Case Information
*2 Before RILEY, LAY, and SMITH, Circuit Judges.
___________
SMITH, Circuit Judge.
Cynthiа A. Schuhardt and Nancy M. Becker ("Appellants") brought a qui tam action as relators for the government against Washington University ("the University") alleging violations of the False Claims Act (FCA), 31 U.S.C. §§ 3729 et seq . Schuhardt, individually, also made a claim for retaliation under 31 U.S.C. § 3730(h). The University moved for summary judgment on аll claims and the district court granted the University's motion. We affirm in part and reverse in part.
I. Background
Washington University's Department of Surgery employed Appellants as "coders." As coders, Appellants performed an accounting task. Specifically, codеrs reviewed patient files and determined the appropriate billing structure. Many of the bills prepared by Appellants were submitted for payment to various federal entities including Medicare and Medicaid. In late 1996 and early 1997, the University’s Department оf Surgery conducted a large scale review of patient files. As part of that review, Appellants checked patient files to ensure proper documentation for billing purposes. If the file data was incomplete, Appellants cоntacted the patient's attending physician and obtained the documentation needed to prepare a bill for the medical services provided.
According to Appellants, as they reviewed patient files they became concеrned that the University's billing practices could include fraud. Specifically, Appellants believed that the University's doctors did not properly document their involvement with patients. Central to Appellants' concern was that the University was billing federally funded prоgrams for surgical procedures and other medical services as if they were performed by teaching physicians when the procedures and services were *3 actually performed by residents, fellows and nurses in the absence of a teaching рhysician.
Schuhardt complained to her supervisor about the billing methods. According to Schuhardt, the University's billing practice remained unchanged. She told her advisors that she thought it was "illegal" and "fraudulent" to bill Medicare for undocumented surgeries, and that "if the OIG [Office of Inspector General] would come in they would frown upon us and they'd pretty much wipe us out." Schuhardt alleged that she was humiliated, criticized, demoted, harassed, and eventually discharged because of her complaints.
After Schuhardt’s termination, Appellants submitted their allegations to the United States Government pursuant to the qui tam provisions of the FCA. The government declined to intervene in the matter, explaining that it was unable to verify any specific allegations of fraud. Appellants pursued the casе as relators in the name of the United States and filed the instant action in the United States District Court for the Eastern District of Missouri.
In response, the University filed a motion to dismiss contending that Appellants failed to plead fraud with sufficient particularity. The district court agreed with the University and ruled that the complaint failed to satisfy the particularity requirements of Fed. R. Civ. P. 9(b). However, rather than dismiss Appellants' suit, the district court granted Appellants leave to file an amended complaint. Appellants filed an amended complaint making specific allegations of fraud in connection with fifteen separate patients. The University repeated its motion to dismiss for failure to plead fraud with particularity. The district court denied the motion.
Appellants conducted lengthy discovery related to their fifteen distinct allegations of fraud. Following discovery, the University sought summary judgment on two grounds. First, the University argued that appellants failed to provide sufficient supportive evidence of fraud. Second, the University moved for summary *4 judgment on Schuhardt’s claim for retaliation contending that she did not engage in protected activity within the meaning of 31 U.S.C. § 3730(h). Appellants requested the district court to grant additional discovery under Fed. R. Civ. P. 56(f) prior to ruling on Washington University’s motion for summary judgment. The district court denied Appellants' motion to continue discovery, and granted the University’s motion for summary judgment. The Appellants' combined complaint and Schuhardt's claim for retaliation were dismissed.
II. Discussion
A. FCA Claim On appeal, Appellants make four arguments for reversal of the district сourt's summary judgment in favor of the University on their qui tam action. They argue: (1) that there was sufficient evidence of fraud to survive summary judgment; (2) that the district court erred by failing to give original medical records proper evidentiary weight; (3) that the district court erred in deciding issues of credibility; and (4) that the district court abused its discretion in denying further discovery.
In a sixty-page memorandum and order, the district court comprehensively detailed the evidence submitted by Appellants. After careful examination of the record and briefs in this casе, we conclude that the district court committed no error of law or fact as to Appellants' FCA claim. Accordingly, we affirm the dismissal of Appellants' qui tam action, adopting the reasoning of the district court's thorough memorandum and order. See Schuhardt v. Washington University , No. 4:99-CV-1202 CEJ (Sep. 29, 2003).
B. Retaliation
The district court аlso granted summary judgment to the University on
Schuhardt’s retaliation claim. We review grants of summary judgment
de novo.
Murphey v. City of Minneapolis,
The FCA whistleblower statute protects employees who are "discharged . . .
because of lawful acts done by the employee . . . in furtherance of [a civil action for
false claims]." 31 U.S.C. § 3730(h);
Wilkins v. St. Louis Hous. Auth.
,
1. Protected Activity
Protected activity is established when the employee's actions satisfy two
conditions. First, the employee’s conduct must have been in furtherance of an FCA
action.
See United States ex rel. Hopper v. Anton
,
An employeе engages in protected activity where (1) the employee in good faith believes, and (2) a reasonable employee in the same or similar circumstances might believe, that the employer is possibly committing fraud against the government.
Wilkins
,
According to Schuhardt, she complained to her supervisor that the University’s
billing practice was illegal and fraudulent. To support that complaint, she copied
patient records to exposе the potential fraud. After reviewing Schuhardt's deposition
testimony, the district court ruled that Schuhardt did no more than her regular job
duties. Consequently, she was not acting in furtherance of a
qui tam
action. However,
the district court ignored the fact that Schuhardt copied files and took them home to
substantiate the existence of fraud. This activity was not within her job duties.
Schuhardt's position required her to check the completeness of documentation to the
furtherance of a
qui tam
action stating, “this argument misses the distinction between
the standards for a successful
qui tam
suit and those for an anti-retaliation claim.”
There, however, we were focusing on the second prong established by the Ninth
Circuit in
Moore v. Cal. Inst. of Tech. Jet Propulsion Lab.
,
medical chart and try to obtain any missing documentation needed for billing the responsible party. Schuhardt’s job duties did not include checking billings for compliance with federal regulatory requirements.
Viewing the еvidence in the light most favorable to Schuhardt, and drawing all inferences in her favor, we conclude that there is sufficient evidence that Schuhardt’s activity was in furtherance of a qui tam action. Specifically, Schuhardt perceived a mass effort to modify patient records months after a procedure had occurred. She explained that doctors signed reports without reviewing files. She advised her supervisor that the activity may be fraudulent and illegal. She also mentioned to the supervisor that a government agency would forbid the practice if it was aware of it. Schuhardt complained to the University over its confidential hotline. Then, when the billing practice remained unchanged, she copied files that she believed to be evidence of fraud.
2. Knowledge
Schuhardt's activity notwithstanding, if the University did not know that she
engaged in protected activity, her claim for retaliation would nonetheless fail.
Wilkins
,
Schuhardt’s statements to hеr supervisors that the University’s billing practice
was fraudulent and illegal are sufficient to overcome a motion for summary judgment
based on lack of notice. The Fifth Circuit has indicated that an employee's report of
illegal or unlawful activity is sufficient to put an employer on notice that the
employee is engaged in protected activity.
Robertson, Inc.
,
*9 The record reveals that Schuhardt told her supervisors that the University’s billing practice was "illegal" and "fraudulent" and that "if the OIG would come in they would frown upon us and they'd pretty muсh wipe us out." These facts provide sufficient notice to the University that Schuhardt was engaged in protected activity. As such, we reverse the order of summary judgment on Schuhardt’s claim for retaliation.
III. Conclusion
In sum, we affirm the dismissal of the Appellants' qui tam action and reverse the order of summary judgment with respеct to Schuhardt’s retaliation claim.
Affirmed in part, reversed in part.
______________________________
Notes
[1] In
Wilkins v. St. Louis Housing Authority,
[2] Part of Schuhardt's job as a coder involved checking the completeness of
documentation for billing purposes and obtaining additional documentation as
necessary. The district court concluded that Schuhardt’s activity was part and parcel
of her employment obligations. An employee tasked with the internal investigation
of fraud against the government cannot bring a § 3730(h) action for retaliation unless
the employee makes it clear that her actions go beyond the assigned task.
See
Eberhardt v. Integrated Design & Constr., Inc.
,