’s claim, Petitioner’s claim does not arise from
termination for failure to provide a surgical debridement, rather it arises from her first-
hand experience overhearing inculpatory conversations between SAM Clinics agents and
witnessing questionable medical procedures performed on a multitude of patients at
various SAM Clinics. Id. These are not “somewhat different details” but completely
independent factual allegations of fraud arising from distinct events. SmithKline Beecham
Clinical Labs., Inc., 149 F.3d 227, 232-33. Thus, Petitioner’s claim must survive the first-
to-file rule regardless of the standard to which it is held.
1. The claims allege a violation of materially different CMS guidelines because
they involve different medical procedures.
A key distinction between the two claims are the medical procedures at focus. Cobb,
a plastic surgeon, refused to provide a potentially medically unnecessary surgical
debridement. R. at 5. Surgical debridement, as defined in the record, is “the removal of
unhealthy tissue from a wound in order to promote healing.” Id. at 3. On the contrary,
Petitioner, a CNS, alleges fraudulent reimbursement for HBO therapy, which is not within
the category of surgical debridement under CMS guidelines. Id.; see also NCD for
Hyperbaric Oxygen Therapy § 20.29 (12/18/2017) available
at https://www.cms.gov/medicare-coverage-
database/view/ncd.aspx?ncdid=12&ver=3. These are two completely different procedures
17
with completely different guidelines for reimbursement under the National Coverage
Determination and Local Coverage Determination standards. Surgical and selective
debridement involves the “removal of dead or unhealthy tissue from a wound using a sharp
instrument, such as a curette or scalpel” and does not require the heightened requirement
assigned to HBO therapy. Daniel R. Levinson, “Medicare Payments for Surgical
Debridement Services in 2004” Dep’t of Health and Human Serv., May 2007, 1, available at
https://oig.hhs.gov/oei/reports/oei-02-05-00390.pdf (further finding that only 1% of
debridement procedures were medically unnecessary); see also Center for Medicare and
Medicaid Services, Local Coverage Determination for Wound Care, L37228, (2020),
https://www.cms.gov/medicare-coverage-database/view/lcd.aspx?LCDId=37228
(debridement requires at least one condition as listed by LCD guidelines be present and
documented). In comparison, HBO therapy is an “adjunctive therapy” that may only be
provided “after there are no measurable signs of healing for at least 30 days of treatment
with standard wound therapy and must be used in addition to standard wound care.” NCD
for Hyperbaric Oxygen Therapy § 20.29 (12/18/2017) available
at https://www.cms.gov/medicare-coverage-database/view/ncd.aspx?ncdid=12&ver=3. This
heightened requirement for HBO therapy differentiates the two cases’ essential facts. The
inquiry pertaining to Respondent’s fraudulent behavior involves completely different
standards and evidence of fraudulent activity.
18
2. Petitioner’s claim articulates allegations of a fraudulent scheme permeating
throughout SAM Clinics backed by several specific instances of fraudulent
activity, whereas Cobb merely alleges a single disputed medical opinion
involving one location.
Moreover, unlike Cobb’s insufficient allegations of fraud, Petitioner’s claim involves
various clinic locations involved in fraudulent activity on a wide scale. R. at 4-
7. Additionally, Petitioner provides specific instances of four different patients, rather than
relying on a single dispute between practitioners. Id. at 7. Petitioner details how
individuals with type I diabetes who typically do not meet the threshold for reimbursable
HBO therapy under the NCD were provided such therapy nonetheless. Id. at 7. She
further alleges that another patient, Patient B, received HBO therapy despite their wound
positively responding “after a short course of conventional treatment[,]” which is a flagrant
violation of the NCD requirements for reimbursement. Id. and NCD for Hyperbaric Oxygen
Therapy § 20.29 (12/18/2017) available at https://www.cms.gov/medicare-coverage-
database/view/ncd.aspx?ncdid=12&ver=3 (“Failure to respond to standard wound care
occurs when there are no measurable signs of healing for at least 30 consecutive
days”). She further details how a physician could not support the rationale for changing a
patient’s course of treatment or the medical basis for another patient’s Wagner grade. R. at
7. All of her allegations regarding Respondents' fraudulent behavior are compounded when
she details an incriminating conversation between O’Keefe and another physician, in which
they explicitly discuss how they “Got to keep those [Medicare reimbursement] numbers
up.” Id. at 5. Additionally, Petitioner took the initiative to discuss her concerns with
another staff member and CNA at SAM Clinics, “who suggested that it was best to just do
what they were told.” Id. These discussions, along with the many incidents of suspicious
19
behavior that Petitioner reports, indicate that Petitioner’s claim arises out of entirely
different facts than Cobb’s.
Cobb’s claim arises out of an alleged wrongful termination for noncompliance with a
procedure Cobb did not wish to perform. Id. Her claim merely alleges that she was
“pressured [] to certify the medical necessity of [a surgical debridement].” Id. The District
Court of Lincoln overseeing Cobb’s case found that her claim did not sufficiently detail
fraudulent activity. Id. Rather, Cobb's claim centers around an allegedly wrongful
termination as a result of not performing a surgical debridement; unlike Petitioner’s claim,
Cobb’s claim arises out of a wrongful termination and is focused on the interactions leading
to termination. Id. Moreover, Petitioner alleges widespread fraud throughout SAM Clinics
involving HBO therapy. Her claim arises solely out of concerns for fraudulent activity
under the FCA and is supported by ample examples of patients and inculpatory
conversations directly acknowledging fraudulent behavior. Id. at 5, 7.
3. Cobb’s claim could not have possibly put the Government on notice of the
fraudulent scheme alleged by Petitioner.
Finally, Petitioner’s claim places the Government on notice of an entirely different
fraudulent scheme that cannot be derived from the essential facts alleged in Cobb’s
claim. When assessing whether a claim is precluded by an earlier filed claim, courts
consider whether the earlier claim contains “the essential facts of a fraudulent scheme” so
the Government has “enough information to discover related frauds[,]” like the one alleged
by the later claim. SmithKline Beecham Clinical Lab’ys. Inc., 149 F.3d 227, 234. “After all,
once the whistle has sounded, the government has little need for additional whistle-
blowers.” United States ex rel. Batiste v. SLM Corp., 740 F. Supp. 2d 98, 104 (D.D.C.
2010). Here, but for the combination of distinct and independent allegations within
20
Petitioner’s claim, the Government would not be on notice of SAM Clinic’s fraudulent HBO
therapy scheme from the essential facts Cobb alleges; the whistle would never sound if not
for Petitioner’s diligent pleadings. Cobb’s claim places the Government on notice of an
employment dispute stemming from a single difference in medical opinion regarding
surgical debridement. She claims that O’Keefe fired her for refusal to provide a surgical
debridement to a patient. R. at 5. She refused to certify the medical necessity of the
procedure because she did not believe it was necessary; however, despite her medical
opinion, O’Keefe disagreed and found it medically necessary, along with the other doctor
who took her place and certified its necessity. Id. While the patient in question happened
to be on Medicare, as are another 71 million individuals in the United States, her claim
leaves the Government grasping at straws to connect this to an actual fraudulent scheme,
let alone one as pervasive as Petitioner’s claim alleges. Centers for Medicare and Medicaid
Services, Medicaid Facts and Figures, (January 30, 2020),
https://www.cms.gov/newsroom/fact-sheets/medicaid-facts-and-figures. This single
disagreement is simply not “enough information [for the Government] to discover related
frauds” like the one Petitioner brings forth. SmithKline Beecham Clinical Lab’ys. Inc., 149
F.3d 227, 234. Cobb merely alleges a dispute in medical opinion between an employee and
two of her colleagues regarding a surgical debridement; she does not allege a series of
detailed and alarming acts of fraudulently reimbursed HBO therapy permeating
throughout “the largest for-profit provider of wound care services in Lincoln[.]” R. at
2. Under this analysis, Petitioner’s claim should not be barred.
Thus, even if “the phrase ‘related action based on the facts underlying the pending
action’, clearly bars claims arising from events that are already the subject of existing
suits[,]” Petitioner’s claim is too far removed from the events alleged by Cobb to be barred
under § 3730(b)(5). SmithKline Beecham Clinical Labs., Inc., 149 F.3d 227,
21
232. Petitioner’s allegations arise from (1) a series of direct violations involving CMS
guidelines for HBO therapy, as opposed to surgical debridement; (2) spread across multiple
clinic locations on several occasions, as opposed to an isolated event involving a dispute in
medical opinion for a single patient; (3) in which multiple agents of SAM Clinics were
heavily involved in and aware of. R. at 4-7. Petitioner is a “true whistleblower” in every
sense of the word; thus, under even the most stringent inquiry, Petitioner’s claim is not
barred by the first-to-file rule. Medtronic, Inc., 552 F.3d 503, 515-16 (“for a qui tam relator
to have standing to bring her claim, she "must be a true 'whistleblower'" and will be
"precluded from collecting a bounty . . . if someone else has filed the claim first."”) (quoting
United States ex rel. Taxpayers Against Fraud v. GE, 41 F.3d 1032, 1035 (6th Cir. 1994)).
C. No Matter Which Test Applies, Barring Petitioner’s Claim Under the First-to-File
Rule Runs Contrary to Congressional Intent and Public Policy.
Should the Court find that Petitioner’s claim is duplicative, the Court essentially
prevents diligent whistleblowers from coming forward with substantial and extensive
claims of fraud because someone placed the government on notice of a mere sliver of that
fraud. Such a result would be a disservice to both the government and other diligent
whistleblowers who wish to file a claim that is both distinct from the first claim and
involves a greater degree of fraud. Furthermore, “courts are guided by congressional intent
in determining whether application of the doctrine would be consistent with the statutory
scheme.” Patsy v. Bd. of Regents, 457 U.S. 496, 536, 102 S. Ct. 2557, 2578 n.4 (1982). With
the policy purpose of § 3730(b)(5) in mind, interpreting the statute as one that bars
Petitioner from filing a claim substantially different from Cobb’s because that would be
contrary to the statutory scheme within the FCA. Rather, the statute seeks to bar claims
that allege identical facts and circumstances. S. Rep. No. 99-345, at 25 (1986), reprinted in
22
1986 U.S.C.C.A.N. 5266, 5290 (“the Committee wishes to clarify in the statute that private
enforcement under the civil False Claims Act is not meant to produce class actions or
multiple separate suits based on identical facts and circumstances”); see also Legislative
Intent (Statutory Intent), Bouvier Law Dictionary, (The Wolters Kluwer Bouvier Law
Dictionary Desk Edition, 2012) (“In ascertaining legislative intent, formal statements
prepared by the committees responsible for passage usually have great weight, as do
statements made at the time of the introduction of bills”). Should the Court follow the
Fourth and Seventh circuit’s approaches to the statute, the Court would in effect “create an
absolute bar [that] would permit opportunistic plaintiffs with no inside information to
displace actual insiders with knowledge of the fraud.” Campbell v. Redding Med. Ctr., 421
F.3d 817, 824 (9th Cir. 2005). This absolute bar runs the risk of defeating the False Claims
Act’s purpose of ensuring the Government is alerted “to the essential facts of a fraudulent
scheme” because diligent parties with information regarding serious fraud could be barred
by hasty plaintiffs who file a claim on similar facts before the diligent party has a chance to
seek counsel. Under this alarming interpretation of the first-to-file bar, opportunistic
plaintiffs with weak claims, like Cobb, can rush to file and bar subsequent parties who wish
to file more developed claims of fraud. Such a result would render plaintiffs unable to
pursue potentially strong claims of fraud committed against the Government because the
claim shares some essential facts alleged by the earlier, yet weaker, claim. It would also
benefit defendants by essentially granting them immunity from a more damaging claim
simply because it was filed after an insufficient claim based on similar facts. Such a result
is certainly not what Congress intended to create by enacting § 3730(b)(5) and the Court
must not run afoul with Congressional intent and public policy.
The acts of fraud alleged by the Petitioner in this case are distinctly different from
those of Cobb’s earlier action and must not be treated as a related action regardless of
23
which standard applies. Unlike Cobb’s action, Petitioner alleges widespread fraudulent
activity throughout the State of Lincoln involving HBO therapy and the specific Medicare
and Medicaid reimbursement provisions pertaining to such therapy. R. at 6. Additionally,
Petitioner’s claim puts the government on sufficient notice of a fraudulent scheme
permeating throughout the SAM clinics of Lincoln. In the process, Petitioner also brings
forth genuinely valuable information that Ms. Cobb did not and could not have
alleged. SmithKline Beecham Clinical Labs., 149 F.3d 227 (quoting United States ex rel.
Springfield Term. Ry. Co. v. Quinn, 14 F.3d 645, 649 (D.C. Cir. 1994)) (emphasizing that
the purpose of the first-to-file rule is to discourage “opportunistic plaintiffs who have no
significant information to contribute of their own.”). She alleges specific instances of
suspicious activity involving four patients, notes incriminating statements made by the
company’s CEO, and blows the whistle for extensive fraudulent activity involving Medicare
and Medicaid reimbursements. R. at 5-7. Cobb’s claim, on the other hand, does little more
than put the government on notice of a single dispute of opinion between a plastic surgeon
and her superior in one of the fourteen wound care centers run by SAM Clinics throughout
Lincoln. Id. at 5. As a result, Cobb fails to establish any allegations of fraud and is
critically distinct from Petitioner’s claim thereby rendering the first-to-file rule
inapplicable. The two claims should not be treated as one in the same as their allegations
place the Government on notice of entirely different acts of fraud. To hold otherwise is
contrary to both public policy and the core purpose of the first-to-file bar.
24
II. THE DISMISSAL OF COBB’S COMPLAINT RENDERED IT INSUFFICIENT
TO PRECLUDE PETITIONER’S CLAIM UNDER THE FIRST-TO-FILE BAR.
A. By Failing to State a Claim, Cobb’s Action Lacked Legal Ability to
Preclude Petitioner’s Later Claim.
Even if the claims rely on substantially similar facts, “in order to preclude later-filed
qui tam actions, the allegedly first-filed qui tam complaint must not itself be
jurisdictionally or otherwise barred.” United States ex rel. Poteet v. Medtronic, Inc., 552
F.3d 503, 516 (emphasis added). On January 20, 2020, Cobb’s action was dismissed for
failure to state a claim with the specificity required under Fed. R. Civ. P. 9(b). R. at 5, 6;
Fed. R. Civ. P. 9(b) (2019). Mason’s complaint was unsealed four days after Cobb’s action
was dismissed. R. at 1 (“Mason’s complaint was unsealed on January 24,
2020[.]”). Because Cobb’s previously filed claim failed to comply with the essential
requirements of Fed. R. Civ. P. 9(b), her claim was “legally infirm from its inception[,]” and
cannot preempt Petitioner’s action. Walburn v. Lockheed Martin Corp., 431 F.3d 966, 972
(6th Cir. 2005).
In Campbell v. Redding Medical Center, the Ninth Circuit Court of Appeals
addressed whether a qui tam action in violation of 31 U.S.C. § 3730(e)(4) of the False
Claims Act still triggers a jurisdictional bar under § 3730(b)(5). 421 F.3d 817, 818 (9th Cir.
2005); See 31 U.S.C. § 3730(e)(4) (“The court shall dismiss an action … if substantially the
same allegations or transactions as alleged in the action or claim were publicly
disclosed”). The court held that a qui tam action with a jurisdictional flaw does not bar
claims filed while the action was still pending. Id. In its rationale, the court notes that
“Congress sought to provide incentives to qui tam whistleblowers to come forward, and we
believe that an overly broad interpretation of the first-to-file bar, allowing even sham
25
complaints to preclude subsequent meritorious complaints in a public disclosure case,
would contravene this intention.” Id. at 821.
The Campbell court, however, needed to distinguish it’s holding from United States
ex rel. Lujan v. Hughes Aircraft Co., in which the Ninth Circuit held that § 3730(b)(5)
“establishes an exception-free, first-to-file bar.” 243 F.3d 1181, 1183 (9th Cir. 2001). On
first impression, the Lujan court addressed the first-to-file rule and whether a claim filed
while an earlier claim is still pending triggers the first-to-file bar when the claim is
dismissed years later. Id. at 1188. Although the Campbell court attempts to distinguish
the two cases by emphasizing that “jurisdictionally flawed” claims are different from
meritless claims, its reasoning falls flat. 421 F.3d 817, 822. Instead, the court’s holding
presents contradictory arguments as to why the Lujan holding is a valid interpretation of
the first-to-file bar. For example, the court stresses the Congressional intent of § 3730(b)(5)
to encourage whistleblowers to come forward and cites the purpose of the 1986 amendments
to the FCA that sought to “repeal overly restrictive court interpretations” of the first-to-file
rule. Id. at 823 (quoting United States ex rel. Hagood v. Sonoma Cty. Water Agency, 929
F.2d 1416, 1420 (9th Cir. 1991)). It further explains how interpreting the first-to-file rule
as an absolute jurisdictional bar would be contrary to Congressional intent by “reducing the
number of qui tam suits[.]” Id. at 824. These policy considerations are the very same
reasons a meritless claim should not bar diligent whistleblowers from moving forward with
their claims.
Notably, the Government in Campbell refuted the contention that “an absolute first-
to-file rule would permit displacement of real whistleblowers by sham complaints by stating
that such a situation would be prevented by” the pleading requirements of Rule
9(b). Id. The court merely brushes off this counterpoint by stating that the pleading
requirement is a separate inquiry from the original source requirement set forth under §
26
3730(e)(4). Id. As a result, the court failed to consider the impact on claims filed while a
“sham complaint[]” awaits dismissal under Rule 9(b). Id. The Sixth Circuit did consider
the impact of meritless claims and held that a later filed qui tam action cannot be barred by
the first-to-file rule if the earlier action could not meet the requirements of Rule
9(b). Walburn v. Lockheed Martin Corp., 431 F.3d 966, 973. In coming to this conclusion,
the court stated that it could not “see how according preemptive effect to a fatally-broad
complaint furthers the policy of encouraging whistleblowers to notify the government of
potential frauds.” Id. at 973. The court applied the same policy rationale as Campbell, but
properly extended it to include claims that fail to state a claim. Id.
This Court should apply the same considerations as Campbell but expand it’s
interpretation of the first-to-file bar to include meritless claims as the Sixth Circuit did in
Walburn. If a claim is inadequate to withstand the basic requirements of its filing,
whistleblowers acting diligently and in good faith should not be barred under the first-to-
file rule once courts discover the claims inadequacy. Fed. R. Civ. P. 9(a) is in place to “give
notice to defendants of the plaintiff’s claim, to protect defendants whose reputation may be
harmed by meritless claims of fraud, to discourage ‘strike suits,’ and to prevent the filing of
suits that simply hope to uncover relevant information during discovery.” United States ex.
Rel. Karvelas v. Melrose-Wakefield Hospital, 360 F.3d 220, 226-31 (1st Cir. 2004) (quoting
Doyle v. Hasbro, Inc., 103 F.3d 186, 194 (1st Cir. 1996)).
Additionally, the purpose of the first-to-file rule is to ensure that individuals who
learn of the earlier action do not capitalize on their finding by filing a similar claim. If that
earlier action failed to plead with particularity, and therefore failed to state a claim, the
policy purpose of the first-to-file rule is still achieved when a second party who filed during
that time frame is not barred because the first claim could not have put the second plaintiff
on sufficient notice of fraudulent conduct. If the Court, however, chooses to enforce the
27
first-to-file rule so that even a meritless claim can preclude a later filed claim while the first
awaits its inevitable dismissal, the purpose of the first-to-file is abandoned. Under such
circumstances, a diligent plaintiff would be barred from litigating a claim involving fraud
against the Government simply because a meritless claim made it to the finish line first.
Preventing true whistleblowers from litigating their claims because they
unknowingly brought the action while an insufficient claim had yet to be dismissed is a
grave injustice contrary to the legislative intent of § 3730(b)(5). Cobb’s claim was illegally
infirm from its inception and cannot bar Petitioner’s claim. Walburn v. Lockheed Martin
Corp., 431 F.3d 966, 972. To hold otherwise would thwart the true purpose of the first-to-
file rule and preclude diligent plaintiffs like Petitioner from litigating an otherwise valid
claim alleging fraud against the Government.
B. Once Cobb's Action Was No Longer Pending, the First-to-File Rule No
Longer Applied to Petitioner’s Claim.
The first-to-file provision is not intended to bar later filed claims where the prior
claim was dismissed. While some circuits interpret it to bar such claims, others agree that
“it would be unjust to require relators to refile their claims even though their only
procedural roadblock was dismissed.” United States ex rel. Boise v. Cephalon, Inc., 159 F.
Supp. 3d 550, 558 (E.D. Pa. 2016). Because Cobb’s action was dismissed and therefore no
longer pending, Petitioner’s claim has overcome the only procedural roadblock and must not
be precluded by the first-to-file rule.
In Kellogg Brown & Root Services, Inc. v. United States ex rel. Carter (“Carter”), the
Supreme Court held that “an earlier suit bars a later suit while the earlier suit remains
undecided but ceases to bar that suit once it is dismissed[.]” 135 S. Ct. 1970, 191 L. Ed. 2d
899 (2015) (emphasis added). While the Carter decision clarified the meaning of a
28
“pending” action under the first-to-file bar, it also left circuit courts to grapple with the
question of what to do when a preceding claim is dismissed, leaving only the later claim
against the defendant. With the guidance of Carter, the First Circuit interpreted the
meaning of pending under the first-to-file bar as it relates to that question. In United
States ex rel. Gadbois v. PharMerica Corp., the court considered whether a claim in
violation of the first-to-file rule can be cured by filing a supplemental complaint once the
related action originally giving rise to the rule is dismissed. 809 F.3d 1, 5 (1st Cir.
2015). The court held that “subject matter jurisdiction falls within the cluster of defects
that may be cured by a supplemental pleading under Rule 15(d).” Id. Thus, if the first-to-
file rule is construed as jurisdictional, the lack of subject matter jurisdiction can still be
cured once the jurisdictional block, as in the earlier claim, is no longer pending. Id. The
Gadbois court notes that the first-to-file rule serves to deter forum-shopping in cases of
diversity jurisdiction and manipulative abuse in cases of federal question
jurisdiction. Id. When “there are no allegations of manipulative abuse of the rule[,]” courts
should provide plaintiffs the opportunity for their case to be heard despite their original
violation of the rule as opposed to simply dismissing their action. Id. Although the court
ultimately decided to remand the case to the district court to determine whether to grant
the plaintiff’s motion to supplement, should this Court determine that Petitioner’s claim
can be cured, the factual and procedural elements of this case are sufficiently developed for
the Court to provide relief. Id. Otherwise, the alternative remedy is to remand Petitioner’s
claim to the District Court of Lincoln to determine whether to cure her qui tam
action. Nevertheless, this Court should adopt the First Circuit’s approach and allow
claimants in violation of the first-to-file rule the ability to cure their technical violation once
the earlier case triggering the rule is dismissed.
29
To bar Petitioner’s claim for a mere technicality is contrary to the purpose of the
first-to-file provision and the False Claims Act as a whole. The False Claims Act serves the
fundamental purpose of protecting the Government from being the unwitting victim of
fraudulent actors by presenting the public with an opportunity to both put them on notice
of the fraudulent activity while also prosecuting the case. If the first-to-file provision
precludes potentially successful claims simply because the party lost the race to file to a
party whose claim could not withstand dismissal, the provision would hinder the ability to
prosecute fraudulent conduct against the Government. Although the circuit courts have yet
to adopt a cohesive approach to the issue of first-to-file violations, even courts that have yet
to adopt the First Circuit’s approach concede that the FCA was not drafted with an intent
to dismiss actions for mere procedural violations. See, e.g., Smith v. Clark/Smoot/Russell, A
JV, 796 F3d 424, 430 (4th Cir. 2015) (holding that a violation of the FCA’s seal provision
requirements “did not incurably frustrate” the purposes of the FCA and therefore should
not be dismissed). As the Supreme Court asked, “Why would Congress want the
abandonment of an earlier suit to bar a later potentially successful suit that might result in
a large recovery for the Government?” Kellogg Brown & Root Servs. v. United States ex rel.
Carter, 575 U.S. 650, 663, 135 S. Ct. 1970, 1979 (2015). Quite simply, “[t]he answer is that
it would not.” United States ex rel. Wood v. Allergan, Inc., 246 F. Supp. 3d 772, 799
(S.D.N.Y. 2017) (holding that the first-to-file provision does not bar later filed claims where
the prior claim was dismissed).
Additionally, the result of preclusion would essentially “produce the contrary result
of [the legislative purpose by] blocking any action to prosecute the [fraudulent] conduct in
question -- in essence, an effective loophole for any prospective defendant.” James B.
Helmer, Jr., American Bar Association Administrative Law and Regulatory Practice
Section, The False Claims Act: Whistleblower Litigation, (2021) at 463, 464. The Third
30
Circuit addressed this contrary concern in United States ex rel. Wood v. Allergan, Inc.,
where it held that an absolute bar under the first-to-file rule “would not only frustrate
Congress’s goal of helping the Government fight fraud, but it would also provide a windfall
to defendants … a particularly perverse outcome, as nothing in the text or history of the
first-to-file rule suggests that it was intended to benefit FCA defendants as opposed to the
conscientious relator and, by extension, the Government.” 246 F. Supp. 3d 772, 798. In
fact, Congress intended to create provisions that provide more protections to the
Government and public, not potential defendants. S. Rep. No. 99-345, at 1 (1986), reprinted
in 1986 U.S.C.C.A.N. 5266, 5290 (“The purpose of S. 1562, the False Claims Reform Act, is
to enhance the Government's ability to recover losses sustained as a result of fraud against
the Government. … In the face of sophisticated and widespread fraud, the Committee
believes only a coordinated effort of both the Government and the citizenry will decrease
this wave of defrauding public funds. S. 1562 increases incentives, financial and otherwise,
for private individuals to bring suits on behalf of the Government.”). Moreover, defendants
would not be prejudiced by allowing a plaintiff to continue their litigation once an earlier
claim is dismissed because, even under the most strict interpretation of the first-to-file rule,
the later filed claim may still be brought if the plaintiff refiles the claim to comply with the
statute. The later filed party’s claim against the defendant does not disappear when the
earlier filed claim does; once the party refiles their claim, the defendant will be exposed to
that litigation again. By allowing plaintiffs like Petitioner to continue with their claim once
the earlier one is dismissed, despite their initial violation of § 3730(b)(5), the Court merely
alleviates parties of delayed decisions and ineffective procedural formalities while also
reducing court resources necessary for such claims.
Should the Court hold that a procedural violation of § 3730(b)(5) is substantial
enough to preclude the violating action, plaintiffs would be required to refile their action
31
following its dismissal. Put bluntly, such a process “would be a pointless formality” with
harmful consequences to both the public and the Government. James B. Helmer, Jr.,
American Bar Association Administrative Law and Regulatory Practice Section, The False
Claims Act: Whistleblower Litigation, (2021) at 468. This requirement, effectively barring
plaintiffs from curing their violation, “would undermine, rather than advance the purposes
of the FCA.” United States ex rel. Wood v. Allergan, Inc., 246 F. Supp. 3d 772, 798. For
example, the court in Allergan, Inc., notes that preclusion for a slight procedural error
“would diminish the incentive for any relator with valuable information to file suit, as she
would have to discount the probability of laying exclusive claim to any spoils by the risk
that, unbeknownst to her, someone else had beaten her to the courthouse door.” Id.
When an earlier filed case is dismissed, the Court should hold that the later filed
case is no longer barred by the first-to-file rule because there is no longer any pending
action warranting its preclusion. To hold that dismissal is required is contrary to
congressional intent. Thus, even if the Court finds that Petitioner’s claim is related to
Cobb’s earlier filed claim, Cobb’s claim is no longer pending and should not preclude
Petitioner from continuing with her claim that SAM Clinics defrauded the Government.
III. EVEN IF THE FIRST-TO-FILE RULE APPLIES TO PETITIONER’S CLAIM,
THE COURT RETAINS SUBJECT MATTER JURISDICTION OVER IT
BECAUSE CONGRESS DID NOT CLEARLY STATE THAT THE RULE
PRESENTS A COMPLETE JURISDICTIONAL BAR.
Even if this Court finds that the first-to-file rule is applicable to Petitioner’s claim,
the Court still maintains subject matter jurisdiction over the claim because Congress did
not clearly state that § 3730(b)(5) is jurisdictional and consequently must be interpreted as
nonjurisdictional. This interpretation of § 3730(b)(5) permits the Court to hear Petitioner’s
32
claim. A jurisdictional statute prohibits a court from hearing a claim that violates the
statute’s requirements; however, a nonjurisdictional statute does not immediately bar the
court from hearing a claim that is noncompliant with the statute. See United States v.
Kwai Fun Wong, 575 U.S. 402, 408-09, 135 S. Ct. 1625, 1631 (2015) (“[A] litigant’s failure to
comply with [a [jurisdictional] bar deprives a court of all authority to hear a case”). Section
3730(b)(5) states that “no person other than the Government may intervene or bring a
related action based on the facts underlying pending action.” Thus, if this statute is
jurisdictional and a party files a related action following another party who has already
filed their claim, the court is immediately deprived of subject matter jurisdiction and
cannot hear the later filed claim. On the other hand, if the statute is nonjurisdictional,
noncompliance with the provision does not lead to an immediate jurisdictional bar. Scott
Glass, Is the False Claims Act's First-to-File Rule Jurisdictional? 118 Columbia L. Rev.
2361, 2373. Congress did not intend the first-to-file rule to render courts powerless in
hearing claims with substantial potential to protect the Government from fraud simply
because a party unknowingly lost the race to file. This Court must honor the congressional
intent behind § 3730(b)(5) and hold that it is nonjurisdictional. Foster v. United States, 303
U.S. 118, 120 (1938) (“Courts should construe laws in harmony with the legislative intent
and seek to carry out legislative purpose”). Under this approach, the Court has subject
matter jurisdiction over Petitioner’s claim.
Courts determine whether a statute is jurisdictional based on the explicit language
within the rule and context surrounding its enactment. Absent a clear statement or
supporting context from Congress that a rule is jurisdictional, courts must proceed under a
nonjurisdictional framework. Sebelius v. Auburn Reg’l Med. Ctr., 568 U.S. 145, 153, 133 S.
Ct. 817, 824 (2013) (“We inquire whether Congress has “clearly state[d]” that the rule is
jurisdictional; absent such a clear statement, we have cautioned, “courts should treat the
33
restriction as nonjurisdictional in character.”) (citation omitted) and Arbaugh v. Y & H
Corp., 546 U.S. 500, 516, 126 S. Ct. 1235, 1245 (2006) (“If the Legislature clearly states that
a threshold limitation on a statute’s scope shall count as jurisdictional, then courts and
litigants will be duly instructed and will not be left to wrestle with the issue. But when
Congress does not rank a statutory limitation on coverage as jurisdictional, courts should
treat the restriction as nonjurisdictional in character.”). In Sebelius v. Auburn Reg’l Med.
Ctr., the Supreme Court applied an analysis of the explicit language within a statute
governing time-limits for healthcare providers to appeal Medicare reimbursement
determinations. 568 U.S. 145, 153, 133 S. Ct. 817, 824 (2013). In a unanimous opinion, the
Court found that the “language Congress used [in the statute] hardly reveals a design to
preclude any regulatory extension” for appeals and lacked key terms normally included in
jurisdictional rules, including “shall” and “notice of appeal.” Id. The Court did not stop its
analysis there, instead it notes that “Congress [need not] incant magic words in order to
speak clearly” regarding their intent to classify a rule as jurisdictional; context may still
indicate how the provision should be construed. Id. One contextual factor is whether the
Court previously interpreted similar provisions as jurisdictional; however, the placement of
the provision “in a section of a statute that also contains jurisdictional provisions” is not
enough to deem the provision jurisdictional. Id. at 825.
Although the circuit courts are divided on whether Congress intended § 3730(b)(5) to
be jurisdictional, circuit courts that interpret the first-to-file provision as jurisdictional
analyzed the statute prior to the Sebelius decision and consequently do not adopt the
proper analytical approach set forth by the Supreme Court. Scott Glass, Is the False
Claims Act's First-to-File Rule Jurisdictional? 118 Columbia L. Rev. 2361, 2376-79. The
Sebelius decision provides that, absent a clear statement from Congress that the rule is
jurisdictional, courts must conclude it is nonjurisdictional. 568 U.S. 145, 153, 133 S. Ct.
34
817, 824 (2013). Since the Sebelius decision, circuit courts are breaking away from their
previous interpretations of the first-to-file rule, instead holding that it is nonjurisdictional
because Congress did not clearly state that it is jurisdictional. See United States v.
Millenium Labs., Inc., 923 F.3d 240, 248 (1st Cir. 2019) (“On de novo review, and in light of
[the] precedent [derived from the Sebelius decision], we hold that the first-to-file rule … is
nonjurisdictional.”); United States ex rel. Hayes v. Allstate Ins. Co., 853 F.3d 80, 86 (2d Cir.
2017) (Holding under the clear statement analysis that “a district court does not lack
subject matter jurisdiction over an action that may be barred on the merits by the first-to-
file rule.”); United States ex rel. Todd Heath v. AT&T, Inc., 416 U.S. App. D.C. 289, 297-98,
791 F.3d 112, 120-21 (2015) (“Congress … knew how to reference "jurisdiction expressly" in
the False Claims Act if that [was] its purpose. But it did not do so in the first-to- file rule.”);
United States v. Sanofi-Aventis U.S. LLC (In re Plavix Mktg.), 974 F.3d 228, 232 (3d Cir.
2020) (Holding that the first-to-file rule is nonjurisdictional because, “[a]s the Supreme
Court has recently instructed, unless Congress states clearly that a rule is jurisdictional,
we will treat it as nonjurisdictional.”). This Court should apply the clear statement rule
dictated by the Supreme Court and join the First, Second, Third, and District of Columbia
circuit courts’ interpretation of § 3730(b)(5) as nonjurisdictional.
Under the framework of Sebelius, this Court should hold that the first-to-file rule is
nonjurisdictional because the language and context of § 3730(b)(5) lack any indication that
it is meant to be jurisdictional. The first-to-file rule, in pertinent part, states:
“When a person brings an action under this subsection, no person other than the
Government may intervene or bring a related action based on the facts underlying
the pending action.” § 3730(b)(5).
The provision does not contain any explicit language requiring courts to interpret it as
jurisdictional. As the District Court in this matter found, “the plain language of the first-
35
to-file provision does not include jurisdictional language,” and without such language or
supporting context, the court must not interpret the rule as jurisdictional. R. at 13. This
finding adopts the Supreme Court’s holding in Sebelius v. Auburn Reg’l Med. Ctr., where
the Court specifically pointed to a statute’s lack of jurisdictional language like “shall.” 568
U.S. 145, 153, 133 S. Ct. 817, 824 (2013). Section 3730(b)(5) contains language dissimilar to
another provision within the FCA, specifically § 3730(e)(1), which explicitly states that “[n]o
court shall have jurisdiction over an action brought by a former or present member of the
armed forces against a member of the armed forces arising out of such person's
service[.]” 31 U.S.C. § 3730(e)(1) (emphasis added). Such language precisely indicates a
jurisdictional intent. Additionally, it is distinct from the FCA’s public disclosure bar within
§ 3730(e)(4), which states that a “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.” (2014) (emphasis added). Like §
3730(e)(1), the public disclosure bar explicitly incorporates jurisdictional language
suggesting that Congress clearly intended it to be a jurisdictional bar. United States ex rel.
Williams v. NEC Corp., 931 F.2d 1493, 1499-500 (11th Cir. 1991) (“The list of methods of
"public disclosure" is specific and is not qualified by words that would indicate that they are
only examples of the types of "public disclosure" to which the jurisdictional bar would
apply. Congress could easily have used "such as" or "for example" to indicate that its list
was not exhaustive. Because it did not, however, we will not give the statute a broader
effect than that which appears in its plain language.” The absence of jurisdictional
language within the first-to-file provision leaves courts left to “treat the restriction as
nonjurisdictional in character.” Arbaugh v. Y & H Corp., 546 U.S. 500, 516, 126 S. Ct. 1235,
1245 (2006).
36
Although § 3730(b)(5) does not plainly state or indicate that the rule is
jurisdictional, the Sebelius Court holds that explicit language alone need not dictate
whether a rule is jurisdictional; context must be considered when the statute lacks
jurisdictional terminology. Id. But even when assessing the context surrounding §
3730(b)(5), it is evident that Congress did not intend to classify this provision as
jurisdictional. First, the Supreme Court has “repeatedly held that filing deadlines are not
ordinarily jurisdictional; indeed [it has] described them as “quintessential claim-processing
rules.” Sebelius v. Auburn Reg’l Med. Ctr., 568 U.S. 145, 153, 133 S. Ct. 817, 825 (2013)
(quoting Henderson v. Shinseki, 562 U. S., at 428, 435 (2011)). These quintessential claim-
processing rules are defined by the Supreme Court as those “which seek to promote the
orderly progress of litigation by requiring parties to take certain procedural steps at
specified times.” Henderson v. Shinseki, 562 U.S. 428, 429, (2011). The first-to-file rule is
simply that: a quintessential claim-processing rule that requires parties to file a claim at a
specified time (prior to a related claim’s filing) in order to “promote the orderly progress of
litigation[.]” Id.
Second, the first-to-file sits alongside “other run-of-the-mill procedural rules” as
opposed to the statute’s jurisdictional sections. While the placement of a statute alone may
not provide enough context to establish Congress’s intent to categorize it as jurisdictional or
not, the location of § 3730(b)(5) in relation to other rules further supports the notion that
this rule is nonjurisdictional. United States v. Sanofi-Aventis U.S. LLC (In re Plavix
Mktg.), 974 F.3d 228, 232 (3d Cir. 2020) (“If Congress had meant to make the first-to-file
bar jurisdictional, it would have logically placed the bar in one of two other sections that
mention jurisdiction and were added at the same time as it.”).
Finally, fundamental policy considerations further support the contention that the
first-to-file provision is nonjurisdictional. The key difference between a jurisdictional and
37
nonjurisdictional provision is that, under a jurisdictional provision, courts must address
whether they have the power to hear the case sua sponte. Scott Glass, Is the False Claims
Act's First-to-File Rule Jurisdictional? 118 Columbia L. Rev. 2361, 2371. This duty to
review whether the court may hear a case sua sponte results in a burden on courts any time
a claim under the FCA is brought forth even though courts are less equipped to assess the
issue in comparison to the Government or defendant, both of whom are likely aware of
pending actions on similar or related matters. Additionally, under this framework, a
defendant may move to dismiss an FCA case at any time for lack of subject matter
jurisdiction. By keeping the door open for dismissal, “[t]ardy jurisdictional objections can
therefore result in a waste of adjudicatory resources and can disturbingly disarm
litigants.” Sebelius v. Auburn Reg'l Med. Ctr., 568 U.S. 145, 153, 133 S. Ct. 817, 824
(2013). Jurisdictions that do not derive an unspoken intention from Congress to
characterize the first-to-file rule as jurisdictional resolve these problems. Under a
nonjurisdictional interpretation of the rule, the defendant is responsible for challenging the
motion’s viability. The defendant would have twenty days from the time they are served to
motion to dismiss the case for lack of standing under § 3730(b)(5) if a related claim is
pending. The defendant would certainly be placed in a time crunch to raise this issue;
however, they are in the best position to determine whether the plaintiff is barred under
the rule because they have notice of any pending claims and the allegations they
contain. Preventing defendants from dismissing a qui tam action at any moment serves
two policy purposes: (1) reducing wasted court time and resources and (2) promoting
finality in court decisions.
Furthermore, given the “[h]arsh consequences” created by a jurisdictional rule, the
Supreme Court imposes “a high bar to establish that a statute of limitations is
jurisdictional.” United States v. Kwai Fun Wong, 575 U.S. 402, 409, (2015). The same
38
rationale applied to jurisdictional statutes of limitations must apply to a rule that similarly
bars a plaintiff from litigating their clase because of the time in which they filed their
claim. The stakes are even higher when the jurisdictional bar also prevents the
Government from prosecuting potentially severe cases in which the named defendants
allegedly defrauded the Government. Congress enacted the FCA to equip the Government
and the people with the necessary tools to fight, prevent, and recover from fraudulent
activity against the Government. James B. Helmer, Jr., American Bar Association
Administrative Law and Regulatory Practice Section, The False Claims Act: Whistleblower
Litigation, (2021) at 13. Deeming § 3730(b)(5) as a jurisdictional rule curtails the
Government’s “chief weapon against fraud” and thwarts the intention of Congress’s
enactment. Id.; See also Gonzalez v. Thaler, 565 U.S. 134, 144, 132 S. Ct. 641, 650 (2012)
(Declining to classify a statute as jurisdictional because, inter alia, to do so “would thwart
Congress’ intent” in enacting the legislation.”).
To rule in favor of the Petitioner, the Court need only consider whether the
Petitioner has sufficiently stated a claim upon which relief may be granted. Given
Petitioner’s array of allegations of fraud and facts supporting Respondent’s wrongdoing, the
Court has subject matter jurisdiction to hear the case.
IV. CERTIFICATIONS OF MEDICAL OPINIONS CAN BE FALSE UNDER THE
FEDERAL CLAIMS ACT; HOWEVER, EVEN UNDER A MORE STRINGENT
APPLICATION OF FALSITY, PETITIONER MEETS THE STANDARD.
Under the FCA, civil liability is imposed on any person who “knowingly presents, or
causes to be presented, a false or fraudulent claim for payment or approval.” 31 U.S.C. §
3729(a)(1)(A). The Court should find that a medical opinion can be false under the FCA,
and that Petitioner has met the requisite standard to show such falsity by presenting
39
evidence that Respondent certified HBO therapy treatments without believing they were
necessary. See generally Winter ex rel. U.S. v. Gardens Reg’l Hosp. & Med. Ctr., Inc., 953
F.3d 1008 (9th Cir. 2020); U.S. ex rel. Druding v. Druding, 952 F.3d 89 (3d. Cir. 2020); U.S.
ex rel. Polukoff v. St. Mark’s Hosp., 895 F.3d 730 (10th Cir. 2018).
To receive reimbursements from the Government through Medicare and Medicaid
programs, providers must comply with specific conditions, including that the reimbursable
services be certified by a physician as “medically necessary.” 42 U.S.C. § 1395f(a)(3). CMS
defines a “‘reasonable and necessary’ service as one that ‘meets, but does not exceed, the
patient's medical need,’ and is furnished ‘in accordance with accepted standards of medical
practice for the diagnosis or treatment of the patient's condition.’” Winter, 953 F.3d at
1113. If providers fail to comply with these conditions, but nevertheless certify that they
were met to receive government payments, they violate the FCA. See generally U.S. ex rel.
Swift-Freeman v. Bon Secours Baltimore Health Sys., 2008 U.S. Dist. LEXIS 132574 (D.
Md. 2008). Requests for government payment can be proven “false” either (1) factually,
when the facts within a claim are untrue, or (2) legally, when a claimant falsely certifies
that it has complied with a statute or regulation that is a condition for government
payments. Druding, 952 F.3d at 96. A claim may be legally false as a result of either an
express false certification or an implied false certification. United States v. Mckesson
Corp., 2021 U.S. Dist. LEXIS 28744 at 7 (N.D. Cal. 2021). For a certification to be false
under the express certification theory, a provider’s certification must falsely state
compliance with a law, rule, or regulation that is a prerequisite for reimbursement. Ebeid
v. Lungwitz, 616 F.3d 993 at 998 (9th Cir. 2010). In contrast, under the implied
certification theory, a provider is not required to make a certification, rather they are liable
if they violate submit payments requirements while knowingly violating the requirements
for payment. Mckesson Corp., 2021 U.S. Dist. LEXIS 28744. Although circuit courts are
40
split regarding which certification theory should apply to cases involving false medical
certifications, the Supreme Court recently expanded the scope of potential liability by
holding that the implied certification theory is a valid theory of liability. Universal Health
Serv.s Inc., v. U.S. ex rel. Escobar, 136 S. Ct. 1989 at 1993 (U.S. 2016). The application of
this theory, however, is limited only to cases in which a provider “(1) made specific
representations about goods or services provided to the government; and (2) knowingly
violated a material statutory, regulatory, or contractual requirement.” Id. at 1995 . The
Supreme Court’s decision in Escobar sets a new precedent, which will likely result in an
increased application of the implied certification theory, even in courts that previously
rejected the theory. See generally Escobar, 136 S. Ct. 1989.
Regardless of which theory courts choose to apply, a provider’s certification violates
the FCA if they make “(1) a false statement or fraudulent course of conduct, (2) made with
scienter, (3) that was material, causing (4) the government to pay out money or forfeit
moneys due.” U.S. v. Univ. of Phx., 461 F.3d 1166 at 1174 (9th Cir. 2006). While the FCA
defines “knowing,” “claim,” “obligation,” and “material,” it does not provide a definition for
the term “false.” 31 U.S.C. § 3729. As a result of this ambiguity, courts have interpreted
“false” in different ways and have applied differing standards of falsehood to false
certification claims. See generally Winter , 953 F.3d 1008; Druding, 952 F.3d 89; Polukoff ,
895 F.3d 730. Some courts apply the common law test, while other courts require proof of
an “objective falsehood.” See generally Winter , 953 F.3d 1008; Druding, 952 F.3d 89;
Polukoff , 895 F.3d 730.
Since the objective falsity standard places a higher burden on plaintiffs who bring
forth accusations of fraud, and subsequently runs contrary to the fundamental purpose of
the FCA, this Court should find that the common law standard is the applicable standard
41
for false certification claims and that, as a result, medical opinions can be false under the
FCA. See generally S. Rep. No. 110-507, pt. 1 (2008).
A. The Common Law Standard of Falsity Should Apply to False Certification Claims,
Medical Opinions Can be False Under the FCA, and Petitioner has Met this
Standard.
Under the common law test for falsity, courts presume that the FCA intended to
incorporate the common law definition of “false.” Winter, 953 F.3d 1108 at 1117. This
Court should hold that the common law test for falsity is the applicable standard for false
certification claims and that medical opinions can be false under the FCA because this
standard best aligns with policy considerations and it furthers the original purpose of the
FCA’s enactment. Id. Petitioner sufficiently establishes falsity under the common law test
because she presents evidence of a medical expert’s opinion that Respondent certified HBO
treatments in violation of CMS guidelines and that an agent of SAM Clinics adjusted a
patient’s wound’s Wagner grade without explanation. R. at 4-7. See generally Winter, 953
F.3d 1008; Druding, 952 F.3d 89; Polukoff , 895 F.3d 730.
The legal definition of a “false statement” is “[a]n untrue statement knowingly made
with the intent to mislead.” Anchor Prop. & Cas. Ins. Co. v. Trif, 46 Fla. L. Weekly D 267
at 24 (2021). Thus, under the common law standard, a provider’s opinion that the medical
procedure is necessary can be false if the provider does not actually hold the opinion, states
an opinion that contains a false fact, knows facts that would preclude the opinion, or does
not know facts that justify the opinion. Omnicare, Inc. v. Laborers Dist. Council Contr.
Indus. Pension Fund, 575 U.S. 175 at 185-191 (U.S. 2015). A number of circuit courts,
including the Ninth, Tenth, and Third Circuits, apply common law standards in cases
involving falsity and medical opinions. See generally Winter, 953 F.3d 1008; Druding, 952
F.3d 89; Polukoff , 895 F.3d 730. For example, the Third Circuit held that providers are
42
liable under the FCA if they fail to comply with statutory or regulatory requirements.
Druding, 952 F.3d 89. In Druding v. Druding, the court invoked the common law standard
and held that a medical expert’s opinion could be used to show non-compliance with
regulatory requirements. See generally Druding, 952 F.3d 89. Additionally, in Druding,
the court held that the common law recognized that opinions can be false. Id. at 98.
Similarly, the Ninth Circuit, in Winter, held that “claims for unnecessary treatment are
false” and that “’[a] doctor’s clinical opinion must be judged under the same standard as any
other representation.’” Winter, 953 F.3d at 1113. The Ninth Circuit rationalizes it holding
by stating that “a ‘doctor, like anyone else, can express an opinion that he knows to be false,
or that he makes in reckless disregard of its truth or falsity.’” Id. In addition to the Third
and Ninth Circuits, the Tenth Circuit recognizes that medical opinions that a procedure is
necessary may be false, holding that “[i]t is possible for a medical judgment to be ‘false or
fraudulent’ as proscribed by the FCA.” Polukoff, 895 F.3d 730 at 742.
The Supreme Court, relying partially on common law principles, addressed the issue
of when medical opinions can be false in its case, Omnicare, Inc. v. Laborers Dist. Council
Constr. Indus. Pension Fund. See generally Omnicare, Inc., 575 U.S. 175 at 185-191.
There, the Supreme Court held that opinion statements can give rise to liability, (1) “if they
contain embedded statements of untrue facts,” (2) “if the speaker did not hold the belief she
professed,” or, (3) “if the supporting fact she supplied were untrue.” Id. at 176. The holding
in Omnicare, along with the circuit court holdings above, demonstrate that falsity can be
proven in several ways under the common law test for liability. See generally Omnicare,
Inc., 575 U.S. 175; Winter , 953 F.3d 1008; Druding, 952 F.3d 89; Polukoff , 895 F.3d 730.
Even circuit courts that require plaintiffs to show falsity with evidence of an “objective
falsehood,” like the Eleventh Circuit, agree that the common law provides useful guidance
43
in determining whether an opinion may be actionable under the FCA. See generally United
States v. AseraCare, Inc., 938 F.3d 1278 (11th Cir. 2019).
The common law test is a useful guide for determining falsity and embodies
Congress’s intentions in enacting the FCA. See generally S. Rep. No. 110-507, pt. 1 (2008).
The FCA is the first whistleblower law enacted in the United States and was passed to
target fraud against the Government. Id. Since the purpose of the FCA is to “maximize
recovery of federal funds lost to fraud with the assistance of competent whistleblowers,”
Congress sought to provide ample opportunity for plaintiffs to present evidence of fraud
that could meaningfully assist the Government in protecting itself from fraud. AMERICAN
BAR ASSOCIATION, 10th National Institute on the Civil False Claims Act and Qui Tam
Enforcement, B-9 (2014). There is an especially high incentive for Congress to prevent
fraud related to Medicare and Medicaid reimbursements considering that, in 2019,
Medicare and Medicaid spending accounted for about 37 percent of all National Health
Expenditure. Centers for Medicare & Medicaid Services, NHE Fact Sheet,
https://www.cms.gov/Research-Statistics-Data-and-Systems/Statistics-Trends-and-
Reports/NationalHealthExpendData/NHE-Fact-Sheet (Dec. 16, 2020, 4:15 PM).
Considering this fact, the common law test for falsity is the most effective way to further
Congress’s objectives because it presents less of a challenge to petitioners who attempt to
bring forth evidence of fraud and it best supports the statutory language found within the
FCA. 31 U.S.C. § 3729. For example, under the common law test, plaintiffs need only show
a difference in medical opinion to support a finding of falsity. This requirement allows
plaintiffs to bring claims of fraud against the Government with greater ease than the far
more stringent requirement under the objective falsehood standard. AseraCare, Inc., 938
F.3d 1278.
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Furthermore, the common law test better reflects the statutory language of the FCA.
See generally S. Rep. NO. 110-507, pt. 1 (2008). Because Congress did not include any
requirements that petitioners prove an “objective falsity” in the FCA, this Court should not
derive such a requirement. Winter, 953 F.3d at 1113. When “the language of the statute is
plain and unambiguous, it must be applied according to its terms.” Larry M. Eig, Statutory
Interpretation: General Principles and Recent Trends, Cong. Rsch. Serv.s (Sept. 24, 2014),
https://sgp.fas.org/crs/misc/97-589.pdf. Since Congress did not define the term “false”
within the statutory language of the FCA, nor did they include a requirement that plaintiffs
must present evidence of an “objective falsehood,” this Court must apply the plain meaning
of the statute and hold that the FCA imposes a common law test for falsity. Larry M. Eig,
Statutory Interpretation: General Principles and Recent Trends, Cong. Rsch. Serv.s (Sept.
24, 2014), https://sgp.fas.org/crs/misc/97-589.pdf. Any concerns that the common law
standard could expose physicians to “open-ended liability,” is refuted by the notion that
policy concerns cannot supersede “the ‘clear statutory text’ of the FCA.” Winter, 953 F.3d
at 1117.
Petitioner meets the common law standard through presenting a compelling expert
medical opinion. R. at 7. For example, in Druding v. Druding, the court held that a
physician’s expert testimony challenging physicians’ certifications creates a triable issue
regarding falsity. Druding, 952 F.3d at 101. The court based this conclusion on the
plaintiff’s expert testimony which reported that, of the forty-seven Care Alternatives
patients examined, thirty-five percent were inappropriately certified for hospice care. Id. at
91. In addition to this, the plaintiff presented evidence that defendant admitted ineligible
patients for hospice care and encouraged its employees to alter their Medicare certifications
to state eligibility. Id. at 91-92. This evidence is similar here where Petitioner presents a
medical expert, who reviewed four cases in which Petitioner observed unqualified patients
45
receiving HBO therapy treatments, and subsequently concluded that the four identified
treatments contradicted CMS guidelines. R. at 7. Based on the similarities of the evidence
presented in Druding to the evidence presented in this case, this Court should conclude
that Petitioner has presented sufficient evidence of falsity under the common law test. See
generally Druding, 952 F.3d 89.
In addition to presenting evidence that Respondent’s medical opinions were false,
Petitioner also introduced sufficient evidence that Respondent violated the FCA by showing
that SAM Clinics physicians falsely certified the medical necessity of HBO treatments. R.
at 6. For example, Petitioner introduced evidence to show that the HBO therapy
treatments certified by SAM Clinics did not satisfy the “reasonable and necessary”
requirement under CMS’s requirements. R. at 6-7. For example, in Polukoff, the court held
that a doctor’s certification for purposes of Medicare reimbursement is false under the FCA
if the procedure is not “reasonable or necessary” under the government’s definition.
Polukoff, 895 F.3d 730 at 743. The government definition of “reasonable and necessary” in
Polukoff included procedures that were “safe and effective, not experimental or
investigational, and appropriate…in terms of being furnished in accordance with accepted
standards of medical practice for the diagnosis or treatment of the patient’s condition”. Id.
at 735. By introducing evidence that the defendant performed unnecessary heart surgeries
yet signed and submitted CMS forms stating that he certified the services and that they
were medically indicated and necessary, the court found that the petitioner pled enough to
state a claim as a matter of law. Id. at 734-739. In the case before us, the applicable
definition of “reasonable and necessary” includes procedures that meet, but do not exceed,
the patient's medical need and are furnished in accordance with accepted standards of
medical practice for the diagnosis or treatment of the patient's condition. Winter, 953 F.3d
at 1113. By providing evidence that a SAM Clinic’s physician changed a wound’s Wagner
46
grade from grade II to grade III, which made it eligible for Medicare reimbursement, and
that in four separate situations, patients who did not qualify for HBO therapy received
treatments, she presented evidence that the doctor’s certifications were false under the
FCA. R. at 7. Due to the presentation of this evidence, this Court should find that
Petitioner introduced sufficient evidence that SAM Clinics violated the FCA.
Moreover, Petitioner also provided evidence that SAM Clinics violated the FCA by
certifying the unnecessary use of these HBO treatments. R. at 4-7. For example, in
Winters, the court held that a relator had sufficiently stated a violation of the FCA when
she provided evidence that hospital management was falsely certifying the medical
necessity of inpatient hospital admissions. Winter, 953 F.3d at 1112. The court came to
this conclusion based on evidence that there was an unusually high increase in inpatient
hospitalizations after the defendant started managing the hospital, that admissions failed
to satisfy admission criteria, and that physicians were being pressured by hospital
management to admit patients and cause false claims to be submitted. Id. at 1113-20. The
evidence presented in Winter is similar to evidence presented by the Petitioner in this case,
including that the number of HBO therapy treatments increased significantly after O’Keefe
became SAM Clinics’ CEO, that at least four certified treatments contradicted CMS
criteria, and that O’Keefe told a physician to “keep those numbers up” when referencing the
HBO therapy treatments. R. at 5. Based on the similarities of evidence presented by the
relator in Winter and the Petitioner in this case, this Court should conclude that Petitioner
has shown sufficient evidence that SAM Clinics violated the FCA. Winter, 953 F.3d at
1108.
Overall, this Court should find that the common law test for falsity is the applicable
standard for false certification claims because this standard aligns with Congress’
intentions and policy consideration, as presented by the statutory language of the FCA, and
47
it furthers the original purpose of the FCA’s enactment. Additionally, by applying the
common law standard to this case, the Court should find that a medical opinion can be false
under the FCA and that, by presenting evidence that SAM Clinics violated the FCA by
falsely certifying the medical necessity of HBO therapy treatments and introducing
corroborating expert testimony, Petitioner has met the standard to show falsity under the
common law test. Even if this Court chooses not to apply the common law standard of
falsity, Petitioner has still met the requirements under the “objective theory” of falsehood
standard.
B. A Realtor Should Not Be Required to Prove Objective Falsehood; However, If They
Must, The Petitioner Has Met This Standard.
Objective Falsehood requires a petitioner to show actual evidence that a provider’s
certification was “objectively false.” United States v. AseraCare, Inc., 938 F.3d 1278, 1297
(11th Cir. 2019). “In a run-of-the-mill ‘factually false’ case, proving falsehood is relatively
straightforward: A relator must generally show that the government payee has submitted
‘an incorrect description of goods or services provided or a request for reimbursement for
goods or services never provided.’” U.S. ex rel. Conner v. Salina Reg'l Health Ctr., Inc., 543
F.3d 1211, 1217 (10th Cir. 2008). A difference in reasonable medical opinions alone is not
sufficient to show that a judgment is false, and a relator is required to provide evidence of
something more than such. United States v. AseraCare, Inc., 938 F.3d 1278, 1297 (11th
Cir. 2019). The Eleventh Circuit determined objective falsehood can be shown in a number
of instances. For example, it is demonstrated where a petitioner either fails to familiarize
himself “with the patient's condition before asserting . . . [an] ill-formed clinical judgment”,
did not subjectively believe the medical opinion he was certifying, or stands alone in a
judgment no reasonable physician would have similarly concluded. United States v.
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AseraCare, Inc., 938 F.3d 1278, 1297 (11th Cir. 2019). “In each of these examples, the
clinical judgment on which the claim is based contains a flaw that can be demonstrated
through verifiable facts.” Id.
Courts have recently found the objective falsehood standard to be too strict and
discouraging of FCA reports of violation. This standard of falsity raises concern because it
allows providers to evade FCA liability by arguing that their judgments were
justifiable. Id. Furthermore, the objective falsehood theory makes it difficult for relators to
provide proof of fraud or falsity due to the high standard of evidence that must be
met. Id. This stringent standard contradicts the purpose of the FCA by limiting the
number of cases from which the government can recover federal funds that have been lost
to fraud. American Bar Association, 10th National Institute on the Civil False Claims Act
and Qui Tam Enforcement, B-9 (2014). The objective falsehood theory also runs contrary to
Congress’ intentions since, when the FCA was enacted, Congress “imposed no requirement
of proving ‘objective falsity’ within the statutory language of the FCA.” United States v.
AseraCare, Inc., 938 F.3d 1278, 1297 (11th Cir. 2019).
The Druding case, which also required the petitioner to prove objective falsity, was
reversed by United States v. Care Alternatives as the Third Circuit found its ruling to be
inconsistent with the application of the statute. In United States v. Care Alternatives, the
court found the district court's “objective” falsity standard conflates the elements of scienter
and falsity. United States v. Care Alternatives, 952 F.3d 89, 96 (3d Cir. 2020), cert. denied,
141 S. Ct. 1371, 209 L. Ed. 2d 119 (2021). They reasoned, “[the notion that] appellant[s]
[cannot] prove falsity because they did not [produce] [physical] evidence that any physician
lied . . . [is] “inconsistent with the text and application of the statute” Id. The court also
recognizes the policy reasons that “the FCA ‘was intended to reach all types of fraud,
49
without qualifications, that might result in financial loss to the Government.” Id. at 97
(citing United States v. Neifert-White Co., 390 U.S. 228, 232, 88 S.Ct. 959, 19 L.Ed.2d 1061
(1968)).
Additionally, the Winter the court did not find themselves directly contradicting the
Eleventh Circuit decision in AseraCare for two reasons. First, the AseraCare court was
specifically asked whether a reasonable disagreement between physicians, without more
evidence, was sufficient to prove falsity at summary judgment. It is important to note that
the Eleventh Circuit “did not consider all subjective statements—including medical
opinions—to be incapable of falsity and identified circumstances in which a medical opinion
would be false.” Winter ex rel. United States v. Gardens Reg'l Hosp. & Med. Ctr., Inc., 953
F.3d 1108, 1119 (9th Cir. 2020). Second, the “objective falsehood” requirement did not
automatically apply to a physician’s certification of medical necessity. The Eleventh Circuit
explicitly distinguished Polukoff by reinforcing that “[CMS] is statutorily prohibited from
reimbursing providers for services ‘which are not reasonable and necessary . . .” United
States v. AseraCare, Inc., 938 F.3d 1278, 1295 (11th Cir. 2019). Congress intended to
prevent “all types of fraud, without qualification, that might result in financial loss to the
Government” and, as such, realtors ought to be subjected to a less stringent standard in
order to fulfill the purpose of the FCA. Therefore, this Court should find that the common
law theory is the more appropriate applicable standard for false certification
claims. Winter ex rel. United States v. Gardens Reg'l Hosp. & Med. Ctr., Inc., 953 F.3d
1108, 1119 (9th Cir. 2020).
Even if the Court chooses to require the objective falsehood theory, Petitioner has
met the standard to prove Respondent has violated the FCA with false certification
claims. In United States v. AseraCare, Inc., 938 F.3d 1278 (11th Cir. 2019), the
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Government gathered medical experts to determine the certification of patients being
terminally ill was false and, therefore, in violation of the FC; yet, they did not provide any
evidence of objective falsity as the Government’s experts—while they disagree—did
understand why the defendant reached his initial conclusion. The court held “a clinical
judgment of terminal illness warranting hospice benefits under Medicare cannot be deemed
false, for purposes of the False Claims Act, when there is only a reasonable disagreement
between medical experts as to the accuracy of that conclusion, with no other evidence to
prove the falsity of the assessment.” United States v. AseraCare, Inc., 938 F.3d 1278, 1281
(11th Cir. 2019). The petitioner in United States v. AseraCare, Inc., had no other evidence
of the defendant’s wrongdoing but the expert testimony from other physicians—
contextualized by broad evidence of AseraCare’s improper business practices—who found
some patients “were not, as a medical fact, terminally ill at the time AseraCare collected
reimbursement for their hospice care.” United States v. AseraCare, Inc., 938 F.3d 1278,
1285 (11th Cir. 2019).
Here, Petitioner has a prior history and extensive knowledge regarding HBO
therapy prior to her transfer to SAM Clinics. Based on the unusual increase in HBO
therapy certifications and the conversations in reference to this, she gathered evidence of
factual falsity from four patient’s charts, all of whom did not have a reasonable or necessary
basis for such treatment. Unlike AseraCare, where the petitioner only had differing medical
opinions as evidence of fraud, here, Petitioner has physical documentation claiming these
procedures were necessary when it was clear, from a patient’s medical records, it was
not. These are not opinions, but verifiable facts—given a patient’s medical condition—that
can and are able to be determined. Should the Court apply the objective falsehood
standard, the reasonings of AseraCare should be followed where a medical certification is
51
objectively false when no reasonable physician would have similarly concluded. AseraCare,
Inc., 938 F.3d at 1297 (11th Cir. 2019).
CONCLUSION
For the reasons set forth above, Petitioner respectfully requests that this Honorable
Court reverse the decision of the United States Court of Appeals for the Fifteenth Circuit.
Respectfully Submitted,
/s/_________________________
Team 3014
Counsel for the Petitioner
State of Lincoln
