2008 D e c i sion s O p inion s of the U nit e d S t at e s C our t of Appe al s for the Thir d C ir c uit 9-24-2008 

# P a ce v . Le a vitt P r e c e de n t i al or N on-P r e c e de n t i al : N on-P r e c e de nt i al D ocke t N o . 07-4510

F o l low thi s a nd a dd it ion al work s at : http://d i git alc ommon s .l a w . vi l l a nova . e du/thir dc ir c uit_2008

Thi s de c i sion i s br ou ght t o you for f r e e a nd ope n a c c e s s b y the O p inion s of the U nit e d S t at e s C our t of Appe al s for the Thir d C ir c uit at V i l l a no va U nive r sity S choo l of L a

w Di git al Reposit or y

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w Di git al Reposit or y

. F or mor e inform at ion, p le as e c ont a ct Be n j amin . C a rl s on@l a

w . vi l l a no va . e du . Re c omme nde d C it at ion " P a c e v . L e a vitt " (2008). 2008 D e cisio n s . P ape r 492. http://d i git alc ommon s .l a

w . vi l l a nova . e du/thir dc ir c uit_2008/492NOT P RE CE DE NT I AL UN I TED STATES CO UR T OF A PP EALS F O R T H E T H IR D C IR C U IT

__________ N o. 07- 4510

__________ D O N N A PA C E , on behal f of he r s el f and a l l ot her s s i m i l ar l ys i tuat ed, Appel l ant vs. M IC H A E L O . L E A V ITT , S ecret aryof the U nit ed S t at es D epart m entof H eal t h and H um an Ser vi ces

__________ O n A p p ea l from the U n it ed S tat es D istri ct C o u rt For t he D i s t r i ctof N ew J er s ey ( C i v. N o. 06- 2925) D i s t r i ctC our tJ udge: H onor abl e W i l l i am J. M ar t i ni

___________ Subm i t t ed U nderT hi r d C i r cui tL . A . R . 34. 1( a)

Sept ember23, 2008

___________ B e f o re : B A R R Y , A M B R O a n d G A R T H , C i r cui tJudges ,

( Fi l ed: Sept ember24, 2008)

___________ OP I NI ON

___________ G A R T H , C i r cui tJudge : D onna Pace appea l s fr om t he D i s t r i ctC our t ’ s or deraff i r m i ng t he s ubs t i tut i on of

### I n e s s e nc e , Pa c e c l a i m e d that the l e tt e r s fa i l e d t o s t at e that Ri ve r be nd wa s ade bt 1 

### c ol l e c t or or that i t wa s att e m

pt i ng t o c ol l e c t

ade bt . She l at e r

c onc e de d that

s he ha d no is sue with the st andard Medicare dem and lette r, le aving o nly the c ov er le tt er at is sue. -2- M i chae l O . L eavi t t , Secr et aryof the U . S. D epart m entof H eal t h and H um an Ser vi ces ( t he “S ec retary ”), fo r th e n am ed d ef en d an t, R iverb en d G o v ern m en t B en ef it s A d m inistrator, I n c . F o rt h e f

o l l o wi n g r e a s o n s , we wi l l a f f i r m. I. O n Ju ly7 , 2 0 0 5 , R iverb en d , a p ri v ate insu ran ce co m p an yac ti n g as a n interm ed iary f o rt h e M e d i c a r e p r o g r a m , s e n tt w o a t t a c h e d l e t t e r s t o P a c e , a M e d i c a r e b e n e f i c i a r y, r eques t i ng r ei m bur s ement foran overpaym ent . O ne w as a s t andar d M edi car e demand l et t erl i s t i ng t he ful l amount ow ed as $4, 735. 64. T he otherw as a cove rl et t er acknow l edgi ng pas tr ece i ptof $1, 064. 58 and s t at i ng t hatt he r emai ni ng bal ance w as $3, 671. 06. O n M a y1 5 , 2 0 0 6 , af

ter re so lv in g th e o v e rp a ym e n t o w e d , P a c e f iled a c o m p lain t in s t at e courtagai ns tR i verbend al l egi ng t hatt hes e l et t er s vi ol at ed the Fai rD ebtC ol l ect i on Pr act i ces A ct( “FD C PA ”) , 15 U . S. C . §§ 1692–1692p. T he ca s e w as r emoved t o fede r al 1 cour t , and the G overnm entm oved t o s ubs t i tut e Secr et aryL eavi t tforR i verbend as t he r eal p a rtyo f in ter e st p u rsu a n t to F e d e ra l R u le o f C iv il P ro c e d u re 1 7 , o r a ltern a tiv e lyto i nt er vene pur s uantt o Feder al R ul e of Ci vi l Pr ocedur e 24( a) . T he M agi s t r at e J udge gr ant ed the mot i on fors ubs t i tut i on on J ul y14, 2006, and the D i s t r i ctC our taff i r m ed on J anuary31, 2007.-3-

Subse quent l y , on N ovember 7, 2007, t he D i s t r i ctC our tdi s m i s s ed the compl ai nt for l ack o f subjectm at t er j uri sdi ct i on becau se a FD C P A cl ai m cann ot be ass ert ed ag ai nst an “of fi cerorempl oy ee of

t he U ni t ed St at es . ” 15 U . S. C . § 1692a( 6) ( C ) . Pace now a p p e a ls th e s u b s titu tio n o f th e S e c re ta ry. II. T h e D i s t r i c tC o u r th a d o r i g i n a l j u r i s d i c t i o n p u r s u a n tt o 2 8 U . S . C . § 1 4 4 1 . We h a v e ju risd ictio n u n d e r 2 8 U .S .C . § 1 2 9 1 , w h ich p ro v id e s a p p e llate ju risd ictio n f ro m a ll fin al de cisi o n s o f U . S . d istri ct co u rt s. W e re v iew fo r ab u se o f d iscreti o n a d istri ct co u rt ’s deci s i on w hethert o j oi n ors ubs t i tut e a pa r t yas a “r eal par t yof i nt er es t ” underFeder al R u le of C ivil P roc ed u re 1 7 (a). E sp o sit o v . U n it ed S tat es, 36 8 F . 3 d 1 2 7 1 , 1 2 7 3 (10 th C ir . 20 04 ); W i ebu rg v. G T E S ou t hw estInc. , 27 2 F . 3d 30 2, 30 8 (5t h C i r. 20 01 ). W e exerci se de novo r evi ew overa di s m i s s al forl ack of s ubj ectm at t erj ur i s di ct i on. M etr opol i t an Li fe Ins. C o . v . P ri ce , 5 0 1 F . 3 d 2 7 1 , 2 7 5 (3d C ir . 2 0 0 7 ). III . Pa c e c on t e nd s t ha tRi ve rbe nd s ho ul d b e s ub j e c tt o l i a bi l i t yun de rt he FD CPA beca us e i tw as l i ke anyot herpr i vat e contr act orhi r ed byt he G overnm ent . E xt endi ng governm ent al i m m uni t yt o R i verbend w oul d, Pace a r gues , perm i ti tt o es cape i t s dut i es and obl i gat i ons undert he FD C PA as a pr i vat e debtcol l ect or . W e do notagr ee. Pr i vat e i ns ur ance compani es , s uch as R i verbend, contr act ed byt he Secr et aryunder P a r tA o f t h e M e d i c a r e P r o g r a m h a v e b e e n k n o wn a s “ f i s c a l i n t e r me d i a r i e s . ” 4 2 U. S . C.

### As the Dis tric t Court no te d, Co ng re ss am ended the Medicare Act to authoriz e 2 

### the Sec re tary

to ente r i nto con tr ac ts with “Medic ar e Adm inis tr ative Con tr ac tors ,”rather than fi s c a li nt e r

m e di ari e s , but

thi s am e ndm e nt

di d not be c om e e ffe c t i ve unt i la ft e r the relev ant ev ents inth is case. 4 2 U .S .C . § 

### 13 95 kk -1 (e ff ec ti ve October 1, 200 5). § 1 3 9 5 h . T h e se f

isc a l in ter m e d iar ies “ ‘a c t[ ] o n b e h a lf o f th e [ M e d ica re ] A d m in istra to r in 2 carr y i ng outcert ai n admi ni s t r at i ve r es pons i bi l i t i es t hatt he l aw i m pos es ’ and [a r e] ent i t l ed t o i ndemni fi cat i on fr om t he U ni t ed St at es , w hi ch, t her efor e, i s ‘ t he r eal par t yof i nt er es t . ’ ” Pani v. E m pi r e B l ue C r os s B l ue Shi el d, 152 F. 3d 67, 71- 72 ( 2d C i r . 1998) ( quot i ng 42 C .F .R . § 4 2 1 .5 (b )) (s u rv e y in g c a se s); a c c o rd S . R e p . N o . 8 9 -4 0 4 (1 9 6 5 ), as re p rin ted in 19 65 U . S . C . C . A . N . 19 43 , 19 95 (“I n the perform ance o f t heircon t ractual unde rt akings, t he ca r r i er s and fi s cal i nt er m edi ar i es w oul d acton behal f of the Secr et ary. . . . T he Secr et ary , how ever , w oul d be the r eal par t yi n i nt er es ti n t he admi ni s t r at i on of the pr ogr am. ”) . I n s endi ng t he l et t er s ati s s ue i n t hi s cas e, R i verbend cl ear l yw as act i ng on b e h a l f o f t h e S e c r e t a r yi n a d mi n i s t e r i n g t h e M e d i c a r e p r o g r a m. B eca us e w e fi nd t hatt he Secr et aryw as pr oper l ys ubs t i tut ed as t he r eal par t yof in te re s t, w e n e e d n o t d e c id e w h e th e r R iv e rb e n d w a s o th e rw is e e n title d to im m u n ity. S in c e F D C P A c laim s c a n n o t b e a ss e rte d a g a in st th e S e c re tar y , the D istric t C o u rt p ro p e rly di s m i s s ed the compl ai ntforl ack of s ubj ectm at t erj ur i s di ct i on. 

### IV . A ccor di ngl y , w e af

fi r m t he D i s t r i ct C our t ’ s or der s of Janua r y 31, 2007 and N ovember27, 2007.