good morning may it please the court my name is jonathan levine and i represent ronald tortures trustee of the bankruptcy estate a relator paul fabulous and writer paul fabulous individually appellants in this matter the first issue on this appeal presents the following question under the false claims act where a complaint describes in detail a fraudulent scheme that had as it as its object the obtaining improper payments from the federal government does rule nine b require that the is obtaining improper payments from the government in other words where the f c a complaint alleges not a private fraud but rather a specifically government directed fraud properly particularized allegations of the underlying fraudulent s obtain those improper government payments will permit an inference that the false claims were actually submitted and are therefore sufficient to satisfy the pleading standards could you point to parts of the third amendment complaint that best make your case well your honor the there are two aspects with respect to claim the there are the claims of the specific details about the fraud and then there are the claims with respect to the allegations of the charges were required to qualify for medicare reimbursement those allegations are at the joint appendix pages three thirty forty three thirty six three forty and three fifty seven which are paragraphs thirty two thirty three thirty six thirty eight thirty submitted claims for reimbursement that it knew were not reimbursable by medicare that's at paragraph one thousand of the third amended complaint which is at three thirty two of the joint appendix paragraph ninety seven which is pages at page three forty nine of the joint appendix paragraphs one o five n one zero eight which are page three fifty two of the joint appendix and yes with respect to paragraphs one of five and one hundred eight those allegations were played on information in belief and i think that was a function of the quite frankly of trial counsel that was uncomfortable pleading a specific building that that neither trial counsel nor the relator individually had actual knowledge occurred thirty minute complaint doesn't plea institutionalized scheme to change the the representation of ambulance runs so that they were medicare reimbursable and i think would only the requirement of pleadings as to a specific presentment and i think that we are and we've we've described the circuit split but i think that that circuit split is now coalescing around a majority rule that was actually expressed most recently recently interesting me by the sixth circuit which had previously been one of the most strenuous advocates of the heightened pleading rule the sixth circuit in the pray that recess birkdale senior living case that we cited in our world twenty eight j letter indicated at this point that every circuit that is applied to heightened standards save ours has retreated from such a requirement in cases in which other detail factual allegations support a strong inference the claims were submitted i'm puzzled that you feel the need to take that position that is that it really doesn't matter at least in this kind of case whether the claims were submitted as i read paragraph one hundred eight of the third amended comply it alleges that the claim in a particular case specified as to the date specified as to the person and his address who was transported was indeed submitted to medicare now that's on information and belief but i'm not sure we have any requirement under rule of mine be or even  say not just this is the claim that was submitted i hereby own knowledge this specific claim was submitted but i saw it with my own eyeballs where would that requirement come from judgments i think that's i think that's fair i think that what i am and yes i do agree that that one o five n one zero eight do specifically allege it minutely on information belief that particular specified ambulance runs which are identifiable to the defendant worst submitted to medicare i agree that rule nine be a louse a claimant to plead on information in belief particularly where it's clear that the information is an exclusive domain of the defendant that's clearly to do with this false statement down so we can submit it to medicare and he then puts the false statement down on the instruction of the the supervisor i'm just trying to grasp what is what is it that makes this so radical when the when the that person on ledges and i complained that the claim was indeed submitted to medicare well judge i think you're making the argument for me i think that it isn't particularly radical i think that that will nine be lost certainly from this circuit permits a a finding where there's a plausible inference that the bills would have been submitted because of the underlying scheme  relate or to plead the submission of those bills on information and belief specifies that certain things have to be plated in detail but i'm not sure it changes the standard as to what  lawyer or appointed has to have in order to make such an allegation i'm missing something no i don't believe you are judge i agree that that what has happened is that there is there any reason why you didn't make that argument directly did you have some sort of hesitations i thought actually judge that i was heading there and i thought that what what are my argument is is that because we fled the underlying fraudulent scheme because we have pled particular ambulance runs that are identifiable to the defendant and to the court that those pleadings are sufficient to meet the of specific of all the specifics of a claim with that have any effect on our pleading standards with other kinds of for on like securities fraud and i don't think there's any reason why it needs to your honor i think that the the ninety standard with look i think that the jurisprudence with respect to nine b is informed by the notion that there are essentially private frauds or private efforts to shave good medical standards or to obtain billions through kickbacks or through for stark act violations that don't necessarily that aren't necessarily government directed and then there are government directed  frauds this allegation here is a specifically government directed fraud the allegation is that these changes were made to the patient care reports for the specific purpose of obtaining medicare reimbursement i think that in that context hoping that the that ninety does not does not apply to the presentment aspect of a false claims act claim does not require this court to step back in any way shape or form with respect to the applicability of nine b in securities litigation or in any of the other kind of fraud claims that this this court regularly adjudicates but let me ask you if i if i could about you know we traditionally walk with some skepticism about such remarks i think that in this context in this in this particular situation you had an author of the legislation and yes it's clearly not dispositive of the legislative history but bear in mind that the text of the statute is also in vegas with respect to the retaliation claimed what would judge shaik here did was it that he determined that the addition of the language other efforts to stop one of more violations of the subchapter was intended to be modified by the prior language of lawful act in furtherance of that prior language existed in the version of the of the statute so that prior language does not i mean there's not a necessary interpretation of the statute to indicate that there needs to be an act in further some larger effort to stop the violation of the of the f c a is that argument either speech can be an act speech is an act all the time people can be punished for speech if for example it's inciting of a crime that's not an omission that's not a mere negligence what your client is alleging here is not everybody else was corrupt but i wasn't and i didn't do these sort of false statements that other people did he's alleging that he specifically refused to participate in at least one claim where as far as we can tell he not only made an effort to stop from but he did stop it from happening because the allegations of the complaint say only two people could've done the change one had already refused he refused the inference is it couldn't be changed and therefore at least that claim wasn't submitted isn't that what the complaint that's correct judgements and that is in fact our argument with respect to what the retaliation standard should be so why does he have to have his any requirement that he has to have taken an action to somehow blow the whistle on the entirety of the scheme the retaliation section talks about stopping a false claim i agree that that is one or more i agree that that is the correct interpretation of  statutory language that in this case there is there is protection from rather this protection for an employee who suffers adverse employment action because of one or more efforts because of other efforts to stop one or more violations of the subchapter by by refusing that that is a form of trying to stop i believe that is the case yes that is our other issues given the limited time following the text of the false claims act you do need a false claim that everybody would agree on that and when you combine that with nine b you do need that it be pled with  industry i think what we would need to go and figure out and be able to answer and therefore respond is we would you know the patient's name or initials if they were redacted we would know need to know the date of the transport we would need to know the privacy of the patient but i assume yours wasn't there's a patient identified as be his particular address is given there is a description of what was about it and how how hard is it going to be for the company to identify that particular invoice the problem is we don't have a date here your honor and so your records don't and your client's records don't enable you to look up transport billing by patient they do permit us to do that so i'm just having and this is very specific about what it is that was said it's specific  as to i mean there are six dozen of these during two thousand and eleven so i suppose that's a lot of allegations but he's saying they were like this what's what's to prevent your client from identifying whether this is a fabrication or not the problem is we look at a couple of things my recollection is and perhaps in reply appellants counsel can correct me but i think these were initials and we don't have a date so the way the computer system works and we did actually try this is outside the record but we did actually try to figure out what these things are that this isn't just an academic exercise  knew you had missed a fabulous name of course you could have asked i suppose if the if if you were only given initials you could have asked if if they had the names from the patients yes but this was on a motion to dismiss because i mean it doesn't seem like an overwhelming task to have figured out which runs were in question for the interview you were given details it actually was harder than you would think your honor and the reason for that is being told that somebody is overweight and diabetic and gets called out on an ambulance when there's thousands and thousands and thousands of runs and mr fabulous work there for more than a year  does actually make it hard that's not how the data is cross referenced if you have his specific address yes it's true there are a lot of people with initials a b c at the same address who are diabetic and overweight thing i forgot of course is the most important thing which is where the claim submitted to the government or not you have to remember that claims that's alleged i mean so the question is what once it said i took this patient to the hospital years his or her name let's assume that for the moment address and approximate date the medical complaint and here is the falsity that i put in the report and on information and belief the company submitted an invoice attaching that false statement what he has to have you're saying he has to be able to say i saw with my own eyeballs that this invoice was submitted to the government is that what's missing no you first it is the court knows we are arguing for the stricter standard and the court has actually gone in and i applying the looser standard sort of the i'm asking you what justifies a stricter standard here than that what in rule nine b says he has to have seen it he can't allege on information and belief that in this pacific case on are about this date a false invoice was submitted to the government and here is what is false about it that i had to falsely certify that he had difficulty maintaining an upright position and that's in the report so to answer your question specifically on information belief is typically only reserved for those cases where the looser standard is used like the group standard and that's the first thing and then the second thing is it's used only when the information about the claim is particularly in the defendants position point of specifically allege that he was forbidden as part of his job to go into the office where the invoices were made and and he doesn't know how is that not peculiarly in the defendant's possession and it seems to me that what you're saying is all a company has to do to avoid these whistleblowers is make sure that the empty is don't see whether the bills are submitted and that the billing people only see the falsified information and so can in good conscience and without any question or concern submit the bill is not the result of  is standing in the shoes of the government it's an assigned claim as we know from vermont the government has all this data so this does not fall into the rubric of cases and how would he know he can be provided by the government no i mean it's not peculiar to lee within its peculiar within the opposing parties knowledge not his but it's not so there's already now so someone can provide it to him for example he's a really that he can talk to government counsel they can give it to him if they want to there's no prohibition the government the government gets involved in a very small percentage of these cases true but there is still a moment when they can provide information this case was under investigation for more than a year i thought the whole point of these quit him actions is that because the government doesn't have the resources to investigate all these things individuals can bring these claims and bring things to the attention of the courts that the government for whatever reason is not able to or interested in pursuing it is you honor but the policy reasons under the false claims act also have a balance as we know from escape the recent supreme court case if he got the information from the government wouldn't you be here arguing that he's not really a legitimate relator at all because his information and i remember a case we had where nobody got that information from the government under the freedom of information act and he was thrown out because it wasn't his information was the government's information i think he's still an original source we haven't argued that he's no i don't  is meant to be not a general fraud statute but a false claims front statute that's really comes down to in the amicus brief they mention the fact that only six percent of non intervening cases result in settlement or judgment and that tells us that there are many many frivolous and it's really frivolous when you identify these invoices and show that the false statements that he claims are in there aren't there and i see loses i this in this situation it seems that this is somebody who arguably more than arguably try to stop something he refused to do something he try to  this stopped why isn't that enough because there's a lack of knowledge so you have to combine the action you know refusing to fill out the patient care report with telling somebody i'm not feeling it he says he couldn't remember and he wasn't comfortable doing it that's not enough so the defendant has to be on notice that i mean this is very basic in retaliation you have to wonder to in order knowledge under the whistleblower concept that he is doing something that is in furtherance of stopping a violation you're saying this is analogous to the kind of title seven climbs we get all the time where  person says i'm not happy with the fact that they didn't let me going to lunch break and doesn't specifically say it was because of my race or gender or something that they didn't let me go on a lunch break and therefore the complaint isn't sufficiently and doesn't have a sufficient nexus to the kind of discrimination that is the subject of the statute and you're saying here he just said i don't remember this he didn't say i'm not going to do this because the front because it's wrong yeah right and as i've been hit now i understand that argument does that mean you're not making the argument that i took judge shade to be relying on that this was not an act or it was a mere omission the idea that he did not sufficiently identify the basis for his refusal to alter the report as being that at a minimum this would be a false falsifying your records because that will result in a false claim being made to the united states government given that this is the was simpler statute under the false claims that i'm not a general you'd say well i say the latter but if he says if he says i will not participate in falsifying records why does he have to say anything more i mean that don't some words convey what the problem is you're on i what more does he need to say it does have to connected to the government in some regard and the reason for that is unlike some of the cases that i know your honour's have read there are many pay hours in this in this market in other words insurance companies or bill government agencies you build individuals to build and then most importantly because a lot of these were a nine one one or nine eleven runs based on emergency situations there are lots of claims claims that are not belittle build for denial is what it's called in the industry and so that's why in the employment industry particularly when you're talking about and i know in contract which is mostly what he talks about here you cannot make the assumption there's not a strong inference without making assumptions but be to falsify these reports other than to facilitate the submission of a false claim well there's a lot of discussion about the fact that this occurs after the cia the corporate integrity agreement comes into effect for this corporation to thoughts what we disagree and we conclude that indeed you can and further that false claims were submitted your argument is that that's not enough well under have to have an actual claim alleged and voice number have we have two arguments here or the first is if we follow the stricter standard yes you have to have an actual claim that has a real basis where he knows it he could have talked to somebody in billing he could have talked to so many compliance you could have called the hotline are back up argument is if the court decides to follow probes and the other cases which have the looser standard he still wouldn't satisfy that and so this court could actually avoid the issue here if it decided to follow gr find that his complaint still wasn't sufficient and a firm on that basis and would not have to decide the circuit split i believe this court does have to decide the circuit split if the court believes that he's met the group standard then the court has to turn to and decide whether the stricter standard has to apply i hope i've answered the court's questions i know i've gone over by six minutes so i would ask the court yes  alleges that he was directed under threat of being put on unpaid leave to change and falsely certify the electronic entry of the p c ours in order to say that patient he had difficulty remaining in upright position in order to qualify b runs in the ambulance for medicare medicaid reimbursement and he says no i won't do that now you tell me what it is that he needs to have said further in order to specify that he was objecting to falsifying a report that was going to lead to a claim to the government well he doesn't ok i agree with your honor that that specific allegation there does sound like  interestingly and he might be i mean you know this might be false or it might be that he's alleging you did artfully to make it sound like the person said this to him when in fact he's inferring that that's what they meant or something of the sort but that's not how we judge complaints this is what he alleges and might be may be a lie and you will find out in the course of discovery and well i'm hoping there's no discovery because it's obviously very expensive to do discovery in these cases i will point out and i know they are expensive to the taxpayer to be paying for ambulance runs that are not in fact reimbursable that's why there's this balance this escobar balance i think that the supreme court has really taken on this issue to say claims should be broadly construed but we need to be  and so on this record we don't think that that would be true may i make one more point on the retaliation i fail to make one is the real the abandonment of the claim so the same lawyers i know this is an odd thing but it's a procedural point if you like and to make the thirty minute complaint does not have count two or amendment amended complaint is filed by the bankruptcy frust the in this is not a bankruptcy it's not it's not your honor not it's not so when you look at the first page of it and i went back and looked at yes paragraph one this is the key to my action on behalf of united states blah blah blah and also for the benefit of the bankruptcy estate of paul fabulous and paul fabulous individually and as the court knows the lawyers here are representing paul fabulous individually and the bankruptcy of the state so i think we do have a problem here that we haven't actually in a band in claim and so i do raise that we don't know a breach but i did check it last i know i did recognize  the complaints a little ambiguous because at the end when they sign they somehow behalf of just the bankruptcy trustee but the allegations are what control in the complaint now the singing for the lawyer  i suppose he might say fabulous brings this action on behalf of the united states but this isn't the passive voice and like paul fabulous only gets in there as a kind of benefi i'm not sure how that works well well your honor if you remember that the bankruptcy action that's the key date in the bankruptcy action is february of two thousand and eleven if you look at all the allegations that are really at issue here your post february two thousand and eleven to bring the claims and so mr fabulous has brought the claims that post a bankruptcy he has to be a plaintiff the bankruptcy doesn't own those claims they only own anything that predates february two thousand and eleven lost he is also with the third amended complaint right or not that's correct and then the court why can't that this vessel be appealed well because it was him and so on april third two thousand and fifteen side we set the order under supple appendix page ten the court amended its prior order and gave leave to amend and so it turns out we have a twelve ninety one section he did not try to but he was represented by counsel well i mean he didn't mean anything to indicate one way or the other whether he was pursuing the retaliation claim he just did not submit anything to try to cure the defects there's  concern no and i do expect in reply as the court knows there is a set of cases under twelve ninety one that does permit the plaintiffs to stand on the dismissed what would be otherwise an interlock to repeal and i expect they'll stand on the plating as soon as i sit down but that doesn't that doesn't deal with the ban of an issue that only deals with the only fix is the twelve ninety one issue it doesn't if it doesn't fix the abandoned claim in the  originally appear in the third in a complaint and were ordered rejected by the trial court after the determination of the motion to dismiss the thirty minute complained that appears to be at the special appendix pages forty five and forty six the complain that was originally the version of the third amended complaint that was served on the defendant have the names of the names where those reductions currently appear let me just if i may address the the claims of waiver it is indeed the  taken america inc at seven fifty six f thirty two to ninety was given leave to and he was given leave to an end but but as the court and i think again judge lynch pointed out the holding by judge a was specifically asked to was there some some act beyond the refusal to to to to participate in the fraud that formed the basis of the retaliation claim so it was repeated and the third amended complaint even though it had been dismissed i mean that's i think the usual practice and then with a note that you're preserving our patent rights the third amended complaint was filed really on behalf of the bankruptcy  then the bankruptcy trustee comes in represented by you or your firm or somebody out we were actually successor firm we did we were not involved in the truck right level but somebody somebody distinct from the lawyer representing mr fabulous comes in representing the bankruptcy you know your honor i believe it was similar it's on the same oir lawyer representing both the bankruptcy represented by fabulous and the bankruptcy trustee ok and i just with respect to the retaliation claim the the basis for judge chase ruling was that there needed to be some further act beyond what was what what what mr fabulous did in refusing to participate in the fraud so to the extent that the argument now claim on appeal the requisite awareness for of the reason for mr fabulous refusal to alter the the p c r can be reasonably inferred from the context of the other allegations of the complaint which includes allegations that management  allegations that requests for mts to make those changes to their electronic p c ours came with a threat that failure to do so would result in corrective action up to and including termination and that said the joint appendix pages ninety two ninety six allegations of suspensions for failing to fill out the paperwork with management corrections and that's at page one hundred two one hundred one and one thirteen and allegations of numerous e m t use expressing concerns about altering medical reasons for ambulance runs and getting in trouble  judge katz when i neglect the kind of the principal reason for why he determination that night he doesn't have to apply to a present and claim an f c a context doesn't require broader revisiting jurisprudence generally and that's because the f c a doesn't require reliance so that in that respect the f c s is its cause of action distinct from all of the other causes of action where it where this court has had to rule on nine b in the context of a claim of fraud finally with respect to the amica is briefs claim that only six percent of non intervene cases have resulted in some sort of favorable determination actual bills literally that the relator be an account or be in the billing department i suspect that there are any number of babies that have been thrown out that bathwater here your adversary seem to suggest that it's an easy thing for somebody like your client to speak to the government what is your ex experience we've done a number of key term cases in my office and who's never been our experience of the government has willingly given up information to support amended allegations of a key term complaint indeed and i don't remember the specific case there was a case from the southern district where the government initially cooperated with the quite apart from the original source issue which is a very substantial issue but quite apart from that i don't believe the government can be a meaningful source of information for a key terror relator and bear in mind to the extent that nine p has any kind of purpose in cabin in discovery we're here on the question of present moment if that really is an issue on a motion to dismiss discovery can be very limited in tailored  discovery gets broader well i think it could be both as to the specific cases and also there's that there's an allegation that there that where there are two electronic or multiple electronic versions of a p c r i think that and