# Opposition Brief — Sandersonson v. HCA-The The Healthcare Healthcare Co Co (No. 06-220) > Briefs, arguments, decisions, and more. URL: https://www.frixlaw.com/law-library/documents/brief%3Amicro_IA40386016_1318%3A2 ## Record - **Collection:** Supreme Court brief - **Document type:** Opposition Brief - **Published:** January 1, 2006 ## Text Supreme Court, U.S. Q) “FILED - No. 06-220 ‘AUG 25 2006 CLERK IN THE ‘ Supreme Court of the United States PHILIP H. SANDERSON, Petitioner, v. HCA-THE HEALTHCARE COMPANY; COLUMBIA HEALTH CARE CORPORATION; HOSPITAL CORPORATION OF AMERICA; and HEALTHTRUST INC., Respondents. On PETITION FOR A Writ OF CERTIORARI TO THE UNITED STATES COURT OF APPEALS FOR THE SIXTH CIRCUIT anton BRIEF IN OPPOSITION ROBERT J. WALKER WALTER P. LOUGHLIN KATHRYN Hays SASSER Counsel of Record WALKER, Tipps & MALONE KIRKPATRICK & LOCKHART 2300 One Nashville Place §NicHoLSON GRAHAM LLP 150 Fourth Avenue North 599 Lexington Avenue Nashville, TN 37219-2424 New York, NY 10022-6030 (615) 313-6000 (212) 536-3900 Joun R. HELLOwW Hooper, LUNpy & Bookman, INc. Watt Plaza, Suite 1600 1875 Century Park East Los Angeles, CA 90067-2799 (310) 551-8111 Attorneys for Respondents 203104 ce COUNSEL PRESS (800) 274-3321 + (800) 359-6859 QUESTIONS PRESENTED FOR REVIEW 1. Whether the heightened pleadings requirement of Rule 9(b) requires a qui tam plaintiff to specifically describe more than the fraudulent accounting scheme underlying a series of continuous and ongoing false hospital cost reports which inflate the defendants’ opening claims for reimbursement from the government? 2. Whether false claims submitted within the period of limitations, but based upon a fraudulent accounting scheme developed outside the limitations, but still in use, are time barred? il “STATEMENT PURSUANT TO SUPREME COURT RULE 29.6 Respondents HCA — The Healthcare Company, Columbia Health Care Corporation, and Hospital Corporation of America are predecessor companies to the company now known as HCA Inc., which does not have a parent corporation. There is no publicly held corporation that owns 10% or more of the stock of HCA Inc. Respondent Healthtrust, Inc., a Delaware corporation, is a wholly owned subsidiary of HCA Inc. | STATEMENT OF THE CASE Petitioner, a qui tam relator, filed his original complaint on June 28, 2001, on behalf of the United States as the real party in interest, alleging that respondents had submitted false claims to government healthcare programs in violation of the False Claims Act, 31 U.S.C. § 3729, et seq. On July 1, 2003, following the decision of the Department of Justice not to intervene in the action, respondents moved to dismiss the complaint on the following grounds: (i) it was time-barred by the applicable six-year statute of limitations, 31 U.S.C. § 3729(b), (ii) it failed to plead fraud with particularity as required by Fed. Rule Civ. Proc. 9(b), and (iii) it failed to state a claim upon which relief can be granted under Fed. Rule Civ. Proc. 12 (b)(6). On July 27, 2003, the district court - entered an order allowing petitioner to amend the initial complaint. The amended complaint was filed on February 26, 2004. Respondents renewed the motion to dismiss. On September 28, 2004, the district court granted the motion and dismissed the amended complaint with prejudice. Petitioner appealed to the Court of Appeals. On May 12, 2006, the Court of Appeals affirmed the judgment of the district court. (Pet. App. la-21a) REASONS FOR DENYING THE PETITION I. The Petition Fails to Satisfy Any of this Court’s Criteria for a Grant of Certiorari The petition seeks review by this Court of the question whether Rule 9(b)’s requirement that averments of fraud be pleaded with particularity should apply to complaints alleging violations of the False Claims Act but does not contend that the decision of the circuit court on this issue is in conflict with prior decisions of this Court or with any other circuit. In the decision below, the circuit court held that the district court’s dismissal of petitioner’s amended complaint “was 2 fully in conformity with existing Sixth Circuit precedent,” ciling two recent decisions where it had applied Rule 9(b) to complaints alleging violations of the False Claims Act. See, e.g., United States ex rel. Bledsoe v. Cmty. Health Sys., Inc., 342 F.3d 634 (6th Cir. 2003); Yuhasz v. Brush Wellman, Inc., 341 F.3d 559, 563 (6th Cir. 2003). (Pet. App. 10a). The decision below also cites to United States ex rel. Karvelas y. Melrose-Wakefield Hospital, 360 F.3d 220 (1st Cir. 2004), where the First Circuit observed that, “every circuit court that has addressed this issue has concluded that the heightened pleading requirements of Rule 9(b) apply to claims brought under the [False Claims Act].” /d. at 228 (colleeting cases from the Third, Fourth, Fifth, Sixth, Ninth, Eleventh, and District of Columbia circuits). Petitioner also docs not contend that the decision below is inconsistent with this Court’s precedents. Instead, the petition effectively invites this Court to overrule the unbroken line of precedent sct forth above by reference solely to Dura Pharmaceuticals v. Broudo, 544 U.S. 336 (2005). Yet in Dura Pharmaceuticals, this Court reversed as unduly permissive a Ninth Circuit decision on the pleading standard with respect to the clement of loss causation in a securities fraud complaint — an issue irrelevant to the False Claims Act. /d. In sum, the petition presents no “compelling reasons” in support of the grant of certiorari. See S. Ct. R. 10. il. The Petition Mischaracterizes the Decisions Below The petition asserts that the court below affirmed the dismissal of the amended complaint on the sole ground that it failed to comply with the pleading requirement of Rule 9(b), and “indicated in dicta that the trial court was correct in its determination that the claims were time barred and did not state a claim under Rule 12(b)(6).” (Pet. 2). This ts a misleading characterization of the record below. The circuit court had no doubt that the amended complaint was legally insufficient on multiple grounds, stating that: “The district court granted the motion on all three grounds... .” (Pet. App. 4a-5a) (emphasis added). Far from being dicta, the circuit court found that the district court had correctly decided each of these issues on the merits, Stating: om ’ ~ We conclude that the-district court was likewise correct in determining that the complaint was not timeiy filed and did not state a cause of action on which relief could be granted, both grounds for dismissal under Rule 12(b)(6). Because the basis for the Rule 9(b) determination is so clearly indicated, however, we find it unnecessary to discuss the remaining tssucs raised under Rule 12(b)(6). (Pet. App. ila). The petition’s apparent purpose in mischaracterizing the record relates to the second of the questions presented whether the courts below applied the statute of iimitations crroneously. However, the circuit court held that it was the failure of the amended complaint to allege any facts or law or regulation in support of its theory — and not any allegedly erroneous application of the statute of limitations — which required dismissal. (Pet. App. 9a). Petitioner tried below to cure the statute of limitations defect by alleging “on information and belief” that conduct occurring in 1981-86 continued into the limitations period, but this effort failed because, according to the circuit court, petitioner alleged no “factual basis for such belicf.” Jd. Allowing such a pleading to go forward would amount to “a license to base claims of fraud on speculation and conclusory allegations.” /d., citing United States ex rel. Thompson v. Columbia/HCA Healthcare 4 Corp., 125 F.3d 899, 903 (Sth Cir. 1997) (quoting Tuchman v. DSC Commc’n Corp., 14 F.3d 1061, 1068 (Sth Cir. 1994)).' Turning to the merits, the courts below correctly determined that the amended complaint was time barred. The district court held that the amended pleading failed to “set forth specific allegations of fraudulent conduct in violation of the False Claims Act within six years of the filing date of the action.” (Pet. App. 19a). Even though the court had allowed petitioner to amend the initial complaint, and he was therefore “on notice that the statute of limitations was at issue,” petitioner failed to cure that deficiency. /d. Indeed, as the circuit court stated, “the amended complaint was virtually unchanged fromthe original. . . .” (Pet. App. 3a). 1. The petition relies upon United States v. Bornstein, 423 U.S. 303 (1976), in support of the grant of certiorari on this point. Bornstein, however, neither involved the issue of the legal sufficiency of a False Claims Act pleading nor the application of the applicable statute of limitations, but rather how the Act should be interpreted for purposes of determining the proper measure and calculation of damages following its violation. /d. at 306-07. 5 CONCLUSION The petition for a writ of certiorari should be denied. Rosert J. WALKER KATHRYN Hays SASSER WALKER, Tipps & MALONE 2300 One Nashville Place 150 Fourth Avenue Nosth Nashville, TN 37219-2424 (615) 313-6000 Respectfully submitted, WALTER P. LOUGHLIN Counsel of Record KIRKPATRICK & LOCKHART NICHOLSON GRAHAM LLP 599 Lexington Avenue New York, NY 10022-6030 (212) 536-3900 JouHn R. HELLOw Hooper, LUNDY & Bookman, INc. Watt Plaza, Suite 1600 1875 Century Park East Los Angeles, CA 90067-2799 (310) 551-8111 Attorneys for Respondents --- Source: Frix Law Library, https://www.frixlaw.com/law-library/documents/brief%3Amicro_IA40386016_1318%3A2. Public record. Not legal advice.