United States Ex Rel. Welch v. My Left Foot Children's Therapy, LLC, 871 F.3d 791

Background

Mary Kaye Welch, a Nevada resident, worked ~1 year for My Left Foot Children’s Therapy, LLC (MLF) and signed a mutual arbitration agreement at hire covering disputes "arising from, related to, or having any relationship or connection whatsoever with" her employment/association, with a separate “Included Claims” clause listing "any other state or federal law."
Welch filed a sealed qui tam complaint alleging MLF presented fraudulent Medicaid/Tricare claims in violation of the federal and Nevada False Claims Acts (FCA); the United States and Nevada declined to intervene.
MLF moved to compel arbitration of Welch’s FCA claims under the Federal Arbitration Act (FAA); the district court denied the motion, reasoning arbitration would bind the government which never agreed to arbitrate.
On appeal, the Ninth Circuit considered only whether the arbitration agreement’s text covers Welch’s FCA claims; Welch did not dispute the agreement’s validity.
The court emphasized ordinary contract interpretation under Nevada law, constrained by FAA principles, and focused on the specific language of three arbitration clauses in the “Agreement” section rather than on the broader “Included Claims” clause.

Issues

Issue	Plaintiff's Argument (Welch)	Defendant's Argument (MLF)	Held
Whether a valid arbitration agreement exists	Agreement is valid but FCA claims are not covered by its scope	Agreement covers "any" disputes related to employment, so FCA claims fall within arbitration	Agreement valid but scope controls; analysis proceeds to scope question
Whether the arbitration agreement’s scope encompasses FCA qui tam claims	FCA claims do not "arise out of," "relate to," or otherwise belong to Welch as her claims; they belong to the government	Broad language (including “any relationship or connection whatsoever” and “any federal law”) brings FCA claims within arbitration	FCA claims do not fall within scope; not arbitrable
Whether the "Included Claims" clause renders all listed federal-law disputes arbitrable	That clause cannot substitute for an actual agreement to arbitrate in the "Agreement" section	The broad "Included Claims" shows parties intended wide coverage, including FCA claims	"Included Claims" is irrelevant unless the "Agreement" section independently covers the dispute; specific terms in Agreement govern
Whether a relator’s FCA claim is a claim "that [Welch] may have against [MLF]" for clause coverage	Relator cannot be said to "have" the government’s FCA claim; the underlying fraud claim belongs to the government	Relator’s statutory rights to prosecute and recover create a sufficient relationship to invoke the clause	FCA fraud claims belong to the government; clause requiring claims Welch "have" does not encompass government-owned FCA claims

Key Cases Cited

United States ex rel. Eisenstein v. City of New York, 556 U.S. 928 (describing qui tam procedure and government’s role)
Gilmer v. Interstate/Johnson Lane Corp., 500 U.S. 20 (arbitration policy and enforcing private arbitration agreements)
Dean Witter Reynolds, Inc. v. Byrd, 470 U.S. 213 (FAA mandates arbitration where agreement exists)
Moses H. Cone Mem’l Hosp. v. Mercury Constr. Corp., 460 U.S. 1 (federal policy favoring arbitration guides arbitrability questions)
Stoner v. Santa Clara Cty. Office of Educ., 502 F.3d 1116 ( Ninth Circuit: FCA claims belong to the government; relator prosecutes on government’s behalf )
Vermont Agency of Natural Resources v. United States ex rel. Stevens, 529 U.S. 765 (FCA effect as partial assignment of government’s damages claim)
Doe v. Princess Cruise Lines, Ltd., 657 F.3d 1204 ("related to" language must have limiting function; cannot be boundless)
Jones v. Halliburton Co., 583 F.3d 228 (employment-related arbitration clauses do not necessarily cover torts that could occur independent of employment)
Stolt-Nielsen S.A. v. AnimalFeeds Int’l Corp., 559 U.S. 662 (FAA interpretive rules; arbitration is consensual)