United States Court of Appeals

Fifth Circuit



## FILED

January 9, 2004

Charles R. Fulbruge III

Clerk UNITED STATES COURT OF APPEALS

FOR THE FIFTH CIRCUIT

02-20825

UNITED STATES OF AMERICA, EX REL, JOYCE RILEY,

Plaintiff-Appellant,

VERSUS

ST. LUKE’S EPISCOPAL HOSPITAL, ET AL

Defendants,

ST. LUKE’S EPISCOPAL HOSPITAL; BRANISLAV RADOVANCEVIC, DR.;

O. HOWARD FRAZIER, M.D.; SURGICAL ASSOCIATES OF TEXAS, P A;

BAYLOR COLLEGE OF MEDICINE; TEXAS HEART INSTITUTE;

EDWARD K. MASSIN, DR.

Defendants-Appellees.

Appeal from the United States District Court

For the Southern District of Texas

Before DAVIS, SMITH, and DUHÉ, Circuit Judges.

DUHÉ, Circuit Judge:

Plaintiff Joyce Riley, a former nurse at St. Luke’s Episcopal

Hospital, sued Defendants under the qui tam provisions of the False

Claims Act (“FCA”), 31 U.S.C. § § 3729 & 3730(b). The district

court dismissed the complaint under Rule 12 (b)(6) for failure to

state a claim. We hold that dismissal was inappropriate at this

stage of the litigation and accordingly reverse and remand for1 Refer e nces to Defendants are as follows: collectively,

"Defendants"; Surgical Associates of Texas and Drs. Frazier and

Massi n, "Physician Defendants"; St. Luke's, THI and its employee

Branislav Radovancevic, "Hospital Defendants"; and Baylor,

"Baylor."

2 further proceedings.

I. BACKGROUND

Riley alleges that Defendants filed false claims with Medicare

and the Civil Health and Medical Program of the Uniformed Services

(CHAMPUS) for services that were either medically unnecessary or

rendered by an unlicensed physician. Defendants Surgical Associates

of Texas, St. Luke’s Episcopal Hospital, and Drs. Edward Massin and

O. Howard Frazier allegedly sou g ht Medicare or CHAMPUS

reimbursement for false claims. Defendant Baylor College of

Medicine allegedly trained or employed residents, students, and

fellows who worked at St. Luke’s and who aided the filing of false

claims. Defendants Dr. Branislav Radovancevic and his employer,

the Texas Heart Institute (THI), allegedly aided the filing of

false claims. THI is an organization of doctors at St. Luke’s who

specialize in treating heart conditions and performing heart

transplants. Dr. Radovancevic earned a medical degree in Belgrade,

and has not passed the medical licensing exam in Texas. 1

Riley asserts essentially that Radovancevic, despite being

unlicensed, performed physician services for patients whose bills

were submitted to and paid by Medicare or CHAMPUS. Her complaint

also asserts that, in apparent pursuit of prestige by being3

industry leaders in terms of number of heart transplants performed,

D efendants performed unnecessary heart transplants paid for by

Medicare or CHAMPUS. The complaint also charges a civil conspiracy

to file false claims.

The district court dismissed Riley’s claims against all

Defendants. U nited States ex rel. Riley v St. Luke’s Episcopal

Hosp. , 200 F. Supp. 2d 673 (S.D. Tex. Apr. 3, 2002), amended 2002

WL 32116882 (S.D. Tex. June 27, 2002) . The district court wrote

that the FCA is not a vehicle for regulatory compliance, and that

materiality and a knowing falsehood are required to implicate the

FCA. I d. 200 F.Supp. 2d at 679. The court held that Medicare

payment s are made according to the patient’s Diagnosis-Related

Group, regardless of wh o provides treatment; therefore, Dr.

Radovancevic’s participation was immaterial to billing and could

not provide the basis f or an FCA claim. I d. at 680. On the

question of medical necessity, the court dismissed th e claims as

challenging scientific judgment about which reasonable minds may

differ, holding that such an opinion cannot be “false” for purposes

of the FCA. I d. at 679. Finding no illegal activity, the court

found no conspiratorial conduct. Id. at 680.

II. DISCUSSION

A. Appellate Jurisdiction

The Hospital Defendants contend that we lack jurisdiction

because Riley’s notice of appeal was untimely. When the United4

States is not a party in an FCA suit, Rule 4(a)(1) allows sixty

days from the entry of the judgment appea led to file a notice of

appeal. U nited States ex rel. Russell v. EPIC Healthcare Mngt.

Group , 193 F.3d 304, 308 (5th Cir. 1999).

Riley noticed her appeal July 16, 2002. The district court

entered a “Final Judgment” on April 1, 2002, providing that

“plaintiff shall take nothing” and referencing reasons given in a

memorandum opinion which granted only St. Luke’s motion to dismiss.

An “Amended Final Judgment” entered April 3 provided that

“de fendants will take nothing” and referenced reasons in an

“amended” memorandum opinion dismissing in favor of all Defendants.

On April 5 the district court vacated the April 3 defendants-takenothing judgment and reinstated the April 1 plaintiff-take-nothing

judgment.

Plaintiff and Defendants both filed post-judgment motions.

After rulings, the district co urt issued the following “Amended

Final Judgment,” entered June 26:

Pursuant to the Amended Memorandum Opinion and Order

dated April 2, 2002, as modified by this Court’s order of

J une 25, 2002 [entered June 27], Plaintiff will tak e

no thing by this suit. This Court’s Judgments [entered

April 1 and April 3] are hereby vacated.

This is a Final Judgment.

The Hospital Defendants characterize the foregoing judgment as

a mere clerical correction that followed their post-judgment Motion

for Correction of Minor Mistakes. Thus they argue this judgment

would not interrupt or restart the time for appealing the real2 As the Advisory Committee's noted about Rule 59(b), "The

phrase ‘no later than' is used

— rather than ‘within'

— to include

post-judgment motions that sometimes are filed before actual entry

of the judgment by the clerk."

5 underlying judgment, th e one entered April 1, from which

Plaintiff’s appeal is untimely. They argue that Plaintiff’s postjudgment mo tion was also ineffective to extend the appellate

deadline because it addressed a judgment that was vacated.

We disagree. Federal Rule of Appellate Procedure 4(a)(4)

specifies several post-judgment motions which must be disposed of

before a notice of appeal can be effective. One is a timely filed

m otion to alter or amend the judgment under Rule 59. Plaintiff

moved to alter or amend judgment on April 5, which was timely and

thus effected a tolling of the time for appeal under Rule

4(a)(4)(A). Plaintiff’s post-judgment motion was timely because it

was “filed no later than 10 days after the judgment [was] entered.”

Fed. R. Civ. P. 59(b). 2

Nor was Plaintiff’s post-judgment motion moot because of the

vacatur of the April 3 judgment. Because her motion (except one

part addressing the defendants-take-nothing error in the April 3

judgment) addressed the merits underlying the judgment as reflected

in the memorandum opinions, it was not mooted by the district

court’s vacatur of the April 3 judgment, which corrected only the

clerical error.

Since Pla intiff’s motion to alter or amend judgment was

timely, the time for filing an appeal ran from the entry of the3 Plaintiff’s July 16 notice of appeal was filed within the

designated time after entry of the final judgment (June 26) and

within the designated time after entry of both the orders disposing

of post-judgment motions (June 17 and June 27).

6 order denying her motion or granting or denying any of the other

motions listed in Rule 4(a)(4). Fed. R. App. P. 4(a)(4)(A). Thus

by any count, 3 her notice of appeal was timely and sufficient to

confer appellate jurisdiction.

B. Legal Standards for Motion to Dismiss

A district court should dismiss for failure to state a claim

o nly if “it appears beyond doubt that the plaintiff can prove no

set of facts in support of his claim which would entitle him to

relie f.” C onley v. Gibson

, 355 U.S. 41, 45-46, 78 S.Ct. 99, 2

L.Ed.2d 80 (1957). We review such ruling de novo. United States

ex rel. Thompson v. Columbia/HCA Healthca re Corp. , 125 F.3d 899,

901 (5th Cir. 1997). The complaint must be liberally construed in

favor of the plaintiff, and all well-pleaded facts accepted as

true. Kaiser Aluminum & Chem. Sales v. Avondale Shipyards, Inc.

,

677 F.2d 1045, 1050 (5th Cir. 1982), cert. denied , 459 U.S. 1105,

103 S.Ct. 729, 74 L.Ed.2d 853 (1983).

Riley urges us to reverse the district court, because it made

assumptions abo ut “evidence” rather than accepting the well-pled

allegations as true. Indeed the district court’s opinion made

several references to the evidence and few, if any, to the

pleadings. The exhibits attached to the complaint, however, are

part of the complaint “for all purposes.” Fed. R. Civ. P. 10(c).4 Although the district court’s memorandum opinion initially

seemed to address only St. Luke’s Rule 12(b)(6) motion to dismiss,

upon reconsideration the district court amended its memorandum

opinion to clarify that each of the defendants was dismissed, under

each of their motions

— including Baylor’s “motion to dismiss or

for summary judgment ”

— for the reasons stated in its memorandum

opinion of April 2. The fact that Baylor attached evidence to its

motion for summary judgment does not change our opinion. In the

context of the memorandum opinion of April 2, it is apparent that

the court granted relief to Baylor based on its motion to dismiss

and not based on its summary judgment evidence. S ee infra subpart

D.

7 Thus it i s not error to consider the exhibits to be part of the

complaint for purposes of a Rule 12(b)(6) motion. 4

To the extent that the district court held that the fraud

claims failed “as unsupported by the evidence,” and noted that

there was “no evidence” or “no credible evi dence” on certain

issues, however, the court was not applying the correct standard

for a Rule 12(b )(6) motion. S ee Rubinstein v. Collins

, 20 F.3d

160, 166 (5th Cir. 1994); Thompson , 125 F.3d at 901.

A Rule 12(b) (6) dismissal is not warranted just because the

district court “believes the plaintiff is unlikely to pre vail on

the merits.” C lark v. Amoco Prod. Co.

, 794 F.2d 967, 970 (5th Cir.

1986). “Even if it seems ‘almost a certainty to the court that the

facts alleged cannot be proved to support the legal claim,’ the

claim may not be dismissed so long as the complaint states a

claim.” I d. (quoting Boudeloche v. Grow Chem. Coatings Corp.

, 728

F.2d 759, 762 (5th Cir. 1984)).

C. Stating a Claim under the FCA5 Second Am. Complaint filed March 17, 1997, ¶¶ 211-13. Further

citations to the second amended complaint are by paragraph number

only.

6 Physician claim Form HCFA-1500 carries an express

certification "that the services shown on this form were medically

indicated and necessary for the health of the patient.” Similarly

if a hospital seeks CHAMPUS reimbursement, the same certification

is present (Form HCFA-1450). P eterson v. Weinberger

, 508 F.2d 45,

52 (5 th Cir.), cert. denied , 423 U.S. 830, 96 S.Ct. 50, 46 L.Ed.2d

47 (1975), recognized that an express false certification on a

claim form submitted to the Government for payment is actionable

under the FCA. That the services be medically necessary is a

condition for payment under the regulations. S ee 42 U.S.C. §

1395y(a)(1)(A) (proscribing payment under Medicare Part A or Part

B unless items or services are “r easonable and necessary”); s ee

8 To state a claim under the FCA, subsection (a)(1), a relator

must allege that the defendant “knowingly” made “a false or

f raudulent claim” to the United States Government. 31 U.S.C.

§ 3729(a)(1) (West 1999). Similarly, to state a claim under

subsection (a)(2), the relator must allege that the defendant

“knowingly” made or used “a false record or statement to get a

false or f raudulent claim” paid by the Government. I d.

§ 3729(a)(2). Generally Riley alleges that Defendants violated

those two subsections of the FCA by admitting and upgrading

patients unnecessarily and covering up for medical bills submitted

for services of an unlicensed doctor. 5 She also alleges that

Defendants conspired to defraud the Government into paying false or

fraudulent claims (FCA subsection (a)(3)). ¶¶ 217-19.

1. Medically Unnecessary Services.

As the district c ourt recognized, claims for medically

unnecessary treatment are actionable under the FCA. 6 The districtalso 42 C.F.R. § 424.32(b) (requiring the use of these for ms for

claims).

9 court concluded, however, that expressions of opinion or scientific

judgments about which reasonable mind s may differ cannot be

“false.” S t. Luke’s

, 200 F.Supp. 2d at 679. We agree in principle

with the district court and accept that the FCA requires a

statement known to be false, which mean s a lie is actionable but

not an error. We disagree, however, with the court’s assessment of

the sufficiency of the allegations.

Riley’s complaint does sufficiently allege that statements

were known to be false, rather than just erroneous, because she

asserts that Defendants ordered the service s knowing they were

unnecessary. The complaint states generally that “patients were

unnecessarily admitted to St. Luke’s

. . . and/or their organ

transplant status artificially upgraded,” ¶ 7, and that Defendants

“knew of, directed, and personally participated in the fraudulent

conduct and false claims described [in the complaint].” ¶¶ 42-49.

More particularly, Riley alleges a “scheme” connoting knowing

misconduct: the Physician Defendants and Hospital Defendants

“part icipated in a scheme that allowed for the unnecessary

admission and artificial up grade of the status of some heart

transplant patients.” ¶ 32.

The “knowing” aspect is reiterated throughout the complaint:

[Defendan t s] were aware of the impropriety of their

actions.

. . .10

Also, because

. . . Defendants wrongly admitted and

upgraded patients, bills submitted to the federal

government were rendered false and unpayable.

. . . Defendants falsely upgraded patients and issued bills for

inappropriate care. . . . Defendants . . . violated the

FCA in rendering inordinate care in unnecessary instances

. . . .

. . .

A known and intended result of Defendants’ conspiracy was

to induce the Government to pay

. . . for fraudulent

hospital services and medical care as described above.

¶¶ 33, 120, 218. These allegations satisfy the FCA’s requirement

that Defendants “know” that the record, statement, or claim is

false.

Dismissing the allegations of claims for medically unnecessary

services, the district court stated, “The evidence shows that St.

Luke’s provided medical care to patients who desperately needed

care.” This controversial finding or conclusion raises the

question of the role of the exhibits attached to the complaint.

Some of Riley’s allegat ions are qualified by the contents of

attached documents. For example, “The medical records of two

example patients show that admissi on to the hospital and/or

admission to the intensive care unit was not medically justified.”

¶ 32. If such an allegation is contradicted by the contents of an

exhibit attached to the pleading, then indeed the exhibit and not

the all egation controls. S immons v. Peavy-Welsh Lumber Co.

, 113

F.2d 812, 813 (5th Cir.), cert. denied

, 311 U.S. 685, 61 S. Ct. 63,

85 L. Ed. 442 (1940).

Some of Riley’s allegations, however, are not dependent on the

documents incorporate d into her complaint. For example, Riley11

claims, “The Defendants participated in a scheme that brought heart

transplant patients to the hospital and/or to ICU who were not, at

that time, truly needing hospital care.” ¶ 120. Additionally,

Riley expressly alleges that she “does not have detailed

information on all Medicare and CHAMPUS patients treate d by the

Defendants.” ¶ 121. The complaint thus conveys that her

referenced exhibits are meant to provide examples only and are not

intended to signify exclusive incidents. S ee also ¶ 208 (“These

are only examples from five patient records . . . .”).

At this preliminary stage, the district court should dismiss

only if it appears beyond doubt that Plaintiff can prove “no set of

facts” in support of her claim. C onley v. Gibson

, 355 U.S. at 45.

Even if Riley’s exhibits called into question one or mo re of the

examples she alleged, they did not call into question all her

allegations of false claims. The district court therefore acted

prematurely in dismissing the complaint because it pr ecluded the

opportunity for Plaintiff by subsequent proof to establish a claim

supporting the allegations not refuted by exhibits. Compare C lark

,

794 F.2d at 970 (holding di smissal under Rule 12(b)(6) improper

unless the complaint “on its face show[s] a bar to relief”), with

Simmons

, 113 F.2d at 813 (holding exhibits defeat claim on contract

where letter attached shows clearly the absence o f any contract,

express or implied).

Defendants next argue that not all Defendants are implicated

by the allegations regarding ICU upgrades and hospital admissions.12

The Physician Defendants argu e that they could not have filed

claims for hospitalization or ICU upgrades because such costs are

billed by the hospi tal, not the physicians. Hospital Defendants

contend that they do not bill for physician services and had no

part in the admission or u pgrade of patients to ICU — matters

accomplished only by doctor’s orders.

The FCA applies to anyone who “‘k nowingly assist[s] in

causing’” the government to pay claims grounded in fraud, “‘without

regard to wheth er that person ha[s] direct contractual relations

with the government.’” Peterson v. Weinberger

, 508 F.2d 45, 52-53

(5th Cir.) (quoting United States ex rel. Marcus v. Hess

, 317 U.S.

537, 544-45, 63 S.Ct. 379, 87 L.Ed. 443 (1943)), cert. denied

, 423

U.S. 830, 96 S.Ct. 50, 46 L.Ed.2d 47 (1975). “Thus, a person need

not be the one who actually submitted the claim forms in order to

be liable.” United States v. Mackby , 261 F.3d 821, 827 (9th Cir.

2001). Riley does allege that the defendants assisted one another

and cooperated in a scheme or pattern of billing for and covering

up these allegedly false-claim items. S ee ¶¶ 27, 30, 32, 42-49,

120, 213, 217. Under the “knowing assistance” standard of H ess and

Peterson , these allegations suffice to implicate all Defendants.

2. Services by an Unlicensed Physician.

Riley alleges that Defendants cooperated in billing for

services rendered by an unlicensed physician, Branislav

Radovancevic, who could not lawfully bill Medicare or CHAMPUS

himself.13

T he Physician Defendants argue that while Riley might have

alleged unauthorized practice of medicine, she did n ot allege a

false or fraudulent claim from Dr. Radovancevic’s all eged

u nauthorized practice. We disagree. The complaint alleges that

when the Hospital Defendants or Physician Defendants submitted

their claims, “they warranted and represented that the services in

such statements were rendered by duly licensed physicians or

persons who are otherwise qualified under the various regulations,

codes, and standards. Many of the professional services rendered,

in part or in whole to those patients, were nevertheless those of

Dr. Radovancevic,” ¶ 28, whom she a lleges was neither authorized

nor supervised. ¶ 30.

The Physician Defendants point out that their claim forms are

expressly designed to include ser vices furnished “by my employee

under my immediate personal supervision.” The allegations of the

complaint, however, are that Dr. Radovancevic provided the services

“without authority or supervision.” ¶ 30. We accept these

allegations as true at this stage of the proceedings. A certifying

doctor who is not the doctor who rendered or personally supervised

the services is subject to liability for a false claim. S ee

Peterson , 508 F.2d at 52.

The Hospital Defendants argue tha t Riley never alleged that

they submitted false claims for Dr. Radovancevic’s services.

Because there is no false-claims liability for an inadvertent

error, they argue that they should not be liable either for a7 She alleges that the Physicians Defendants and St. Luke’s were

aware of the impropriety of their actions and willingly gave Dr.

Radovancevic a place and method to practice “rat her than showing

[him] the door.” ¶¶ 33, 110.

8 The complaint asserts that “the nursing staff at St. Luke’s

[] were told to follow the orders of Branislav Radovancevic, but

directed not to sign his name on any written documentation, such as

physician orders. Instead nurses were instructed in some instances

to sign Dr. Frazier’s name

. . . [or someone else’s name].” ¶ 33;

see also ¶ 34 (alleging Defendants’ “concerted effort” to keep

Radovancevic’s name from written records).

9 Riley alleges that false and unpayable hospital bills were

submitted for Dr. Radovancevic’s care specifically for Patient No.

1108146 and an order for drugs. More generally the complaint

states that Dr. Radovancevic did not himself bill for any services

but that his services nevertheless manifested themselves in false

or fraudulent billings by the Physician Defendants as well as St.

Luke’s. ¶¶ 25, 29, 117, 118, 119, 169, 207.

14 regulatory misstep or for services that were immaterial to the

hospital billings. Arguing against implied-certification

liability, St. Luke’s maintains that it cannot be deemed to have

“knowingly” submitted a false claim based on a regulatory misstep,

where it has actually rendered the serv ices billed. THI and Dr.

Radovancevic cont end that, because they did not submit claims at

all, they are not implicated by the allegations.

St. Luke’s arguments fail, because Riley has not alleged

simple inadvertence. Taking Riley’s allegations as true, St.

Luke’s knew full well that Dr. Radovancevic could not practice

medicine, yet pro vided him the means to do so regardless, 7

instructed nurses to conceal the impropriety, 8 and hid his services

in false billings to Medicare and CHAMPUS, trying to keep Dr.

Radovancevic’s name out of their records. 9Riley alleges that a patient would receive “care, treatment, and

professional se rvice which justified the hospital billing to the

government. Many of these services . . . could be carried out only

on the order of a license physician. Some . . . charges . . . were

directly or in part based on hospital services ordered by Branislav

Radovancevic, an unlicensed physician.” ¶ 31. She also alleges

that “false claims were submitted, and the Government defrauded by

virtue of the facts that [Defendants] . . . participated in a

scheme that allowed Radovancevic, without authority or supervision,

to c are for Medicare and CHAMPUS heart transplant patients in

direct violation of federal and state law.” ¶ 30.

10 Webster's Third New International Dictionary 819 (1981).

11 U nited States ex rel. Willard v. Humana Health Plan

, 336 F.3d

375, 380-81 (5th Cir. 2003).

15 Allegations suffice under the FCA if they state that defendant

made a record or statement known to be false or fraudulent in order

to get a false clai m paid. 31 U.S.C. § 3729(a)(2). “False” can

mean "deceitful,” or “tending to mislead,” 10 and a “false claim” is

one “grounded in fraud which might result in financial loss to the

Government.” P et erson , 508 F.2d at 52. The FCA “reaches beyond

‘claims’ which might be legally enfo rced, to all fraudulent

attempts to cause the Government to pay out sums of money.” Id.

This complaint is not like the one this Court discussed in

Willard

, 11 wherein all the claims were indisputably valid. Here,

the allegations noted describe false records and false claims. The

scienter element is satisfied without resorting to an implied

certification theory of liability. C f. Willard

, 336 F.3d at 381

(“Because Willard does not allege that any of the claims were false

in the sense that they contained false statements or were for

services not performed or the like, Willard must resort to either12 The complaint sufficiently alleges financial injury to the

Government. ¶ 32 (“[Defendants] participated in a scheme that

allowed for the unnecessary admission and artificial upgrade of the

status of some heart transplant patients.

. . . This medical care

and treatment falsely and fraudulently manifested itself into bills

submitted to the federal government that were paid.”); ¶ 180 (“The

bills establish Defendant Rado vancevic is making decisions that

affect the amount the U.S. Government [sic], rendering the above

bills false and unpayable.” ); ¶ 208 (“Because Defendants falsely

admitted and upgraded patients . . . the bills submitted to the

federal government were false and unpayable.”); ¶ 219 (“The United

States Government, unaware of the falsity . . . paid the full

amount . . . .”).

16 the ‘implied certification’ or ‘fraud in the inducement’ theories

of liability through which it may be possible to demonstrate that

otherwise valid claims are actionable under the FCA.”).

As for THI, Dr. Radovancevic, and Baylor, any stipulation that

they did not file claims does not exonerate them. As discussed

above, anyone who “knowingly assist[s] in causing” the government

to pay claims g rounded in fraud can be liable under the FCA.

Peterson , 508 F.2d at 52.

We find Defendants’ assertion that fi nancial injury to the

Government was not sufficiently alleged to be without merit. 12 The

Hospital Defendants’ argument that the FCA is inequitable in the

healthcare industry is one more properly addressed to Congress than

a court.

4. Conspiracy.

Defendants argue that Riley’s conspiracy allegations are

conclusory and that she fails to allege an identifiable act in

furtherance of the conspiracy. Riley alleged that the acts13 200 F. Supp. 2d 673, 675 n. 1.

14 While the district court declared that it was granting

Baylor’s “motion to dismiss or for summary judgment,” we readily

see from the court’s reasons for ruling that the court granted only

the motion to dismiss and did not act upon the alternative motion

for summary judgment. S ee

, e.g.

, 200 F. Supp. 2d 6 7 3, 675

17 described in the complaint constituted one or more conspiracies “to

defraud the United States Government by getting false, fraudulent

claims approved or paid,” and th at Defendants “took substantial

steps in furtherance of those co nspiracies, i nter alia

, by

preparing false records and claims and submitting such documents to

the Government via the Medicare and/or CHAMPUS system for payment

and approval.” ¶ 217. Whether this general allegation of

conspiracy survives will depend largely on whether the underlying

allegations of false statements and false claims surv ive the

specificity challenge under Rule 9(b), a matter we leave to the

district court in the first instance, as discussed next.

D. Matters Not Decided by the District Court

Defendants ask that we affirm dismissal because the complaint

did not meet the specificity requirement of Fed. R. Civ. P. 9(b).

The district court did not address whether Riley’s complaint

complied with Rule 9(b) because it held that the dismissal for

failure to state a claim rendered the inqui ry moot. 13 Riley and

Baylor also ask us to determine whether Baylor is entitled to

relief on its motion for summary judgment

— another matter not

decided by the district court. 14(determination that Court “should GRAN T the defendant’s 12(b)(6)

motion to dismiss”); i d. n. 2 (amendment to original memorandum

opinion, adding that dismissal is against all defendants

– not just

St. Luke’s, whose motion to dismiss is the subject of the

memorandum opinion); id. at 677-79 (discussing Rule 12(b)(6)); id.

at 680 (concluding that motion to dismiss should be granted).

18 Although we may consider alternative grounds for upholding the

district court's decision, Flournoy v. Century Fin. Co., Inc. (In

re Henderson)

, 577 F.2d 997, 1002 n. 5 (5th Cir. 1978), we decline

to do so in this case. Thus the particularity requirements of Rule

9(b) and the merits of Baylor’s motion for summary judgment can be

addressed as necessary in the first instance by the district court

upon remand. S ee Youmans v. Simon

, 791 F.2d 341, 348 (5th Cir.

1986) (declining to consider Rule 9(b) challenges not been passed

upon by the district court).

We remind the district court, however, of the central

importance of rule 9(b) in regard to allegations of fraud:

[T]he reference [in rule 9(b)] to “circumst ances constituting fraud” usually requires

the claimant to allege at a minimum the identity of the person who made the fraudulent

statement, the time, place, and content of the

misrepresentation, the resulting injur y; and

the method by which the misrepresentation was

communicated . . . .

In cases concerning fraudulent misrepresentation and omission of facts, Rule 9(b)

typically requires the claimant to plead the

type of facts omitted, the place in which the

omissions should have appeared, and the way in

which the omitted facts made the representations misleading.

2 J AMES W. M OORE ET AL

., M OORE ’ S F EDERAL P RACTICE § 9.03[1][b], at 9-19

18 through 9-19 (3d ed. 2003) (footnotes omitted); accord Tuchman

v. DSC Communications Corp. , 14 F.3d 1061, 1068 (5th Cir. 1994).

III. CONCLUSION

After de novo review of the motions and second amended

complaint, we hold that the district court misapplied the Rule

12(b)(6) standards in dismissing this matter. As the district

court has not assessed the sufficiency of the complaint under Rule

9(b) or the merits of Baylor’s motion for summary judgment, we

remand to the district court for consideration of those matters in

due course and for further proceedings consistent herewith.

“Nothing in this opinion is to be construed as indicating the view

of this court regarding the ultimate merits of any of the

allegations.”

REVERSED AND REMANDED.