Amicus Curiae Brief — William Beaumont Hospital, Petitioner v. United States, ex rel. David Felten

Supreme Court briefOct 14, 2021

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No. 21-443

IN THE

Supreme Court of the United States

————

WILLIAM BEAUMONT HOSPITAL,

Petitioner,

UNITED STATES OF AMERICA, EX REL.

DAVID L. FELTEN, M.D., PH.D.,

————

Respondent.

On Petition for a Writ of Certiorari to the

United States Court of Appeals

for the Sixth Circuit

————

BRIEF OF AMICI CURIAE AMERICAN

HOSPITAL ASSOCIATION, FEDERATION OF

AMERICAN HOSPITALS, MICHIGAN HEALTH

& HOSPITAL ASSOCIATION, KENTUCKY

HOSPITAL ASSOCIATION, OHIO HOSPITAL

ASSOCIATION, AND TENNESSEE HOSPITAL

ASSOCIATION IN SUPPORT OF PETITIONER

————

CHAD GOLDER

Counsel of Record

LAW OFFICE OF CHAD GOLDER

514 6th Street, NE

Washington, DC 20002

(203) 506-0670

golderlawoffice@gmail.com

Counsel for Amicus Curiae

October 14, 2021

WILSON-EPES PRINTING CO., INC. – (202) 789-0096 – WASHINGTON, D.C. 20002

TABLE OF CONTENTS

Page

INTEREST OF AMICI CURIAE ........................

INTRODUCTION AND

SUMMARY OF ARGUMENT .........................

ARGUMENT ........................................................

I. The Sixth Circuit’s Atextual Expansion

Of The FCA’s Anti-Retaliation Provision

Will Invite Additional Costly, Meritless

FCA-Related Litigation ............................

II. The Sixth Circuit’s Misinterpretation Of

The FCA’s Anti-Retaliation Provision

Will Harm Hospitals By Causing Limited

Resources To Be Shifted Away From Their

Core Mission Of Delivering Healthcare ....

A. Qui Tam Lawsuits Disproportionately

Target Hospitals And Other Healthcare Entities.........................................

B. Most Qui Tam Suits Lack Merit .........

C. Defending FCA Claims Is Expensive

And Diverts Resources From The

Delivery Of Healthcare Services .........

CONCLUSION ....................................................

(i)

TABLE OF AUTHORITIES

CASES

Page(s)

Abraham Lincoln Mem’l Hosp. v. Sebelius,

698 F.3d 536 (7th Cir. 2012) .....................

Beverly Cmty. Hosp. Ass’n v. Belshe,

132 F.3d 1259 (9th Cir. 1997) ...................

Hughes Aircraft Co. v. United States ex rel.

Schumer,

520 U.S. 939 (1997) ...................................

Clemes v. Del Norte Cty. United School Dist.,

No. C-93-1912, 1996 WL 331096, (N.D.

Cal. May 28, 1996) ....................................

Jones-McNamara v. Holzer Health Systems,

630 Fed.Appx. 394, (6th Cir. 2015) ..........

Lestage v. Coloplast Corp.,

19-2037, 2020 WL 7238287

(1st Cir. Dec. 9, 2020) ...............................

Nesbitt v. Candler County,

945 F.3d 1355 (11th Cir. 2020) .................

McKenzie v. BellSouth Telecomms., Inc.,

219 F.3d 508 (6th Cir. 2000) .....................

Potts v. Center for Excellence in Higher

Education, Inc.,

908 F.3d 610 (10th Cir. 2018) ...................

Riley v. St. Luke’s Episcopal Hosp.,

252 F.3d 749 (5th Cir. 2001) .....................

Rockwell Int’l Corp. v. United States,

549 U.S. 457 (2007) ...................................

iii

TABLE OF AUTHORITIES—Continued

Page(s)

Schindler Elevator Corp. v. United States

ex rel. Kirk,

563 U.S. 401 (2011) ...................................

Schweiker v. Gray Panthers,

453 U.S. 34 (1981) .....................................

Singletary v. Howard University,

939 F.3d 287 (D.C. Cir. 2019) ...................

Smith v. Clark/Smoot/Russell,

796 F.3d 424 (4th Cir. 2015) .....................

Texas Dep’t of Housing & Community Affairs

v. Inclusive Communities Project, Inc.,

135 S. Ct. 2507 (2015) ...............................

United States ex rel. Chorches v. American

Med. Response, Inc.,

865 F.3d 71 (2d Cir. 2017) ........................

7, 8

United States ex rel. Foulds v.

Texas Tech Univ.,

171 F.3d 279 (5th Cir. 1999) .....................

United States ex rel. Yesudian v.

Howard Univ.,

153 F.3d 731 (D.C. Cir. 1998) ...................

United States ex rel. Tran v. Computer

Sciences Corp.,

53 F.Supp.3d 104 (D.D.C. 2014) ...............

Universal Health Servs., Inc. v.

United States ex rel. Escobar,

136 S. Ct. 1989 (2016) ...............................

TABLE OF AUTHORITIES—Continued

FEDERAL STATUTES

Page(s)

31 U.S.C. § 3729(a)(1)...................................

31 U.S.C. § 3730(h)(1) ..................................

31 U.S.C. § 3730(h)(2) ..................................

31 U.S.C. § 3730(d) .......................................

42 U.S.C. § 1320a-7 ......................................

42 U.S.C. § 1396a(a)(39)...............................

OTHER AUTHORITIES

American Hospital Association, Fact Sheet:

Underpayment by Medicare and Medicaid

(January 2021) ..........................................

American Hospital Association, Regulatory

Overload: Assessing the Regulatory Burden

on Health Systems, Hospitals and Postacute Care Providers (October 2017) ........

Christina Orsini Broderick, Qui Tam Provisions and the Public Interest: An Empirical

Analysis, 107 Colum. L. Rev. 949 (2007) ....

Civil Monetary Penalty Inflation Adjustment, 86 Fed. Reg. 2005 (Jan. 11, 2021) ..

David A. Hyman, Health Care Fraud and

Abuse: Market Change, Social Norms,

and the Trust “Reposed in the Workmen,”

30 J. Legal Stud. 531 (2001) .....................

Eric Topor, Intervention in False Claims

Act Lawsuits: Is It Make or Break?,

Bloomberg Law (Apr. 24, 2017) ................ 16, 18

TABLE OF AUTHORITIES—Continued

Page(s)

Pamela H. Bucy, The PATH from Regulator

to Hunter: The Exercise of Prosecutorial

Discretion in the Investigation of Physicians at Teaching Hospitals, 44 St. Louis

U. L.J. 3 (2000)..........................................

Pamela H. Bucy, Growing Pains: Using the

False Claims Act to Combat Health Care

Fraud, 51 Ala. L. Rev. 57 (1999) ..............

Patricia Meador & Elizabeth S. Warren,

The False Claims Act: A Civil War Relic

Evolves into a Modern Weapon, 65 Tenn.

L. Rev. 455 (1998) .....................................

Joan H. Krause, “Promises to Keep”: Health

Care Providers and the Civil False Claims

Act, 23 Cardozo L. Rev. 1363 (2002) ........ 15, 21

Kaufman Hall, COVID-19 in 2021: The

Potential Effect on Hospital Revenues

(Feb. 2021) .................................................

Kaufman Hall, Financial Effects of COVID19: Hospital Outlook for the Remainder of

2021 (September 2021) ............................. 5, 22

Kaufman Hall, National Hospital Flash

Report (September 2021) ..........................

Keith D. Barber et al., Prolific Plaintiffs or

Rabid Relators? Recent Developments

in False Claims Act Litigation, 1 Ind.

Health L. Rev. 131 (2004) .........................

TABLE OF AUTHORITIES—Continued

Page(s)

Lauren Coleman-Lochner, Shaky U.S.

Hospitals Risk Bankruptcy in Latest

Covid Wave, Bloomberg (Oct. 14, 2020) ...

Medicare Payment Advisory Commission,

A Data Book: Health Care Spending and

the Medicare Program (June 2019) ..........

Memorandum of Law in Support of the

United States’ Motion to Dismiss, United

States ex rel. SMSF, LLC v. Biogen, Inc.,

No. 16-11379 (D. Mass. Dec. 17, 2018),

ECF No. 53 ................................................

Michael Rich, Prosecutorial Indiscretion:

Encouraging the Department of Justice to

Rein in Out-of-Control Qui Tam Litigation Under the Civil False Claims Act, 76

U. Cin. L. Rev. 1233 (2008) ...................... 16, 18

Rita Sverdlik et al., Research Announcement: Moody’s - US not-for- profit

hospital profitability holds steady in FY

2018 after two years of declines, Moody’s

Investors Service (April 25, 2019) ............

Robert I. Field, Why Is Health Care

Regulation So Complex?, 33 Pharmacy &

Therapeutics 607 (Oct. 2006) ...................

Ron Shinkman, Ratings agencies issue

foreboding reports on hospital finances as

AHA seeks $100B to respond to COVID19, Health Care Dive (March 20, 2020) ... 5, 21

vii

TABLE OF AUTHORITIES—Continued

Page(s)

Sean Elameto, Guarding the Guardians:

Accountability in Qui Tam Litigation

Under the Civil False Claims Act, 41 Pub.

Cont. L.J. 813 (2012).................................

Timothy Blanchard, Medicare Medical Necessity Determinations Revisited: Abuse of

Discretion and Abuse of Process in the

War Against Medicare Fraud and Abuse,

43 St. Louis U. L.J. 91 (1999) ...................

Todd J. Canni, Who’s Making False Claims,

The Qui Tam Plaintiff or the Government

Contractor? A Proposal to Amend the

FCA to Require That All Qui Tam

Plaintiffs Possess Direct Knowledge, 37

Pub. Cont. L.J. 1 (2007) ............................ 17, 18

U.S. Dep’t of Justice, Acting Associate

Attorney General Jesse Panuccio Delivers

Remarks at the American Bar Association’s 12th National Institute on the Civil

False Claims Act and Qui Tam Enforcement (June 14, 2018) ................................

U.S. Dep’t of Justice, Acting Assistant

Attorney General Brian M. Boynton

Delivers Remarks at the Federal Bar

Association Qui Tam Conference (Feb.

17, 2021)) ...................................................

U.S. Dep’t of Justice, Deputy Associate

Attorney General Stephen Cox Gives

Remarks to the Cleveland, Tennessee,

Rotary Club (March 12, 2019) ..................

viii

TABLE OF AUTHORITIES—Continued

Page(s)

U.S. Dep’t of Justice, False Claims Act Cases:

Government Intervention in Qui Tam

(Whistleblower) Suits (June 13, 2012)......

U.S. Dep’t of Justice, Fraud StatisticsOverview: October 1, 1986-September 30,

2020 ....................................................... 3, 11, 12

Victor E. Schwartz & Phil Goldberg,

Carrots and Sticks: Placing Rewards As

Well As Punishment in Regulatory and

Tort Law, 51 Harv. J. on Legis. 315

(2014) .........................................................

INTEREST OF AMICI CURIAE1

The American Hospital Association represents

nearly 5,000 hospitals, healthcare systems, and other

healthcare organizations. AHA members are committed to improving the health of the communities they

serve and to helping ensure that care is available to

and affordable for all Americans. The AHA educates

its members on healthcare issues and advocates on

their behalf so that their perspectives are considered

in formulating health policy. One way in which the

AHA promotes the interests of its members is by

participating as amicus curiae in cases with important

and far-ranging consequences for their members, including cases arising under the False Claims Act (FCA).

E.g., Universal Health Servs., Inc. v. United States ex

rel. Escobar, 136 S. Ct. 1989 (2016); Schindler Elevator

Corp. v. United States ex rel. Kirk, 563 U.S. 401 (2011);

Rockwell Int’l Corp. v. United States, 549 U.S. 457

(2007).

The Federation of American Hospitals is the

national representative for over 1,000 leading taxpaying community hospitals and health systems throughout the United States. FAH members provide patients

and communities with access to high-quality, affordable care in both urban and rural America across

46 states, plus Washington, DC and Puerto Rico. Its

members include teaching, acute, inpatient rehabilitation, behavioral health, and long-term care hospitals,

Pursuant to Supreme Court Rule 37.6, amici affirm that no

counsel for a party authored this brief in whole or in part, and

that no person or entity other than amici, their members, and

their counsel made a monetary contribution intended to fund

the preparation or submission of this brief. The parties have

consented to the filing of this brief

and provide a wide range of inpatient, ambulatory,

post-acute, emergency, children’s, and cancer services.

Established in 1919, the Michigan Health &

Hospital Association represents the interests of its

members on key issues and supports their efforts to

provide quality, cost-effective, and accessible care.

Established in 1929, the Kentucky Hospital

Association represents hospitals, related health care

organizations, and integrated health care systems. It

is dedicated to sustaining and improving the health

status of Kentucky’s citizens.

Established in 1915, the Ohio Hospital Association helps its members meet the needs of the

communities they serve by influencing health policy,

driving healthcare quality improvements, and advocating for economic sustainability among hospitals.

Established in 1938, the Tennessee Hospital

Association is the premiere organization that promotes and represents the interests of Tennessee

hospitals, health systems, and the patients they serve.

Amici’s member-hospitals are frequent targets in

FCA lawsuits. The reasons why are clear: hospitals

are heavily regulated; the regulations governing them

are often impenetrable; and they receive a majority of

their reimbursement from government healthcare programs. Together, those factors make them uniquely

vulnerable to FCA claims, many of which are dismissed as meritless despite having already imposed

significant costs on hospitals. The same exposure to

costly, groundless FCA claims exposes them to costly,

groundless FCA retaliation claims, which are frequently “part and parcel of FCA cases.” Pet. 11.

It is therefore unsurprising that Petitioner is a

hospital. As the dissenting opinion below indicated,

previous cases raising the question presented here

demonstrate that hospitals are often forced to defend

themselves against baseless retaliation claims brought

by former employees. See Pet. App 22a n.2 (Griffin, J.,

dissenting). As such, the legal issue in this case is of

considerable importance to amici’s members.

The Sixth Circuit’s erroneous decision makes amici’s

participation even more important. If upheld, the

decision will vastly expand hospitals’ exposure to

FCA-retaliation suits, sometimes years after a plaintiff left her job. Amici, which include the state hospital

associations in every state in the Sixth Circuit,

therefore have a strong interest in ensuring that

this Court restores the correct reading of the FCA’s

anti-retaliation provision.

INTRODUCTION AND

SUMMARY OF ARGUMENT

This case presents an important question that

has divided courts of appeals: whether a former

employee may bring a False Claims Act retaliation

claim against her former employer based on conduct

that occurred after her employment ended. This

question is relevant to employers of all kinds. But it

is especially important to amici’s members.

Hospitals face a disproportionate amount of FCA

litigation. The most recent Department of Justice

statistics show that healthcare entities are already

defendants in roughly two-thirds of all FCA cases. See

U.S. Dep’t of Justice, Fraud Statistics-Overview:

October 1, 1986-September 30, 2020, https://www.just

ice.gov/opa/press-release/file/1354316/download. Many

of these cases, however, lack merit. Year after year,

the number of FCA cases increases, but the Department of Justice continues to decline participation in

the overwhelming majority of them—a clear indicator

that these cases never should have been brought in the

first place. Given the sheer volume of FCA suits, any

erroneous interpretation that expands FCA-related

liability is concerning to amici’s members—and should

be to this Court as well.

Adopting the Sixth Circuit’s rule would make this

untenable situation even worse. As it is, several

features of the FCA’s anti-retaliation provision invite

excessive and expensive litigation. For example, the

definition of protected activity sweeps in acts far short

of filing an FCA suit; the statute provides for enticingly high damages; and unlike the FCA itself, the

retaliation provision does not permit the United States

to weed out unmeritorious suits. And if all of that were

not enough, the Sixth Circuit applies an exceedingly

broad causation standard for FCA retaliation. Unlike

many other circuits, it recognizes retaliation claims if

a plaintiff’s protected activity was merely a “motivating factor” in the alleged retaliatory act. Compare

McKenzie v. BellSouth Telecomms., Inc., 219 F.3d 508,

518 (6th Cir. 2000), with Lestage v. Coloplast Corp.,

19-2037, 2020 WL 7238287, at *1 (1st Cir. Dec. 9,

2020). The statute need not be stretched any further.

Yet by distorting the FCA’s text to permit retaliation

claims by former employees, for conduct years after

their employment ceased, the Sixth Circuit erroneously

exposes employers to virtually-unbounded retaliation

liability. See Potts v. Center for Excellence in Higher

Education, Inc., 908 F.3d 610, 615 n.2 (10th Cir. 2018)

(“a former employee could wait years upon years

before whistleblowing and then sue if the employer

allegedly retaliated”); Pet. 31 (explaining how a relator

terminated today could bring suit decades later if the

Sixth Circuit’s decision stands).

This expansion of FCA-retaliation liability is particularly dangerous for amici’s members because “most

U.S. hospitals typically operate on thin margins.” Ron

Shinkman, Ratings agencies issue foreboding reports

on hospital finances as AHA seeks $100B to respond

to COVID-19, Health Care Dive (March 20, 2020),

https://www.healthcaredive.com/news/ratings-agencie

s-issue-foreboding-reports-on-hospital-finances-as-ahaseeks/574541/. The ongoing COVID-19 pandemic

has only exacerbated hospitals’ financial challenges.2

Exposing amici’s members to even broader FCAretaliation liability will worsen hospitals’ precarious

financial state, and will almost certainly divert scarce

resources from their core mission of providing patient

care and improving the health of their communities.

This Court therefore should grant certiorari to

reverse the Sixth Circuit’s reading of the FCA’s antiretaliation provision. In so doing, it will establish

E.g., Kaufman Hall, Financial Effects of COVID-19: Hospital

Outlook for the Remainder of 2021 (September 2021), https://

www.aha.org/system/files/media/file/2021/09/AHA-KH-Ebook-Fi

nancial-Effects-of-COVID-Outlook-9-21-21.pdf (projecting (1) hospitals and health systems to lose $54 billion in net income by the

end of 2021; (2) median operating margins to be 10-11% below

pre-pandemic levels; and (3) over one-third of hospitals to be

operating in the red by the end of 2021).; Lauren ColemanLochner, Shaky U.S. Hospitals Risk Bankruptcy in Latest Covid

Wave, Bloomberg (Oct. 14, 2020), at https://finance.yahoo.com/

news/shaky-u-hospitals-risk-bankruptcy-133423429.html (“The

growing number of [COVID-19] cases is threatening the very

survival of hospitals just when the country needs them most.

Hundreds were already in shaky circumstances before the virus

remade the world, and the impact of caring for Covid patients has

put hundreds more in jeopardy.”).

harmony across the circuits and ensure that FCA

defendants—especially hospitals—do not face the

costly consequences that flow from the Sixth Circuit’s

atextual interpretation.

ARGUMENT

I. The Sixth Circuit’s Atextual Expansion of

The FCA’s Anti-Retaliation Provision Will

Invite Additional Costly, Meritless FCARelated Litigation

Petitioners have persuasively explained why “the

Sixth Circuit’s decision will create an unbounded antiretaliation provision that immensely burdens countless employers.” Pet. 30. In addition to the reasons

Petitioners offered, several features of the FCA’s antiretaliation provision render it susceptible to the

consequences that Petitioners correctly predict. Given

those statutory features, that provision need not be

judicially-broadened any further. Yet the Sixth’s

Circuit misinterpretation does just that, compounding

the risks of meritless FCA-related litigation discussed

in the Petition for Writ of Certiorari (at 30-33) and

Section II below.

First, the FCA’s anti-retaliation provision protects

an extensive range of activity. The statute sets forth

two categories of “protected activity”: (1) “lawful acts

done by the employee, contractor, agent or associated

others in furtherance of an action under this section”,

and (2) “other efforts to stop 1 or more violations of this

subchapter.” 31 U.S.C. 3730(h)(1). Critically, these

two prongs trigger protections against retaliation for

activity far short of filing an actual FCA lawsuit (many

of which we know are meritless anyway).

The first prong protects not only retaliation in

response to an employee’s full-fledged FCA lawsuit,

but also to “steps taken antecedent to a False Claims

Act proceeding.” Singletary v. Howard University, 939

F.3d 287, 295 (D.C. Cir. 2019) (internal quotation

marks omitted); see Pet. 32. For instance, “[t]he FCA’s

anti-retaliation provision protects employees ‘while

they are collecting information about a possible fraud,

before they have put all the pieces of the fraud together.’”

Jones-McNamara v. Holzer Health Systems, 630

Fed.Appx. 394, 399 (6th Cir. 2015) (quoting United

States ex rel. Yesudian v. Howard Univ., 153 F.3d 731,

740 (D.C. Cir. 1998)).

As broad as that first prong is, the “second prong

broaden[s] the universe of protected conduct under

[Section] 3730(h)” even further. United States ex rel.

Chorches v. American Med. Response, Inc., 865 F.3d

71, 97 (2d Cir. 2017); see Smith v. Clark/Smoot/

Russell, 796 F.3d 424, 434 (4th Cir. 2015) (“While we

have not yet spelled out the contours of ‘other efforts

to stop’ a False Claims Act violation, it plainly

encompasses more than just activities undertaken in

furtherance of a False Claims Act lawsuit.”). “[U]nlike

the first [prong], [the second prong] is not tied to

the prospect of a False Claims Act proceeding.”

Singletary, 939 F.3d at 295-96. “To put it simply, the

focus of the second prong is preventative—stopping

‘violations’—while the first prong is reactive to an

(alleged) actual violation of the statute.” Id. at 296.

Accordingly, this provision has been interpreted to

include activity like mere internal reporting of suspected FCA violations, see Jones-McNamara, 630

Fed.Appx. at 399, “and at least one piece of the

legislative history appears to indicate that the [second

prong] was sufficiently broadened that it included

refusals to participate in the scope of protected

activity.” United States ex rel. Tran v. Computer

Sciences Corp., 53 F.Supp.3d 104, 136 (D.D.C. 2014)

(citing 155 Cong. Rec. E1295–03 (Statement of Rep.

Berman)); see Chorches, 865 F.3d at 96-97 (“Fabula’s

refusal to falsify the December 2011 PCR so as to

hinder the filing of a fraudulent claim in violation of

the FCA constitutes protected activity under § 3730(h).”).

With so many novel theories of FCA healthcare fraud,

see infra at 13, and with so many meritless attempts

at establishing such fraud as it is, see infra at 16-18,

the vast scope of these prongs opens the door to a

significant amount of additional meritless FCAretaliation claims.

Second, the sizable damages available under the

FCA anti-retaliation provision invite further litigation. The statute permits “reinstatement with the

same seniority status that employee, contractor, or

agent would have had but for the discrimination,

2 times the amount of back pay, interest on the back

pay, and compensation for any special damages sustained as a result of the discrimination, including

litigation costs and reasonable attorneys’ fees.” 31

U.S.C. 3730(h)(2) (emphasis added). Thus, in broadly

providing that retaliation plaintiffs “shall be entitled

to all relief necessary to make that employee, contractor, or agent whole,” 31 U.S.C. 3730(h)(1), the

statute specifically authorizes double back pay plus an

assortment of other potential damages (e.g., emotional

distress, litigation costs, attorney’s fees,). The availability of these high-paying damages provides a

lucrative incentive for FCA-retaliation suits, particularly given that defendants routinely choose to settle,

rather than fight, FCA-related claims. See infra at 20;

Pet. 32-33.

Third, unlike underlying FCA claims, the United

States has no role to play in deciding whether or how

an FCA retaliation claim may proceed. When a relator

brings a qui tam action, the United States is considered the real party in interest, and the FCA provides

the government with significant rights. See 31 U.S.C.

§ 3130(c). But FCA-retaliation claims “are brought on

behalf of and for the benefit of the employee.” Clemes

v. Del Norte Cty. United School Dist., No. C-93-1912,

1996 WL 331096. at *5 (N.D. Cal. May 28, 1996); see

United States ex rel. Foulds v. Texas Tech Univ., 171

F.3d 279, 295 (5th Cir. 1999) (the “qui tam plaintiff

keeps all of the proceeds from any successful § 3730(h)

claim; indeed, only a qui tam plaintiff possesses the

right to bring such a claim.”). As such, the United

States cannot take over FCA-retaliation litigation or

filter out meritless claims through dismissal motions.

This feature thus enables FCA-retaliation plaintiffs to

engage in all sorts of costly litigation without the

mature oversight of the United States government.

Fourth, several courts of appeals—including the

Sixth Circuit—apply a “plaintiff-friendly” causation

standard to FCA-retaliation claims. Nesbitt v. Candler

County, 945 F.3d 1355, 1358 (11th Cir. 2020). In those

circuits, a plaintiff must only show that the protected

activity was a “motivating factor” for the alleged retaliatory act, not a “but for” cause of that act. Compare

McKenzie, 219 F.3d at 518 (motivating factor test),

with Nesbitt, 945 F.3d at 1361-62 (but-for causation

test). It goes without saying that in the circuits that

apply the more plaintiff-friendly test, employees are

able to bring litigation for a wider range of alleged

employer behavior. And even more litigation will be

available if plaintiffs are permitted to allege, as they

now are in the Sixth Circuit, that a former employer

took some adverse action because a years-old protected activity was merely a “motivating factor.”

Taken together, these features of the FCA’s antiretaliation provision demonstrate how broad it already

is, how likely it is to invite meritless litigation, and

how unnecessary it is for courts to atextually expand

the statute any further by allowing former employees

to bring suit based on post-employment conduct. Given

these features, moreover, it is clear that Congress

knows how to draft and amend the FCA antiretaliation provision when it wants to broaden its

scope. But as Petitioners and the dissenting judge

below explained, the text of the statute makes plain

that Congress did not do that, see Pet. 17-24; Pet. App.

16a-22a (Griffin, J., dissenting), and Congress easily

could have done so by explicitly referring to “former”

employees, see Pet at 29.

II. The Sixth Circuit’s Misinterpretation

Of The FCA’s Anti-Retaliation Provision

Will Harm Hospitals By Causing Limited

Resources To Be Shifted Away From Their

Core Mission Of Delivering Healthcare

The Sixth Circuit’s misinterpretation of the FCA’s

anti-retaliation provision leaves employers vulnerable

to almost-unbounded FCA-related litigation. That is

highly problematic in itself. But those consequences

will unduly impact America’s hospitals—and the

patients they serve—simply because hospitals already

suffer from a disproportionate amount of costly, meritless FCA-related litigation. As this Court considers

whether to grant certiorari, it should not lose sight of

how the FCA has been asserted against hospitals in

ways that will be worsened if the Sixth Circuit’s

decision is allowed to stand.

A. Qui Tam Lawsuits Disproportionately

Target Hospitals And Other Healthcare

Entities.

FCA lawsuits have increased tremendously in recent

decades. This growth has been driven primarily by

suits in which the government has declined to

participate—a strong indicator of their lack of merit.

While the United States has filed slightly less than one

hundred and fifty FCA cases in each of the last few

years, qui tam relators have filed almost five times

as many—646 in 2018, and 638 in 2019, and 672 in

2020. U.S. Dep’t of Justice, Fraud Statistics-Overview:

October 1, 1986-September 30, 2020, supra; see U.S.

Dep’t of Justice, Deputy Associate Attorney General

Stephen Cox Gives Remarks to the Cleveland,

Tennessee, Rotary Club (March 12, 2019), https://www.

justice.gov/opa/speech/deputy-associate-attorney-gene

ral-stephen-cox-gives-remarks-cleveland-tennessee-ro

tary (“Qui tam filings have been on the rise for many

years.”).

These suits disproportionately target healthcare

entities. Of the 922 new FCA matters filed in 2020,

for example, 573 involved healthcare defendants. U.S.

Dep’t of Justice, Fraud Statistics-Overview: October 1,

1986-September 30, 2020, supra (identifying number

of FCA cases involving the Department of Health and

Human Services as the primary client agency). That

is nearly two-thirds of the new matters filed that year.

The statistics are even more striking when comparing

only relator-filed qui tam cases. Nearly seventy percent of those case were filed against healthcare

entities. Id. (456 of 672 cases). This stands in stark

contrast to 1987, when only 15 of the 371 cases—a

mere four percent—involved healthcare entities. Id.3

Hospitals are prime targets for qui tam lawsuits for

several reasons. For starters, hospitals are heavily

regulated. “Almost every aspect of the field is overseen

by one regulatory body or another, and sometimes

by several.” Robert I. Field, Why Is Health Care

Regulation So Complex?, 33 Pharmacy & Therapeutics

607, 607 (Oct. 2006), https://www.ncbi.nlm.nih.gov/

pmc/articles/PMC27307 86/pdf/ptj33_10p607.pdf. By

one count, 130,000 pages of rules govern healthcare

providers, with Medicare rules comprising over 100,000

of those pages. Victor E. Schwartz & Phil Goldberg,

Carrots and Sticks: Placing Rewards As Well As

Punishment in Regulatory and Tort Law, 51 Harv. J.

on Legis. 315, 350 (2014). That volume, on its own, is

enough to make hospitals a prime target for FCA suits.

What is more, courts consistently recognize the

challenge for healthcare providers in trying to comply

with these many rules and regulations. This Court,

for instance, has referred to the Medicare and Medicaid

statutes as “among the most intricate ever drafted by

Congress.” Schweiker v. Gray Panthers, 453 U.S. 34,

43 (1981). And one court of appeals may have said

These numbers, regrettably, are not likely to change. Just

weeks after taking office, the new Administration indicated that

healthcare-related FCA cases are among its top priorities. See

U.S. Dep’t of Justice, Acting Assistant Attorney General Brian M.

Boynton Delivers Remarks at the Federal Bar Association Qui

Tam Conference (Feb. 17, 2021), https://www.justice.gov/opa/

speech/acting-assistant-attorney-general-brian-m-boynton-deliv

ers-remarks-federal-bar. The Department of Justice apparently

intends to specially target healthcare providers that rely on

electronic health records and telehealth services, and it plans to

deploy so-called “data analytics” to unearth FCA suspects in the

“health care arena.” Id.

it best when it observed that “clarity is uniformly

recognized as totally absent from the Medicaid and

Medicare statutes.” Beverly Cmty. Hosp. Ass’n v.

Belshe, 132 F.3d 1259, 1266 (9th Cir. 1997); see

Abraham Lincoln Mem’l Hosp. v. Sebelius, 698 F.3d

536, 541 (7th Cir. 2012) (describing the Medicare and

Medicaid rules as “among the most completely impenetrable texts within human experience” (internal

quotation marks omitted)). With such a confounding

regulatory environment, employees can easily assert

that hospitals violated some ambiguous law and

thereby defrauded the government.

As these laws and regulations have piled up, so have

the theories of FCA liability in the healthcare space.

That, too, has contributed to the steep rise in FCA

litigation against hospitals. Historically, the law was

applied to cases where services were not rendered to

patients and the government was defrauded when

reimbursement claims for those non-services were

submitted. Today, the law has been “stretched . . . to

encompass activities that are increasingly removed

from their factual and legal precursors,” including

“medical necessity fraud, fraud by billing consultants,

violations of federal anti-referral statutes and qualityof-care requirements, and Cost Report fraud.” Joan H.

Krause, “Promises to Keep”: Health Care Providers and

the Civil False Claims Act, 23 Cardozo L. Rev. 1363,

1383 (2002). Hospitals now are forced to reckon with

increasingly innovative relators and courts that are

all too willing to accept their groundbreaking theories.

Accordingly, “[t]o say that participation in the Government health care programs has become a high-risk

endeavor would be an understatement.” Timothy

Blanchard, Medicare Medical Necessity Determinations

Revisited: Abuse of Discretion and Abuse of Process in

the War Against Medicare Fraud and Abuse, 43 St.

Louis U. L.J. 91, 134 (1999).

Hospitals also are uniquely vulnerable to costly

FCA litigation because of the way in which healthcare

claims are submitted for reimbursement and the sums

involved. Specifically, hospitals submit a large number

of individual claims to the government in connection

with healthcare programs, and they receive a substantial amount of federal funds for providing care to their

patients. In 2018, for example, Medicare spent $147.4

billion on inpatient hospital services alone. Medicare

Payment Advisory Commission, A Data Book: Health

Care Spending and the Medicare Program, 4 (June

2019), http://www.medpac.gov/docs/default-source/databook/jun19_databook_entirereport_sec.pdf?sfvrsn=0.

Moreover, claims typically are submitted in far

smaller dollar amounts, since they are broken down by

each service provided. Twenty-Five Years Of Health

Law Through The Lens Of The Civil False Claims Act,

19 Ann. Health L. 13, 15 (2010). (“Unlike in the

defense industry, where a contractor may submit a

small number of very large payment requests to the

government each year, physicians submit thousands

of bills for relatively small amounts. In the defense

context, treble damages are likely to be the major

deterrent, with the additional $11,000 per-claim penalty merely a nuisance. For a physician, in contrast,

the per-claim penalties may rise quickly even as

treble damages remain small.”); Patricia Meador &

Elizabeth S. Warren, The False Claims Act: A Civil

War Relic Evolves into a Modern Weapon, 65 Tenn.

L. Rev. 455, 456 (1998) (hospitals are “particularly

susceptible to actions under the False Claims Act due

to the many [claim] forms health professionals must

health care programs”). This vastly increases the

number of claims that can be included in a single FCA

suit.

The likelihood of significant penalties and damages

further attracts qui tam relators. As an initial matter,

hospitals and “health care providers, unlike many . . .

defendants, have a fair amount of assets, making

pursuit of a civil action viable.” Pamela H. Bucy,

Growing Pains: Using the False Claims Act to Combat

Health Care Fraud, 51 Ala. L. Rev. 57, 59 (1999). In

addition, under the FCA’s lengthy statute of limitations, literally hundreds of thousands of claims can

be at issue. Under its treble damages provision, a

hospital could be held liable for three times the

claimed amount (without regard to the costs the

provider actually incurred to provide the services).

And under today’s per-claim penalty rules, relators

can seek up to $23,606 per claim (and in some states

double that if Medicaid claims are at issue), meaning

that even small dollar claims quickly amount to monumental liabilities. See Civil Monetary Penalty Inflation

Adjustment, 86 Fed. Reg. 2005, 2006 (Jan. 11, 2021).

Consequently, even where the government suffers

little or no actual harm, relators may still seek massive penalties based on the view that the FCA requires

a separate penalty for each and every false claim

submitted to the government. See Joan H. Krause,

“Promises to Keep”: Health Care Providers and the

Civil False Claims Act, supra (relators often rely on

vast numbers of small-value Medicare or Medicaid

claims to threaten astronomical penalties).

These factors add up to one conclusion: year after

year, hospitals are forced to defend against an increasing number of FCA suits, asserting an increasing

number of fraud theories. And because the reasons

for this have more to do with the laws that govern

hospitals and how hospitals do business, this is

unlikely to change any time soon.

B. Most Qui Tam Suits Lack Merit.

Although the number of qui tam suits has increased

in recent years, the quality of those suits hasn’t

improved in tandem. Quite the contrary. Most qui

tam suits lack merit.

One indicator of how meritless most qui tam suits

remain is how infrequently the United States chooses

to intervene. Despite the growing number of new FCA

matters each year, the United States continues to

decline to intervene in the overwhelming majority of

them. See Eric Topor, Intervention in False Claims Act

Lawsuits: Is It Make or Break?, Bloomberg Law (Apr.

24, 2017); see U.S. Dep’t of Justice, False Claims Act

Cases: Government Intervention in Qui Tam

(Whistleblower) Suits, at 2 (June 13, 2012).

As such, in the majority of FCA cases relators are

left to pursue their claims—and their own pecuniary

interests—in the name of the United States, but

unrestrained by government oversight, direction, or

prosecutorial discretion. See Hughes Aircraft Co. v.

United States ex rel. Schumer, 520 U.S. 939, 949 (1997)

(“Qui tam relators are . . . less likely than is the

Government to forgo an action arguably based on a

mere technical noncompliance with reporting requirements that involved no harm to the public fisc.”);

Michael Rich, Prosecutorial Indiscretion: Encouraging

the Department of Justice to Rein in Out-of-Control

Qui Tam Litigation Under the Civil False Claims Act,

76 U. Cin. L. Rev. 1233, 1264- 65 (2008) (“The result is

that the government does not dismiss, and relators are

permitted to proceed with, thousands of non-meritorious qui tam suits.”). Such unrestrained use of the

government’s false claims authority creates serious

financial risks for hospitals.

A substantial number of declined qui tam suits are

dismissed or settled pre-trial, but often only after

burdensome and expensive motions practice and discovery. According to a comprehensive empirical analysis

of suits from 1987 to 2004, 92% of cases in which the

U.S. declined to intervene were dismissed without

recovery. See Christina Orsini Broderick, Qui Tam

Provisions and the Public Interest: An Empirical

Analysis, 107 Colum. L. Rev. 949, 974-975 (2007).

Thus, less than 10% of non-intervened private qui tam

actions actually result in recovery, with more than

90% dismissed as frivolous or otherwise without merit.

Id. That study concluded that the high rate of dismissal “lends strong support to the conclusion that qui

tam statutes result in many frivolous claims.” Id.; see

Riley v. St. Luke’s Episcopal Hosp., 252 F.3d 749, 767

n.24 (5th Cir. 2001) (Smith, J., dissenting) (“Of the

1,966 [of all qui tam] cases that the government has

refused to join, only 100 have resulted in recoveries

(5%)”); Todd J. Canni, Who’s Making False Claims,

The Qui Tam Plaintiff or the Government Contractor?

A Proposal to Amend the FCA to Require That All Qui

Tam Plaintiffs Possess Direct Knowledge, 37 Pub.

Cont. L.J. 1, 9 (2007) (the “majority of qui tam actions

lack merit.”).

DOJ statistics confirm that the vast majority of

declined cases do not lead to sizeable recoveries. Since

1987, only 6% of the total amount of recovery from qui

tam settlements and judgments have come from cases

where the government declined to intervene. See DOJ

Fraud Statistics, supra (calculated by dividing the

total recovery in declined qui tam cases by the total

recovery in all qui tam cases). And the amount is even

lower for healthcare cases. Id. at 6. Indeed, “[t]he bulk

of the $2.4 billion recovered by the federal government

in 2016 from health-care [FCA] settlements and judgments came from cases in which the Justice Department

intervened.” Topor, Intervention in False Claims Act

Lawsuits, supra.

The Department of Justice itself has admitted that

it “declines to intervene in some cases due to the lack

of legal or factual support.” U.S. Dep’t of Justice, Acting

Associate Attorney General Jesse Panuccio Delivers

Remarks at the American Bar Association’s 12th National

Institute on the Civil False Claims Act and Qui Tam

Enforcement (June 14, 2018), https://www.justice.gov/

opa/speech/acting-associate-attorney-general-jesse-pa

nuccio-delivers-remarks-american-bar. Consistent with

DOJ’s analysis, scholars have drawn the only possible

conclusion from the “immense disparity between

recoveries in qui tam actions in which the Government

intervened and those in which it did not.” Sean Elameto,

Guarding the Guardians: Accountability in Qui Tam

Litigation Under the Civil False Claims Act, 41 Pub.

Cont. L.J. 813, 826 (2012). They have found that most

qui tam actions brought without government intervention assert “meritless or frivolous claims.” Id.

C. Defending FCA Claims Is Expensive

And Diverts Resources From The Delivery Of Healthcare Services.

Defending qui tam cases is expensive and disruptive. It is indisputable that most FCA “suits exact a

net cost,” as defendants expend financial resources

to defend against (often meritless) claims and suffer

unwarranted harm to their reputations.

Rich,

Prosecutorial Indiscretion, supra; see Canni, Who’s

Making False Claims, supra (“The casualties of the

dismissed suits are not the plaintiffs. Rather, it is the

government contractor whose reputation is tarnished

and who is now without hundreds of thousands of

dollars or possibly on the verge of bankruptcy after

having defended against speculative allegations.”).

To understand why, consider the following statement from the Department of Justice in a case where

it not only declined to participate but also sought to

dismiss under 31 U.S.C. § 3730(c)(2)(A). The government explained that to litigate the case “it would have

to spend considerable time and effort monitoring court

filings, filing statements of interest, and responding

to requests for substantial amounts of discovery.”

Memorandum of Law in Support of the United States’

Motion to Dismiss at 10, United States ex rel. SMSF

LLC v. Biogen, Inc., No. 16-11379 (D. Mass. Dec. 17,

2018), ECF No. 53. It further noted that

[a]nticipated discovery burdens include the

expense of collecting, reviewing, processing,

and producing documents from among multiple federal healthcare programs, as well as

voluminous prescription drug event data and

patient health information for potentially

thousands of beneficiaries, which, due to its

sensitive nature, may require additional (and

costly) screening and redaction. Moreover,

the government also likely would spend considerable time preparing numerous agency

witnesses for depositions.

Id. at 11. Critically, the government would have to do

these things even though it was not a party to the case.

Hospitals are not so lucky. Even where the government chooses to decline participation, defendant-hospitals

are left to fend off expensive, meritless lawsuits.

Unsurprisingly, healthcare defendants disproportionately bear the burden of these expenses, while also

facing different cost-benefit analyses than many other

FCA defendants. Hospitals must consider defense

costs, the magnitude of potential liability, reputational harms, and the possibility of an adverse

decision resulting in exclusion from participation in

federal healthcare programs. See, e.g., 31 U.S.C.

§§ 3729(a)(1), 3730(d); 42 U.S.C. § 1320a-7, 1396a(a)(39).

See David A. Hyman, Health Care Fraud and Abuse:

Market Change, Social Norms, and the Trust “Reposed

in the Workmen,” 30 J. Legal Stud. 531, 552 (2001)

(“Providers who believe they are blameless are under

tremendous pressure to settle because of . . . the high

probability of bankruptcy and professional disgrace if

the jury does not see things the same way the provider

does.”); see generally Texas Dep’t of Housing &

Community Affairs v. Inclusive Communities Project,

Inc., 135 S. Ct. 2507, 2550 (2015) (“the costs of litigation, including the expense of discovery and experts,

may push cost-conscious defendants to settle even

anemic cases. Defendants may feel compelled to abandon substantial defenses and . . . pay settlements in

order to avoid the expense and risk of going to trial”

(internal citations and quotation marks omitted)).4

For healthcare providers, the cost of litigating or

settling FCA cases diverts resources from their core

responsibility: caring for patients. See Keith D.

Barber et al., Prolific Plaintiffs or Rabid Relators?

Recent Developments in False Claims Act Litigation, 1

Ind. Health L. Rev. 131, 172 (2004). Hospitals have

limited resources, and it is an unavoidable fact of life

For this reason, courts in FCA-retaliation cases should make

no inferences from the fact that, as here (Pet. App. 29a), a

defendant decided to settle an underlying FCA claim.

that dollars spent on litigation and settlements cannot

be used for patient care. Plus, FCA cases do not just

impose financial costs; they also inflict broader costs

on doctors and hospital staff. For example, “[e]mployees

and executives may be diverted from their usual

duties to deal with the human, logistical, business,

public relations and financial issues that arise during

an investigation. Employees may leave for a less

stressful environment, and recruiting new staff may

become difficult.” Pamela H. Bucy, The PATH from

Regulator to Hunter: The Exercise of Prosecutorial

Discretion in the Investigation of Physicians at

Teaching Hospitals, 44 St. Louis U. L.J. 3, 41 (2000).

Put simply, FCA-related claims place considerable

burdens on hospitals’ finances, time, and human

capital, all of which would be otherwise devoted to

providing patient care. See Joan H. Krause, “Promises

to Keep”: Health Care Providers and the Civil False

Claims Act, supra (excessive use of the FCA “divert[s]

resources away from the goal of providing high-quality

medical care to program beneficiaries”).

These costs come as hospitals face enormous

financial challenges, which have skyrocketed during

the pandemic. “[M]ost U.S. hospitals typically operate

on thin margins. Shinkman, Ratings agencies issue

foreboding reports on hospital finances as AHA seeks

$100B to respond to COVID-19, supra. Before COVID19, “hospitals . . . struggled to reduce costs amid

shrinking patient numbers and slowing revenue growth,

while also adjusting to changing reimbursement structures and demands of other healthcare industry

participants such as insurers and employers.” Rita

Sverdlik, et al., Research Announcement: Moody’s-US

not-for-profit hospital profitability holds steady in FY

2018 after two years of declines, Moody’s Investors

Service (April 25, 2019), https://www.moodys.com/

research/Moodys-US-not-for-profit-hospital-profitabil

ity-holds-steady-in--PBM_1172741?showPdf=true. Now,

“margins of America’s hospitals will remain depressed

throughout 2021, the percentage of hospitals with

negative margins will likely increase, and the financial health of rural hospitals will be significantly

affected.” Kaufman Hall, COVID-19 in 2021: The

Potential Effect on Hospital Revenues, supra. Indeed,

“[p]rior to the pandemic, about one quarter of hospitals

had negative margins.” Id. That was bad enough. But

because of COVID-19, “more than a third of U.S.

hospitals will maintain negative operating margins

through” 2021. Kaufman Hall, Financial Effects of

COVID-19: Hospital Outlook for the Remainder of

2021 (September 2021), https://www.aha.org/system/

files/media/file/2021/09/AHA-KH-Ebook-Financial-Ef

fects-of-COVID-Outlook-9-21-21.pdf. Needless to say,

forcing hospitals to spend precious dollars on FCArelated litigation only further reduces those margins.

At the same time, the costs of providing care continue to increase. For example, hospital drug expenses

have increased 24% from pre-pandemic levels, see

Kaufman Hall, National Hospital Flash Report

(September 2021), https://www.kaufmanhall.com/si

tes/default/files/2021-09/national-hospital-flash-repor

t_sept.-2021_final.pdf, and an average-sized community hospital spends nearly $7.6 million annually to

comply with federal regulations, Am. Hosp. Ass’n,

Regulatory Overload: Assessing the Regulatory Burden

on Health Systems, Hospitals and Post-acute Care

Providers, at 4 (October 2017), available at https://

www.aha.org/system/files/2018-02/regulatory-overloadreport.pdf. In addition, hospitals continue to be underpaid by Medicare and Medicaid—the very programs

that generate so many FCA lawsuits. Hospitals were

paid only 87 cents for every dollar spent caring for

Medicare patients in 2019, resulting in a $56.8 billion

shortfall that year; similarly, hospitals received payment of only 90 cents for every dollar spent caring for

Medicaid patients in 2019, resulting in a $19 billion

shortfall that year. See Am. Hosp. Ass’n, Fact Sheet:

Underpayment by Medicare and Medicaid (January

2021), https://www.aha.org/system/files/media/file/20

20/01/2020-Medicare-Medicaid-Underpayment-FactSheet.pdf. With slim or negative margins, everincreasing operating costs, and less money coming in

from the government than hospitals need, the threat

posed by the costs of defending against meritless FCA

and FCA-retaliation lawsuits should be self-evident.

* * *

The Sixth Circuit’s efforts to widen the reach of 31

U.S.C. 3730(h) were incorrect as a matter of law,

created an acknowledged circuit split, and will generate costly and distracting consequences for employers,

especially amici’s member-hospitals and memberhealth systems. This Court should grant certiorari to

rectify these serious problems.

CONCLUSION

For the reasons stated above and in the Petition for

Writ of Certiorari, the Petition should be granted.

Respectfully submitted,

CHAD GOLDER

Counsel of Record

LAW OFFICE OF CHAD GOLDER

514 6th Street, NE

Washington, DC 20002

(203) 506-0670

golderlawoffice@gmail.com

Counsel for Amicus Curiae

October 14, 2021

This is a copy of a public record, reproduced as it was published. It is not legal advice, and it may not be the version a court would rely on. Check the official source before you cite it.