Meyer v. Horizon Health Corp

FOR PUBLICATION

UNITED STATES COURT OF APPEALS

FOR THE NINTH CIRCUIT

UNITED STATES OF AMERICA, ex rel., 

MICHAEL M. MEYER; PATRICIA J.

SZERLIP, No. 06-17084

Plaintiffs-Appellants,

 D.C. No.

CV-00-01303-SBA

v.

HORIZON HEALTH CORPORATION; OPINION

SUMMIT MEDICAL CENTER;

SUKHDEEP GREWAL, M.D.,

Defendants-Appellees.



Appeal from the United States District Court

for the Northern District of California

Saundra B. Armstrong, District Judge, Presiding

Argued and Submitted

January 13, 2009—San Francisco, California

Filed May 14, 2009

Before: Myron H. Bright,* Stephen Reinhardt, and A.

Wallace Tashima, Circuit Judges.

Opinion by Judge Myron H. Bright;

Dissent by Judge Reinhardt

*The Honorable Myron H. Bright, Senior United States Circuit Judge

for the Eighth Circuit, sitting by designation.

5799

5802 MEYER v. HORIZON HEALTH CORP.

COUNSEL

Sarah S. Wright, San Rafael, California, and John A.

McGuinn, San Francisco, California, for the plaintiffs-

appellants.

Thomas M. Brown, Kenneth P. White, George P. Schiavelli,

Teresa Cespedes Ellis, and Amber Finch, Los Angeles, Cali-

fornia, for defendant-appellee Horizon Health Corporation.

Gregory M. Luce, Washington, D.C., and Shawn Hanson and

Tracy M. Strong, San Francisco, California, for defendant-

appellee Summit Medical Center.

Robert R. Moore and Michael J. Betz, San Francisco, Califor-

nia, for defendant-appellee Sukhdeep Grewal, M.D.

MEYER v. HORIZON HEALTH CORP. 5803

OPINION

BRIGHT, Circuit Judge:

In this appeal, qui tam relators Michael M. Meyer and

Patricia J. Szerlip contend that the district court erred by

granting a motion to dismiss for lack of subject-matter juris-

diction brought by Horizon Health Corporation, Summit Med-

ical Center, and Dr. Sukhdeep Grewal (collectively

“appellees”). The principal issues on appeal relate to whether

relators’ fraud allegations are based on a public disclosure,

and, if so, whether the relators were the original source of

those allegations. Having jurisdiction under 28 U.S.C. § 1291,

we affirm.

FACTS AND PROCEDURAL HISTORY

In 2000, relators Meyer, Szerlip, and Vicki Weatherford

sued appellees, asserting claims under the qui tam provisions

of the False Claims Act, 31 U.S.C. §§ 3729-3733 (“the Act”).

Meyer and Szerlip were psychiatric nurses employed by Sum-

mit; Weatherford was employed by Horizon as the “Senior

Bridges” program director. The Senior Bridges program was

a geropsychiatric unit managed by Horizon at a facility owned

by Summit.

The gravamen of relators’ allegations assert that appellees

fraudulently billed Medicare for patient services. Specifically,

relators contend that appellees admitted patients to the Senior

Bridges program despite knowing that those patients, who

suffered from dementia, could not benefit from the program.

Appellees received a considerably larger daily Medicare reim-

bursement for a patient in the Senior Bridges program

($1,830) than for a patient in the regular “medical/surgical

unit” ($1,085).

After a long delay in its decision, the government in May

2004 declined to intervene. Relators then filed their First

5804 MEYER v. HORIZON HEALTH CORP.

Amended Complaint (“FAC”) against appellees in September

2004. Appellees moved to dismiss the FAC, asserting that

relators failed to allege the fraud with particularity. The dis-

trict court granted the motion to dismiss, but permitted rela-

tors to file a Second Amended Complaint (“SAC”), which

they filed in May 2005. Appellees moved to dismiss the SAC

under Fed. R. Civ. P. 9(b) and 12(b)(6). In September 2005,

the district court granted appellees’ motion, dismissed the

complaint, and granted relators leave to file a Third Amended

Complaint (“TAC”). After relators filed the TAC, appellees

moved to dismiss the TAC under Fed. R. Civ. P. 9(b) and

12(b)(6), which the district court denied.

In March 2006, relator Weatherford withdrew from the suit.

In August 2006, appellees moved to dismiss the TAC under

Fed. R. Civ. P. 12(b)(1), arguing that the district court lacked

subject-matter jurisdiction because the allegations of the

remaining relators, Meyer and Szerlip, had been publicly dis-

closed by Weatherford’s 1999 state-court wrongful-

termination suit and they were not original sources of the alle-

gations. The district court granted the motion, dismissed the

TAC, and this appeal follows.

DISCUSSION

I. The district court did not err by granting appellees’

motion to dismiss.

Relators contend first that the district court improperly

granted appellees’ 12(b)(1) motion to dismiss the TAC. Spe-

cifically, relators challenge the district court’s determinations

that the TAC was based on prior public disclosure and that the

relators did not qualify as original sources of the allegations.

We review a district court’s conclusion that it lacks subject-

matter jurisdiction de novo and the findings of fact relevant

to that determination for clear error. See A-1 Ambulance Serv.,

Inc. v. California, 202 F.3d 1238, 1242-43 (9th Cir. 2000).

MEYER v. HORIZON HEALTH CORP. 5805

[1] The Act prohibits false or fraudulent claims for pay-

ment to the United States, 31 U.S.C. § 3729(a), and authorizes

civil actions to remedy such fraud to be brought by the Attor-

ney General, § 3730(a), or by private individuals in the gov-

ernment’s name, § 3730(b)(1). But the Act provides that

[n]o court shall have jurisdiction over an action

under this section based upon the public disclosure

of allegations or transactions in a criminal, civil, or

administrative hearing, in a congressional, adminis-

trative, or Government Accounting Office report,

hearing, audit, or investigation, or from the news

media, unless the action is brought by the Attorney

General or the person bringing the action is an origi-

nal source of the information.

§ 3730(e)(4)(A).

[2] The public-disclosure bar in § 3730(e)(4)(A) sets up a

two-tiered inquiry. First, “we must determine whether there

has been a prior ‘public disclosure’ of the ‘allegations or

transactions’ underlying the qui tam suit.” A-1 Ambulance

Serv., 202 F.3d at 1243. “If and only if there has been such

a public disclosure, we next must inquire whether the relator

is an ‘original source’ within the meaning of

§ 3730(e)(4)(B).” Id. Relators, as the qui tam plaintiffs, bear

the burden of establishing subject-matter jurisdiction by a pre-

ponderance of the evidence. United States v. Alcan Elec. &

Eng’g, Inc., 197 F.3d 1014, 1018 (9th Cir. 1999). We now

turn to this analysis.

A. Public disclosure

Relators filed this suit in April 2000 after very similar alle-

gations were publicly disclosed in a wrongful-termination suit

that Weatherford filed in state court in October 1999. Accord-

ingly, the district court dismissed relators’ suit, holding that

the Weatherford suit was a public disclosure and that relators’

5806 MEYER v. HORIZON HEALTH CORP.

qui tam allegations “plainly share a substantial identity with

the allegations disclosed through the Weatherford complaint

filed in state court in 1999.” Whether a particular disclosure

“triggers the jurisdictional bar of § 3730(e)(4)(A) is a mixed

question of law and fact, which we review de novo.” A-1

Ambulance Serv., 202 F.3d at 1243.

The public-disclosure question potentially implicates two

distinct but related determinations. First, “we must decide

whether the public disclosure originated in one of the sources

enumerated in the statute.” Id. When a public disclosure origi-

nates in one of these sources, we must then determine

“whether the content of the disclosure consisted of the ‘alle-

gations or transactions’ giving rise to the relator’s claim, as

opposed to ‘mere information.’ ” Id. (quoting Hagood v.

Sonoma County Water Agency, 81 F.3d 1465, 1473 (9th Cir.

1996)). For a qui tam suit to be “based upon” a prior public

disclosure, § 3730(e)(4)(A), the publicly disclosed facts need

not be identical with, but only substantially similar to, the

relator’s allegations. See United States ex rel. Lujan v. Hughes

Aircraft Co., 243 F.3d 1181, 1189 (9th Cir. 2001); see also

United States ex rel. Biddle v. Bd. of Trustees of Leland Stan-

ford, Jr. Univ., 161 F.3d 533, 537 (9th Cir. 1998) (“[A] claim

is ‘based upon’ public disclosure when the claim repeats alle-

gations that have already been disclosed to the public.”).

Here, relators concede that (1) Weatherford filed her suit

nearly six months before they filed this suit; (2) the Weather-

ford suit contains similar fraud allegations; and (3) a lawsuit

can publicly disclose allegations or transactions under the

Act. Relators argue only that they “made the first public dis-

closure when they presented evidence to the government

through their counsel to Medicare fraud investigator Steven

M. Lack, on July 6, 1999, fully three months before the

Weatherford lawsuit.” In other words, their suit is not subject

MEYER v. HORIZON HEALTH CORP. 5807

to the Act’s public-disclosure bar because they “were the first

to disclose the Medicare fraud.”1 We reject this contention.

Even accepting relators’ assertion that they disclosed the

allegations of Medicare fraud to the government before

Weatherford filed her suit, we reject relators’ argument

because it fails the first prong of the two-part test described

in A-1 Ambulance Serv.2

[3] Public disclosure may occur in only three categories of

fora: (1) in a “criminal, civil, or administrative hearing”; (2)

in a “congressional, administrative, or Government Account-

ing Office report, hearing, audit, or investigation”; or (3) in

the “news media.” § 3730(e)(4)(A); A-1 Ambulance Serv.,

202 F.3d at 1243. Relators’ apparent argument is that they

made the first public disclosure by informing the government

of the allegations during a meeting with Investigator Lack.

But relators offer no argument (and cite no authority) in sup-

port of their contention that such a private disclosure to a gov-

ernment employee is a public disclosure, as the Act defines

the term.

[4] In any event, relators’ argument, which asks us to read

into the Act a fourth forum for a public disclosure, is fore-

1

In their reply brief, relators argue additionally that “[t]he Weatherford

action is not a prior public disclosure because this action picks up from

where the Weatherford action left off.” But this new theory, first raised in

relators’ reply brief, is waived. See Alcan Elec. & Eng’g, Inc., 197 F.3d

at 1020 (stating that arguments raised on appeal for the first time in a reply

brief are waived).

2

Appellees brought a factual, as opposed to facial, motion to dismiss for

lack of subject-matter jurisdiction. See Safe Air for Everyone v. Meyer,

373 F.3d 1035, 1039 (9th Cir. 2004) (explaining the distinction). Accord-

ingly, we “need not presume the truthfulness of the plaintiffs’ allegations”

and may “look beyond the complaint . . . without having to convert the

motion into one for summary judgment.” White v. Lee, 227 F.3d 1214,

1242 (9th Cir. 2000). Here, however, we accept relators’ version of the

facts as true for purpose of their public-disclosure argument because, even

under their version, relators’ argument would fail.

5808 MEYER v. HORIZON HEALTH CORP.

closed by caselaw. For example, this court has held that “in-

formation that was ‘disclosed in private’ ” is not a public

disclosure under the Act.3 United States ex rel. Schumer v.

Hughes Aircraft Co., 63 F.3d 1512, 1518 (9th Cir. 1995)

(quoting United States ex rel. Stinson, Lyons, Gerlin & Busta-

mante v. Prudential Ins. Co., 944 F.2d 1149, 1161 (3d Cir.

1991)), vacated on other grounds by 520 U.S. 939 (1997); see

also United States ex rel. Devlin v. California, 84 F.3d 358,

360 (9th Cir. 1996) (holding that, although a newspaper arti-

cle was a public disclosure, a relator’s private disclosure to a

reporter in advance of publication was not a public disclo-

sure). This rule applies even when the private disclosure is

made to a government employee. See Hughes Aircraft, 63

F.3d at 1518. Moreover, a public disclosure is restricted to

information that is actually made public as opposed to mate-

rial that is “ ‘only theoretically available upon the public’s

request.’ ” Id. at 1519-20 (quoting United States ex rel.

Springfield Terminal Ry. Co. v. Quinn, 14 F.3d 645, 652-53

(D.C. Cir. 1994)). Thus, even when the government has the

information, it is not publicly disclosed under the Act until it

is actually disclosed to the public. See id.

[5] Accordingly, even if relators disclosed the alleged Med-

icare fraud to Investigator Lack before Weatherford filed her

3

We also note that the majority of circuits that have considered the issue

have concluded that disclosure to the government, without more, is not a

public disclosure under § 3730(e)(4)(A). See, e.g., United States ex rel.

Rost v. Pfizer, Inc., 507 F.3d 720, 728 (1st Cir. 2007) (“In our view, a

‘public disclosure’ requires that there be some act of disclosure to the pub-

lic outside of the government.”); Kennard v. Comstock Res., Inc., 363 F.3d

1039, 1043 (10th Cir. 2004) (holding that the public-disclosure require-

ment “clearly contemplates that the information be in the public domain

in some capacity and the Government is not the equivalent of the public

domain”); United States ex rel. Williams v. NEC Corp., 931 F.2d 1493,

1499-1500 (11th Cir. 1991) (stating that a report submitted to government

officials was not a public disclosure under the Act). But see United States

v. Bank of Farmington, 166 F.3d 853, 861 (7th Cir. 1999) (“Disclosure to

an official authorized to act for or to represent the community on behalf

of government can be understood as public disclosure.”).

MEYER v. HORIZON HEALTH CORP. 5809

suit, such a disclosure would not be a public disclosure within

the meaning of the Act. And because it would not qualify as

a public disclosure, relators’ argument that they first publicly

disclosed the allegations must be rejected.

B. Original Source

[6] Because the Weatherford suit publicly disclosed the

allegations in relators’ suit, we must next consider whether

relators are original sources under the Act. See

§ 3730(e)(4)(A), (B); A-1 Ambulance Serv., 202 F.3d at 1243.

An original source is an individual who has “direct and inde-

pendent knowledge of the information on which the allega-

tions are based and has voluntarily provided the information

to the Government before filing an action under this section

which is based on the information.” § 3730(e)(4)(B); see also

Rockwell Int’l Corp. v. United States, 127 S. Ct. 1397, 1405

(2007). This court has held that to be an original source, a

relator “must satisfy an additional requirement under

§ 3730(e)(4)(A) that is not in the statute in haec verba,”

namely that he “ ‘had a hand in the public disclosure of the

allegations that are a part of [his] suit.’ ” United States ex rel.

Zaretsky v. Johnson Controls, Inc., 457 F.3d 1009, 1013 (9th

Cir. 2006) (alteration in original) (quoting Wang v. FMC

Corp., 975 F.2d 1412, 1417 (9th Cir. 1992)). Thus, post-

Wang, the requirements for the original-source exception are

as follows:

To qualify as an original source, a relator must show

that he or she [1] has direct and independent knowl-

edge of the information on which the allegations are

based, [2] voluntarily provided the information to the

government before filing his or her qui tam action,

and [3] had a hand in the public disclosure of allega-

tions that are a part of . . . [the] suit.

United States ex rel. Lujan v. Hughes Aircraft Co., 162 F.3d

1027, 1033 (9th Cir. 1998) (internal quotation marks omitted).

5810 MEYER v. HORIZON HEALTH CORP.

Relators contend that the district court erred by concluding

that they were not original sources under the Act. We dis-

agree.

Initially, we note a potentially fatal defect with relators’

original-source argument. The pages of relators’ opening brief

do not easily reveal why the district court allegedly erred in

concluding that relators were not original sources. As dis-

cussed above, relators argue that there was no prior public

disclosure of the allegations and assert that the conversations

with Investigator Lack were a public disclosure. But in the

course of making that short argument,4 they also baldly con-

clude that they “meet the Ninth Circuit’s test for ‘original

sources.’ ” An appellant’s brief “must contain . . . appellant’s

contentions and the reasons for them, with citations to the

authorities and parts of the record on which the appellant

relies.” Fed. R. App. P. 28(a)(9) (emphasis added). This court

deems issues unsupported by argument to be abandoned. See

Self Directed Placement Corp. v. Control Data Corp., 908

F.2d 462, 467 (9th Cir. 1990). The exegesis in relators’ reply

brief is marginally clearer, but the reply brief is ordinarily not

the place for such an analysis in the first instance on appeal.

See Alcan Elec. & Eng’g, Inc., 197 F.3d at 1020 (holding that

such arguments are waived).

[7] In any event, we conclude that the district court did not

err by determining that relators were not original sources. To

establish the proposition that they were original sources, rela-

tors must show that they possessed “direct and independent

knowledge of the information” on which their allegations are

based. See § 3730(e)(4)(B); Rockwell, 127 S. Ct. at 1407-08.

To show direct knowledge, “the relator must show that he had

firsthand knowledge of the alleged fraud, and that he obtained

this knowledge through his own labor unmediated by any-

4

Relators’ opening brief dedicates only three pages to public disclosure

and the original-source exception. Relators’ reply brief, on the other hand,

dedicates 24 of its 25 pages to these issues.

MEYER v. HORIZON HEALTH CORP. 5811

thing else.” Alcan Elec. & Eng’g, Inc., 197 F.3d at 1020

(internal quotation marks omitted). A relator has independent

knowledge when he knows about the allegations before that

information is publicly disclosed. Id. (“Harshman’s knowl-

edge was ‘independent’ because it preceded the public disclo-

sure in the [earlier] complaint.”).

Here, the TAC alleges fraud solely regarding the treatment

and billing for the patient referred to as “Patient A.” Thus,

relators must have direct and independent knowledge of the

treatment and billing of Patient A. The district court found

that relators had “no such direct and independent knowledge.”

We conclude that the record supports the district court.

[8] The TAC contains no allegation that relators had direct

and independent knowledge of appellees’ alleged attempt to

defraud the government with respect to Patient A. See Rock-

well, 127 S. Ct. at 1408-09 (stating that courts examine the

allegations in the amended complaint to determine whether a

relator qualifies as an original source under the Act). Simi-

larly, relators’ declarations filed in opposition to appellees’

motion to dismiss contain no assertion that relators had direct

and independent knowledge of appellees’ allegedly fraudulent

billing for Patient A’s services.5 The TAC and declarations

reveal, at most, that Szerlip knew about alleged fraud, not that

she had direct and independent knowledge of the alleged

fraud. This is an important distinction. The district court did

not clearly err by determining that relators lacked the requisite

direct and independent knowledge of the alleged fraud to

qualify as original sources.

5

More than one week after briefing on appellees’ motion to dismiss

closed, relators filed an “Ex Parte Application for Leave to File Additional

Documents,” which included new declarations of relators and relators’

counsel. As noted in Section III, infra, relators have proffered no argument

as to why we should disturb the district court’s discretionary decision to

refuse to accept these untimely materials, and, therefore, we limit our

review to the TAC and the motion papers that the district court did accept.

5812 MEYER v. HORIZON HEALTH CORP.

We note additionally that relators have not established

another prerequisite to be an original source: that they “had a

hand in the public disclosure of allegations that are a part of

. . . [the] suit.” Wang, 975 F.2d at 1418; see also Johnson

Controls, 457 F.3d at 1018 (stating that relators must “play a

role in the public disclosure at issue”). The district court

determined that relators did not have a hand in the Weather-

ford suit, which publicly disclosed the allegations, because

they were not parties to the Weatherford suit. But we need not

determine whether a relator must actually be a party to a prior

lawsuit that publicly discloses the allegations to “have a hand

in” the public disclosure. It is sufficient to say that neither the

TAC nor relators’ declarations filed in opposition to appel-

lees’ motion to dismiss the TAC include any assertion that

relators had a hand in the Weatherford suit’s public disclosure

of the allegations.

The district court did not err by determining from the

record before it that relators neither had direct and indepen-

dent knowledge of the alleged fraudulent practices surround-

ing Patient A nor had a hand in the public disclosure of those

allegations.

II. Relators have withdrawn their challenge to the SAC.

Relators contend in their opening brief that the district

court erred by concluding that the SAC failed to meet the

heightened pleading requirements of Fed. R. Civ. P. 9(b) and

dismissing the SAC on that basis. Appellees argue that rela-

tors cannot challenge the district court’s dismissal of the SAC

because relators filed the TAC, which supersedes and waives

any error involving the SAC. In their reply brief, relators con-

cede the issue, acknowledging that “by filing the TAC, they

cannot challenge the district court’s dismissal of their SAC.”

Because relators have expressly withdrawn this issue, we do

not consider it.

MEYER v. HORIZON HEALTH CORP. 5813

III. Appellees’ motion to strike.

Appellees move to “(1) strike pages five through 23 of

[relators’] Reply Brief, which contain new legal argument and

record citations and, (2) strike [relators’] Supplemental

Excerpts of Record because the documents contained therein

are not part of the district court record.”

[9] As noted throughout this opinion, we have not relied on

the arguments that relators first raised in their reply brief.

Appellees also assert that we should not consider the supple-

mental declarations filed with the Ex Parte Application for

Leave to File Additional Evidence. The district court denied

relators’ application to file these supplemental declarations,

noting that they were untimely filed as a result of relators’

“deliberate choice . . . not to respond fully to the Motion [to

dismiss]” and would amount to an “inequitable . . . surreply.”

Relators have proffered no argument regarding why the dis-

trict court abused its discretion by refusing to accept these

untimely materials. But because our holding does not rely on

either the arguments that relators first raised in their reply

brief or the supplemental declarations, we deny appellees’

motion to strike as moot.

CONCLUSION

For the foregoing reasons, we AFFIRM the district court’s

dismissal of the TAC with prejudice. We also DENY appel-

lees’ motion to strike certain matters sought to be presented

by relators. Each party shall pay its own costs on this appeal.

REINHARDT, Circuit Judge, dissenting:

I agree with the majority that the Weatherford suit consti-

tuted a public disclosure, thereby triggering the requirement

that the relators be “original sources” in order to proceed with

5814 MEYER v. HORIZON HEALTH CORP.

their qui tam suit. I disagree, however, with the majority’s

assessment of the record, and conclude that Szerlip has met

her burden of showing “original source” status, thereby estab-

lishing jurisdiction, by a preponderance of the evidence.1

As the majority correctly states, a qui tam relator is an

“original source” of the action if she “[1] has direct and inde-

pendent knowledge of the information on which the allega-

tions are based and [2] has voluntarily provided the

information to the Government before filing an action under

this section which is based on the information.” 31 U.S.C.

§ 3730(e)(4)(B). In addition, our circuit requires that the rela-

tor has “had a hand in the public disclosure of allegations that

are a part of . . . [the] suit.” United States ex. rel. Devlin v.

State of California, 84 F.3d 358, 360 n.3 (9th Cir. 1996)

(internal quotations omitted). This third requirement is satis-

fied, however, where the relator discloses her allegations to

the government before similar allegations are publicly dis-

closed. See United States ex rel. Lujan v. Hughes Aircraft Co.,

162 F.3d 1027, 1034 (9th Cir. 1998). Doing so is considered

“indirectly” having a hand in the public disclosure. See id.

The evidence shows by a preponderance of the evidence

that Szerlip satisfies both the second and third requirements

of “original source” status because she disclosed her allega-

tions to the government before filing this action and therefore

before the public disclosure in the Weatherford suit. Specifi-

cally, Szerlip’s attorney filed a declaration stating that Szerlip

had given her documents about the alleged fraud, including

information about “Patient A,” which she submitted to a gov-

ernment Medicare fraud investigator at a meeting on July 6,

1999. Because the Weatherford suit was not filed until Octo-

ber 5, 1999, Szerlip’s disclosure to the government through

her attorney predated the filing of that suit. The attorney’s

declaration includes a copy of a FedEx bill showing that an

1

Because I conclude that Szerlip meets the original source requirement,

I do not reach the question whether Meyer does as well.

MEYER v. HORIZON HEALTH CORP. 5815

agent of the Office of Inspector General of the United States

Department of Health & Human Services sent her a package

on July 7, 1999, corroborating the attorney’s statement that

the agent mailed her back all the documents the day after their

meeting. Nothing in the record contradicts this evidence.2

Szerlip also satisfies the remaining requirement for “origi-

nal source” status: that she possess “direct and independent

knowledge of the information on which the allegations are

based.” 31 U.S.C. § 3730(e)(4)(B). To have such “direct and

independent knowledge” of the fraud, a relator must show that

she had “firsthand knowledge of the alleged fraud,” which she

obtained “through [her] own labor unmediated by anything

else,” and through channels independent of the public disclo-

sure. United States v. Alcan Electrical & Engineering, Inc.,

197 F.3d 1014, 1020 (9th Cir. 1999) (internal quotation marks

and citations omitted). Here, the complaint and its exhibits

show that Szerlip was Patient A’s nurse therapist and that she

observed that Patient A was kept in the Senior Bridges Pro-

gram although she was not improving and did not want to be

there. Szerlip’s declaration also states that she witnessed

Medicare fraud — including the admission of patients who

were unable to benefit from the program, false entries regard-

ing Dr. Grewal’s visits to patients, and the extension of

patients’ stays in the unit beyond that which was appropriate

— and alerted management to them before resigning. Again,

nothing in the record contradicts these statements.

These documents show that, much like the other relators

whom this court has found to have direct and independent

knowledge, Szerlip encountered the alleged fraud — the

fraudulent admission and treatment practices — through her

2

The defendants argue that an application for an order extending time

to intervene filed by the United States government in this case indicates

that the relators met with government agents in June 2000. That applica-

tion, however, does not state that it was the first time that government

agents met with the relators or their attorney.

5816 MEYER v. HORIZON HEALTH CORP.

own experience as a nurse therapist, and not through the pub-

lic disclosure or other secondary sources. C.f., e.g., United

States ex rel. Newsham v. Lockheed Missiles & Space Co.,

Inc., 190 F.3d 963, 970 (9th Cir. 1999) (relators observed

improper billing and nonproductive labor during their work as

a technician and an analyst); Wang v. FMC Corp., 975 F.2d

1412, 1417 (9th Cir. 1992)(engineer-relator worked on the

allegedly defective product). That she did not have direct

access to the fraudulent invoices does not matter, because “to

qualify as an original source, a relator does not have to have

personal knowledge of all elements of a cause of action.”

Minnesota Association of Nurse Anesthetists v. Allina Health

System Corp., 276 F.3d 1032, 1050 (8th Cir. 2002). The direct

knowledge of her unit’s fraudulent admissions and treatment

practices is sufficient to raise the inference that the govern-

ment was being billed fraudulently. C.f. id. (holding that the

nurses’ direct knowledge of operating room practices, despite

their lack of access to billing records, is sufficient to satisfy

original source status).

Because there are uncontradicted statements in the record

showing that Szerlip had direct and independent knowledge of

the alleged fraud and that she revealed her knowledge to the

government before the Weatherford suit, I would conclude

that the district court clearly erred when it determined that

Szerlip has not alleged facts sufficient to demonstrate that she

satisfies any of the criteria for original source status, and

would hold instead that Szerlip has met her burden of estab-

lishing subject-matter jurisdiction by a preponderance of the

evidence. See United States v. Alcan Elec. & Eng’g, Inc., 197

F.3d 1014, 1018 (9th Cir. 1999). Although the majority would

require Szerlip to allege her original source status more

clearly in the complaint or submit more documents in its sup-

port, I do not think that any more is required for a preponder-

ance of the evidence than uncontested facts showing that she

met all three prongs of the inquiry. I would therefore reverse

MEYER v. HORIZON HEALTH CORP. 5817

the district court and remand in order to allow the proceedings

to continue.3

3

I conclude that Szerlip did not waive the “original source” argument

in the opening brief, but raised it sufficiently when she argued that she had

first hand knowledge of the fraud and that her attorney met with a govern-

ment agent prior to the filing of the Weatherford action.