Source: s3://data.kl3m.ai/documents/govinfo/USCOURTS/USCOURTS-caed-2_04-cv-00282/USCOURTS-caed-2_04-cv-00282-19/pdf.json

Nature of Suit Code: 890
Nature of Suit: Other Statutory Actions
Cause of Action: 31:3729 False Claims Act

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UNITED STATES DISTRICT COURT

EASTERN DISTRICT OF CALIFORNIA

UNITED STATES OF AMERICA,

ex rel. BEVERLY ENGLUND,

NO. CIV. S-04-282 LKK/JFM

Plaintiffs,

v. O R D E R

LOS ANGELES COUNTY, et al.,

Defendants.

 /

Pending before the court are four motions. Plaintiff filed

two motions for partial summary judgment and defendant filed a

motion to dismiss and motion for summary judgment.

Plaintiff, Beverly Englund, brings a qui tam suit against

defendant, Los Angeles County, ("County") under the False Claims

Act (“FCA”), 31 U.S.C. §§ 3729, et seq., alleging that the County

made false claims and/or conspired with the State of California in

order to receive unwarranted funds under the Federal Medicaid

Program (“Medicaid”). The United States has elected not to

intervene in this suit. The court resolves the matter based on the

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26 Undisputed unless otherwise noted. 1

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parties’ papers and after oral argument.

I.

FACTS & PROCEDURAL HISTORY 

1

A. Medicaid Overview 

Medicaid is a federal program designed to enable states to

furnish medical assistance to the indigent. See 42 U.S.C. § 1396.

Under the Medicaid statute, the Federal government contributes to

participating states' costs of providing medical assistance to

Medicaid-eligible persons. See id. at § 1396 b(a)(1). The states

administer the program, make payments for medical assistance, and

then seek reimbursement from the Federal government. See 42 C.F.R.

§ 430.30. 

B. Selective Provider Contracting Program (“SPCP” )

Medicaid typically requires eligible health care providers,

including counties, to be paid on a fee-for-service basis. 42

U.S.C. § 1396(a)(30)(A). This requirement may be waived, however,

if a state demonstrates that the waiver would promote costeffectiveness and efficiency. 

California applied for and received such a waiver in 1982.

Pursuant to this waiver, the California Legislature established the

Selective Provider Contracting Program (“SPCP”),see Cal. Welf. &

Inst. Code §§ 14081 & 14087. The SPCP was intended to achieve

savings by replacing the regulatory model with a competitive model.

Under the SPCP, California contracts with hospitals that provide

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 Plaintiff disputes that the savings could be used for non- 2

medical care purposes. However, this dispute is not material. As

discussed at greater length in the analysis section of this order,

there is ample evidence that even if the County and State were

improperly using the SPCP savings, the Federal government knew of

this practice, thereby negating defendant’s intent to defraud or

make false claims. 

3

services to Medicaid beneficiaries at competitively negotiated

rates in lieu of Medicaid's traditional fee-for-service

reimbursement. Id. The California Medical Assistance Commission

(“CMAC”) negotiated the rates with the providers, including the

County. CMAC meets twice a month in open and closed sessions to

consider new contracts and amendments to existing contracts. 

The Federal government, specifically, the Centers for Medicare

& Medicaid Services (“CMS”) renewed the SPCP waiver roughly every

two years between 1982 and 2005. The waiver was granted on the

condition that (1) the overall program be cost-effective and (2)

"[a]ll aggregate payments to hospitals including negotiated per

diem rates and sub-program payments must not exceed each individual

hospital's aggregate Medicaid customary charges."). See Fiore

Letter at 2, Ex. 5 of Christine Yip Decl. (“Yip Decl.”). Through

a somewhat complicated procedure, the details of which are not

relevant to the pending motions, the SPCP saved money. Thomas

Scully Dep. at 42:21-43:14., (“Scully Dep.”) Ex. 16 of Yip Decl.;

Melnick Decl., Ex. 2 at 17. It was understood by local, state and

federal officials that the savings gained through the SPCP waiver

could be used by the State in any way they saw fit. As discussed 2

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more fully in the analysis section of this order, this arrangement

was controversial. That said, the practice of using the savings

in any way the State saw fit was well-known. For example, Thomas

A. Scully, the Administrator for CMS testified that “we let the

State use their savings and the Federal savings for other [nonmedical] purposes.” Scully Dep. at 84:3-86:17, Ex 16. of Yip Decl.

As Scully explained, “under the waiver, we essentially let

California and other states with similar waivers not just get their

savings but the Federal savings as well and redirect it

theoretically to health care programs," but because "money was

fungible in the State's budget" states could spend the savings on

whatever they choose. Id.

C. Intergovernmental Transfers (IGTs) 

IGTs are transfers of funds from one governmental entity to

another, typically between a local government and the State. IGTs

were used as the non-federal share for purposes of accessing

federal Medicaid matching funds. “Such transfers - which typically

require that public entities at the city or county level transfer

funds to the State - are specifically sanctioned by the Medicare

Act, which grants states the flexibility to fund up to 60% of their

share of Medicare expenditures with local dollars.” Alaska Dep’t

of Health and Soc. Services v. Centers for Medicare and Medicaid

Services, 424 F.3d 931, 936 (9th Cir. 2005), citing 66 Fed. Reg.

3148, 3148 (2001).

The use of IGTs to fund the State’s share of Medicaid was

controversial. There was wide recognition that IGTs allowed

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Again, plaintiff disputes the extent to which IGTs could be 3

used to draw federal funds. However, for the reasons set forth in

footnote 2, this dispute is immaterial. 

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states to maximize their ability to “pull down” federal money.3

Scully Dep. at 17:15-18:25, Ex. 16 of Yip Decl. Indeed, in 1993,

Congress enacted various limits on the use of IGTs. See, e.g.,

The Omnibus Budget Reconciliation Act of 1993, Pub. L. 103-66,

§ 13621(b), 107 Stat. 312, 630 (limiting the amounts of certain

disproportionate share hospital payment adjustments to uncovered

costs). The limits placed on the use of IGTs are referred to as

Upper Payment Limits (“UPLs”). UPLs set a maximum amount that

a state may pay to Medicaid providers and still receive federal

matching funds. “In other words, a state could conceivably make

payments to providers in excess of the UPLs but it could not

legitimately receive any federal matching contributions towards

the excess amount.” Ashley County Medical Ctr. v. Thompson, 205

F. Supp. 2d 1026, 1033 (E.D. Ark. 2002). The typical UPL was

100% of a hospital’s uncompensated costs. 

It is important to note, however, that Congress granted an

exception with respect to California. In 1997, Congress granted

California relief from the UPL caps and allowed providers such

as the defendant to use IGTs to receive 175% of their

uncompensated costs. See Balanced Budget Act of 1997, Pub. L.

105-33, Title IV, § 4721(e), 111 Stat. 251, 514. 

D. SB 1255 Program & Disproportionate Share Hospitals (“DSHs”)

Federal Medicaid law directs states to take into account

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 Plaintiff maintains that the County was not eligible for 4

supplemental funding because it could not demonstrate a “purpose”

for the supplemental funding. See Pl.’s Opp’n to Def.’s Mot. for

Summ. J., at 13. However, as previously noted, even if plaintiff’s

contention is taken as true, there is ample evidence that the

Federal government knew of the County’s practices. Therefore, the

fact that the County may have been in violation of the State code

is immaterial. In any event, the Federal government was not

responsible for enforcement of the State statute. 

6

“the situation of hospitals which serve a disproportionate number

of low-income patients with special needs.” 42 U.S.C. §

1396a(a)(13)(A)(iv). 

Under the authority of the SPCP waiver, the California

Legislature enacted Senate Bill 1255 (“SB 1255”)(codified at Cal.

Welf. & Inst. Code § 14085.6). SB 1255 provided supplemental

payments to certain eligible DSH hospitals for uncompensated

costs. Id.

Hospitals that (1) served a disproportionate share of low

income patients, (2) operated an emergency room, and (3) were

"able to demonstrate a purpose for additional funding under the

[SPCP] including proposals relating to emergency services and

other health care services . . . that are made available, or will

be made available, to Medi-Cal beneficiaries," were eligible to

negotiate with CMAC for supplemental payments under SB 1255. See

Cal. Welf. & Inst. Code § 14085.6(g). The defendant was one of

the providers eligible to receive supplemental funds.4

Based on the amount of money in the fund and the amount of

the anticipated federal reimbursement, CMAC negotiated with

eligible public and private providers for the share of the

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Plaintiff disputes this fact. Def.’s RSUF 9. However, none 5

of the cited to excerpts of Chell’s deposition contradict what

defendant has stated, namely, that the County disclosed the above

information to the State. The court therefore finds this fact

undisputed. 

 Plaintiff also states that this fact is disputed, yet fails 6

to cite to any evidence which supports her position. 

7

supplemental funds each would receive. Bryon Chell Dep. Vol. 1

at 25:24-27:21, (“Chell Dep.”), Ex. 6 of Yip Decl. 

It is undisputed the County sought the most money - within

the legally applicable limits - it could get for the County's

Department of Health Services. County negotiators disclosed to

CMAC that (1) the County sought the largest SB 1255 payment

possible without exceeding the cap set by Congress; (2) the

County needed additional revenues to push off forecasted

department-wide budget deficits in later years; and (3) the

County included only the "net" amount of the SB 1255 funding

(gross payment minus IGT amount) in calculating the budget of its

Department of Health Services, because it returned an amount

equivalent to the IGT to the County general fund. See generally

Pl.’s SUF 9.5

After receiving SB 1255 distributions as payment for having

provided Medicaid services, the County kept the "net" amount of

the funds (gross payment minus the amount of the IGT) in the

County's Hospital Enterprise Funds. The County returned to its

general fund an amount equal to the IGT sent to the State to

finance the payment. See Gary Wells Dep. at 79:14-80:21 (“Wells

Dep.”), Ex. 13 of Yip Decl.; Naimo Decl. ¶¶ 9, 11. The County 6

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did not track SB 1255 dollars once they were deposited in its

Hospital Enterprise Funds or the County general fund. Wells Dep.

at 80:22-81:19, Ex. 13 of Yip Decl. 

E. Negotiations with CMS 

The State sought reimbursement from the Federal government

for a share of its Medicaid expenditures. Wells Dep. at 223:8-

13, Ex. 13 of Yip Decl. These claims were made quarterly on Form

CMS-64. The State used the CMS-64 form to inform the Federal

government of the total, statewide amount of federal

reimbursement it was claiming for all Medicaid expenditures by

the State, including SB 1255 disbursements the State had made to

providers. Stan Rosenstein Dep. at 59:16-60:22, (“Rosenstein

Dep.”) Yip. Decl. Ex. 4. The forms were prepared by the State

Department of Health Services Accounting Division. Id.

F. Plaintiff’s Second Amended Complaint

The parties have different understandings of what

plaintiff’s complaint actually alleges. The confusion over

plaintiff’s complaint is not new. In the court’s August 30, 2005

Order denying defendant’s motion to dismiss, the court noted that

“because of the complexity of the Medicare system, relator’s

pleadings leave much to be desired in terms of clarity.” August

30, 2005 Order at 15. The court therefore takes this opportunity

to more precisely define plaintiff’s complaint. 

Plaintiff voluntarily dismissed her third, fourth, and

seventh claims for relief. Plaintiff has four remaining claims,

all brought under the False Claims Act: 31 U.S.C. § 3729(a)(1)

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9

(knowingly presenting, or causing to be presented, to the United

States Government a false or fraudulent claim for payment or

approval); § 3729(a)(2) (knowingly making, using, or causing to

be made or used, a false record or statement to get a false or

fraudulent claim paid or approved by the Government); §

3729(a)(7) (knowingly making, using, or causing to be made or

used, a false record or statement to conceal, avoid, or decrease

an obligation to pay or transmit money or property to the

Government); and § 3729(a)(3) (conspiring to defraud the

Government by getting a false or fraudulent claim allowed or

paid). 

A plain reading of the complaint reveals that the thrust of

plaintiff’s allegation is that the County violated the FCA when

it caused and/or conspired with the State to seek federal funds

under Medicaid, funds which the County was not entitled to

receive. According to plaintiff, the County was not entitled to

receive these funds because the County failed to demonstrate a

“purpose” under the SPCP. As the court explained in its last

order: 

From what the court can determine, the false claim that

defendant allegedly made to the State, which was

consequently made to the Federal government, is that the

funds which were disbursed to it by the State under SB 1255

would be used to provide health care and related remedial

or preventative services when, in actuality, the funds

disbursed to it were “expended for non-Medicaid, and even

non-healthcare purposes.” Although not entirely clear from

their complaint, the court clarified with counsel for

relator during oral argument, that relator avers that

defendant misused both the funds transferred to the State

by the County (what defendant refers to as “IGT” funds),

and the federal matching funds.

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10

August 30, 2005 Order at 17. 

G. Prior Motion Practice 

On August 30, 2005, the court denied the County’s motion to

dismiss. The County’s motion was premised on the grounds that

plaintiff’s claims were barred under the FCA public disclosure

requirement. The FCA bars a qui tam action that is based on

allegations or transactions already disclosed in certain public

fora, unless the relator is the original source of the

information underlying the action. See A-1 Ambulance Serv., Inc.

v. California, 202 F.3d 1238, 1243 (9th Cir. 2000). In its

August 2005 Order the court found that there were no public

disclosures which contained references to the “allegations or

transactions” giving rise to plaintiff’s claim. 

III.

STANDARD FOR SUMMARY JUDGMENT 

Summary judgment is appropriate when it is demonstrated that

there exists no genuine issue as to any material fact, and that

the moving party is entitled to judgment as a matter of law.

Fed. R. Civ. P. 56(c); See also Adickes v. S.H. Kress & Co., 398

U.S. 144, 157 (1970); Secor Limited v. Cetus Corp., 51 F.3d 848,

853 (9th Cir. 1995).

Under summary judgment practice, the moving party

[A]lways bears the initial responsibility of

informing the district court of the basis

for its motion, and identifying those

portions of "the pleadings, depositions,

answers to interrogatories, and admissions

on file, together with the affidavits, if

any," which it believes demonstrate the

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absence of a genuine issue of material fact.

Celotex Corp. v. Catrett, 477 U.S. 317, 323 (1986). "[W]here the

nonmoving party will bear the burden of proof at trial on a

dispositive issue, a summary judgment motion may properly be made

in reliance solely on the 'pleadings, depositions, answers to

interrogatories, and admissions on file.'" Id. Indeed, summary

judgment should be entered, after adequate time for discovery and

upon motion, against a party who fails to make a showing

sufficient to establish the existence of an element essential to

that party's case, and on which that party will bear the burden

of proof at trial. See id. at 322. "[A] complete failure of

proof concerning an essential element of the nonmoving party's

case necessarily renders all other facts immaterial." Id. In

such a circumstance, summary judgment should be granted, "so long

as whatever is before the district court demonstrates that the

standard for entry of summary judgment, as set forth in Rule

56(c), is satisfied." Id. at 323.

If the moving party meets its initial responsibility, the

burden then shifts to the opposing party to establish that a

genuine issue as to any material fact actually does exist.

Matsushita Elec. Indus. Co. v. Zenith Radio Corp., 475 U.S. 574,

586 (1986); See also First Nat'l Bank of Ariz. v. Cities Serv.

Co., 391 U.S. 253, 288-89 (1968); Secor Limited, 51 F.3d at 853.

In attempting to establish the existence of this factual

dispute, the opposing party may not rely upon the denials of its

pleadings, but is required to tender evidence of specific facts

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in the form of affidavits, and/or admissible discovery material,

in support of its contention that the dispute exists. Fed. R.

Civ. P. 56(e); Matsushita, 475 U.S. at 586 n.11; See also First

Nat'l Bank, 391 U.S. at 289; Rand v. Rowland, 154 F.3d 952, 954

(9th Cir. 1998). The opposing party must demonstrate that the

fact in contention is material, i.e., a fact that might affect

the outcome of the suit under the governing law, Anderson v.

Liberty Lobby, Inc., 477 U.S. 242, 248 (1986); Owens v. Local No.

169, Assoc. of Western Pulp and Paper Workers, 971 F.2d 347, 355

(9th Cir. 1992) (quoting T.W. Elec. Serv., Inc. v. Pacific Elec.

Contractors Ass'n, 809 F.2d 626, 630 (9th Cir. 1987), and that

the dispute is genuine, i.e., the evidence is such that a

reasonable jury could return a verdict for the nonmoving party,

Anderson, 477 U.S. 248-49; see also Cline v. Industrial

Maintenance Engineering & Contracting Co., 200 F.3d 1223, 1228

(9th Cir. 1999).

In the endeavor to establish the existence of a factual

dispute, the opposing party need not establish a material issue

of fact conclusively in its favor. It is sufficient that "the

claimed factual dispute be shown to require a jury or judge to

resolve the parties' differing versions of the truth at trial."

First Nat'l Bank, 391 U.S. at 290; See also T.W. Elec. Serv., 809

F.2d at 631. Thus, the "purpose of summary judgment is to

'pierce the pleadings and to assess the proof in order to see

whether there is a genuine need for trial.'" Matsushita, 475

U.S. at 587 (quoting Fed. R. Civ. P. 56(e) advisory committee's

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note on 1963 amendments); see also International Union of

Bricklayers & Allied Craftsman Local Union No. 20 v. Martin

Jaska, Inc., 752 F.2d 1401, 1405 (9th Cir. 1985).

In resolving the summary judgment motion, the court examines

the pleadings, depositions, answers to interrogatories, and

admissions on file, together with the affidavits, if any. Rule

56(c); See also In re Citric Acid Litigation, 191 F.3d 1090, 1093

(9th Cir. 1999). The evidence of the opposing party is to be

believed, see Anderson, 477 U.S. at 255, and all reasonable

inferences that may be drawn from the facts placed before the

court must be drawn in favor of the opposing party, see

Matsushita, 475 U.S. at 587 (citing United States v. Diebold,

Inc., 369 U.S. 654, 655 (1962) (per curiam)); See also Headwaters

Forest Defense v. County of Humboldt, 211 F.3d 1121, 1132 (9th

Cir. 2000). Nevertheless, inferences are not drawn out of the

air, and it is the opposing party's obligation to produce a

factual predicate from which the inference may be drawn. See

Richards v. Nielsen Freight Lines, 602 F. Supp. 1224, 1244-45

(E.D. Cal. 1985), aff'd, 810 F.2d 898, 902 (9th Cir. 1987).

Finally, to demonstrate a genuine issue, the opposing party

"must do more than simply show that there is some metaphysical

doubt as to the material facts. . . . Where the record taken as

a whole could not lead a rational trier of fact to find for the

nonmoving party, there is no 'genuine issue for trial.'"

Matsushita, 475 U.S. at 587 (citation omitted).

IV.

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 Defendant also filed a motion to strike certain evidence 7

submitted by plaintiff in support of plaintiff’s motion for partial

summary judgment. 

14

ANALYSIS

Plaintiff brings two motions for partial summary judgment.

The first motion argues that the County could not demonstrate

“purpose” under the SPCP for additional funds. The second motion

seeks adjudication that, as a matter of law, the State of

California discriminated in favor of the County’s hospitals in

connection with the distribution of SB 1255 funds in violation

of 42 C.F.R. Sec. 431.55(f). 

Defendant also brings two motions. Defendant’s motion to 7

dismiss for lack of subject matter jurisdiction is premised on

the jurisdictional bar set forth in the FCA. Defendant’s motion

for summary judgment seeks adjudication of plaintiff’s entire

complaint on the grounds that plaintiff cannot prove the

essential elements of a claim pursuant to the FCA.

For the reasons discussed herein, the court finds that

plaintiff failed to furnish sufficient evidence to establish any

genuine material issue of fact so that a reasonable trier of fact

could find in its favor that defendant knowingly submitted a

false claim. Accordingly, the court grants summary judgment in

defendant’s favor. 

A. The False Claims Act 

The False Claims Act (FCA) imposes liability on those who

defraud the government. 31 U.S.C. § 3729. It encourages the

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uncovering of such fraud by permitting private persons to bring

qui tam actions on behalf of the government. Id. at § 3730(b);

see also United States ex rel. Campbell v. Redding Med. Ctr., 421

F.3d 817, 823 (9th Cir. 2005) (“‘[T]he Committee's overall intent

in amending the qui tam section of the False Claims Act is to

encourage more private enforcement suits.’” (quoting Sen. Rep.

No. 99-345, at 23-24 (1986))). Such qui tam relators then share

in any recovery obtained on the government's behalf. 31 U.S.C.

§ 3730(d). 

Liability under the False Claims Act occurs when a person,

(1) knowingly presents, or causes to be presented, to

an officer or employee of the United States Government

...a false or fraudulent claim for payment or

approval;

(2) knowingly makes, uses, or causes to be made or

used, a false record or statement to get a false or

fraudulent claim paid or approved by the Government;

(3) conspires to defraud the Government by getting a

false or fraudulent claim allowed or paid; [or]

...

(7)knowingly makes, uses, or causes to be made or

used, a false record or statement to conceal, avoid,

or decrease an obligation to pay or transmit money or

property to the Government.

31 U.S.C. § 3729(a). 

Although plaintiff brought suit under each of these

subdivisions, the analysis as to what constitutes “knowingly” and

intent is essentially the same for all four. 

In order to establish liability under the FCA, plaintiff

must prove three elements: (1) a “false or fraudulent” claim; (2)

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which was presented, or caused to be presented, by the Defendant

to the United States for payment or approval; (3) with knowledge

that the claim was false. See United States v. Mackby, 261 F.3d

821, 826 (9th Cir. 2001); 31 U.S.C. § 3729(a). 

The Act expansively defines the term “claim” to cover “any

request or demand, whether under a contract or otherwise, for

money or property ... if the United States Government provides

any portion of the money or property which is requested or

demanded.” 31 U.S.C. § 3729(c). See also Costner v. URS

Consultants, Inc., 153 F.3d 667, 677 (8th Cir. 1998) (“[O]nly

those actions by the claimant...[calculated to] caus[e] the

United States to pay out money it is not obligated to pay ... are

properly considered ‘claims' within the meaning of the FCA.”);

As explained by the Second Circuit, the term “false or

fraudulent” is not defined in the FCA. See Mikes v. Straus, 274

F.3d 687, 696 (2d Cir. 2001). A common definition of “fraud” is

“an intentional misrepresentation, concealment, or nondisclosure

for the purpose of inducing another in reliance upon it to part

with some valuable thing belonging to him or to surrender a legal

right.” Webster's Third New International Dictionary 904 (1981).

“False” can mean “not true,” “deceitful,” or “tending to

mislead.” Id. The juxtaposition of the word “false” with the

word “fraudulent,” plus the meanings of the words comprising the

phrase “false claim,” suggest an improper claim is aimed at

extracting money the government otherwise would not have paid.

Id. Mikes 274 F.3d at 696.

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Claims are not "false" under the FCA when reasonable persons

can disagree regarding whether the service was properly billed

to the Government. See United States ex rel. Lamers v. City of

Green Bay, 168 F.3d 1013, 1018 (7th Cir. 1999) (holding that

"errors based simply on faulty calculations or flawed reasoning

are not false under the FCA ... [a]nd imprecise statements or

differences in interpretation growing out of a disputed legal

question are similarly not false under the FCA") (citations

omitted); Hagood v. Sonoma County Water Agency, 81 F.3d 1465,

1477 (9th Cir. 1996) ("How precise and how current the cost

allocation needed to be in light of the [Water Supply Act's]

imprecise and discretionary language was a disputed question

within the [Government]. Even viewing [plaintiff's] evidence in

the most favorable light, that evidence shows only a disputed

legal issue; that is not enough to support a reasonable inference

that the allocation was false within the meaning of the False

Claims Act"). 

The requisite intent is the knowing presentation of what is

known to be false. “In short, the claim must be a lie.” Hindo

v. Univ. of Health Sciences/The Chicago Med. Sch., 65 F.3d 608,

613 (7th Cir. 1995). The Act defines “knowingly” as: (1)

possessing actual knowledge; (2) acting in deliberate ignorance

of falsity; or (3) acting in reckless disregard of falsity. See

§ 3729(b).

For the purposes of the case at bar, it is important to note

that the Federal government’s knowledge of the alleged false

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claim is relevant to whether the defendant “knowingly” submitted

a false claim. This is known as the “government knowledge

defense” to FCA liability. As explained more fully below, this

defense suggests that the “knowing” submission of fraudulent

claims is logically impossible when responsible government

officials have been fully apprised of all relevant information.

See United States ex rel. Lamers v. City of Green Bay, 998 F.

Supp. 971, 988 (E.D. Wis. 1998). Since the crux of an FCA

violation is intentionally deceiving the government, no violation

exists where relevant government officials are informed of the

alleged falsity, thus precluding a determination that the

government has been deceived. Id., see also United States ex rel.

Butler v. Hughes Helicopters, Inc., 71 F.3d 321, 327 (9th Cir.

1995); Wang ex rel. United States v. FMC Corp., 975 F.2d 1412,

1421 (9th Cir. 1992). 

B. Defendant’s Motion for Summary Judgment 

Defendant moves for summary judgment on the four remaining

claims set forth in plaintiff’s complaint. In this section, the

court reviews the key facts, and then examines the various

elements necessary for establishing liability under the FCA. 

1. Overview of the SB 1255 Funding Scheme

Given the complicated nature of this case, the court

revisits the facts at issue in the pending motions. Rather than

get bogged down in detail, the court attempts to set forth an

overall understanding of the undisputed facts. 

Under SB 1255, (a state statute) certain providers of

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“Health Care Financing Administration” was the former name 8

of the Center for Medicare & Medicaid Services (“CMS”). 

19

Medicaid services can seek supplemental Medicaid funding. The

County is one such provider. Under SB 1255, IGTs from public

entities (such as the County) are used for the non-federal share

of the supplemental funds. In other words, at the time at issue

in this case, the County would transfer money to the State, which

in turn, would use that money to apply for matching funds from

the Federal government. Providers such as the County could seek

up to 175% of uncompensated costs under SB 1255. The idea was

that the State would “put up” part of the funds and then the

Federal government would “match” the State’s contribution. 

Once the State made the SB 1255 payment to the County (which

consisted of both the State and Federal shares), the “net” amount

would go to the hospitals (the gross payment minus the IGT

amount) and the amount of the initial IGT would go to the

County’s general DHS fund.

It is also clear that once the County received the SB 1255

payment it was not limited to how it used the money. As Bruce

Vladeck, the Administrator of Health Care Financing

Administration from 1993-1997, testified: 8

Q: What did you mean earlier when you said that from the

Federal government's point of view, money is fungible and

all you are really looking at is whether the State's

payments are for services actually provided?

A: Well, again, in this context, in the case of Los

Angeles County Department of Health Services, they receive

a check from the State of California for an SB 1255

payment. The sources of those dollars are an

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intergovernmental transfer and a federal match. Is it

relevant from the Federal government's point of view

whether the intergovernmental transfer, whether any part of

those dollars, frankly, are actually spent to pay nurses or

to buy aspirin or to pay for the electricity in the

facility? The answer is because money is fungible, the

answer is no.

****

[T]here is a separate underlying philosophical issue, which

is ever since the 1980s - and, again, 1255 is a very good

reflection of it - it has been the policy of the Federal

government and its health insurance programs to move away

from a philosophy of cost reimbursement to a philosophy of

setting appropriate prices and then letting the provider

use the funds received . . . however they think best,

provided they are providing the services for which they are

billing.

Vladeck Dep. at 52:17-54:19, Ex. 2 of Yip Decl.; see also Vladeck

Dep. at 37:21-38:9 ("[M]oney is fungible. Once it was paid to

the hospitals, if it was paid for services that were actually

being provided, at that point our sort of formal jurisdiction

over it and interest of what became of the funds ended."). 

In order to be eligible to receive SB 1255 funds, providers

had to (1) serve a disproportionate share of low income patients,

(2) operate an emergency room, and (3) "demonstrate a purpose

for additional funding under the [SPCP] including proposals

relating to emergency services and other health care services ...

that are made available, or will be made available, to Medi-Cal

beneficiaries," Cal. Welf. & Inst. Code § 14085.6(g). 

The parties greatly dispute the meaning of the word

“purpose” in Cal. Welf. & Inst. Code § 14085.6(g). Plaintiff

argues in both her opposition and motion for summary judgment

that this provision of the California Code is a requirement to

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receiving funding. See Pl.’s Opp’n to Def.’s Mot. for Summ. J.

at 14; see generally Pl.’s Mot. for Summ. Adjudication. The

County, however, maintains that showing “purpose” can be met by

seeking funds to preserve the availability of Medicaid services.

As explained below, this dispute is immaterial in resolving the

pending motions. Even if the court accepts plaintiff’s

interpretation of the Code, there is simply no evidence of the

County’s intent to file a false or fraudulent claim. 

With this basic understanding of the facts in mind, the

court turns to the substance of defendant’s motion. 

2. Elements of FCA claim

As noted earlier, the FCA prohibits any person from

knowingly presenting a false or fraudulent claim for payment or

approval by the Federal government. 31 U.S.C. § 3729(a)(1).

Therefore, establishing liability under the FCA requires proof

that: (1) the defendant made a claim against the United States;

(2) the claim was false or fraudulent; and (3) that the defendant

knew the claim was false or fraudulent. See United States ex

rel. Oliver v. Parsons Co., 195 F.3d 457, 461 (9th Cir. 1999).

 The court addresses the key elements. 

i. Falsity of Claim 

The court first addresses the issue of whether defendant

made a “false” claim to the Federal government. In order to

establish “falsity” there must be evidence the claim was aimed

at extracting money the government otherwise would not have paid.

See Mikes v. Straus, 274 F.3d 687, 696 (2nd Cir. 2001). See also

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Clarence T. Kipps, Jr. et al., Materiality as an Element of

Liability Under the False Claims Act, A.B.A. Center for

Continuing Legal Educ. Nat'l Inst. (1998), B-37, B-46 (“[A] claim

cannot be determined to be true or false without consideration

of whether the decisionmaker should pay the claim - that is, a

claim is ‘false’ only if the Government or other customer would

not pay the claim if the facts about the misconduct alleged to

have occurred were known.”).

Plaintiff’s complaint alleges that the County either caused

and/or conspired with the State to falsely claim Medicaid funds

which the County was not entitled to receive. Namely, the County

caused the State to submit a false claim for SB 1255 funding

because the County could not meet the requirement of

demonstrating a “purpose” for additional funding under SP 1255.

See Pl.’s Opp’n to Def.’s Mot. for Summ. J. at 13-20. 

Both parties expend a great deal of time and energy

discussing the meaning of the word “purpose” and whether it is

a requirement or merely an eligibility criteria to receive SB

1255 funds. In brief, defendant argues that plaintiff cannot

establish falsity because SB 1255 payments were not limited to

costs. Rather, both the plain reading of the statute, as well

as the legislative history, suggest that the language referring

////

////

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Pursuant to Federal Rule of Evidence 201, the court takes 9

judicial notice of the documents attached as Exhibits 3 through 5

to the Declaration of Martha Boersch. The documents reflect the

legislative history of SB 1255. 

23

to “purpose” is an eligibility condition. “By the plain 9

language of SB 1255, the payments are to help disproportionate

share hospitals preserve access to Medicaid services, not simply

cover costs.” Def.’s Mot. for Summ. J. at 19. Defendant also

argues that no law restricts how the County spend the SB 1255

funds. 

Plaintiff avers that the “purpose” language should be

construed as a restriction on how the County could use the SB

1255 funds. Because the County did not use all SB 1255 funds for

medical services, plaintiff contends that the County could not

demonstrate a purpose for supplemental funding under SP 1255 and

thus, did not qualify for supplemental funding. See generally,

Pl.’s Opp’n at 19. 

Both parties appear to be asking the court to interpret Cal.

Welf. & Inst. Code § 14085.6(g) and the meaning of “purpose.”

There are several reasons the court need not engage in statutory

interpretation at this point in time. 

First, whether the County caused and/or conspired to submit

a “false” claim turns on how a state code provision, namely Cal.

Welf. & Inst. Code § 14085.6(g), is interpreted. Plaintiff and

defendant have divergent views as to the meaning and significance

of the word “purpose.” This question of interpretation is purely

a legal dispute. 

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It is well established in this Circuit and elsewhere that

imprecise statements or differences in interpretation growing out

of a disputed legal question are not false under the FCA. Hagood,

81 F.3d at 1477-78 (“Even viewing [plaintiff’s] evidence in the

most favorable light, that evidence shows only a disputed legal

issue; that is not enough to support a reasonable inference that

the allocation was false within the meaning of the False Claims

Act.”). 

Indeed, claims are not “false” under the FCA when reasonable

persons can disagree regarding whether the service was properly

billed to the government. See Lamers, 168 F.3d at 1018("errors

based simply on faulty calculations or flawed reasoning are not

false under the FCA, [a]nd imprecise statements or differences

in interpretation growing out of a disputed legal question are

similarly not false under the FCA") (citations omitted). See

also United States v. Prabhu, 442 F. Supp. 2d 1008, 1033 (D. Nev.

2006) (“To establish falsity under the FCA, it is not sufficient

to demonstrate that the person's practices could have or should

have been better. Instead, plaintiff must demonstrate that an

objective gap exists between what the Defendant represented and

what the Defendant would have stated had the Defendant told the

truth.”); United States ex rel. Roby v. Boeing Co., 100 F. Supp.

2d 619, 625 (S.D. Ohio 2000) (“At a minimum, the FCA requires

proof of an objective falsehood .... Expressions of opinion,

scientific judgments, or statements as to conclusions about which

reasonable minds may differ cannot be false”). 

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Whether Cal. Welf. & Inst. Code § 14085.6(g) imposes

criteria or requirements, is a legal question upon which

reasonable minds could differ. As discussed in more depth below,

the County presents evidence which suggests that its

interpretation of § 14085.6(g) and the meaning of “purpose” was

in fact reasonable and widely recognized and understood. 

There is a second reason the court need not interpret the

meaning of “purpose.” It is well established that the FCA is not

a vehicle for ensuring regulatory compliance. See, e.g., United

States ex rel. Hopper v. Anton, 91 F.3d 1261, 1267 (9th Cir.

1996) (“[v]iolations of laws, rules, or regulations alone do not

create a cause of action under the FCA”). Thus, even if the

County did not fully comply with the California code, this

alleged non-compliance does not, without more, establish a

“false” claim. Lamers, 168 F.3d at 1020 (“the FCA is not an

appropriate vehicle for policing technical compliance with

administrative regulations”). As a sister court remarked, the

“False Claims Act only attaches liability to false claims for

payment, not to underlying activity that allegedly violates

federal law.” United States ex rel. Swan v. Covenant Care, Inc.,

279 F. Supp. 2d 1212, 1221 (E.D. Cal. 2002) (J. Levi). Although

the circumstances of the cases are not analogous, the Swan court

offers helpful guidance on the question of statutory compliance:

To allow FCA suits to proceed where government payment

of Medicare claims is not conditioned on perfect

regulatory compliance - and where HHS [Department of

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Health and Human Services] may choose to waive

administrative remedies, or impose a less drastic

sanction than full denial of payment - would

improperly permit qui tam plaintiffs to supplant the

regulatory discretion granted to HHS under the Social

Security Act, essentially turning a discretionary

denial of payment remedy into a mandatory penalty for

failure to meet Medicare requirements. 

Id. at 1222. In the case at bar, even if the County did not

sufficiently comply with Cal. Welf. & Inst. Code § 14085.6(g),

liability under the FCA is not necessarily triggered. Indeed,

the cited cases suggest that the FCA is not the vehicle with

which to police statutory compliance. 

There is a third reason why the court need not engage in

statutory interpretation of § 14085.6(g). Even if the court were

to accept plaintiff’s interpretation of § 14085.6(g), no

reasonable jury could conclude that the County had the requisite

scienter to establish liability. In other words, even if the

County caused the State to make “false” claims, the record lacks

any evidence that the County knowingly made a false claim, one

of the key elements for establishing liability under the FCA. 

ii. Knowing Submission of False Claim 

For the reasons discussed herein, the court concludes that

there is a want of evidence from which a jury could reasonably

infer that the County knowingly asserted a false claim to the

government.

The FCA’s scienter requirement is laid out in section

3729(b) of the FCA. One violates the Act if one has “actual

knowledge” that one is submitting a false or fraudulent claim for

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payment or approval, “acts in deliberate ignorance of the truth

or falsity” of one's false claim, or “acts in reckless disregard

of the truth or falsity” of one's false claim. 31 U.S.C. §

3729(b). As held in Hagood:

Innocent mistake is a defense to the criminal charge or

civil complaint. So is mere negligence. The statutory

definition of ‘knowingly’ requires at least ‘deliberate

ignorance’ or ‘reckless disregard’ ... [W]hat constitutes

the offense is not intent to deceive but knowing

presentation of a claim that is either ‘fraudulent’ or

simply ‘false’. The requisite intent is the knowing

presentation of what is known to be false.

Hagood, 929 F.2d at 1421. The requisite intent is the knowing

presentation of what is known to be false. 

Indeed, “for a qui tam action to survive summary judgment,

the relator must produce sufficient evidence to support an

inference of knowing [falsity].” United States ex rel. Anderson

v. Northern Telecom, Inc., 52 F.3d 810, 815 (9th Cir. 1995),

cert. denied, 516 U.S. 1043(1996). 

In the case at bar, it is undisputed that the Federal

government knew what the County was doing and implicitly approved

of the County’s actions. Given the fact that the County’s

alleged “scheme” was well known and public, it cannot also be

true that the County had the requisite intent to purposefully

defraud the government. 

iii. The Government Knowledge Defense 

It is well settled that the Federal government’s knowledge

of an alleged “false” claim contradicts a defendant’s intent to

knowingly submitted a false claim. See Butler, 71 F.3d at 327;

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Wang, 975 F.2d at 1421. This is known as the “government

knowledge defense.” In essence, this defense holds that the

"knowing" submission of a false claim is logically impossible

when responsible government officials have been fully apprised

of all relevant information. Lamers, 998 F. Supp. at 988. Since

the crux of an FCA violation is intentionally deceiving the

government, no violation exists where the government has not been

deceived. Id. 

Two Ninth Circuit cases illustrate this type of defense.

In United States ex rel. Butler v. Hughes Helicopters, Inc., 71

F.3d 321, 327 (9th Cir. 1995), the United States Army and the

defendant, a manufacturer of military helicopters, maintained a

pattern of close communication over the course of a complicated,

highly technical procurement process. Although the plaintiff

produced evidence that certain testing requirements were not met

despite official statements to the contrary, the court held that

because the Army was fully aware of and acceded to all deviations

from the testing regime, the defendant had not acted with the

requisite intent to deceive. Id. at 326-29. 

Similarly, in Wang v. FMC Corp., 975 F.2d 1412, 1421 (9th

Cir. 1992), another case involving a defense contractor, the

court concluded that “[t]he fact that the government knew of

[defendant's] mistakes and limitations, and that [defendant] was

open with the government about them, suggests that while

[defendant] might have been groping for solutions, it was not

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 Other circuits also recognize the government knowledge 10

defense. See, e.g., United States ex rel. Becker v. Westinghouse

Savannah River Co., 305 F.3d 284, 288 (4th Cir. 2002)(where the

government knows and approves of the particulars of a claim for

payment before that claim is presented, the presenter cannot be

said to have knowingly presented a fraudulent or false claim- the

government's knowledge effectively negates the fraud or falsity

required by the FCA); United States ex rel. Durcholz v. FKW, Inc.,

189 F.3d 542, 545 (7th Cir. 1999) ("If the government knows and

approves of the particulars of a claim for payment before that

claim is presented, the presenter cannot be said to have knowingly

presented a fraudulent or false claim."); United States v.

Southland Mgmt. Corp., 288 F.3d 665, 686 (5th Cir. 2002) (rejecting

government knowledge defense but noting that such a defense would

be viable “where the falsity of the claim is unclear and the

evidence suggests that the defendant actually believed his claim

was not false because the government approved and paid the claim

with full knowledge of the relevant facts.”). 

29

cheating the government in the effort.” Id. at 1421.10

In the case at bar, the County submits extensive evidence

that officials on both the State and Federal levels were well

aware of the County’s actions and understood the alleged “scheme”

to be legal. Thus, even if the County caused the State to

submit a “false” claim, the government’s knowledge negates the

County’s intent. See Butler, 71 F.3d at 327. 

iv. Evidence of Government Knowledge 

The County presents evidence that CMS was fully aware that

the County was using a legal loophole to maximize the amount of

federal funding the State could receive for Medicaid services.

As the County explained in its brief, “CMS did not like the IGT

programs, to be sure, but they were legal, enjoyed statuary

protection, and helps to preserve the viability of public safetynet hospitals in the absence of national health insurance.”

Def.’s Reply at 32. 

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It is important to note that while Congress imposed 11

restrictions on states’ use of IGTs, California was granted relief

from these payment limits – at least for the time periods relevant

to this litigation. See Balanced Budget Act of 1997, Pub. L.

105-33, Title IV, § 4721(e), 111 Stat. 251, 514. 

30

First, using IGTs to maximize federal contributions is a

phenomenon that is not unique to the County, or even to

California. As the County explained in its motion, since the

early 1990's, CMS has tried a number of approaches to prevent

states from using Medicaid maximization "schemes" to increase the

amount of federal reimbursement without a corresponding increase

in Medicaid services. Acknowledging the legality of these

"schemes," CMS has changed upper payment limit regulations and

has negotiated with states to stop using IGTs. See Medicaid

Program, State Share of Financial Participation, 56 Fed. Reg.

56132, 56132 (1991); Statement of Regulatory Priorities, 65 Fed.

Reg. 73354, 73375 (2000); Revision to Medicaid Upper Payment

Limit Requirements for Hospital Services, Nursing Facility

Services, Intermediate Care Facility Services for the Mentally

Retarded, and Clinic Services, 66 Fed. Reg. 3148, 3164-65, 3168

(2001).11

Second, CMS understood and knew of the County and State’s

practice of using IGTs to obtain additional federal funding.

Thomas Scully, the Administrator of CMS, testified that he was

well aware that Los Angeles County was taking back the amount of

the IGTs and transferring it to its general fund. As Scully

testified, “almost every state was doing that to some degree.”

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Scully Dep. at 98:14-20, Ex. 16 of Yip. Decl. Scully goes on to

explain:

The money is fungible. The fundamental problem is there is

no way to track the dollars. So the fundamental problem

is, whether it is ... upper payment limits or

intergovernmental transfers, it is all a way of just

getting air to claim and draw down your federal match ...

I was very aware of what they were doing all along.

Scully Dep. at 99:8-18. Scully went on to confirm that he was

well aware of the fact that some of the SB 1255 money was going

into the general fund. Id. While expressing concern with this

scheme, Scully made it very clear that he knew of the scheme and

believed it was legal. As Scully explained, “everybody in

Congress understood it was a total scam, but it happened to be

a scam Congress authorized.” Scully Dep. at 110:11-13.

State level officials were also aware of how the County was

using IGTs and that the amount of the IGT from the County to the

State was not available to finance the County’s Department of

Health Services. For example, there is ample testimony that

County representatives informed State representatives that only

the net SB 1255 benefit (that is, the gross payment minus the IGT

amount) was available to finance the needs of the providers. See

Freedman Decl, ¶¶ 14-17; Rodriguez Decl. ¶¶ 5-12. There is also

testimony that State officials were well aware of the County’s

use of IGTs. For example, Stan Rosenstein, the statistician for

the California Department of Health Services testified that he

knew that the County took part of the SB 1255 payment to put in

the County’s general fund. Rosenstein testified that he knew

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this from “numerous presentations by the LA County, both to us

[CA DHS], to the commission [CMAC], to the Federal government

over many years of them presenting that false information.”

Rosenstein Dep, at 37:3-6., Ex. 4 of Yip Decl.

The Executive Director of CMAC, Bryon Chell, also testified

that he knew about Los Angeles County’s practice of using IGTs

to help the State pull down federal funds. In fact, Chell was

well aware that the County was trying to get as much money as

they could without going above the 175% limit. “My understanding

was that they were always trying to seek their maximum amount of

money, including federal funds, to save their healthcare system.”

Chell Dep. at 84:24-85:2., Ex. 6 of Yip Decl. 

Congressional hearings also confirmed that the scheme

practiced by the County was not unique. In 2000, CMS Medicaid

Director Tim Westmoreland testified before Congress that even

abusive IGT practices were legal: 

SEN. BREAUX: The disturbing thing that I have here is

that we're emphasizing the States doing these schemes

and legal money laundering and yet we in Washington,

probably with the help of a number of members of

Congress who have written and called and supported

this effort, and now had it sort of made to look like

the states are doing something that was highly

inappropriate and improper, but yet every state that's

doing it has been approved by the Federal government

that runs the program.

MR. WESTMORELAND: Mr. Breaux, I do not mean to

suggest that states are doing anything illegal in any

way. These have been approved and I do recognize

that.

SEN. BREAUX: Well, Ms. Allen and Mr. Mangano talked

in terms of legalized money laundering and financial

schemes. It doesn't sound too complimentary to what

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they're doing. If I was from the State, I'd say look

I've got this piece of paper from Washington that says

I can do exactly what I'm doing and now you're calling

it all kind of dastardly names.

MR. WESTMORELAND: With all difference [sic] I think

the important word in that phrase is legalized money

laundering. I do consider this to be inappropriate,

but it is not illegal.

SEN. BREAUX: Well how can it be inappropriate if your

office has stamped its approval on it?

MR. WESTMORELAND: I'm afraid that in retrospect I

think people would have been better advised to propose

a more limited regulation that did to other publicly

owned facilities what we did in 1987 for state-owned

facilities. I think it would have better advised.

Yip Decl., Ex. 28 at DEF 36497. 

Finally, it was also understood by the Federal government

that the County could spend the SB 1255 payments however it

liked. See Scully Dep. at 85:1-9 (“...we let the State use their

savings and the federal savings for other purposes.”) & 113:9-24.

In sum, the County has met its initial burden of setting

forth facts which demonstrate the absence of a genuine issue of

material fact. The burden shifts to plaintiff to establish that

disputed facts remain. Matsushita, 475 U.S. at 586. 

Plaintiff fails to cite to any evidence which suggests that

the State or Federal government did not know of the County’s

practices. Plaintiff’s strongest argument is that “there is no

evidence that the Government had knowledge of the County's

inability to demonstrate a ‘purpose’ for SB 1255 funding.” Pl.’s

Opp’n to Def.’s Mot. for Summ. J., at 35, citing Haydel Decl.,

Exs. MM, GG at 83:1-22, 83:24-84:15, 140:16-1.). Even if this

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 If additional evidence exists, the court cannot locate it 12

in the massive record which was submitted in this case. All told,

over three hundred pages of briefs were submitted and at a minimum,

over one thousand pages of exhibits. The court reminds both

parties that “‘[j]udges are not like pigs, hunting for truffles

buried in’ the record.” Albrechtsen v. Board of Regents of

University of Wisconsin System, 309 F.3d 433, 436 (7th Cir.

2002)(quoting United States v. Dunkel, 927 F.2d 955, 956 (7th Cir.

1991).

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were true, however, plaintiff cites no evidence which disputes

the pages of deposition testimony in which high level government

officials acknowledge that they knew of the County’s scheme to

get the maximum amount of federal dollars possible. Indeed, 12

the central allegation of plaintiff’s complaint is not that

defendant was violating Cal. Welf. & Inst. Code § 14085.6(g) by

not demonstrating a “purpose”, but that defendant was causing or

conspiring to cause the State to make false claims to the Federal

government. Therefore, whether the County could demonstrate a

“purpose” under the California Code is not dispostive as to

whether the County knowingly submitted a false claim from the

government. 

In short, the County has presented sufficient facts that

officials at all levels of government knew of the County’s

practices, thereby negating intention under the “government

knowledge defense.” Here, as in Butler, the Federal government

was fully aware of the County’s practices and thus the County did

not act with the requisite intent to deceive. Butler, 71 F.3d

at 326-29.

Indeed, while the County’s practices were not necessarily

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Given that the County did not have the requisite scienter 13

to establish liability under FCA, the court need not address the

third element of FCA liability, namely, whether the County’s

actions constituted a “claim” under the FCA. 

To be clear, the partial motions for summary judgment 14

filed by plaintiff were not cross motions to defendant’s motion for

summary judgment. Plaintiff’s first motion is entitled:

“Plaintiff’s Motion for Summary Adjudication Regarding the County’s

Inability to Demonstrate A Purpose under the SPCP for Additional

Funds.” The second motion is entitled, “Plaintiff’s Motion for

Summary Adjudication Regarding the State’s Discrimination in Favor

of Los Angeles County in Distribution of SB 1255 Funds.”

The court cannot help but note that missing from both of

plaintiff’s motions is any discussion of how these allegations

constitute a “false claim” as defined in the FCA and related case

law. There is simply no mention in either motion of what a

plaintiff must prove in order to establish liability under the FCA.

Although plaintiff spends a great deal of time discussing the

scheme by which the County used IGTs to get federal Medicaid funds,

there is no explanation as to how this alleged “scheme” constituted

a “false claim” under the FCA. 

Moreover, even if the Court were to rule in plaintiff’s favor

and determine that the County had submitted a false claim, for the

reasons discussed above, it is clear that the County did not have

the requisite scienter to trigger liability under the FCA.

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popular with Congress and CMS, there was a common understanding

that the practices were legal. For this reason, the court finds

that there is a want of evidence from which a jury could infer

that the County knowingly asserted a false claim to the Federal

government and summary judgment must be entered for the County.13

The court’s ruling on the County’s motion for summary

judgment is dispositive as to the entirety of plaintiff’s

complaint. The remaining motions are therefore moot and the

court need not address them. 

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V.

CONCLUSION

For the reasons explained above, the court orders as

 follows:

1. Defendant’s Motion for Summary Judgment is GRANTED.

2. Plaintiff’s Motions for Partial Summary Judgment are

DENIED.

3. Defendant’s Motion to Dismiss is DENIED.

4. Defendant’s Motion to Strike is DENIED. 

IT IS SO ORDERED. 

DATED: October 31, 2006.

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