United States Court of Appeals 

For the First Circuit 

No. 17-1610 

THOMAS GUILFOILE, 

Plaintiff, Appellant, 

v. 

JOHN M. SHIELDS, SR.; SHIELDS PHARMACY, LLC, d/b/a Shields 

Health Solutions; UMASS MEMORIAL SHIELDS PHARMACY, LLC, d/b/a 

Shields Health Solutions; SHIELDS PHARMACY EQUITY, LLC, d/b/a 

Shields Health Solutions; SHIELDS SPECIALTY PHARMACY HOLDINGS, 

LLC, d/b/a Shields Health Solutions, 

Defendants, Appellees. 

APPEAL FROM THE UNITED STATES DISTRICT COURT 

FOR THE DISTRICT OF MASSACHUSETTS 

[Hon. Denise J. Casper, U.S. District Judge] 

Before 

Howard, Chief Judge, 

Lipez and Barron, Circuit Judges. 

Paul W. Mollica, with whom Tammy T. Marzigliano and Outten & 

Golden LLP were on brief, for appellant. 

Brian J. Leske for appellees. 

Michael J. Sullivan and Ashcroft Law Firm, LLC on brief for 

 appellee John M. Shields. 

 Walter B. Prince, William A. Worth, and Prince Lobel Tye LLP 

on brief for appellees Shields Pharmacy, LLC, and Shields Pharmacy 

Equity, LLC. 

 David C. Casey, Stephen T. Melnick, and Littler Mendelson PC 

on brief for appellees UMass Memorial Shields Pharmacy, LLC, and 

Shields Specialty Pharmacy Holdings, LLC. 
January 15, 2019 
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LIPEZ, Circuit Judge. In alleged violation of the False 

Claims Act, appellant Thomas Guilfoile claims he was fired from 

his job in retaliation for accusing his employer of violating the 

Anti-Kickback Statute and making false representations in customer 

contracts. See 31 U.S.C. § 3730(h); 42 U.S.C. § 1320a-7b(b). The 

district court dismissed his complaint on the ground that Guilfoile 

did not allege sufficient facts to show he was engaged in protected 

conduct within the meaning of the retaliation provision of the 

False Claims Act. After careful review of the complaint and the 

law, we affirm as to the contractual language claim but vacate and 

remand as to the claim involving the Anti-Kickback Statute. 

I. 

A. Factual Background 

Because this appeal follows the grant of a motion to 

dismiss pursuant to Federal Rule of Civil Procedure 12(b)(6), we 

recite the facts as alleged in the amended complaint. See 

Davis v. Coakley, 802 F.3d 128, 130 (1st Cir. 2015). We include 

only those facts relevant to the issues on appeal. 

Appellant Guilfoile is a seasoned management 

professional with 30 years of finance and operations experience. 

Appellee John Shields, Guilfoile's employer during the period 

relevant to this case, is the CEO of a collection of health care 

LLCs, joint ventures, and holding companies that operate in concert 

as a single integrated entity (the "Integrated Entity"). The 
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component businesses of the Integrated Entity include appellees 

Shields Pharmacy, LLC; UMass Memorial Shields Pharmacy, LLC; 

Shields Pharmacy Equity, LLC; and Shields Specialty Pharmacy 

Holdings, LLC.1 

The Integrated Entity partners with hospitals to provide 

specialty pharmacy services for chronically ill patients by either 

operating a pharmacy directly in the hospital or by filling 

specialty prescriptions through an off-site location. The 

Integrated Entity processes the prescriptions, bills the patient's 

insurance, provides patients with financial advice, and follows up 

with patients to ensure their adherence to complex medication 

regimens. The Integrated Entity regularly bills federal insurance 

programs, including Medicaid and Medicare, for the services it 

provides to patients covered by those programs. As a secondary 

line of business, the Integrated Entity also runs home infusion 

and high-risk care management programs. 

After years of providing free business advice to his 

long-time friend and neighbor Shields, Guilfoile began to consult 

for the Integrated Entity in April 2013 and officially joined the 

Integrated Entity full-time as president in August of that year. 

 1 All four component corporations are closely-held 

corporations with a shared principal place of business at an office 

in Quincy, Massachusetts. Two of the corporations are incorporated 

in Massachusetts and two are incorporated in Delaware. Shields is 

the sole manager registered with the Secretary of the Commonwealth 

of Massachusetts for all four corporations. 
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Guilfoile's employment contract included terms governing salary, 

bonuses, an equity stake in the Integrated Entity's joint ventures, 

an equity vesting schedule, and protocols in the event of 

termination. Shields was Guilfoile's immediate supervisor. The 

complaint alleges that during Guilfoile's tenure, Shields 

Specialty Pharmacy Holdings and UMass Memorial Shields Pharmacy 

had boards of directors composed of Shields, Guilfoile, and the 

same two other individuals.2 

Under Guilfoile's leadership, the Integrated Entity grew 

from a start-up to a successful operation generating millions of 

dollars in profit. The Integrated Entity enjoyed overwhelmingly 

positive feedback from patients, providers, and employees, and 

Guilfoile's leadership was appreciated by Shields and the 

Integrated Entity. 

However, in the fall of 2015, Guilfoile became concerned 

that the Integrated Entity was violating the law. At that time, 

he learned that Shields had previously entered into a contract on 

behalf of the Integrated Entity with Michael Greene,3 Shields's 

long-time friend and a consultant whom several New Jersey hospitals 

 2 The complaint does not shed much further light on the 

Integrated Entity's management structure. For ease of reference, 

we join the parties and refer to the two boards of directors 

identified in the complaint as "the Board." 

3 The pleadings, briefs, and the district court's order 

sometimes spell the consultant's surname as "Green," but we follow 

the spelling suggested by appellant and supported by the record. 
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paid for financial advice. The contract obligated the Integrated 

Entity to, among other things, pay Greene's consulting firm, the 

Ayrault Group, $35,000 per quarter for each hospital contract that 

Greene successfully referred to the Integrated Entity, 

specifically targeting two hospitals that Greene was working for 

as a paid consultant: Newark Beth Israel Medical Center ("NBIMC") 

and University Hospital ("University"). The Integrated Entity, 

with assistance from Greene, eventually entered into contracts for 

specialty pharmacy services with both NBIMC and University, and 

the Integrated Entity paid Greene "referral fees." Guilfoile 

believed that these payments "had improperly induced [Greene] to 

steer [the] hospital contracts to the Integrated Entity." 

Guilfoile conferred with the Integrated Entity's 

counsel, who agreed that Guilfoile had valid concerns about the 

contract with Greene. Guilfoile notified Shields that he believed 

the contract violated the federal Anti-Kickback Statute because 

the Integrated Entity had paid Greene to secure contracts with 

hospitals that would result in the Integrated Entity making claims 

for payment to federal insurance programs. Such payments are 

prohibited by the statute, as explained in greater detail below. 

Guilfoile was especially concerned about the implications of the 

kickback scheme for the contract with University, which he believed 

was government owned. 
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At Guilfoile's insistence, Shields ultimately approached 

Greene to discuss voiding Greene's contract with the Integrated 

Entity and obtaining refunds of any payments to the Ayrault Group. 

After an apparent negotiation, Shields revealed to Guilfoile that 

Greene agreed to waive payments yet to be made for the University 

referral but refused to return the money that the Integrated Entity 

had already paid for the NBIMC referral. Guilfoile believed that 

by letting the NBIMC payment stand, the Integrated Entity still 

may have violated the Anti-Kickback Statute. He therefore urged 

Shields to reveal the matter to the Board and offered to make the 

disclosure jointly. Shields refused. 

In December 2015, Guilfoile learned that the contracts 

the Integrated Entity had used to form partnerships with hospitals 

contained a false representation that the Integrated Entity 

maintained "a fully staffed 24/7 [c]all [c]enter in Quincy, 

Massachusetts." The Integrated Entity at the time did not have 

such a center.4 Guilfoile believed that making false 

representations to government-owned hospitals, like University, 

about medication management services for chronically ill patients 

with serious medical conditions was contract fraud and posed a 

serious threat to public health and safety.

 4 The complaint is unclear as to whether the Integrated 

Entity operated a call center that did not conform with the 

description in the contracts, or if the Integrated Entity did not 

operate a call center at all. 
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Despite Guilfoile's insistence that the Integrated 

Entity either amend the contracts to remove the representation or 

create a fully-staffed 24/7 call center, Shields refused to take 

action or notify the Board. Instead, Shields suggested that the 

Integrated Entity should address the issue only if a customer 

complained about the breach. In an effort to bring the Integrated 

Entity into compliance with the contractual language, Guilfoile 

alerted the Human Resources department and the Director of 

Operations that they should prepare to hire enough staff to operate 

a 24/7 call center. 

 On December 22, 2015, Shields asked Guilfoile to come 

to his home office, where Shields expressed his concern about 

Guilfoile "going over his head" and "airing his dirty laundry" to 

the Board. Shields told Guilfoile that he viewed the Board as a 

"third rail" -- i.e., an entity that should be approached with 

caution -- to which Guilfoile was getting too close. Shields also 

explained that he felt he "had to protect his interests and his 

family" and that he could not risk a vote by the Board against 

him. After Guilfoile rejected Shields's suggestion that the two 

of them consider "parting ways," the meeting ended without a 

concrete resolution. Shields stated that he would give the matter 

additional thought. 

A week later, on December 28, Shields terminated 

Guilfoile's employment in a phone call without further 
- 9 - 

explanation. The following day, Shields emailed Guilfoile to 

confirm that his employment was terminated. Shields did not 

provide any reason for the termination and did not refer to 

Guilfoile's performance or possible misconduct as a basis for the 

termination. Guilfoile then received a written notice stating 

that his termination was retroactive to December 22. The letter 

did not state that he was being terminated for cause. 

After his termination, Guilfoile notified the Board that 

Shields had terminated him because he feared that Guilfoile would 

report the suspected violations of law to the Board. Guilfoile 

subsequently forwarded a letter to the Board memorializing his 

concerns. Following these disclosures, Shields made repeated 

threats to file suit against Guilfoile for defamation and tortious 

interference, which he in fact subsequently did. On February 26, 

2016, Guilfoile received a letter from the Integrated Entity 

discussing its purported right to repurchase Guilfoile's vested 

equity for a total of $15. The letter stated, for the first time, 

that Guilfoile had been "terminated for cause." 

B. Procedural Background 

On April 1, 2016, Guilfoile filed this action against 

the Integrated Entity and Shields alleging "whistleblower 

retaliation" in violation of the False Claims Act and a variety of 

state law employment, wage, contract, and tort claims. In the 

operative amended complaint ("the complaint"), filed after 
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defendants filed motions to dismiss, Guilfoile alleges that the 

Integrated Entity retaliated against him for his "efforts to stop 

violations of the [False Claims Act]," specifically his 

"disclosures . . . related to the kickbacks [the Integrated Entity] 

paid Mr. Green[e] in exchange for referrals of federally insured 

patients, and disclosures related to contracts the Integrated 

Entity entered into with government-owned hospitals even though 

the Integrated Entity knew the contracts included fraudulent 

terms." 

Regarding the payments to the Ayrault Group, the 

complaint alleges that Guilfoile reasonably believed the payments 

to be "violations of the [Anti-Kickback Statute], a per se

violation of the [False Claims Act], resulting in the submission 

of fraudulent claims to the government," and that "[t]he Integrated 

Entity violated the [Anti-Kickback Statute] and the [False Claims 

Act] by willfully paying remuneration to induce a person [Greene] 

to refer patients for the furnishing of a service for which the 

Integrated Entity knew payment would be made under federal health 

care programs." Finally, the complaint alleges that the Integrated 

Entity retaliated against Guilfoile by terminating his employment, 

"threatening to sue him, fabricating an after-the-fact contention 

as to 'cause,' attempting to repurchase his equity for the amount 
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of $15, and then making good on their threat to sue him after he 

instituted this law suit."5 

Following oral argument on defendants' motions to 

dismiss, Guilfoile requested leave to file a memorandum "in 

response to legal authority and factual allegations that 

[d]efendants raised for the first time during oral argument." The 

last sentence of the brief accompanying the request stated, "If 

this [c]ourt determines . . . that the present [a]mended 

[c]omplaint does not adequately plead a cause of action under the 

anti-retaliation provision of the [False Claims Act], plaintiff 

respectfully requests that the [c]ourt allow him the opportunity 

to file a second amended complaint alleging additional facts, like 

those set forth in this memorandum and supporting affidavit." 

Guilfoile's "supporting affidavit" alleged additional facts 

concerning the Integrated Entity's business, Greene's role in 

recommending the Integrated Entity to the hospitals for the 

provision of pharmacy services, and the nature of the 24/7 call 

center service. 

In granting the motions to dismiss, the district court 

determined that Guilfoile had failed to adequately plead that he 

was engaged in protected conduct, the first element of a False 

 5 The complaint alleges that "four days after Mr. Guilfoile 

initiated this action in federal court . . . Mr. Shields filed 

suit against [him] in state court, bringing claims for defamation 

and tortious interference." 
- 12 - 

Claims Act retaliation claim. The court therefore dismissed the 

retaliation count without analyzing the other elements of the 

claim. The court then declined to exercise supplemental 

jurisdiction over the state law claims and dismissed them without 

prejudice. In a footnote, the court granted in part and denied in 

part Guilfoile's request to provide a response to defendants' 

purportedly new theories and factual allegations presented at oral 

argument. The court stated that it had considered his briefing as 

to the legal authority first raised at oral argument, but had not 

considered factual assertions outside the complaint, presumably 

including the factual assertions in the "supporting affidavit." 

The court did not respond to Guilfoile's suggestion in his motion 

that he be allowed to file a second amended complaint if the court 

found the operative complaint lacking. 

 Guilfoile subsequently filed a "Motion to Vacate 

Judgment and For Leave to Amend the Complaint" pursuant to Federal 

Rules of Civil Procedure 59(e) and 15(a). After the district court 

denied the motion, Guilfoile timely appealed both the dismissal of 

his complaint and the denial of his post-judgment motion. 

II. 

A. Standard of Review 

 We review de novo a district court's grant of a motion 

to dismiss pursuant to Federal Rule of Civil Procedure 12(b)(6). 

Haley v. City of Boston, 657 F.3d 39, 46 (1st Cir. 2011). We must 
- 13 - 

evaluate whether the complaint adequately pleads facts that "state 

a claim to relief that is plausible on its face." Bell Atl. Corp. 

v. Twombly, 550 U.S. 544, 570 (2007). In performing this 

evaluation, we "assume the truth of all well-pleaded facts and 

give the plaintiff the benefit of all reasonable inferences 

therefrom." Thomas v. Rhode Island, 542 F.3d 944, 948 (1st Cir. 

2008). However, we do not "draw unreasonable inferences or credit 

bald assertions [or] empty conclusions." Theriault v. Genesis 

HealthCare LLC, 890 F.3d 342, 348 (1st Cir. 2018) (alteration in 

original) (internal quotation marks omitted). A suit is properly 

dismissed "if the complaint does not set forth factual allegations, 

either direct or inferential, respecting each material element 

necessary to sustain recovery under some actionable legal theory." 

U.S. ex rel. Hutcheson v. Blackstone Med., Inc., 647 F.3d 377, 384 

(1st Cir. 2011) (emphasis added) (internal quotation marks 

omitted). Before reviewing the sufficiency of the complaint under 

this standard, we provide a brief overview of the pertinent 

statutes. 

B. False Claims Act 

The False Claims Act ("FCA"), 31 U.S.C. §§ 3729-3733, 

prohibits, in relevant part, any person from "knowingly 

present[ing], or caus[ing] to be presented, a false or fraudulent 

claim" to the federal government. 31 U.S.C. § 3729(a)(1)(A) 

(emphasis added); see Universal Health Servs., Inc. v. United 
- 14 - 

States ex rel. Escobar, 136 S. Ct. 1989, 1996 (2016) (explaining 

that the FCA is focused "on those who present or directly induce 

the submission of false or fraudulent claims").6 For purposes of 

the statute, "a 'claim' . . . includes direct requests to the 

[g]overnment for payment as well as reimbursement requests made to 

the recipients of federal funds under federal benefit programs." 

Escobar, 136 S. Ct. at 1996 (citing 31 U.S.C. § 3729(b)(2)(A)). 

The FCA includes a scienter requirement that the false claim be 

submitted "knowingly." 31 U.S.C. § 3729(a)(1), (b)(1). A "nonsubmitting" entity that knowingly causes the submission of a false 

claim may be liable under the FCA even if the entity directly 

submitting the claim to the government lacks the requisite mental 

state. See Hutcheson, 647 F.3d at 389-90.

The FCA is also "subject to a judicially-imposed 

requirement that the allegedly false claim . . . be material." 

United States ex rel. Loughren v. Unum Grp., 613 F.3d 300, 307 

(1st Cir. 2010).7 The falsity of a claim is "material" if it has 

 6 The FCA does not define "false or fraudulent." However, 

the Supreme Court has held that the phrase encompasses 

"misrepresentations by omission" in addition to "express 

falsehoods." Escobar, 136 S. Ct. at 1999. 

7 The FCA defines and uses "material." See 31 U.S.C. 

§ 3729(a)(1)(B), (G), (b)(4). However, § 3729(a)(1)(A), which 

prohibits the knowing submission of false claims, does not contain 

the term. We have therefore described the "materiality" 

requirement in regard to § 3729(a)(1)(A) as judicially created 

because it derives from a general reading of materiality into all 

sections of the FCA rather than from the statutory language. See 
- 15 - 

"a natural tendency to influence or was capable of influencing the 

[government]'s decision" whether to pay or reimburse the claim. 

Id. The Supreme Court has emphasized that the FCA's "materiality 

standard is demanding," and a plaintiff directly alleging the 

submission of a false claim8 must plead facts to support 

allegations of materiality with "plausibility and particularity." 

Escobar, 136 S. Ct. at 2003, 2004 n.6. Whether an express or 

implied false representation of compliance with statutes or 

regulations is "material" is ordinarily "a fact-intensive and 

context-specific inquiry." New York v. Amgen Inc., 652 F.3d 103, 

111 (1st Cir. 2011). 

In addition to prohibiting the submission of false 

claims, the FCA bars an employer from retaliating against an 

employee "because of lawful acts done . . . in furtherance of an 

action under this section or other efforts to stop 1 or more 

violations of [the FCA]." 31 U.S.C. § 3730(h)(1). To prevail on 

an FCA retaliation claim, "a plaintiff must show that 1) the 

employee's conduct was protected under the FCA; 2) the employer 

 

Hutcheson, 647 F.3d at 388 n.13. Indeed, the Supreme Court has 

declined to decide "whether § 3729(a)(1)(A)'s materiality 

requirement is governed by § 3729(b)(4) [the statutory definition 

of "materiality"] or derived directly from the common law." 

Escobar, 136 S. Ct. at 2002. 

8 The False Claims Act's "qui tam" provisions authorize 

private individuals, known as "relators," to bring suit on the 

government's behalf based on the submission of false claims to the 

government. See 31 U.S.C. § 3730(b). 
- 16 - 

knew that the employee was engaged in such conduct; and 3) the 

employer discharged or discriminated against the employee because 

of his or her protected conduct." United States ex rel. Karvelas 

v. Melrose-Wakefield Hosp., 360 F.3d 220, 235 (1st Cir. 2004), 

abrogated on other grounds by Allison Engine Co., Inc. v. United 

States ex rel. Sanders, 553 U.S. 662 (2008). In general, "proving 

a violation of § 3729 [the false claims provision] is not an 

element of a § 3730(h) [retaliation] cause of action." Graham 

Cty. Soil & Water Conservation Dist. v. United States ex rel. 

Wilson, 545 U.S. 409, 416 n.1 (2005). 

The pleading standards for actions directly alleging the 

submission of false claims, such as qui tam actions pursuant to 31 

U.S.C. § 3730(b), and the pleading standards for actions alleging 

retaliation, differ in crucial ways. In a suit directly alleging 

the submission of a false claim, a plaintiff must sufficiently 

plead facts supporting the existence of an actual false claim. 

See Karvelas, 360 F.3d at 225 ("Evidence of an actual false claim 

is the sine qua non of a False Claims Act violation." (internal 

quotation marks omitted)). However, in a suit alleging retaliation 

under the FCA, a plaintiff must sufficiently plead that he or she 

was retaliated against based on "conduct that reasonably could 

lead to a viable FCA action." Id. at 236. We have further 

explained that "conduct protected under" the FCA retaliation 

provision encompasses an employee's "investigations, inquiries, 
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testimonies or other activities that concern the employer's 

knowing submission of false or fraudulent claims for payment to 

the government." United States ex rel. Booker v. Pfizer, Inc., 

847 F.3d 52, 59 (1st Cir. 2017) (quoting Karvelas, 360 F.3d at 

237).9 This standard is consistent with the legislative intent 

that "[p]rotected activity [for purposes of an FCA retaliation 

claim] should . . . be interpreted broadly." Karvelas, 360 F.3d 

at 236 (quoting S. Rep. No. 99–345, at 34 (1986), reprinted in 

1986 U.S.C.C.A.N. 5266, 5299). Because an FCA retaliation claim 

"does not require a showing of fraud," a plaintiff alleging 

retaliation "need not meet the heightened pleading requirements of 

[Federal Rule of Civil Procedure] 9(b)." Id. at 238 n.23.10

 9 We derived the "reasonably could lead" standard from the 

statutory language prohibiting retaliation by an employer "because 

of lawful acts done by the employee . . . in furtherance of an 

[FCA] action." See Karvelas, 360 F.3d at 235-36 (quoting 31 U.S.C. 

§ 3730(h)(1)). Therefore, a court must consider whether the 

conduct of the employee who was allegedly retaliated against -- 

that is, the employee's whistleblowing or investigative activities 

-- reasonably could lead to an FCA action. Of course, the question 

of whether the employer engaged in conduct that could run afoul of 

the FCA is a necessary component of this inquiry. After all, the 

employee's conduct must "concern the employer's knowing submission 

of false . . . claims . . . because only such conduct reasonably 

could lead to an FCA action." Booker, 847 F.3d at 59-60 (internal 

quotation marks omitted). 

 

10 Conversely, because a direct FCA claim does require a 

showing of fraud, a qui tam plaintiff must "meet the Rule 9(b) 

pleading standards." Karvelas, 360 F.3d at 238. 
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C. Anti-Kickback Statute 

The Anti-Kickback Statute ("AKS") criminalizes, in 

relevant part, the "knowing[] and willful[]" offer or payment of 

"any remuneration (including any kickback, bribe, or rebate)" to 

induce a person to "recommend . . . ordering any . . . service 

. . . for which payment may be made in whole or in part under a 

[f]ederal health care program." 42 U.S.C. § 1320a-7b(b)(2)(B). 

Relevant considerations for identifying an unlawful kickback 

include: (1) whether the person being paid the alleged kickback is 

"in a position to generate [f]ederal health care program business" 

and (2) whether at least one purpose of the payment could be "to 

induce or reward the referral or recommendation of business payable 

in whole or in part by a [f]ederal health care program." OIG 

Supplemental Compliance Program Guidance for Hospitals, 70 Fed. 

Reg. 4858, 4864 (Jan. 31, 2005). Essentially, the AKS targets any 

remunerative scheme through which a person is "paid 'in return 

for' referrals" to a program under which payments may be made from 

federal funds. United States v. Patel, 778 F.3d 607, 618 (7th 

Cir. 2015) (quoting 42 U.S.C. § 1320a-7b(b)(1)(A)). 

In 2010, the AKS was amended to create an express link to the FCA. 

The AKS now provides that "a claim that includes items or services 

resulting from a violation of this section constitutes a false or 

fraudulent claim for purposes of [the FCA]." 42 U.S.C. 
- 19 - 

§ 1320a-7b(g), as amended by the Patient Protection and Affordable 

Care Act, Pub. L. No. 1110148, 124 Stat. 119 (2010). 

III. 

Appellant contends that he was retaliated against within 

the meaning of the FCA anti-retaliation provision when he was fired 

after raising concerns to Shields and others about (1) the alleged 

kickbacks to Greene and (2) the contractual misrepresentations 

regarding a 24/7 call center. Although appellees attack the 

sufficiency of the complaint on several grounds, the district court 

dismissed the FCA claims on the basis that Guilfoile had not 

plausibly pleaded that he had engaged in protected conduct. Our 

analysis begins with this first element of an FCA retaliation 

claim. 

A. Payments to Greene/Ayrault Group 

The district court concluded that Guilfoile had failed 

to adequately plead that his actions in raising concerns about the 

payments to Greene and the Ayrault Group reasonably could have led 

to an FCA action. Specifically, the district court reasoned that 

Guilfoile failed to adequately plead an AKS violation, and that 

even if he had adequately pleaded an AKS violation, he failed to 

connect any such violation to a potential false claim within the 

meaning of the FCA. We disagree with the district court's approach 

and its conclusion. 
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Guilfoile has brought an FCA retaliation claim, not a 

"direct" claim of an FCA violation. As discussed above, adequately 

pleading an FCA retaliation claim does not require adequately 

pleading the submission of a false claim or meeting the Rule 9(b) 

standards for pleading fraud. See Graham Cty., 545 U.S. at 416 & 

n.1; Karvelas, 360 F.3d at 238 n.23; see also United States ex 

rel. Grenadyor v. Ukrainian Vill. Pharmacy, Inc., 772 F.3d 1102, 

1108-09 (7th Cir. 2014) (affirming dismissal of qui tam claim for 

failure to plead kickbacks with particularity but reversing 

dismissal of retaliation claim based on internal reporting of 

alleged kickbacks). Rather, plaintiffs like Guilfoile need only 

plead that their actions in reporting or raising concerns about 

their employer's conduct "reasonably could lead to an FCA action." 

Booker, 847 F.3d at 59 (internal quotation marks omitted). Put 

colloquially, rather than plausibly pleading the existence of a 

fire -- the actual submission of a false claim -- a plaintiff 

alleging FCA retaliation need only plausibly plead a reasonable 

amount of smoke -- conduct that could reasonably lead to an FCA 

action based on the submission of a false claim. 

Because this case involves an alleged violation of the 

AKS, we consider the 2010 amendment to the AKS stating that "a 

claim that includes items or services resulting from a violation 

of this section constitutes a false or fraudulent claim for 

purposes of [the FCA.]" 42 U.S.C. § 1320a-7b(g). We have 
- 21 - 

previously declined to directly address the impact of 

§ 1320a-7b(g) on FCA actions, see Hutcheson, 647 F.3d at 379 n.1, 

and we do not attempt to assess the full implications of the AKS 

provision today. We need not do so because the issue before us is 

not the standard for proving an FCA violation based on the AKS, 

but rather the requirements for pleading an FCA retaliation claim. 

For our present purposes, it is enough to say that in light of 

§ 1320a-7b(g), "[a]n AKS violation that results in a federal health 

care payment is a per se false claim under the FCA." United States 

ex rel. Lutz v. United States, 853 F.3d 131, 135 (4th Cir. 2017). 

That is, drawing on the "resulting from" language of the 2010 

amendment, if there is a sufficient causal connection between an 

AKS violation and a claim submitted to the federal government, 

that claim is false within the meaning of the FCA. See United 

States ex rel. Greenfield v. Medco Health Sols., Inc., 880 F.3d 

89, 96-98 (3d Cir. 2018) (discussing causal connection issue);11

United States ex rel. Bawduniak v. Biogen Idec, Inc., No. 12-CV10601-IT, 2018 WL 1996829, at *5-6 (D. Mass. Apr. 27, 2018) (same). 

We further read the AKS amendment as obviating the need 

for a plaintiff to plead materiality -- that is, to plead that 

 11 We note that Greenfield involved a qui tam suit directly 

alleging an FCA claim based on a violation of the AKS and 

ultimately turned on the standard for proving such claims at 

summary judgment. See Greenfield, 880 F.3d at 98. 
- 22 - 

compliance with the AKS was material to the government's decision 

to pay any specific claim. This construction inescapably follows 

from the statute's plain language stating that a claim resulting 

from a violation of the AKS "constitutes a false or fraudulent 

claim." 42 U.S.C. § 1320a-7b(g). The statute's use of the term 

"constitutes" would be meaningless if courts had to engage in a 

materiality analysis -- for example, by inquiring into whether the 

entity submitting the claim had certified its compliance with the 

AKS -- after establishing that a claim resulted from an AKS 

violation. See, e.g., United States v. Catholic Health 

Initiatives, 312 F. Supp. 3d 584, 594 (S.D. Tex. 2018) ("Due to 

[§ 1320a–7b(g)], liability under the FCA for AKS violations does 

not require the defendants to have expressly certified their 

compliance with the AKS."); United States ex rel. Kester v. 

Novartis Pharm. Corp., 43 F. Supp. 3d 332, 364 (S.D.N.Y. 2014) 

(stating that "from and after [the AKS amendment,] the act of 

submitting a claim . . . itself implie[d] compliance with the AKS, 

even in [the] absence of any express certification of compliance." 

(second alteration in original) (internal quotation marks and 

citation omitted)). 

Our reading of § 1320a-7b(g) is consistent with the 

legislative history, which indicates Congress's intent to "ensure 

that all claims resulting from illegal kickbacks are 'false and 

fraudulent'" and to "strengthen [] whistleblower actions based on 
- 23 - 

medical care kickbacks . . . [b]y making all claims that stem from 

an illegal kickback subject to the False Claims Act." 155 Cong. 

Rec. S10852-01, S10853 (daily ed. Oct. 28, 2009) (statement of 

Sen. Kaufman). If a plaintiff must plead and prove that compliance 

with the AKS was "material" to a claim "resulting from" an AKS 

violation, § 1320a-7b(g) would not represent the strengthening of 

whistleblower actions that Congress intended. Moreover, 

§ 1320a-7b(g)'s obviation of the "materiality" inquiry essentially 

codifies the long-standing view that AKS violations are "material" 

in the FCA context.12 This codification has the benefit, however, 

of bypassing judicially created theories of materiality, such as 

express or implied certification, that "do more to obscure than 

 12 Prior to the 2010 AKS amendment, courts had consistently 

held that compliance with the AKS (or the lack thereof) was 

"material" to the government's decision to pay a given claim based 

on the theory that the government's payment was contingent on the 

submitting entity's express or implied certification that it had 

complied with the AKS. See, e.g., Amgen, 652 F.3d at 110; United 

States ex rel. Wilkins v. United Health Grp., Inc., 659 F.3d 295, 

314 (3rd Cir. 2011), abrogated on other grounds by Escobar, 136 S. 

Ct. 1989; United States v. Rogan, 517 F.3d 449, 452-53 (7th Cir. 

2008); United States ex rel. Westmoreland v. Amgen, Inc., 812 F. 

Supp. 2d 39, 52 (D. Mass. 2011); United States ex rel. Lisitza v. 

Johnson & Johnson, 765 F. Supp. 2d 112, 127-28 (D. Mass. 2011) 

(citing cases). The legislative history suggests that the 2010 

amendment was intended to codify the link between AKS violations 

and false claims within the meaning of the FCA as well as to 

correct one district court case holding that claims for payment 

resulting from AKS violations could be "laundered" if the claims 

were submitted to the government by a party who was unaware that 

a kickback had occurred. See 155 Cong. Rec. S10852-01, S10853-54 

(daily ed. Oct. 28, 2009) (statements of Sens. Kaufman and Leahy); 

Kester, 41 F. Supp. 3d at 332-35 (discussing the 2010 amendment's 

legislative history). 
- 24 - 

clarify the issues before" a court considering an FCA claim. 

Hutcheson, 647 F.3d at 385–86. 

With this understanding of the AKS amendment in mind, we 

consider whether Guilfoile has plausibly pleaded that the concerns 

he raised about the payments to Greene reasonably could have led 

to an FCA action. The allegations in the complaint, coupled with 

the reasonable inferences we must draw from them, plausibly pleaded 

that claims for payment were, or were going to be, submitted to 

the government in connection with the Integrated Entity's work 

with the New Jersey hospitals. Specifically, the complaint alleges 

that the Integrated Entity "regularly bills federal insurance 

programs[,] including[] Medicaid [and] Medicare," and that 

Guilfoile "believed the contract with Mr. Green[e] violated the 

federal AKS because the Integrated Entity had paid illegal 

kickbacks to secure a contract at hospitals where it billed to 

federal insurance programs." (Emphasis added.) These allegations 

support the reasonable inference that the government was being 

billed for services provided by the Integrated Entity in connection 

with its contracts with the hospitals. 

Guilfoile has also plausibly alleged a sufficient causal 

connection between any submitted claims and the payments to Greene. 

Specifically, the complaint alleges that the Integrated Entity 

entered into an agreement to pay Greene 

"for each hospital contract that [he] successfully referred to the 
- 25 - 

Integrated Entity, specifically targeting two hospitals that [he] 

was working for as a paid consultant"; that the Integrated Entity 

entered into contracts with those two hospitals; and that the 

Integrated Entity in fact paid him "referral fees." The allegation 

that Greene was paid pursuant to the agreement supports the 

reasonable inference that Greene was responsible for connecting 

the Integrated Entity with the New Jersey hospitals. In other 

words, we reasonably infer from the complaint's allegations that 

the Integrated Entity paid Greene to induce him to use his position 

with the hospitals to influence them to select the Integrated 

Entity for the contracts at issue. Further, the complaint permits 

the reasonable inference that, if not for the agreement with 

Greene, the Integrated Entity would not have been in a position to 

benefit from federal health care payments arising from its work 

with the hospitals. See supra 5-6.13 

Finally, Guilfoile has plausibly alleged that the 

payments to Greene were a violation of the AKS. The relationship 

between the Integrated Entity and Greene -- payment to induce the 

 13 In addition to the allegation that Greene was paid for 

referring the hospitals to the Integrated Entity, the complaint 

alleges that Greene advised the Integrated Entity on how to bid 

for the hospital contracts. Contrary to the suggestion by 

appellees, and drawing all reasonable inferences in Guilfoile's 

favor, we simply do not read the complaint to allege that the 

extent of Greene's assistance to the Integrated Entity was 

providing insider information about the hospitals' bidding 

process. 
- 26 - 

generation of federal health care program business -- has the 

hallmarks of a kickback scheme. See 42 U.S.C. § 1320a-7b(b)(2)(B) 

(criminalizing payments to "induce [a] person . . . to . . . 

recommend purchasing, leasing, or ordering any good, facility, 

service, or item for which payment may be made in whole or in part 

under a [f]ederal health care program"). Importantly, the nature 

of the alleged scheme is materially indistinguishable from the 

scheme in United States v. Bay State Ambulance & Hospital Rental 

Service, Inc., 874 F.2d 20 (1st Cir. 1989), which involved a 

criminal conviction under the AKS. In Bay State, a hospital 

employee, who was on an advisory committee charged with advising 

the hospital on accepting bids for an ambulance services contract, 

was paid by an ambulance company to induce him to recommend that 

the hospital enter into a contract for ambulance services with 

that company. See 874 F.2d at 22. There was no allegation that 

the hospital employee was paid to refer individual patients for 

individual ambulance trips or that the federal government would 

pay the hospital simply for entering into the contract with the 

ambulance company, which contract was the direct outcome of the 

illegal remuneration scheme. Yet, we held that a crime had 

occurred under the AKS once the person who was in a position to 

influence the hospital was paid to use his influence to win the 

contract for the ambulance company. See id. 
- 27 - 

The dissent's concern with the "attenuated" nature of 

the AKS scheme alleged in the complaint is misplaced.14 First, 

although we can see how our colleague drew his interpretation from 

the language of the AKS, we are bound by Bay State, as the dissent 

recognizes. Appellees point to no authority for the contention 

that the AKS scheme as pleaded is materially distinguishable from 

the scheme in Bay State and outside the compass of the AKS. The 

dissent's attempt to factually distinguish Bay State is also 

unconvincing. Any suggestion in the dissent that the nature of 

the kickback scheme is more speculative than the scheme in Bay 

State fails to adequately recognize the difference between 

pleading standards for an FCA retaliation claim, at issue here, 

and standards of proof for a criminal conviction under the AKS, at 

issue in Bay State. Second, but equally as important, this case 

gives us no reason to question Bay State. The type of scheme 

proven in Bay State and alleged in the present case is in the 

heartland of what the AKS is intended to prevent -- the use of 

payments to improperly influence decisions on the provision of 

 14 As our dissenting colleague articulates his concern: 

"There is . . . a fair amount of attenuation between the actual 

transactions that Greene was allegedly induced to 'arrange for' 

(the hospitals' 'purchas[es]' or 'order[s]' of the Integrated 

Entity's general pharmacy services) and the transactions 'for 

which payment may be made . . . under a Federal health care program' 

(some unknown purchases from an Integrated Entity-run pharmacy of 

some unknown drugs by some unknown patients who happened to be 

eligible for reimbursement under a federal health care program)." 
- 28 - 

health care that lead to claims for payment to federal health care 

programs.15 Accepting our colleague's contention -- that there is 

too great a distance between the Integrated Entity's payments to 

Greene to capture the hospital contracts and the submission of 

claims to federal insurance programs, which is the unmistakable 

objective of the contracts -- would leave a hole in the statutory 

scheme and essentially permit pay-offs to capture federal health 

care funds. See OIG Supplemental Guidance, 70 Fed. Reg. at 4864 

(an illegal kickback is a payment whose purpose, at least in part, 

is "to induce or reward the referral or recommendation of business 

payable in whole or in part by a [f]ederal health care program"). 

Further, we disagree with our dissenting colleague that 

our interpretation of the FCA and the AKS, and our application of 

the statutory language to the alleged facts in light of our 

precedent, is foreclosed by the manner in which Guilfoile presented 

 15 We also disagree with the dissent that we should consider 

here arguments not raised in Bay State that would challenge the 

viability of that decision. Unlike in United States v. DiPina, 

178 F.3d 68, 73 (1st Cir. 1999), where we acknowledged that we are 

not bound by dicta in a prior opinion, accepting the appellees' 

arguments about attenuation in this case would mean that the 

holding in Bay State was incorrect and that the case was therefore 

wrongly decided. The similar facts in Bay State and this case are 

not "background facts." They are facts that implicate the 

applicability of the AKS in both cases. It is a fundamental 

principle that a newly constituted appellate panel cannot overrule 

a prior panel in the absence of newly announced Supreme Court law, 

an intervening en banc opinion of this court, a statutory 

overruling, or developments in the law. See Lassend v. United 

States, 898 F.3d 115, 124-25 & n.6 (1st Cir. 2018). 
- 29 - 

his arguments before us or before the district court. This is not 

a case where an appellant has tried to introduce on appeal an issue 

that was never before the district court or to otherwise "sand 

bag" the other side. Although Guilfoile may not have consistently 

raised certain arguments, the core issue of whether the payment 

scheme as pleaded falls within the compass of the AKS was before 

the district court and is at the core of his appeal. Before the 

district court and before us, Guilfoile consistently argued that 

he has adequately alleged an AKS violation for purposes of pleading 

an FCA retaliation claim. The fact that he did not rely on Bay 

State or did not consistently present a "market access" theory to 

support the AKS violation in no way precludes us from reaching our 

result. In the context of a de novo review necessitating our 

interpretation of a statute, we routinely employ rationales that 

have been less than satisfactorily presented by the parties if 

that is the correct way of resolving the issue under the applicable 

law. We cannot allow our responsibility to articulate the most 

sensible resolution of an issue, especially, as here, an issue of 

statutory interpretation involving our own precedent, to be 

unreasonably circumscribed by the parties' arguments. 

Hence, in summary, after drawing all reasonable 

inferences in Guilfoile's favor and considering the effect of the 

statutory language drawing a connection between AKS violations and 

FCA actions, we conclude Guilfoile has plausibly pleaded that he 
- 30 - 

engaged in protected conduct within the meaning of an FCA 

retaliation claim. That is, when Guilfoile raised concerns about 

the payments to Greene he was engaging in conduct that "reasonably 

could lead to an FCA action," Booker, 847 F.3d at 59 (internal 

quotation marks omitted), specifically, an FCA action based on the 

submission of claims resulting from an AKS violation.16 

In view of its conclusion that Guilfoile had not 

adequately pleaded that he engaged in protected conduct, the 

district court did not go on to analyze the other two elements of 

Guilfoile's FCA retaliation claim: specifically, that (1) his 

employer knew that he was engaged in protected conduct and (2) his 

employer retaliated against him because of that conduct. See 

Karvelas, 360 F.3d at 235. However, we readily conclude that 

Guilfoile has plausibly alleged that the Integrated Entity knew 

that he was engaging in protected conduct. Guilfoile specifically 

 16 Many of the cases cited by appellees for the proposition 

that the complaint does not adequately plead an FCA retaliation 

claim are clearly inapposite because they apply standards for 

directly pleading violations of the AKS and FCA, see, e.g., United 

States ex rel. Kalec v. NuWave Monitoring, LLC, 84 F. Supp. 3d 793 

(N.D. Ill. 2015); standards for proving AKS and FCA claims on 

summary judgment, see, e.g., United States ex rel. Perales v. St. 

Margaret's Hosp., 243 F. Supp. 2d 843 (C.D. Ill. 2003); standards 

for assessing criminal conviction under the AKS, see, e.g., Patel, 

778 F.3d 607; or standards for evaluating FCA retaliation claims 

that we do not follow, see, e.g., United States ex rel. Uhlig v. 

Fluor Corp., 839 F.3d 628, 635 (7th Cir. 2016). The case of United 

States ex rel. Rost v. Pfizer, Inc., 736 F. Supp. 2d 367 (D. Mass. 

2010), predates the 2010 amendment to the AKS and applies an 

outmoded theory of implied certification. 
- 31 - 

alleged that "he notified Mr. Shields . . . that he believed the 

contract with Mr. Green[e] violated the federal AKS because the 

Integrated Entity had paid illegal kickbacks to secure a contract 

at hospitals where it billed federal insurance programs." 

Guilfoile also has plausibly pleaded that he was 

retaliated against because of his protected conduct, given the 

close temporal proximity -- about a week -- of his termination to 

his final conversation with Shields about the payments to Greene. 

See Harrington v. Aggregate Indus. Ne. Region, Inc., 668 F.3d 25, 

32 (1st Cir. 2012) (suggesting that a plaintiff can satisfy the 

third element of a prima facie retaliation case by plausibly 

pleading temporal proximity where the retaliatory action occurred 

two months after the protected conduct). To the extent appellees 

contend that the complaint does not adequately allege that 

Guilfoile informed Shields that he was concerned about fraud on 

the government, see, e.g., McKenzie v. BellSouth Telecomms., Inc., 

219 F.3d 508, 516 (6th Cir. 2000), we disagree. The complaint 

explicitly alleges, for example, that Guilfoile "notified [] 

Shields . . . that he believed the contract with [] Green[e] 

violated the federal AKS because the Integrated Entity had paid 

illegal kickbacks to secure a contract at hospitals where it billed 

to federal insurance programs." 
- 32 - 

B. The 24/7 Call Center 

We agree with the district court that Guilfoile has not 

sufficiently pleaded a connection between the 24/7 call center 

contractual terms and the submission of any claim.17 In general, 

"[i]t is not the case that any breach of contract, or violation of 

regulations or law, or receipt of money from the government where 

one is not entitled to receive the money, automatically gives rise 

to a claim under the FCA." United States ex rel. Hopper v. Anton, 

91 F.3d 1261, 1265 (9th Cir. 1996). Even in the FCA retaliation 

context, there must be a reasonable connection between the alleged 

conduct and the submission of claims within the purview of the 

FCA. 

For a plaintiff to adequately plead that a contractual 

breach could reasonably lead to an FCA action, he or she must 

 17 Anticipating this possible outcome of our review, 

Guilfoile asserts that the district court erred by twice rejecting 

his requests to amend the complaint to correct any pleading 

deficiencies. But he has not demonstrated that the court abused 

its discretion and committed a manifest error of law in denying 

his motion to vacate the judgment and amend the complaint. See 

Markel Am. Ins. Co. v. Díaz-Santiago, 674 F.3d 21, 32 (1st Cir. 

2012) (stating that we "review[] the district court's denial of 

post-judgment relief under Rule 59(e) for abuse of discretion," 

and that, "[g]enerally, to prevail on a Rule 59(e) motion, the 

moving party must . . . clearly establish a manifest error of law." 

(internal quotation marks omitted)); Maldonado v. Dominguez, 137 

F.3d 1, 11 (1st Cir. 1998) ("[A] district court cannot allow an 

amended pleading where a final judgment has been rendered unless 

that judgment is first set aside or vacated pursuant to Fed. R. 

Civ. P. 59 or 60."). 
- 33 - 

adequately plead causation and materiality. See D'Agostino v. 

ev3, Inc., 845 F.3d 1, 7-8 (1st Cir. 2016). With respect to the 

24/7 call center contractual term, Guilfoile has not pleaded any 

plausible connection between the alleged contractual breach and 

the submission of claims to the government, or how the contractual 

breach would have been material to the payment of any claims. For 

this reason, the district court correctly dismissed Guilfoile's 

FCA retaliation claim to the extent it relied on his activities 

concerning the 24/7 call center.18 

IV. 

For the foregoing reasons, we affirm dismissal of the 

complaint as to the 24/7 call center issue but vacate and remand 

as to the retaliation claim involving a potential violation of the 

Anti-Kickback Statute. Given this disposition, the district court 

may need to reconsider its decision to decline supplemental 

jurisdiction over Guilfoile's state law claims. 

So ordered. Costs to appellant. 

- Concurring and Dissenting Opinion Follows - 

 18 Our reasoning and conclusion would be the same if Guilfoile 

had alleged that the Integrated Entity violated any statute or 

regulation by not having a 24/7 call center or by falsely stating 

in its contracts that it had a 24/7 call center. See Booker, 847 

F.3d at 60. However, we do not read the complaint to plausibly 

allege that the Integrated Entity violated any statutes or 

regulations despite Guilfoile's subjective belief that the alleged 

false representation "posed a serious threat to public health and 

safety." 
- 34 - 

BARRON, Circuit Judge, concurring in part and dissenting 

in part. To plead a viable retaliation claim under the False 

Claims Act ("FCA"), 31 U.S.C. § 3730(h)(1), a plaintiff must allege 

that the conduct that he reported to his employer and that resulted 

in his termination was "calculated, or reasonably could lead, to 

a viable FCA action." United States ex rel. Karvelas v. MelroseWakefield Hosp., 360 F.3d 220, 236 (1st Cir. 2004) (internal 

quotation marks omitted). Thus, when an FCA retaliation claim 

relies on a report of a violation of the Anti-Kickback Statute 

("AKS"), 42 U.S.C. § 1320a-7b(g), as is the case here, the 

plaintiff needs to allege facts that would suffice to show that 

the conduct that he reported to his employer is of a kind that is 

actionable under the AKS. See Karvelas, 360 F.3d at 237 (holding 

that "protected" activities must "concern the employer's knowing 

submission of false or fraudulent claims for payment to the 

government" (emphasis added)). 

To be clear, the plaintiff in such a case need not prove 

at the pleading stage that what he complained to his employer about 

was an actual AKS violation. But, the plaintiff must sufficiently 

allege that "his reports concerned FCA-violating activity such as 

the submission of false claims" resulting from conduct that could 

constitute a violation of the AKS. United States ex rel. Booker 

v. Pfizer, Inc., 847 F.3d 52, 60 (1st Cir. 2017). And, for that 

reason, the allegation in Thomas Guilfoile's complaint in this 
- 35 - 

case that "he reasonably believed" that the conduct that he was 

reporting to his employer prior to his termination revealed a 

"violation[] of the AKS . . . resulting in the submission of 

fraudulent claims to the government" is not itself of any 

significance. Guilfoile must do more than assert a "legal 

conclusion couched as a factual allegation" to satisfy his burden 

at the pleading stage. Ashcroft v. Iqbal, 556 U.S. 662, 678 (2009) 

(quoting Bell Atl. Corp. v. Twombly, 550 U.S. 544, 555 (2007)); 

see also Karvelas, 360 F.3d at 224 (setting aside "bald assertions" 

or "unsupportable conclusions" in an FCA complaint). The crucial 

question that we must resolve, therefore, is whether, taking as 

true the complaint's factual allegations about the conduct that 

Guilfoile reported to his employer, Guilfoile has satisfied his 

burden to show that the conduct that he allegedly reported is at 

least of a kind that falls within the scope of the AKS. For, if 

that conduct alleged is not even of that kind, then I do not see 

how his FCA retaliation claim -- insofar as it is premised on the 

report of an AKS violation -- may survive a motion to dismiss. 

I. 

Guilfoile alleges in his complaint that his employer -- 

several general pharmacy services providers operating as a single 

integrated entity (the "Integrated Entity") -- was bidding for 

hospital contracts with the assistance of a financial consultant, 

Michael Greene, who was simultaneously serving as a financial 
- 36 - 

advisor to those hospitals. I agree with the majority that 

Guilfoile sufficiently alleges in his complaint that he was fired 

by his employer after reporting that it was making payments to the 

consultant in order to induce him to use his position at the 

hospitals to steer the hospital contracts the Integrated Entity's 

way. See Maj. Op. 25. I also agree that these allegations of 

employer-induced double-dealing are concerning. 

Nevertheless, the District Court found those factual 

allegations -- even if taken as true -- to be legally wanting. 

The District Court did so because it interpreted the AKS to 

prohibit only payments made to induce "other providers or 

individuals [to] directly refer[] or recommend[] patients to 

specific services" to be paid for with federal health care funds. 

The District Court then concluded that Guilfoile has not alleged 

facts sufficient to show that Greene "could or did play a role in 

referring or recommending federal program patients to Defendants 

through his financial consultant work with Defendants." 

In reaching that conclusion, the District Court rejected 

Guilfoile's argument that Greene's facilitation of general 

contracts between the Integrated Entity and the hospitals for 

general pharmacy services that created the opportunity for 

"general access to patients amounts to a referral or 

recommendation" within the meaning of the AKS. The District Court 

appears to have relied for that determination on the attenuated 
- 37 - 

relationship between two things: (1) the general contracts for 

pharmacy services that Greene allegedly arranged between the 

Integrated Entity and the hospitals; and (2) the particular 

purchases by particular buyers of drugs from the pharmacies set up 

by the Integrated Entity in the hospitals. 

I see how the text of the AKS lends support to the 

District Court's logic. As relevant here, the AKS prohibits 

payments "to induce" the recipient of the payments "to purchase, 

lease, order, or arrange for or recommend purchasing, leasing, or 

ordering any good, facility, service, or item for which payment 

may be made in whole or in part under a Federal health care 

program[.]" 42 U.S.C. § 1320a-7b(b)(2)(B). The only transactions 

that Guilfoile has alleged that the Integrated Entity paid Greene 

to induce him to "arrange for or recommend" directly, however, are 

the "purchas[es]" or "order[s]" by the hospitals of the specialty 

pharmacy services provided by the Integrated Entity via the 

contracts allegedly facilitated by Greene's paid work for 

Integrated Entity. But, "payment . . . under a Federal health 

care program" is not made for those general services. Rather, 

payment is only made from a federal health care program in 

consequence of the particular purchases by particular buyers of 

drugs from the pharmacies set up by the Integrated Entity in the 

hospitals. 
- 38 - 

 There is, then, necessarily a fair amount of 

attenuation between the actual transactions that Greene was 

allegedly induced to "arrange for" (the hospitals' "purchas[es]" 

or "order[s]" of the Integrated Entity's general pharmacy 

services) and the transactions "for which payment may be made . . 

. under a Federal health care program" (some unknown purchases 

from an Integrated Entity-run pharmacy of some unknown drugs by 

some unknown patients who happened to be eligible for reimbursement 

under a federal health care program). Moreover, that degree of 

attenuation appears to inhere in the conduct that Guilfoile's 

complaint alleges took place, given the middleman nature of the 

general pharmacy services that the Integrated Entity retained 

Greene to assist it in offering to the hospitals. Thus, nothing 

about Guilfoile's allegations concerning his report of that 

conduct to his employer indicates that the progression of the case 

will reveal the attenuation that concerned the District Court to 

be any less substantial than it now appears to be. 

II. 

The majority rejects the District Court's reasoning 

regarding the attenuation problem. The majority concludes that 

United States v. Bay State Ambulance & Hosp. Rental Serv., Inc., 

874 F.2d 20 (1st Cir. 1989), compels us to construe the AKS to 

encompass situations with this degree of attenuation between 

general services contracts and any federal payment from a federal 
- 39 - 

health care program that would result from particular purchases by 

particular patients availing themselves of those services. See 

Maj. Op. 26-27. It is true that Bay State did uphold the AKS 

conviction of an ambulance services company and its president for 

paying kickbacks to a hospital employee. Bay State did so, 

moreover, even though that employee "arrange[d] for" only a general 

ambulance services contract between the hospital and the ambulance 

services provider, and not any particular purchase of ambulance 

services by a patient for which the federal government would make 

a payment. See id. at 25-26, 36. 

In my view, however, Bay State is not so clearly 

controlling a precedent on the attenuation issue as the majority 

concludes that it is. That is so for three reasons. 

First, the attenuation issue was not raised in Bay State. 

And thus, Bay State did not need to address -- and did not in fact 

address -- whether what the kickback recipient "arrange[d] for or 

recommend[ed]" fell within the scope of the AKS or was instead too 

attenuated from any payment from a federal healthcare program to 

do so because the parties made no such argument. See Gately v. 

Com. of Mass., 2 F.3d 1221, 1226 (1st Cir. 1993) (describing the 

"essential principles of stare decisis" to include "(1) an issue 

of law must have been heard and decided" and "(2) if an issue is 

not argued, or though argued is ignored by the court, or is 

reserved, the decision does not constitute a precedent to be 
- 40 - 

followed"); United States v. DiPina, 178 F.3d 68, 73 (1st Cir. 

1999) ("Where, in a prior decision, we have not considered an issue 

directly and assessed the arguments of parties with an interest in 

its resolution, that decision does not bind us in a subsequent 

case where the issue is adequately presented and squarely before 

us, merely because some of the background facts are the same."). 

Second, Bay State is in some respects an easier case in 

which to find the nexus that the text of the AKS demands between 

the payment from a federal health care program and the transaction 

that the payment recipient "arrange[d] for" than this one is. The 

ambulance services eventually purchased by patients in Bay State 

were clearly reimbursable under a federal health care program. By 

contrast, it is less clear to me that the specialty pharmacy 

service (as opposed to the drugs purchased by patients) is itself 

reimbursable, thereby making the attenuation issue that concerned 

the District Court all the more acute. And Guilfoile's complaint 

does nothing to supply useful clarification.19

 19 Contrary to the majority's suggestion that this distinction 

is insignificant, see Maj. Op. 27-28, it seems to me that the fact 

that the contracts between the Integrated Entity and the hospitals 

contemplate the provision of a general service that is not itself 

reimbursable under a federal healthcare program should give us 

pause. The text of the relevant AKS provision requires that the 

"good, facility, service, or item" at issue be one "for which 

payment may be made in whole or in part under a Federal health 

care program[.]" 42 U.S.C. § 1320a-7b(b)(2)(B). And I have found 

no authority -- nor does Guilfoile identify any -- that suggests 

that the AKS does encompass conduct predicated on the defendant's 

offering of middleman services of this type. See, e.g., United 
- 41 - 

Finally, we should, in my view, be wary of extending Bay 

State in construing the AKS to reach the conduct alleged here. 

Congress passed the AKS to address a form of corruption that 

threatens to cheat federal taxpayers and that might also pose a 

risk to public health. See, e.g., Medicare-Medicaid Anti–Fraud 

and Abuse Amendments, Pub. L. 95-142, 91 Stat. 1183 (1977) 

(describing the act as one "to strengthen the capability of the 

Government to detect, prosecute, and punish fraudulent activities 

under the [M]edicare and [M]edicaid programs"); United States v. 

Hancock, 604 F.2d 999, 1001 (7th Cir. 1979) (identifying the "evils 

Congress sought to prevent by enacting the kickback statutes" to 

include the "potential for increased costs to the MedicareMedicaid system and misapplication of federal funds"). In fact, 

Congress was so concerned about this form of corruption that it 

even made it a felony to engage in the conduct that the AKS covers. 

See Pub. L. 95-142 (upgrading an AKS violation to a felony). 

 

States v. Polin, 194 F.3d 863, 864-65 (7th Cir. 1999) (upholding 

convictions of a doctor and nurse who paid a pacemaker company 

sales representative a fee for each patient he "referred" to the 

company for pacemaker monitoring services); United States v. 

Vernon, 723 F.3d 1234, 1254-55 (11th Cir. 2013) (upholding 

conviction of specialty pharmacy executive who paid a patient 

advocate a 45% commission for each prescription that her patients 

filled at the pharmacy to induce the patient advocate to refer her 

patients to the pharmacy); United States v. Shoemaker, 746 F.3d 

614 (5th Cir. 2014) (upholding conviction of nursing staffing 

company executive who paid a hospital's board chair $5 for each 

staffing hour that the hospital purchased from the nursing company 

to induce the chair to recommend to the hospital's COO that the 

hospital increase its hours from the nursing company). 
- 42 - 

But, the AKS, like any statute that addresses an 

important public problem, does not have limitless reach. And, as 

with any statute that imposes criminal liability, as the AKS does, 

we must be careful to construe its reach in a manner that ensures 

that it affords those subject to it with due notice and in 

accordance with the principle that only Congress may impose 

criminal liability. See Liporata v. United States, 471 U.S. 419, 

427 (1985). 

I recognize that we would not need to worry about 

transgressing those interpretive principles here if, as the 

majority concludes, this case concerns the alleged reporting of 

conduct that falls within the AKS's "heartland." See Maj. Op. 27. 

But, I do not see how we could so conclude, no matter how broad 

the AKS may seem to be. In fact, if the conduct alleged in the 

complaint before us constitutes conduct that is of a kind that 

falls within the AKS's heartland, then I would be hard-pressed to 

conjure the kind of conduct that would reside on its outskirts. 

Of course, statutes that have cores also have 

peripheries. And conduct that falls within the periphery of a 

statute's scope is no less unlawful than conduct that falls within 

its core. At the same time, conduct that lies outside even the 

periphery -- as measured, most clearly, by the words that Congress 

chose to denominate the statute's bounds -- is not conduct that 

may give rise to liability. And that is so no matter how much 
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such conduct may seem to be concerning in its own right and no 

matter how much that kind of conduct may even bear some resemblance 

to the kind of conduct that plainly does falls within the statute's 

scope. 

For all of these reasons, then, Bay State does not, in 

my view, dictate the outcome in this case. And that matters 

because, although we are generally free to affirm a judgment below 

on any ground manifest in the record, see MacDonald v. Town of 

Eastham, 745 F.3d 8, 11 (1st Cir. 2014), we are not equally free 

to reverse one on a ground that the appellant does not raise on 

appeal. Yet while Guilfoile did cite Bay State in a footnote in 

his filings below to support the proposition that "paying 

inducements for referrals to access markets in order to bill 

federal health care programs is a cognizable violation of the AKS, 

and therefore the FCA," he has inexplicably, as the Integrated 

Entity points out, abandoned that market access argument on 

appeal.20 See Igartúa v. United States, 626 F.3d 592, 603 (1st 

 20 I note that Guilfoile does cite Bay State on appeal, but 

only in support of the separate points that he adequately alleged 

that Greene's position as a financial advisor at the hospitals put 

him on sufficient footing to steer the hospital contracts to the 

Integrated Entity and that he does not need to show that the 

alleged arrangement resulted in a drain on the public fisc. 

Guilfoile does not, however, make any argument on appeal as to how 

Bay State resolves the attenuation issue in his favor. See 

González v. Vélez, 864 F.3d 45, 56 n.7 (1st Cir. 2017) ("On appeal, 

. . . claims are deemed abandoned unless they are, at a minimum, 

accompanied by some developed argumentation."). 
- 44 - 

Cir. 2010) (noting that "[a]rguments that are intentionally 

relinquished or abandoned" or "raised in a perfunctory or not 

serious manner [are] waived"). 

Having abandoned that theory for why the attenuation 

inherent in the conduct that he alleged poses no concern, Guilfoile 

engages with the attenuation issue on appeal only by invoking cases 

that discuss whether the plaintiff has sufficiently made out a 

false claim under the FCA. See, e.g., U.S. ex rel. Hutcheson v. 

Blackstone Med., Inc., 647 F.3d 377, 383 (1st Cir. 2011) (holding 

that hospitals' claims for reimbursement of doctor's services 

using medical devices were "false" under the FCA where the doctors 

had accepted kickbacks from the medical device manufacturer); 

United States ex rel. Yesudian v. Howard Univ., 153 F.3d 731, 740 

(D.C. Cir. 1998) (holding that plaintiff had "a good faith basis 

for going forward at the time of retaliation" as to the 

"[]submission of a false claim to the federal government" element 

where the plaintiff knew that 80% of the defendant's money came 

from the federal government). But, those cases bear only on the 

separate element of an FCA action that a "false or fraudulent 

claim" be submitted to the federal government. See 31 U.S.C. §§ 

3729(a)(1),(b)(2). Given that Guilfoile's FCA retaliation claim 

is premised only on the theory that the conduct that he reported 

to his employer was prohibited by the AKS, see 42 U.S.C. § 1320a7b(g), that separate issue takes on significance only if Guilfoile 
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has sufficiently alleged as a threshold matter that the conduct 

that he was reporting was of a kind that violates the AKS.

III.

Because I do not believe that Bay State is controlling 

on the critical issue of attenuation, and because Guilfoile has 

dropped the market access theory that he pressed below, I see no 

viable basis on appeal for rejecting the District Court's 

conclusion that Guilfoile "has not set forth sufficient factual 

allegations to support a plausible anti-kickback statute 

violation." To excuse the waiver here is to deprive the appellees 

of their judgment based on an argument that Guilfoile -- by 

abandoning that argument on appeal -- gave them no reason to think 

that they needed to confront and that, understandably, they did 

not. Accordingly, I see no reason to decide, without adequate 

briefing from the parties, the open interpretive question 

concerning the scope of what constitutes conduct that is of a kind 

the AKS encompasses on which Guilfoile's retaliation claim 

necessarily depends. And so, given the posture of this case -- a 

posture that is of Guilfoile's own making on appeal -- I conclude 

that we must affirm the District Court's decision. 

 I therefore respectfully dissent.