915 F.3d 1158
8th Cir.2019Background
- Relators (Strubbe, Trader, Christie) filed a sealed qui tam complaint alleging CCMH submitted false Medicare claims by reassigning breathing treatments and lab work to paramedics/EMTs, misrepresenting provider credentials, billing for services at other facilities, and inflating cost reports; the government declined to intervene.
- Plaintiffs also asserted FCA § 3730(h) retaliation claims after Strubbe reviewed hospital finances and the qui tam was unsealed; Christie and Trader alleged adverse actions after reporting concerns and a licensure issue.
- District court dismissed all substantive FCA counts under Rule 9(b) for lack of particularity but allowed Strubbe’s retaliation claim to proceed; later granted summary judgment to CCMH on Strubbe’s retaliation claim.
- On appeal, the Eighth Circuit reviewed de novo the Rule 9(b) dismissals and the summary judgment on retaliation and affirmed the district court’s rulings.
- Court held relators failed to plead representative false-claim examples or reliable indicia that false claims were actually submitted; many allegations were made on information and belief without supporting facts.
- The court also held the FCA does not impose individual liability for retaliation, and Christie/Trader failed to plead that their complaints put CCMH on notice that they were acting to stop FCA violations.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether Counts I (presentation of false claims) pleaded fraud with particularity under Rule 9(b) | Alleged scheme: paramedics/EMTs instructed to document 30-minute breathing treatments, perform lab work, and reclassify staff to increase Medicare billing; supervisory statements tied changes to "billing" | Allegations lack specific representative examples, billing-system access, or facts showing claims were submitted; many allegations are on information and belief without foundation | Dismissed: relators failed Rule 9(b); pleaded scheme but lacked reliable indicia that claims were actually submitted |
| Whether Count II (§ 3729(a)(1)(B) false records) sufficiently connected false records to actual government claims | False records (30-min entries, misclassification, cost reports) are material and intended to get claims paid | Must plead a connection between false records and an actual claim; complaint fails to show such linkage | Dismissed: relators did not connect records to government claims and relied on unsupported information-and-belief allegations |
| Whether Count III (conspiracy re: Anti-Kickback Statute) met Rule 9(b) particularity for conspiracy | Alleged payments to related vendors and collusion with Eventide to increase billing | No details of an agreement or overt acts in furtherance of a conspiracy were pleaded | Dismissed: conspiracy not pleaded with requisite particularity |
| Whether relators’ retaliation claims (including individual liability for Bruce and Strubbe’s summary-judgment claim) were viable | Relators: complaints to board/state and Strubbe’s unsealing of qui tam were protected activity; Bruce is individually liable after 2009 FCA amendments; Strubbe alleges adverse employment actions following protected activity | Defendant: complaints did not notify CCMH of FCA-linked fraud; § 3730(h) does not impose individual liability; termination occurred months after notice and under legitimate policy (no work in 6 months) | Dismissed against Bruce; Christie/Trader dismissed for failing to allege employer knowledge of protected activity; summary judgment for CCMH on Strubbe — she cannot show termination solely motivated by protected activity or pretext |
Key Cases Cited
- United States ex rel. Joshi v. St. Luke's Hosp., Inc., 441 F.3d 552 (8th Cir.) (Rule 9(b) requires representative examples or particularized scheme details)
- United States ex rel. Thayer v. Planned Parenthood of the Heartland, 765 F.3d 914 (8th Cir.) (can plead scheme plus reliable indicia that claims were submitted)
- Drobnak v. Andersen Corp., 561 F.3d 778 (8th Cir.) (allegations on information and belief require statement of facts supporting belief)
- Olson v. Fairview Health Servs. of Minn., 831 F.3d 1063 (8th Cir.) (FCA liability attaches to the claim for payment)
- United States ex rel. Grubbs v. Kanneganti, 565 F.3d 180 (5th Cir.) (need both scheme details and indicia billing records were used to submit claims)
- Schuhardt v. Washington Univ., 390 F.3d 563 (8th Cir.) (elements of an FCA retaliation claim)
- McDonnell Douglas Corp. v. Green, 411 U.S. 792 (U.S.) (burden-shifting framework for retaliation claims)
- Celotex Corp. v. Catrett, 477 U.S. 317 (U.S.) (summary judgment burden principles)
- Ashcroft v. Iqbal, 556 U.S. 662 (U.S.) (plausibility standard for pleadings)
- Bell Atlantic Corp. v. Twombly, 550 U.S. 544 (U.S.) (plausibility standard and pleading requirements)
- Clark Cty. Sch. Dist. v. Breeden, 532 U.S. 268 (U.S.) (temporal proximity and causation in retaliation claims)
- Kiel v. Select Artificials, Inc., 169 F.3d 1131 (8th Cir.) (more than temporal connection usually required to show causation)
- Schaffhauser v. United Parcel Serv., Inc., 794 F.3d 899 (8th Cir.) (ways to show pretext for employer's nondiscriminatory reason)