Source: s3://data.kl3m.ai/documents/govinfo/USCOURTS/USCOURTS-cand-4_00-cv-01303/USCOURTS-cand-4_00-cv-01303-7/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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[Proposed] Case CV 00-1303 SBA (BZ) 

UNITED STATES DISTRICT COURT 

NORTHERN DISTRICT OF CALIFORNIA 

OAKLAND DIVISION 

UNITED STATES OF AMERICA, ex rel. 

MICHAEL M. MEYER and PATRICIA J. 

SZERLIP, 

Plaintiffs, 

v. 

HORIZON HEALTH CORPORATION, a 

Delaware Corporation, SUMMIT 

MEDICAL CENTER, a California 

Corporation, and SUKHDEEP GREWAL, 

M.D., 

Defendants. 

Case No. CV 00-1303 SBA 

 ORDER GRANTING SUMMIT 

MEDICAL CENTER’S MOTION TO 

DISMISS THIRD AMENDED 

COMPLAINT FOR LACK OF 

JURISDICTION UNDER RULE 12(b)(1)

This matter comes before the Court on Defendant Summit Medical Center’s Motion to 

Dismiss Third Amended Complaint for Lack of Jurisdiction Under Rule 12(b)(1). Defendants 

Sukhdeep Grewal, M.D. and Horizon Health Corporation have joined in the motion. Having read 

and considered the arguments presented by the parties in the papers submitted to the Court, the 

Court finds this matter appropriate for resolution without a hearing. The Court hereby GRANTS 

the motion. 

Case 4:00-cv-01303-SBA Document 204 Filed 10/02/06 Page 1 of 8
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[Proposed] Case CV 00-1303 SBA (BZ) 

The False Claims Act ("FCA") gives incentives to individuals with genuine knowledge of 

fraud against the Government to expose that fraud through a qui tam action. Relators Patricia 

Szerlip and Michael Meyer are not those individuals. Neither Meyer nor Szerlip qualify as 

"original sources" of the allegations, and accordingly, they are barred from bringing this action by 

the FCA's public disclosure bar. See 31 U.S.C. § 3730(e)(4). This action must therefore be 

dismissed for lack of subject matter jurisdiction under 31 U.S.C. § 3730(e)(4). 

Relators Patricia Szerlip and Michael Meyer, and former relator Vicki Weatherford, filed 

this action under seal on April 13, 2000, alleging a scheme of Medicare fraud under the qui tam

provisions of the FCA. See 31 U.S.C. § 3730(b). These provisions permit private parties, known 

as "relators," to file suit under seal on behalf of the United States alleging fraud against the 

federal Government. Id. While the case is under seal, the United States is required to investigate 

the relator's allegations and decide whether to intervene. Id. On May 6, 2004, after investigating, 

the Government decided not to intervene. See Docket Entry Nos. 20, 21. 

Relators elected to continue litigating the action and filed a First Amended Complaint on 

September 20, 2004. This Court subsequently dismissed with leave to amend the First and Second 

Amended Complaints for failing to allege the scheme of Medicare fraud with sufficient 

particularity under Fed. R. Civ. P. 9(b). On October 17, 2005, Relators filed their Third Amended 

Complaint ("TAC"), with allegations specific to one individual patient referred to as "Patient A." 

Summit moved to dismiss that complaint on November 9, 2005. The Court denied the motion to 

dismiss on February 9, 2006 with respect to the allegations concerning Patient A. Summit 

answered the Third Amended Complaint on February 27, 2006. On March 17, 2006, Relators 

filed a "Notice of Withdrawal" stating that relator Vicki Weatherford was withdrawing from the 

action. On May 25, 2006, this Court ordered that plaintiff Vicki Weatherford be deemed 

withdrawn from the action. Szerlip and Meyer are now the sole Relators in this action. 

Prior to filing this qui tam action on April 13, 2000, Vicki Weatherford alone brought 

Weatherford v. Horizon Health Corp., Case No. 817852-1, in the Superior Court of the State of 

California in the County of Alameda on October 5, 1999 ("Weatherford"). In Weatherford, she 

sued for breach of contract, wrongful to iation and defamation after she resigned from her 

Case 4:00-cv-01303-SBA Document 204 Filed 10/02/06 Page 2 of 8
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[Proposed] Case CV 00-1303 SBA (BZ) 

position as Program Director of the Senior Bridges Program. The Senior Bridges Program was a 

geropsychiatric unit managed by Horizon at Summit. Horizon employed Ms. Weatherford and 

was responsible for the management of the Senior Bridges Program on behalf of Summit. The 

Weatherford Complaint, as well as the deposition of Vicki Weatherford taken on March 7 and 13 

of 2000, expressly alleged that Defendants committed Medicare fraud by admitting physically ill 

patients with dementia to the Senior Bridges Program at Summit. The allegations in the TAC 

parrot the allegations made in the 1999 Weatherford Employment Action. 

Under the FCA, this Court lacks jurisdiction where the allegations in a qui tam complaint 

have been publicly disclosed, unless the relator is an "original source." See 31 U.S.C. § 

3730(e)(4); United States ex rel. Lujan v. Hughes Aircraft Co., 243 F.3d 1181 (9th Cir. 2001). 

The public disclosure bar of the FCA provides: 

No court shall have jurisdiction over an action under this section 

based upon the public disclosure of allegations or transactions in a 

criminal, civil, or administrative hearing, in a congressional, 

administrative, or Government Accounting Office report, hearing, 

audit, investigation, or from the news media, unless the action is 

brought by the Attorney General or the person bringing the action is 

an original source of the information. 

31 U.S.C. § 3730(e)(4)(A). Szerlip and Meyer bear the burden of establishing jurisdiction. See

United States ex rel. Harshman v. Alcan Elec. & Eng'g, Inc., 197 F.3d 1014, 1018 (9th Cir. 1999). 

This Court must consider three questions to determine whether it has jurisdiction in light 

of the statutory public disclosure bar: 

(1) Have the allegations in the qui tam Complaint been publicly disclosed? 

(2) If so, is the qui tam suit "based upon" the disclosed information? 

If yes, are either Szerlip or Meyer an "original source" of the information? A-1 Ambulance 

Serv. v. California, 202 F.3d 1238 (9th Cir. 2000); accord United States ex rel. Cooper v. Blue 

Cross & Blue Shield of Fla., Inc., 19 F.3d 562, 565 n.4 (11th Cir. 1994). “‘To qualify as an 

original source, a relator must show that he or she has direct and independent knowledge of the 

information on which the allegations are based, voluntarily provided the information to the 

Government before filing his or her qui tam action, and had a hand in the public disclosure of 

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[Proposed] Case CV 00-1303 SBA (BZ) 

allegations that are a part of . . [the] suit.’” See United States ex rel. Zaretsky v. Johnson 

Controls, Inc., No. 04-55536, 2006 U.S. App. LEXIS 20436, at *9 (9th Cir. Aug. 9, 2006) 

(quoting Lujan, 243 F.3d at 1033). 

As explained below, this Court lacks jurisdiction under the A-1 Ambulance three-part test. 

A. The Weatherford Employment Action is a Prior Public Disclosure. 

It is well settled that allegations in a prior civil litigation action are public disclosures 

under 31 U.S.C. § 3730(e)(4). Allegations in a complaint, as well as deposition testimony, will 

trigger this jurisdictional bar. United States ex rel. McKenzie v. Bellsouth Telcomms., Inc., 123 

F.3d 935, 939 (6th Cir. 1997) (prior employment complaint filed in state court constituted a prior 

public disclosure); United States ex rel. Westerfield v. University of San Francisco, 2006 U.S. 

Dist. LEXIS 15276 (N.D. Cal., Feb. 14, 2006) (prior employment complaint filed in state court 

triggered public disclosure bar); United States ex rel. Swan v. Covenant Care, Inc., 279 F. Supp. 

2d )212 (E.D. Cal. 2002) (prior complaint filed in state court triggered public disclosure bar, as 

did deposition testimony); United States ex rel. King v. Hillcrest Health Ctr., Inc., 264 F.3d 1271 

(10th Cir. 2001) (prior employment complaint triggered public disclosure bar); United States ex 

rel. Gilligan v. Medtronic, Inc., 403 F.3d 386 (6th Cir. 2005) (prior complaint filed in state court 

triggered public disclosure bar); United States ex rel. Pentagen Technologies Int'l. v. CACI Intl., 

Inc., 1995 U.S. Dist. LEXIS 17512 (S.D.N.Y. 1995) (deposition testimony in a prior state court 

action triggered public disclosure bar). The Weatherford employment action and subsequent 

pleadings in Weatherford are thus public disclosures under the FCA. 

B. The Qui Tam Allegations are "Based Upon" the Public Disclosures Because They 

Share a Substantial Identity with the Allegations in Weatherford. 

The Ninth Circuit has held that for a qui tam lawsuit to be "based upon" a prior disclosure, 

the facts in the earlier disclosure need not be identical, but "substantially similar." Lujan, 243 

F.3d at 1189. For an action to be "based upon" a prior public disclosure, the content of that 

disclosure must consist of the “allegations or transactions” giving rise to relators’ claim. Id. "The 

substance of the disclosure need not contain an explicit ‘allegation’ of fraud, so long as the 

material elements of the allegedly fraudulent “transaction” are disclosed in the public domain." 

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[Proposed] Case CV 00-1303 SBA (BZ) 

United States ex rel. Found. Aiding the Elderly v. Horizon West Inc., 2001 U.S. App. LEXIS 

27363, at *4-5 (9th Cir. 2001). In the instant action the allegations in the TAC plainly share a 

substantial identity with the allegations disclosed through the Weatherford complaint filed in state 

court in 1999. 

C. Neither Relator Qualifies as an Original Source. 

Because their qui tam allegations are based upon publicly-disclosed information, Szerlip 

and Meyer must demonstrate that they are an “original source” in order for this Court to have 

subject matter jurisdiction. See 31 U.S.C. § 3730(e)(4)(A). In this Circuit, the definition of 

"original source" has three elements. A relator must satisfy each element to qualify as an original 

source. The relator must (1) have "voluntarily provided the information to the Government" 

before filing the qui tam complaint; (2) have "had a hand in" the prior public disclosure of the 

allegations; and (3) have "direct and independent knowledge of the information on which the 

allegations are based." Johnson Controls, 2006 U.S. App. LEXIS 20436, at *9; Harshman, 197 

F.3d at 1020; United States ex rel. Devlin v. California, 84 F.3d 358, 360 n.3 (9th Cir. 1996); 

Wang v. FMC Corp., 975 F.2d 1412 (9th Cir. 1992); Hillcrest, 264 F.3d at 1280-81. It is not 

enough for Relators to have some vague involvement in the lawsuit constituting the prior 

disclosure. 

Here, Szerlip and Meyer have not alleged facts to demonstrate that they satisfy any of the 

above elements. Szerlip and Meyer failed to establish that they provided their information 

concerning the alleged fraud to the Government before bringing the instant action. United States 

ex rel. Jones v. Horizon Healthcare Corp., 160 F.3d 326, 334-35 (6th Cir. 1998) (failure to 

disclose allegations to government prior to bringing suit resulted in dismissal of case); United 

States ex rel. Settlemire v. District of Columbia, 198 F.3d 913, 920 (D.C. Cir. 1999) (noting that 

relator was not an original source in part because he never alleged that he contacted the 

government prior to bringing suit). 

Even if Relators were able to demonstrate that they made a disclosure to the Government 

prior to filing their action, neither Szerlip nor Meyer can demonstrate that they caused the public 

disclosure in Weatherford because neither Relator was a party to that action. Campbell v. 

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[Proposed] Case CV 00-1303 SBA (BZ) 

Redding Med. Ctr., 421 F.3d 817, 822 (9th Cir. 2005) ("An original source, on the other hand, 

‘must have had a hand in the public disclosure’ which alerted the Government to the essential 

facts of the fraudulent scheme.”); Wang, 975 F.2d at 1418; accord Johnson Controls, 2006 U.S. 

App. LEXIS 20436, at *21. When fraud is publicly disclosed through previous civil litigation, 

the relators must have been involved in bringing the original complaint to qualify as an original 

source. See United States ex rel. Barajas v. Northrop Corp., 5 F.3d 407, 411 (9th Cir. 1993) 

(relator had a hand in the disclosure when he was the relator in the previous qui tam action and 

when he personally approached the Government with information prior to that original suit). 

Finally, Szerlip and Meyer must demonstrate that they possess both direct and 

independent knowledge. To demonstrate “direct” knowledge, "the relator must show that he had 

firsthand knowledge of the alleged fraud, and that he obtained this knowledge through his 'own 

labor unmediated by anything else.’” Harshman, 197 F.3d at 1020 (quoting United States ex rel. 

Aflatooni v. Kitsap Physicians Servs., 163 F.3d 516, 525 (9th Cir. 1998)). Relators have no such 

direct or independent knowledge.

Because the allegations in their Complaint were disclosed in a prior civil litigation filed by 

Weatherford alone, and because neither Szerlip nor Meyer can demonstrate that they are an 

original source, this Court lacks jurisdiction and must dismiss. See, e.g., Harshman, 197 F.3d at 

1018; Gilligan, 403 F.3d 386; United States ex rel. Paranich v. Sorgnard, 396 F.3d 326, 342 (3d 

Cir. 2005); United States ex rel. Grynberg v. Praxair, Inc., 389 F.3d 1038, 1054 (10th Cir. 2004); 

United States ex rel. Dingle v. Bioport Corp., 388 F.3d 209, 214-16 (6th Cir. 2004), cert. denied, 

125 S. Ct. 1708 (2005); United States ex rel. Reagan v. East Tex. Med. Ctr. Reg'l Healthcare Sys., 

384 F.3d 168 (5th Cir. 2004). 

Plaintiffs’ Application For Leave To Submit Additional Evidence

 On September 27, 2006, Plaintiffs filed an application requesting leave of Court to file 

additional evidence in support of their opposition to the Motion to Dismiss. They filed their 

opposition on September 12, 2006 and briefing on the motion closed September 19, 2006. The 

Court denies the application for a few reasons. First, the court file reveals that Plaintiffs are 

represented by two law firms; The Wright Law Firm and McGuinn, Hillsman & Palefsky. 

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[Proposed] Case CV 00-1303 SBA (BZ) 

Plaintiffs have provided no persuasive reason why, with these resources, they were unable to file 

the additional evidence in a timely fashion. Plaintiff’s counsel’s attempt to characterize the delay 

as excusable is unavailing. It is clear from the application that the delay occasioned by this filing 

was the result of a deliberate choice of Plaintiffs not to respond fully to the Motion in order to 

“move this case along”. Second, given that all of the issues which Plaintiffs’ application is 

designed to address were presented clearly in the Motion papers filed by Defendants, it would be 

inequitable at best to allow Plaintiffs to file what, in substance is a surreply. There is simply no 

legitimate basis for waiting over two weeks after filing their opposition and over one week after 

the Defendants’ reply to submit this application. Finally, given the allegations presented in the 

Third Amended Complaint, the additional evidence proffered and the controlling authorities cited 

extensively above, even if the Court were to consider the additional evidence, it does not alter the 

fact that Plaintiffs have failed to demonstrate that this Court enjoys jurisdiction over this matter, 

given their respective involvement, or lack thereof, in the matters leading up to the filing of this 

action. 

Accordingly, 

IT IS HEREBY ORDERED THAT Summit Medical Center's request that the Court take 

judicial notice of the referenced pleadings from the record in the Weatherford case is GRANTED, 

Plaintiffs’ Application for Leave to File Additional Evidence is DENIED and Summit Medical 

Center’s motion to dismiss the Third Amended Complaint is GRANTED with prejudice. 

Dated: 9/29/06 

 _______________________________ 

 SAUNDRA BROWN ARMSTRONG 

 United States District Judge 

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[Proposed] Case CV 00-1303 SBA (BZ) 

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