false claims act and i hope to reserve five minutes of my time for a bottle of possible as i said you get it began but you get thirty seconds none the less if charging the government more than ten times the amount that is law allowed by law is not a false claim that it is hard to imagine what would be a false claim in this case the district court dismissed at the pleading stage your complaint alleging exactly that kind of a false claim and this court should therefore reverse and reinstate the case my plan is to cover three areas briefly first that the third amended complaint does adequately allege falsity second where the district court one astray and third wife planned parenthood's attempts to confuse the matter by shoehorning this case in the full certification category doesn't work as a defense attorney to the first affirmative aspect of the of the argument complaint here is that planned parenthood gave out drugs and devices to people of low income means and then build the government for those devices and drugs they were allowed only to build the government acquisition cost but in fact they billed at markups of five six seven even more than ten times the amount i wanted i want to stop you right there they were only allowed how do you get they were only allowed that's the third amended complaint i understand but how do you know they were only allowed from the federal regulations from the  from your interpretation of the federal regulations yes yes what if i disagree about that as a court if you disobey federal regulations are what they are right but it seems to me that in this particular case it was a fight between planned air parenthood and your client about what the federal regulations said not only what they said but whether they really were said clearly not only were they said whether they were said clearly but whether they were right and so one said one thing one said another and it seemed interesting to me that the government whose post to be the most anxious to deal with this said why are i realize we wouldn't do it that way but we know they have an argument about that and so therefore we're not going to do anything about it yet your client seems to think that it's false yes the ok i've got several things to respond to in there the policy question of what should be the billing law obviously is not something a planned parenthood can take into its own hands they will you should be letting us charge more than so we're just going to go do it the question of whether they were confused goes to scienter which is separate element from falsity the faulty question is as your honor phrase that the strict legal question of whether or not the building was in compliance with the law as it stood and on that the fight i don't think was so much between my client and planned parenthood as it was between the state of california and planned parenthood because the state of california told them they could not charge dispensing fee and they had to build acquisition costs but that close but the same state of california you're referencing when they they don't even want to come in on your on your allegations they say hey this is a problem this nona this is something we understand they did we understand we didn't want to do it that way but we can't say it's really that kind of conduct that we should take offense to if that's the rosenstiel letter that you're referring to i that it was a decision not to collect the money it's unusual i'll grant you that normally when you have underpaid the government though they may decide not to prosecute you criminally but they'll at least ask for the money back so it's highly unusual that they didn't even ask for the money back but even that letter acknowledged that under the audit as it was conducted the money was overpaid and so it's not like the state the state and we fix it this way at no point anywhere in the record is there any indication that the state ever said to planned parenthood you can do this all right let's go one further than the fact that it is against the regulation does that make it falls in the billing context yes what case says that pin down i think is the best case for that and i would refer the court  to this is for sixty one f there are eleven sixty six where the court is this thing between archetypal false claims and full certification and the court says that when you are overcharging the government under a contract that is an archetypal false claim and the claim itself is what's false in particular on pit page level we've got to go into the issue about fal certification no that's to be distinguished from full certification which is those categories of cases where the contractor or grants he has already provided the proper products at the proper price they're not broken  it's it's they gave him the right number but there's something else wrong like for example you had a program that said we want these products made but they can't be manufactured in north korea but they go ahead and do it or you've got a program to hire people of low income and they hire people for the project regardless of what they're making it doesn't go to the specific thing the government has asked it's a collateral can collateral condition and then the question becomes is it material and was it a prerequisite for payment when you're dealing with overbilling you don't need to go into that collateral issue well my worry is and trying to apply the rules that i have to do for this f c a and i reply the rules as they relate to mine it frankly worries me that when reading the complaint it seems like the best you've ever pled is that they asked person one thing the regulations did not allow them to ask for and i don't do we say that they are asking for more money than they're allowed to get if i say you owe me a hundred bucks and you'll only owe me fifty that's a false claim i understand ok cool if i could if i could please ask you a question on a slightly different subject i don't think it was one of the three things you said you wanted to address and it wasn't the basis for the district court's ruling but that's th knowingly false so mike and the district court didn't rule on c an't or but where in your complaint in the complaint that was dismissed do you make allegations sufficient under federal rule of civil procedure nine be a religion to see enter ok the c enter allegations are at various places in the complaint but i would point the court particular to excerpts of record pages seventy four through seventy six paragraphs thirty nine through forty and also excerpts of record one forty seven and what that basically deals with is the communications from state officials to planned parenthood telling them that they couldn't bill beyond cos the standard under the false claims act for knowing is defined to include recklessness and this court has said in the decision that the recipient of government funds is obligated to be familiar with legal requirements for reimbursement and to follow them so we think we have two stages both of which are sufficient for  alleging sufficient science or one is that the law said you couldn't do this and they were required to know what the law was the second is that in case they didn't know what the state told and they still went ahead and did it so in your complaint you're suggesting there's an allegation that here parenthood knew that it was violating the billing policies yes are you saying that the complaint even because when i read your complaint it seemed to me you were even suggesting quite the opposite in fact you said that when the defendant was having to do with the investigation an r and audit that acted with candor and truthfulness the district court said that they entered acted with candor and truthfulness our position is that at the beginning it's been ported to keep in mind there are three separate stages of this process ninety ninety seven ninety eight there is an exchange of letters between planned parenthood and state officials w state officials say you can't do this and planned parenthood says we think we should be able to but we want to work this out and that communication plant here that continues billing at the marked up rates for the next five six years whatever the period was then the state audits them and at that point planned parenthood again admits that they're doing this and says we think we should be allowed to do this and ultimately go to the state legislature and has a lot changed now  implicit in that you didn't need to change the law unless there was something wrong with it the way you want the way it was before in terms of what you were doing and but in any event as soon as they were candid all along and told us the we're over billing we're proud of it and the state said that's fine you go ahead and do it that still wouldn't be a defense because the state can't buy will that if you don't actually falls i'm sorry if they say if they say we know we're more billing well let me let me ask this a different way  in the part of the complaint that you referred me to in your response to my earlier question is there language in there saying that planned parenthood was knowingly making false claims you know not inference or argument like it's alleged the state told them so they must have known but is there a place where it says they knew this was false when they submitted yes in the in the parts of the complaint that allege the particular sections of the false claims act violations and probably elsewhere but i don't have the whole complete memorized because it's kind of long but in those par alleges specifically that they were knowing violations the particular correspondence that attached to the complaint shows the planned parenthood knew because it was told so we have the allegation and we have the factual predicate for that should be enough especially since scienter is a at best a disputed factual issue from planned parenthood side that's enough to get us past the pleading stage ok thank you ok but if i've got any time left i'd like good morning he may please the court matthew imhoff on behalf of the planned parenthood of police here you know there's several problems with the arguments that we've heard on behalf of opponents this morning the critical problem is that there's a lot there's several arguments that are being made this court that were never made to the district court at all all the arguments about legal falsity which i understood counsel this morning again to push aside as he did before the district court were never made to the district court this court has a policy of not considering arguments made for the first time on appeal all the legal falsity arguments that appellant were making were never made to the district court and more than that they were actually affirmatively shunned we teed up both legal falsity and factual a claim that's false because it's inconsistent with the facts on the ground that's not the allegation here is no allegations mr whoever can do the acknowledge they planned parenthood build for condoms for oral contraceptives but provided condoms or the planned parenthood bill for all contraceptives but never provide them this is not a factually false claim i mean me this young have you seen the case of birth i have you on it seems to me that presenting claims that are contrary to the regulations makes falls so there's a line in burst so that says this your honor courts decide whether claim is false or fraudulent by determining whether a defendant representations are accurate in light of applicable law right now the problematical law is subject to judicial interpretation courts are interpreted the f c a to cover claims for services rendered and medicare costs reports containing non allowed are in play that cause some courts avail we reject that approach claims for medicare reimbursement one claim was for bankruptcy legal fees these are only allowed if incurred in relation to patient care those fees were not reimbursable inclusion and the fees unrelated to patient care rander those fees falls and your are i understand the guy understand the concern there find that in this complaint and as dan your honor now burst so had no discussion of the type of legal for a falsity that it was it is there was no discussion in the argument wasn't made that we're making here before before you this argument was not made in burst so about whether it was factually false or legally false and what category that claim that came under now her so did an overrule hopper it didn't overrule it be it and it didn't overrule endow and hopper says very clearly but bru says no false statement no false certification are needed and that can be there's no way that that can be read consistently with the be had and with copper and with and and so if you look if you trying to harmonize this court's decisions you can ignore hopper which says that a violation of rules or regulations is not alone and enough of the false claims act there has to be a false or vacation and that's and it be it says the same thing and breaks it down very clearly well this case a pretty straight no false certification is needed no false statement is needed all you've got to do is included fees unrelated to the patient care their faults you have to also argue that there was a false statement because all we're trying to do is see whether he's pled enough to get here under the f c a that's right here and i looked at bruce so and that's what worries me but he's playing well your honor so if i were you got say a bribe judge ghoul's argument there are questions about knowing so your honor i think the knowing we were in the knowing argument hand down hands down and the reason why is because the appellants included in their complaint is an attachment to their complaint the rosenstein letter which in which the state of california didn't just say we understand you build wrong we would've done it that way they said we failed to define clearly any rules that required at cost billing and that's why we're not requiring payment it's because we failed to define things and so where the state says specifically that it's their rules and they're looking at their rules and they've got an audit that's already been done and looked very clearly at it and they found that they found that planned parenthood that somebody in planned parenthood's circumstances could not have knowingly violated the rule because they didn't define the rule clearly enough i don't know it so despite allegations the complaint you're not and you're not the court need not give deference to allegations that are undermined by other allegations or attachments to the complaint that's this court's decision in spree well where a complaint was a complaint that allegations but attachments to those complaints under law undermine those allegations and here we have the rosenstein letter saying is clear is day that the state said are bad we failed to define this clearly i can imagine a stronger circumstance to cut a long letter which the district court which judge matsch cited specifically they cut a very long letter back saying we think we're right and here's why and the state never responded to that planned parenthood adding told the state this is  and we think we're right continue to bill after having had this discussion with the state and then at the end of the process in two thousand and four the state not only turn to planned parenthood said we didn't define the rules clearly enough which built into that is the notion that planned parenthood could not have knowingly violated a rule that they didn't define clearly enough but not only that the legislature the state of california passed a law that allowed planned parenthood to bill at the same levels it always had understand want to make sure the court understands the reasons why that's the case planned parenthood was billing it's usually customary costs that is if somebody walked in off the street and wasn't low income and wanted a pack of pills back of oral contraceptives this is what planned parenthood would charge them twelve dollars now that amount if planned parenthood instead written prescriptions for those amounts for those pack of pills and sent people to walgreens and c v s it's in the record here the c would have been three four five times that for the state planned parenthood was saving the state money by billing the way it was it could have scripted this stuff out it did and so if you look at the record as a whole there's not only no falsity because i don't think you can reverse so in isolation you have to can you have to we have to try to harmonize it with to be it and with hopper hopper makes it clear of violation of a rule or regulation is not enough to violate the false claims act it's of regulatory violation that's what it is there has to be a false statement it is after all the false claims act and then you move to handout where the court did find that there was an actual specific false certification in and out the court went through this analysis and ultimately concluded that there was a specific certification a promise to abide by an incentive compensation banned by the university of phoenix and the court held that suspect that's a lie it's a rule violation but it's also a law and that's what we demand and then you get to be where this court said if you're going to get we've got even put a new layer on it and got even more detail than the houses and here's what the course said we have handout that says you have your factually false claims or you have your legally false claims and this is not a factually false case i think that actually ends the inquiry here but even if the court is going to consider legal falsity which even  and if burst so is going to be where the court is hung up they never made that argument to the district court this court need not consider that argument and should not consider an argument based on perso because it's legal falsity and that's not an argument they said is beside the point before the district court but if we get down to a bit what we start to see is that there's two ways you have a question because i'm sorry you go yes yeah i do ok so  knowing violation ok now my my and related question is this does rule nine b protect early requirement have anything to do with that or is it is  and also does that it ball the plausibility requirement under it paul those that come into play here well i think so i want to take your questions to take your questions in reverse the question is is are there allegations plausible under it ball and then we also have the nine b issue so actually start with nine b this court in a being dismissed with prejudice a case where there was where they identified regulatory violations and certifications and said that  still not enough and dismissed and affirmed a dismissal with prejudice under nine b because there weren't sufficient allegations around knowledge and c enter and how the claims were false and that's that the district in this case that clearly to be had and fall the courts lee so i get your honor i think that nine b does come into play here that even if you think they might have gone far enough in general to talk about falsity they still haven't been sufficiently particular about it and that is another basis on which to display on which to affirm the dismissal because there's no specifics particularly when you try to harmonize the rosenstein letter the letter that says where the state says  regulations were unclear with the allegations with the general allegations about knowledge and intent it's really interesting if you look at the emails that are exchanged that are attached to the complaint there are internal planned parenthood emails you see people saying we thought we resolved this issue back in ninety seven ninety eight and now it's come up again these are people who didn't know that they were violating the rules they thought they'd had a conversation with the state back in ninety seven ninety eight and they thought they were billing right and then the state comes in six years later and then ultimately the state confirms that it was it's fault that the billing rules were unclear and so if you look at all that it becomes very hard for  arguments to the district court on legal falsity that could end it even if you consider the arguments on legal falsity the new arguments presented for the first time in this court there's no false statement there's no false certification here anywhere and we end appellant has had many many years this is the third amended complaint there were two earlier corrected ones so this is the sixth attempt to draft a complaint that adequately alleges falsity after planned parenthood brought three motions pointed its that point in its guns at the lack of falsity in the complaint and the district court previously before this instant motion specifically looked at the complaint and looking at nine b judge gould said there's not enough on falsity here i need more on falsity on how these claims were false they then created the third amended complaint which the district court looked at carefully and found no basis for for a finding of falsity and then dismissed within his discretion particularly since there had been so many different attempts to do to put together a complaint that survives scrutiny that he exercised his discretion to dismiss with prejudice and in everything that i've seen your honor in this court's decisions and i commend the court to hopper and out and to be a good and harmonize that with birth so and i think you'll find that there's no way that this court that this complaint can pass muster under any of those decisions because there's no falsity there's no factual falsity there's no legal falsity and there's no legal certification asserted unless anybody has any questions alls i have no questions who thank you thank you for your argument you have the falsity argument that planned parenthood raised with the basis of the district court's decision was added at the last minute to the fourth motion to dismiss it was not raised previously and so that was not put in issue previously regarding rule nine b the district court did not decide the rule nine b question and so that's not before the court it's important to note also that the ninety objection the defendants raised only applied to six or seven of the defendants the reason i say six or seven is because one of them is in bankruptcy from the proceedings so it is not an alternative grounds for firms of dismissal next i want to point out that rule nine b if i remember correctly when i left i read the rule does not apply to cite enter i think it explicitly says that science may be a verdict generally so th particular does not apply next on the regulatory violation sugarless endow says yes we said in hopper there are regulatory violation by itself is not enough but that doesn't mean that regulatory violations can't violate the s c a they can if you have a false claim and in fact handle says regarding the the argument that planned parenthood to agree specifically to obey the laws it says and i quote from him down an explicit statement however is not necessary to make a statutory requirement a condition of payment and we have never held as much i think that's important because certification claims deal with those situations where you're doing something that might otherwise be allowed but isn't allowed because you agreed to something to the contrary if there's a law that says you can't do this you don't need to agree to follow the law it binds you already the policy arguments the council made about why planned parenthood should be allowed to do the billing that wants to those are fine policy arguments and they were persuasive to the legislature but they don't affect whether or not they were allowed to do it at the time regarding so i enter school you would ask about the specific allegations excerpts evidence in there for summary judgment on our side and at the state officials repeatedly told plantar that they could not do this and never told them to the contrary now planned parenthood says well we were told we could that's not in the record you're free to develop that about i think time is finished thank you appreciate your pre shared both arguments thank you very much this case case twelve five six three five two vols first planned parenthood is submitted