# United States Ex Rel. Meyer v. Horizon Health Corp.

> Court of Appeals for the Ninth Circuit · May 14, 2009 · 565 F.3d 1195

URL: https://www.frixlaw.com/law-library/cases/9563552

## Case

- **Full name:** UNITED STATES of America, Ex Rel., Michael M. MEYER; Patricia J. Szerlip, Plaintiffs-Appellants, v. HORIZON HEALTH CORPORATION; Summit Medical Center; Sukhdeep Grewal, M.D., Defendants-Appellees
- **Court:** Court of Appeals for the Ninth Circuit
- **Decided:** May 14, 2009
- **Citations:** 565 F.3d 1195; 2009 U.S. App. LEXIS 10923; 2009 WL 1331874
- **Precedential status:** Published
- **Opinion:** Dissent by Reinhardt
- **Judges:** Bright, Reinhardt, Tashima
- **Cited by:** 107 later opinions in the Frix Law Library

## Citator (automated)

- **Red flag:** Overruled on other grounds by United States Ex Rel. Hartpence v. Kinetic Concepts, Inc., 792 F.3d 1121 (2015).
- Negative treatments: 1
- Distinguished by: 0
- Full citator and citing cases: https://www.frixlaw.com/law-library/cases/9563552

## How later opinions describe it (automated extraction)

- holding that a new theory, first raised in a reply 9 brief, is waived
- holding that district court did not 5 | abuse discretion in refusing to permit “inequitable surreply”
- holding that district court did not 16 abuse discretion in refusing to permit “inequitable surreply”
- holding that district 9 court did not abuse discretion in refusing to permit “inequitable surreply”
- holding that district court did not abuse discretion in refusing to permit “inequitable sur-reply”

## Opinion text

REINHARDT, Circuit Judge,
dissenting:
I agree with the majority that the Weatherford suit constituted a public disclosure, thereby triggering the requirement that the relators be “original sources” in order to proceed with their qui tarn 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 establishing jurisdiction, by a preponderance of the evidence. 1
As the majority correctly states, a qui tarn relator is an “original source” of the action if she “[1] has direct and independent knowledge of the information on which the allegations are based and [2] has voluntarily provided the information to the *1204 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 relator 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 satisfied, however, where the relator discloses her allegations to the government before similar allegations are publicly disclosed. 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 allegations to the government before filing this action and therefore before the public disclosure in the Weather-ford suit. Specifically, 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 government Medicare fraud investigator at a meeting on July 6, 1999. Because the Weatherford suit was not filed until October 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 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 “original 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 disclosure. 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 Program 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 regarding 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 own experience as a nurse therapist, and not through the public disclosure or other secondary sources. C.f., e.g., United States ex *1205 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 government 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 establishing 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 support, I do not think that any more is required for a preponderance of the evidence than uncontested facts showing that she met all three prongs of the inquiry. I would therefore reverse the district court and remand in order to allow the proceedings to continue. 3
. Because I conclude that Szerlip meets the original source requirement, I do not reach the question whether Meyer does as well.
. 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 application, however, does not state that it was the first time that government agents met with the relators or their attorney.
. 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 government agent prior to the filing of the Weatherford action.

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Source: Frix Law Library, https://www.frixlaw.com/law-library/cases/9563552. Public record. Not legal advice.