Toby T. Watson v. Jennifer King-Vassel
2013 U.S. App. LEXIS 17989
| 7th Cir. | 2013Background
- Relator Dr. Toby T. Watson filed a qui tam False Claims Act (FCA) suit after obtaining medical records showing psychiatrist Dr. Jennifer King‑Vassel prescribed psychotropic medications to minor N.B., a Medicaid beneficiary.
- Watson alleged 49 prescriptions were "off‑label" and thus not reimbursable by Medicaid under the statutory definition of "medically accepted indication," so claims submitted to Medicaid were "false." The DOJ declined to intervene.
- King‑Vassel moved for summary judgment raising primarily (1) standing/public‑disclosure issues and (2) in a short section, that Watson failed to identify experts to explain Medicaid reimbursement and pharmaceutical compendia. The district court denied the primary grounds but granted summary judgment based on Watson’s failure to name experts.
- The district court concluded Watson needed (a) a Medicaid‑system expert to show King‑Vassel caused claims to be submitted and had the requisite state of mind, and (b) a medical expert to show the prescriptions were not supported by the statutorily listed compendia (i.e., were not "medically accepted").
- The Seventh Circuit reversed, holding that (i) Watson’s lay evidence could support a jury finding of reckless disregard and causation without a Medicaid expert, and (ii) the district court’s blanket requirement of a medical expert to interpret compendia at summary judgment was premature and overbroad.
Issues
| Issue | Plaintiff's Argument (Watson) | Defendant's Argument (King‑Vassel) | Held |
|---|---|---|---|
| Whether relator needed an expert to prove King‑Vassel’s state of mind (FCA "knowingly" element) | Lay evidence (mother’s affidavit, pharmacy records, billing entries) is sufficient to raise a jury question that King‑Vassel knew or recklessly disregarded Medicaid payment for prescriptions | The Medicaid process is arcane; without an expert, relator cannot show defendant knew claims would be submitted or acted with requisite mental state | Reversed: lay evidence could support a reasonable jury finding of reckless disregard; expert not categorically required |
| Whether relator needed a Medicaid‑system expert to prove causation (that prescriptions caused claims to be presented) | Writing prescriptions for a Medicaid patient is foreseeably linked to claims being submitted; no expert required to show basic causation | The intervening Medicaid/pharmacy processes are a "black box"; an expert is needed to trace causation | Reversed: the chain is foreseeable and jurors can infer causation absent affirmative contrary evidence; expert not categorically required |
| Whether relator needed a medical expert to prove falsity (prescriptions not supported by statutory compendia) | Some prescriptions are plainly unsupported (e.g., age‑based contraindications) and can be evaluated from compendia pages; expert not necessarily required for all prescriptions | Compendia and medical issues are complex and not within lay understanding; relator failed to produce expert proof of falsity | Reversed in part: district court erred to grant blanket summary judgment for failure to name an expert; some claims may require experts, but not all at this stage |
| Whether district court abused discretion by entering summary judgment on grounds not fully argued by defendant | Relator lacked notice that compendia interpretation would be dispositive and defendant did not move on that ground | Defendant argued generally for need of experts; court appropriately enforced its scheduling and expert‑disclosure rules | Reversed: defendant did not press the compendia‑expert theory in its motion and summary judgment on that basis was premature/overbroad |
Key Cases Cited
- Buckman Co. v. Plaintiff's Legal Comm., 531 U.S. 341 (preemption context for FDA/regulatory issues cited in discussion of off‑label use)
- United States ex rel. Crews v. NCS Healthcare of Ill., Inc., 460 F.3d 853 (7th Cir.) (Medicaid claim to state agency can form basis for FCA liability)
- Celotex Corp. v. Catrett, 477 U.S. 317 (summary judgment burden‑shifting and nonmoving‑party obligations)
- Palsgraf v. Long Island R.R. Co., 162 N.E. 99 (N.Y.) (proximate‑cause principles discussed in causation analysis)
- Chambers v. NASCO, Inc., 501 U.S. 32 (district court inherent authority to impose sanctions; cited re: sanctions imposed on relator and counsel)
- United States v. Krizek, 111 F.3d 934 (D.C. Cir.) (discussion of "reckless disregard" as extension of gross negligence in FCA context)
- United States ex rel. Yannacopoulos v. General Dynamics, 652 F.3d 818 (7th Cir.) (FCA mental‑state boundaries: excludes innocent mistakes)
- United States ex rel. Williams v. Renal Care Group, Inc., 696 F.3d 518 (6th Cir.) (background on FCA addition of "reckless disregard")