T hi s di s pos i t i on i s notappr opr i a t e f orpubl i c a t i on and i s notpr e c e de nt * e xc e pta s pr ovi de d by 9th C i r . R . 36- 3. NOT F OR P UB L I CAT I ON UN I TE D STATE S C OU RT OF APPE ALS FOR T HE NI NTH CI RC UI T UN I T E D S T AT E S OF AME R I C A, P l ai nt i ff

- A pp el l ee , v. E U G E N E C H E N , M .D ., D e f

e n d a n t - A p p e lla n t. N o. 09- 16477 D . C . N o . 2 : 0 4 - c v - 0 0 8 5 9 - P MP ME MOR AN DU M *

A pp ea l fr om the U ni t ed S t at es D i stri ctC ou rt

f orthe D i s tr i c tof

N e va da P hi l i p M . P r o, D i s tr i c tJ udge , P r e s i di ng A r gue d a nd S ubm i tt e d O c t obe r6, 2010 S a n F r a n c is c o , C a lif

o rn ia B efo re: B E E Z E R , K L E IN F E L D , an d G R A B E R , C i rcu i tJu d g es. D r . E u g e n e C h e n ap p e a ls th e d is tr ic t c o u r t’s f in a l ju d g m e n t a g a in s t h im . J udgm e ntw a s e nt e r e d a f t e raj ury f

ound tha tD r . C he n know i ngl y s ubm i tt e d 3, 544 fa l se cl ai m s t o M edi care . D r. C hen ass ert s thatthe evi dence pres ent ed attri al w as 

# FI LED OC T 28 2010 M OLLY C. DW Y ER, CLERK U . S. C O U R T OF APPE ALS2

i nsuffi ci entt o p rove the go vernm ent ’ s c as e. B ec ause w e c on cl ud e thatsubst ant i al e v id e n c e s u p p o rts th e ju ry ’s v e r d ic t a g a in s t D r . C h e n , w e a f f irm th e ju d g m e n t. A ju ry v e r d ic t m u s t b e u p h e ld if s u p p o r te d b y “s u b s ta n tia l e v id e n c e .” See H arper v . C i t

y of L os A ng eles , 53 3 F . 3d 10 10 , 10 21 (9th C i r. 20 08 ). S ub st ant i al e v id e n c e is e v id e n c e a d e q u a te to s u p p o r t th e ju ry ’s c o n c lu s io n e v e n if it is p o s s ib le to d r a w ac o n tr a ry c o n c lu s io n f r o m th e s a m e e v id e n c e . Se e i d. W he n r e vi e w i ng a j ury ’ s ve r di c t , w e m us t“ vi e w a l l e vi de nc e i n the l i ghtm os tf a vor abl e t o the no nm ov i ng party, draw al l re as on abl e i nfer ence s i n the fa vo r of the no n-m ov er , a nd di s r e ga r d a l l e vi de nc e f a vor abl e t o the m ovi ng pa r ty tha tthe j ury i s not r e q u ir e d to b e lie v e .” I

d. T he c r e di bi l i ty of

the w i tne s s e s a nd the w e i ghtof the e v i d e n c e a r e i s s u e s f

o rth e j u ry a n d a r e g e n e r a l l y n o ts u b j e c tt o ap p e l l a t e r e v i e w. Se e W a te c C o . v . L iu , 40 3 F . 3d 64 5, 65 1 n . 5 (9th C i r. 20 05 ). T h e f a c ts o f th is c a s e a r e k n o w n to th e p a r tie s , s o w e d o n o t r e p e a t th e m . U n d e rth e F a ls e C la im s A c t ( “F C A ” ) , “a n y p e r s o n w h o . . . k n o w in g ly pr e s e nt s , orc aus e s t o be pr e s e nt e d, af a l s e orf r audul e ntc l a i m f

orpa y m e ntor approv al ” i s l i abl e t o the U . S . G ov ernm ent . 31 U . S . C . § 3 72 9(a) (1). T he pl ai nt i ff m u s t p r o v e a ll e le m e n ts o f a n F C A c la im b y ap r e p o n d e r a n c e o f th e e v id e n c e . I

d. § 3 7 3 1 ( d ) .3 I D r . C h e n a s s e rts th a t h e p r o v id e d as e p a r a te lyid e n tif iab le c o n s u lta tio n in e a c h c a s e w h e r e h e b ille d ac o n s u lta tio n c o d e , a n d th e r e f o r e h e w a s e n title d to pa y m e nt . H e s t a t e s tha tthe tr e a t i ng phy s i c i a ns r e que s t e d, a nd he pr ovi de d, c o n s u lta tio n s th a t w e n t ab o v e a n d b e y o n d th e r o u tin e p r o c e d u r e . B u t th e r e q u e s ts o f tre atin g p h ys ician s, D r. C h en ' s n o tes, an d th e tes ti m o n y o f th e g o v er n m en t’ s w i tne s s e s s uppor tthe f

i ndi ng tha ts e pa r a t e c ons ul t a t i ons w e r e ne i the rr e que s t e d nor p e r f o rm e d . E v e n if

d e f e n s e e v id e n c e s u g g e s ts o th e rw is e , th e ju ry w a s e n title d to w e ig h th e e v id e n c e a n d d e te rm in e th e c r e d ib ility o f w itn e s s e s . See W

at ec , 403 F .3 d a t 6 5 1 n .5 . D r . C he n a tt e m pt s t o di s c r e di tthe gove rnm e nt ' s c a s e by a s s e r t i ng tha tthe gove rnm e ntr e l i e d e nt i r e l y on pape rw ork a nd e xpe r tt e s t i m ony a nd pr e s e nt e d no e vi de nc e of

w ha the a c tua l l y di d. B utdoc um e nt s s uc h a s r e f e rr a l r e que s t s a nd co n su l t at i o n rep o rt s a re r e l e va nte vi de nc e of the s e rvi c e s tha tw e r e r e que s t e d a nd perf orm ed. F urther, D r. C hen h i m se l f des cr i bed the se rvi ce s he provi ded. T he j ury c oul d ha ve c onc l ude d tha tD r . C he n s ubm i tt e d f a l s e c l a i m s s i m pl y by c om pa r i ng D r. C hen’ s ow n t es t i m on y w i th M edi care re gu l at i on s, C urre ntP roce du ra l T e rm i nol ogy M a nua l ( “ C P T M a nua l ” ) de f i ni t i ons , a nd de s c r i pt i ons pr ovi de d by g o v e rn m e n t w itn e s s e s .4 II D r . C he n a s s e rt s tha te ve n i f hi s c l a i m s w e r e f

a l s e , he di d notknow thatthey w e r e f a l s e . U nde rthe F C A , ape r s on “ know i ngl y ” s ubm i t s f a l s e i nf orm a t i on i f

he or she “ (i ) has ac tual kn ow l edge of the i nform at i on ; (i i ) a ct s i n d el i bera t e i gn orance of the truth orf

a l s i ty of the i nf orm a t i on; or( i i i ) a c t s i n r e c kl e s s di s r e ga r d of the truth orf a l s i ty of the i nf orm a t i on. ” 31 U . S . C . § 3729( b) ( 1) ( A ) . A l though a d e f e n d a n t c a n n o t b e h e ld liab le f o ra n “[ i]n n o c e n t m is ta k e ” o r“m e r e n e g lig e n c e ,” U . S. exre l . H

ag oo d v. So no m a C nt

y. W at erA gency , 92 9 F . 2d 14 16 , 14 21 (9th C i r. 1 9 9 1 ) , “n o p r o o f

o f s p e c if ic in te n t to d e f

r au d ” is r e q u ir e d , 3 1 U .S .C . § 3 7 2 9 ( b ) ( 1 ) ( B ) . A s th is c o u rt h a s p r e v io u s ly n o te d , “w h a t c o n s titu te s th e o f f e n s e is noti nt e ntt o de c e i ve ” butr a the r“ the know i ng pr e s e nt a t i on of w ha ti s know n t o be fa l se . ” H

agood , 929 F . 2d a t1421. S ubs t a nt i a l e vi de nc e s uppor t s the j ury ' s f i ndi ng tha tD r . C he n kn o w in g ly subm i tt ed fa l se cl ai m s. T he go vernm entprod uced evi dence thatD r. C hen k new M e di c a r e ’ s bi l l i ng l i m i t a t i ons on c ons ul t a t i ons ora c t e d i n r e c kl e s s di s r e ga r d or de l i be r a t e i gnor a nc e of

the M e di c a r e bi l l i ng r e gul a t i ons . M e di c a r e pr ovi de r s ha ve ad u ty to f

a m ilia r iz e th e m s e lv e s w ith b illin g r e q u ir e m e n ts . See H ec klerv. Cm t

y. H ea l th Servs. , 467 U . S . 51, 64 ( 1984) . M e di c a r e a l s o s e nts e ve r a l pa m phl e t s a nd5

ne w s l e tt e r s tha tc ol l e c t i ve l y e xpl a i ne d the r e qui r e m e nt s f ora“ c ons ul t a t i on” a nd th e p r o p e ru s e o f

th e m o d if

ie r s a n d c o d e s u s e d b y D r . C h e n . T he j ury m i gh tal so have i nferre d D r. C hen’ s kno w l edge from ci rc um st ant i al e vi de nc e . F ore xa m pl e , D r . C he n r out i ne l y us e d the hi ghe s t - pa y i ng c ons ul t a t i on c o d e . A f te rh e w a s s u e d , D r . C h e n c h a n g e d h is p ap e rw o rkb u t c o n tin u e d to b ill a c o n s u lta tio n c o d e w ith e a c h p r o c e d u r e . D r . C he n a r gue s tha tde s pi t e thi s e vi de nc e , the j ury w a s pr e c l ude d f r om f i ndi ng know l e dge f

ortw o r e a s ons . F i r s t , he a r gue s tha the ba s e d hi s c l a i m s on a r e a s onabl e i nt e rpr e t a t i on of the C P T M a nua l . S e c ond, he a r gue s tha the r e l i e d on M e di c a r e ’ s a dvi c e i n s ubm i tt i ng hi s c l a i m s . W e be l i e ve the r e w a s s uf f i c i e nt ev i d en ce fo r th e j u ry t o rej ectb o th o f th ese arg u m en t s. W e ha ve r e c ogni z e d tha ta l though ade f e nda nt ’ s r e a s onabl e i nt e rpr e t a t i on of ar e gul a t i on doe s notpr e c l ude af i ndi ng of f a l s i ty unde rthe F C A , ade f e nda ntw ho re l i es on “ a goo d fai th i nt erpret at i on of a r egul at i on i s notsubj ec tt o l i abi l i ty. ” U . S. ex r e l . O l i v e rv . P ars ons C o. , 195 F . 3d 457, 464 ( 9th C i r . 1999) . T hi s i s true

“ notbe c aus e hi s orhe ri nt e rpr e t a t i on w a s c orr e c tor‘ r e a s onabl e ’ butbe c aus e the go od fa i th n ature of hi s or herac t i on fore cl oses the po ss i bi l i ty thatthe sc i ent er re qu i re m enti s m et . ” I

d. B u t th er e is s u ff

icien t ev id en ce th at D r. C h en ’s i nt erpret at i on of the C P T M anual w as nei ther c orre ctno r i n g oo d fai th, so the j ury6

w a s e nt i t l e d t o r e

j e c tD r . C he n’ s a s s e r t i on tha the l a c ke d know l e dge be c aus e he b a s e d h is c la im s o n ar e a s o n ab le in te rp r e ta tio n o f th e C P T M a n u a l. L i kew i se , the j ury r ea sonabl y r ej ec t ed D r. C hen’ s c on t ent i on thathe l ac ked know l e dge be c aus e he r e l i e d on M e di c a r e ’ s a dvi c e . E vi de nc e tha tade f e nda nt r e l i e d on the gove rnm e nt ’ s a dvi c e i n s ubm i tt i ng hi s c l a i m ori nf orm e d the gove rnm e ntof

the unde r l y i ng f

a c t s pr i ort o s ubm i tt i ng the c l a i m m a y s how tha tthe d e f e n d a n tl a c k e d s u f

f i c i e n tk n o wl e d g e f

o rl i ab i l i ty u n d e rth e F C A. See W an g ex r e l . U . S. v . F M CC or p. , 975 F . 2d 1412, 1420- 21 ( 9th C i r . 1992) ( a f f i rm i ng sum m ary j ud gm entfor def endantw here the defendantop enl y di sc l osed d e f ic ie n c ie s in q u a lity in a n e f f o rt to r e s o lv e th o s e d e f

ic ie n c ie s ) ; H

agood , 929 F . 2d a t1421 ( not i ng tha tthe gove rnm e nt ’ s know l e dge a nd e vi de nc e tha tthe d e f e n d a n t “d id m e r e ly w h a t th e [ g o v e rn m e n t] b id it d o ” m a y b e r e le v a n t in de t e rm i ni ng the de f

e nda nt ’ s know l e dge ) . B utw he the rgove rnm e ntknow l e dge or a d v ic e p r o v e s th e d e f

e n d a n t’s la c ko f

k n o w le d g e is h ig h ly f

a c t d e p e n d e n t. See H agood , 92 9 F . 2d at14 21 (def erri ng such an i ss ue t o sum m ary j ud gm entor tri al ). H e r e , th e g o v e rn m e n t d id n o t e x p lic itly in s tru c t D r . C h e n to b ill a s h e d id . D r. C h en st at es th ath e rel i ed o n th ree l ett ers fro m M ed i care ag en t s. E ach o f th ese l e tt e r s c onc e rne d i ndi vi dua l i ns t a nc e s . A l though one of the l e tt e r s e xpl a i ne d the prop eruse of apart i cul arm od i fi er , there i s no evi dence thatD r. C hen ever7

req u est ed o r received g en eral b i l l i n g ad v i ce fro m M ed i care ag en t s. A d d i t i o n al l y, the gove rnm e ntof

f e r e d e vi de nc e tha tD r . C he n e i the rl e f touti m por t a ntf

a c t s or c r e a te d d o c u m e n ta tio n a f te rth e f a c t to s u p p o r t h is ap p e a ls . In short , subst ant i al evi dence s up po rt s the j ury' s f i nd i ng thatD r. C hen act ed e i the rw i th “ a c tua l know l e dge , ” “ i n de l i be r a t e i gnor a nc e ” or“ i n r e c kl e s s di s r e ga r d” o f th e f a ls ity o f h is c la im s . 3 1 U .S .C . § 3 7 2 9 ( b ) ( 1 ) ( A ) . III F i nal l y, D r. C hen argues thatby focusi ng on the 37 cl ai m s r evi ew ed as part of a2003 i nve s t i ga t i on, the gove rnm e ntf a i l e d t o pr oduc e a ny e vi de nc e of 3, 507 of th e 3 , 5 4 4 f

a l s e c l a i m s s u b m i tt e d t o th e j u ry . Gi v e n th e p a r t i c u l a r s o f th i s c a s e , we d o n o t a d d r e s s th e p o te n tia l p r o b le m s w ith u s in g s a m p lin g a n d e x tr ap o la tio n to pr ove F C A vi ol a t i ons . T he gove rnm e nte s t abl i s he d tha tD r . C he n s ubm i tt e d a nd r e c e i ve d pa y m e ntf

ora l l 3, 544 c ons ul t a t i on c l a i m s , a nd D r . C he n c onc e de s tha tthe r e f e rr a l r e q u e s t a n d s e rv ic e s p r o v id e d w e r e th e s a m e f o re a c h o f

th e s e c la im s . T he onl y di s t i nc t i on tha tD r . C he n dr a w s a m ong the 3, 544 c l a i m s i s tha t37 of these cl ai m s w er e c l osel y e xam i ned attri al w hi l e the others w er e not . B uteven D r. C hen con ce des thatthe go vernm entneed no tprod uce e verydo cum entre l at ed t o everycl ai m . R egar dl es s of the nu m ber a nd dat e of the cl ai m s f ocused on at8

tri al , w e m ustconcl ud e thatthe evi dence s up po rt ed the j ury’ s f i nd i ng w i th res pect to a ll 3 ,5 4 4 c la im s . AF F I RME D.