Court Opinion

ID: 9323389
Source: CourtListenerOpinion
Date Created: 2022-12-07 01:00:38.347497+00
Date Added: 2024-06-11T17:14:47.144979
License: Public Domain

Case: 22-60209     Document: 00516568637         Page: 1     Date Filed: 12/06/2022

              United States Court of Appeals
                   for the Fifth Circuit
                                                                       United States Court of Appeals
                                                                                Fifth Circuit

                                                                              FILED
                                                                      December 6, 2022
                                  No. 22-60209                           Lyle W. Cayce
                                                                              Clerk

   United States of America, ex rel, Cameron Jehl

                                                           Plaintiff—Appellant,

                                       versus

   GGNSC Southaven, L.L.C., doing business as Golden
   Living Center-Southaven; GGNSC Administrative
   Services, L.L.C., doing business as Golden Ventures;
   GGNSC Clinical Services, L.L.C., doing business as
   Golden Clinical Services,

                                                         Defendants—Appellees.

                  Appeal from the United States District Court
                    for the Northern District of Mississippi
                             USDC No. 3:19-CV-91

   Before Richman, Chief Judge, and Stewart and Haynes, Circuit
   Judges.
   Per Curiam:*

          *
            Pursuant to 5th Circuit Rule 47.5, the court has determined that this
   opinion should not be published and is not precedent except under the limited
   circumstances set forth in 5th Circuit Rule 47.5.4.
Case: 22-60209      Document: 00516568637          Page: 2   Date Filed: 12/06/2022

                                    No. 22-60209

          Relator Cameron Jehl (“the relator”) brought this qui tam action
   against GGNSC Southaven, LLC, GGNSC Administrative Services, LLC,
   and GGNSC Clinical Services (collectively, “GGNSC”) seeking to recover
   damages, penalties, fees, and costs under the False Claim Act (“FCA”). See
   31 U.S.C. § 3729, et seq. After determining that a “complete failure of proof”
   existed with respect to each of the essential elements of the relator’s claims,
   the district court granted summary judgment in favor of GGNSC. For the
   following reasons, we AFFIRM.
               I. FACTUAL & PROCEDURAL BACKGROUND
          In 2005, Lionelle Trofort was working as a licensed registered nurse
   in the state of Virginia which she considered her permanent state of residence
   (“PSOR”). According to Trofort, she considered Virginia to be her PSOR
   because she lived there, her family lived there, she had been stationed there
   when she served in the military, and she planned to return there after she
   completed her work as a travelling nurse. That year, she obtained her Virginia
   multistate license which allowed her to work as a travelling nurse in states
   outside of Virginia. In 2010, she began working as a travelling nurse in
   medical facilities in Arizona, Arkansas, and Mississippi. While working in
   these out-of-state locations, Trofort would live in different hotels on the
   weekdays and weekends. On February 28, 2013, Trofort’s multistate license
   was revoked by the state of Virginia. Her license was reinstated, however,
   after she submitted a declaration on March 20, 2013, indicating that Virginia
   was her PSOR.
          GGNSC operates the Golden Living Center (“Golden Living”)
   which is a 140-bed nursing home in Southaven, Mississippi. Trofort applied
   to work at Golden Living’s Mississippi location on March 22, 2013. She was
   hired and began her employment as nursing director of Golden Living’s
   Southaven facility on April 23, 2013. The following day, Golden Living

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   confirmed with the Virginia nursing board that Trofort held a valid active
   Virginia nursing license with multistate privileges.
           During the period that Trofort’s multistate license was revoked
   (February 28, 2013 through March 20, 2013), she worked at an Arkansas
   facility. GGNSC reported the revocation of Trofort’s license to the Arkansas
   nursing board as it was required to do as a compact nursing board with an
   affirmative duty to report and disclose. The Arkansas nursing board assigned
   investigator Dan West to the matter. West learned that Trofort had a
   Tennessee driver’s license and considered that fact as potential evidence that
   her PSOR was in Tennessee, rather than Virginia. Although the Arkansas
   nursing board issued a subpoena related to Trofort’s work in Arkansas the
   previous year, it ultimately declined to take any action against her based on
   her possession of a Tennessee driver’s license.
           On February 28, 2014, less than a year after Trofort was hired as
   Golden Living’s nursing director, she was suspended. She was then
   terminated on March 4, 2014. Over a year later, on May 31, 2015, the Virginia
   nursing board issued a final adverse action in a public ruling against Trofort,
   revoking her multistate credential. 1
           In the instant appeal, the relator is a licensed attorney and resident of
   Shelby County, Tennessee. He is not affiliated with GGNSC or Golden
   Living. In January 2017, he deposed Trofort in an unrelated wrongful death
   case. While working on that deposition, he discovered publicly available
   administrative depositions that had been posted on the state of Virginia’s
   nursing board website. The post stated that between February 27th and

           1
             The May 31, 2015 revocation of Trofort’s Virginia multistate credential was based
   on an administrative settlement between Trofort and the state of Arizona in proceedings
   that are unrelated to the facts of this case.

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   March 19th of 2013, Trofort had “practiced professional nursing without a
   valid license or multistate compact license” and that she had applied to work
   at Golden Living in Southaven on March 22, 2013. Relying on this publicly
   available information, the relator filed this qui tam action in April 2019 2 on
   behalf of himself and the United States seeking to recover damages and fees
   under the FCA. See 31 U.S.C. § 3729, et seq. According to the amended
   complaint, by employing Torfort as Golden Living’s Director of Nursing
   Services between April 23, 2013 and March 4, 2014, while she purportedly
   did not possess a valid Mississippi nursing license, GGNSC submitted
   Medicare and Medicaid claims to both the state of Mississippi and the federal
   government. As a result, the relator alleged, GGNSC’s certifications of
   compliance with applicable licensure laws in their Medicare and Medicaid
   reimbursement requests were false within the meaning of the FCA.
   Consequently, the relator claimed, GGNSC received millions of dollars in
   Medicare and Medicaid reimbursement payments to which it was not
   entitled.
          The relator estimated that GGNSC submitted approximately 1,393
   claims during the period that Trofort allegedly lacked proper licensing and
   sought damages for each alleged violation. The FCA provides “for a civil
   penalty of not less than $5,000 and not more than $10,000” for each act in
   violation of the statute. See 31 U.S.C. § 3729(a)(1). Thus, the relator sought
   a base of $13,930,000 for the alleged violations, plus approximately $7 million
   in damages for the Government’s wrongful payments to GGNSC during the
   applicable period, in addition to treble damages. In total, the relator sought
   over $30 million in his suit against GGNSC.

          2
              The relator amended his qui tam complaint twice, in March and July of 2020.

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                                    No. 22-60209

          In May 2021, GGNSC moved for summary judgment. In July 2021,
   the district court issued an order to show cause as to why the relator’s suit
   against GGNSC should not be dismissed. The district judge that issued the
   show cause order subsequently recused himself and the case was reassigned.
   The newly assigned district judge reviewed the parties’ briefing that had been
   submitted in response to the earlier show cause order and on March 30, 2022,
   rendered summary judgment in favor of GGNSC.
          In its memorandum opinion, the district court observed that the
   relator alleged that Virginia could not be Trofort’s true PSOR as she claimed
   because she listed a Tennessee address where she had been staying, had
   obtained a Tennessee driver’s license, paid taxes in Tennessee, and
   registered to vote there. The district court disagreed with the relator’s
   allegation, however, noting that “[t]here is no statute or regulation that
   invalidates a multistate license merely because a nurse lists an address
   outside her PSOR, pays taxes outside her PSOR, or obtains a driver’s license
   outside her PSOR.” The court went on to discuss the extensive guidance
   published by the Center for Medicare and Medicaid Services (“CMS”) and
   the applicable Supreme Court and Fifth Circuit jurisprudence and
   determined that “[t]he undisputed facts [did] not establish material evidence
   from which a reasonable jury [could] find a violation of the FCA’s falsity,
   knowledge, or materiality elements.” On this basis, the district court
   concluded that there was a “complete failure of proof on each of the essential
   elements of the relator’s claims” and thus summary judgment in GGNSC’s
   favor was warranted.
          The district court went on to opine that the relator’s action would also
   likely fail under the FCA’s public disclosure bar prohibiting “qui tam actions
   that are ‘substantially the same’ as allegations previously publicly disclosed
   in federal reports or from the news media unless the qui tam relator is the
   ‘original source of the information’ on which the allegations are based.”

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   Because its summary judgment ruling was already adequately supported by
   alternative grounds, however, the court declined to rule on the public
   disclosure bar issue. This appeal ensued.
                          II. STANDARD OF REVIEW
          We conduct a de novo review of a district court’s grant of summary
   judgment. Sanders v. Christwood, 970 F.3d 558, 561 (5th Cir. 2020).
   “Summary judgment is proper ‘if the movant shows that there is no genuine
   dispute as to any material fact and the movant is entitled to judgment as a
   matter of law.’” Id. (citing FED. R. CIV. P. 56(a)). A dispute regarding a
   material fact is “genuine” if the evidence is such that a reasonable jury could
   return a verdict in favor of the nonmoving party. Anderson v. Liberty Lobby,
   Inc., 477 U.S. 242, 248 (1986). “[C]onclusional allegations and
   unsubstantiated assertions may not be relied on as evidence by the
   nonmoving party.” Carnaby v. City of Houston, 636 F.3d 183, 187 (5th Cir.
   2011); see also Celotex Corp. v. Catrett, 477 U.S. 317, 324 (1986). “A panel may
   affirm summary judgment on any ground supported by the record, even if it
   is different from that relied on by the district court.” Reed v. Neopost USA,
   Inc., 701 F.3d 434, 438 (5th Cir. 2012) (internal quotation marks and citation
   omitted).
                                III. DISCUSSION
          On appeal, the relator asks this court to reverse the district court’s
   summary judgment and direct entry of judgment in its favor “because there
   is conclusive proof establishing each element of FCA liability—falsity,
   knowledge, and materiality.” We are unpersuaded. As the district court
   noted in the proceedings below, “the relator’s entire FCA claim is based
   upon an allegation that the defendants employed a Virginia licensed nurse
   who lacked a valid multistate credential.” But the relator’s position here, as

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   the district court concluded, is unsupported by both CMS guidance and
   applicable Supreme Court and Fifth Circuit jurisprudence.
          To guide the operations of long term care facilities such as Golden
   Living, CMS provides extensive guidance in its State Operations Manual. 3
   CMS’s manual states that a facility is not in breach of the governing
   regulation, and thus a nursing license is still considered valid, until (1) the
   authority having jurisdiction regarding noncompliance with its applicable
   laws issues a final adverse action and (2) that action is not under appeal or
   litigation by the facility or the professional providing services. In this context,
   “final adverse action” means “an adverse action imposed by the authority
   having jurisdiction that is more than a corrective action plan or the imposition
   of a civil money penalty, such as a ban on admissions, suspension or loss of a
   facility or professional license, etc.” In other words, as the district court
   explained, CMS “take[s] the position that the license is invalid only after a
   state governing board determines it is invalid in a final adverse action from
   which there is no appeal.”
          The FCA “imposes significant penalties on those who defraud the
   Government.” Universal Health Servs., Inc. v. United States ex rel. Escobar,
   579 U.S. 176, 180 (2016). The Act “imposes liability on anyone who

          3
             State Operations Manual, Appendix PP, Guidance to Surveyors for Long Term
   Care Facilities. See Centers for Medicare & Medicaid Services, Pub. 100-07, State
   Operations Provider Certification, Transmittal 70 (Jan. 7, 2011) available at
   https://www.cms.gov/Regulations-and-
   Guidance/Guidance/Transmittals/downloads/R70SOMA.pdf; see also Centers for
   Medicare & Medicaid Services Memorandum from Director, Survey and Certification
   Group to State Survey Agency Directors regarding Clarification and revisions to
   Interpretive Guidance at F Tag 492, as Part of Appendix PP, State Operations Manual for
   Long       Term      Care      Facilities    (June     1,     2012)     available    at
   https://www.cms.gov/Medicare/Provider-Enrollment-and-
   Certification/SurveyCertificationGenInfo/Downloads/Survey-and-Cert-Letter-12-34.pdf

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   knowingly presents, or causes to be presented, a false or fraudulent claim for
   payment or approval, or knowingly makes, uses, or causes to be made or used,
   a false record or statement material to a false or fraudulent claim.” United
   States ex rel. Lemon v. Nurses To Go, Inc., 924 F.3d 155, 159 (5th Cir. 2019)
   (quoting 31 U.S.C. § 3729(a)(1)(A), (B)). A “claim” is considered a “direct
   request[] for government payment as well as reimbursement requests made
   to the recipients of federal funds under a federal benefits program.” Id.
   (citation omitted). To determine whether liability attaches under the FCA,
   we ask “(1) whether there was a false statement or fraudulent course of
   conduct; (2) made or carried out with the requisite scienter; (3) that was
   material; and (4) that caused the government to pay out money or to forfeit
   moneys due (i.e., that involved a claim).” Id. (citation omitted). “What
   matters is not the label that the Government attaches to a requirement, but
   whether the defendant knowingly violated a requirement that the defendant
   knows is material to the Government’s payment decision.” Escobar, 579 U.S.
   at 181.
             As a preliminary matter, it is undisputed that the Medicare and
   Medicaid reimbursement requests that GGNSC submitted when Trofort
   worked for Golden Living are considered “claims” for purposes of the FCA.
   The three remaining elements regarding FCA liability are addressed below.
             A. Falsity
             The relator first alleges that GGNSC submitted “false” claims in
   violation of the FCA because Trofort allegedly lacked a multistate nursing
   license when GGNSC submitted certain Medicare and Medicaid requests for
   reimbursement while representing that they were in compliance with the
   nurse licensure requirements that are mandated by state and federal law. We
   disagree. “[W]hether a claim is valid depends on the contract, regulation, or
   statute that supposedly warrants it. It is only those claims for money or

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   property to which a defendant is not entitled that are ‘false’ for purposes of
   the False Claims Act.” United States v. Southland Mgmt. Corp., 326 F.3d 669,
   674–75 (5th Cir. 2003).
          GGNSC’s actions while Trofort worked at Golden Living fully
   comported with CMS guidance that a license is invalid only after a state
   governing board determines it is invalid in a final adverse action from which
   there is no appeal. As stated supra, although Trofort’s license was
   temporarily revoked, it was reinstated prior to the date she began her
   employment with Golden Living. Moreover, the day after Trofort began her
   employment with Golden Living, the facility confirmed with the Virginia
   nursing board that she held a valid active Virginia nursing license with
   multistate privileges. At that point, no “final adverse action” had been taken
   to invalidate Trofort’s license. Because Trofort’s license was still valid, the
   certifications that GGNSC submitted between April 23, 2013 and March 4,
   2014 were accurate and comported with the applicable CMS guidance.
   GGNSC was entitled to rely on this guidance as this court affords deference
   to CMS’s manual provisions interpreting its own regulations. See Baylor
   Cnty. Hosp. Dist. v. Price, 850 F.3d 257, 261 (5th Cir. 2017) (observing with
   respect to the CMS manual that “this court accords Skidmore deference to
   ‘agency interpretations of statutes they administer that do not carry the force
   of law[.]’” (citing Skidmore v. Swift & Co., 323 U.S. 134 (1944)). The relator
   has thus failed to show that GGNSC submitted false Medicare and Medicaid
   claims for reimbursement to which it was not entitled. See Southland, 326
   F.3d at 674–75.
          B. Scienter
          The relator next claims that GGNSC knew that Trofort’s Virginia
   privileges had been invalidated by her residency in Tennessee because it had
   received a copy of her Tennessee driver’s license and her tax forms showing

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   a Tennessee address. Again, we disagree. “To prove scienter, the
   government must show the [d]efendants had (1) actual knowledge of falsity,
   (2) acted with deliberate ignorance of the truth or falsity of the information
   provided, or (3) acted with reckless disregard of the truth or falsity of the
   information provided.” United States v. Hodge, 933 F.3d 468, 473 (5th Cir.
   2019) (internal quotation marks and citation omitted).
          Although Trofort’s multistate credential had been temporarily
   revoked, she did not begin her employment with GGNSC until it was
   reinstated. GGNSC was aware that Trofort’s license was reinstated because
   she had submitted a declaration to the Virginia nursing board that Virginia,
   not Tennessee, was her PSOR. Given these circumstances, GGNSC had no
   reason to believe that Trofort’s multistate license was invalid based on her
   connections to Tennessee. Indeed, GGNSC confirmed the day after Trofort
   began working at the Golden Living facility that she held a valid active
   Virginia nursing license with multistate privileges. The relator’s allegations
   that GGNSC “knew” that Trofort’s license had been invalidated are
   therefore meritless because Trofort’s license was valid when she worked for
   Golden Living. Consequently, the relator cannot show that GGNSC
   knowingly     submitted   false    Medicare      and   Medicaid   claims   for
   reimbursement. See Hodge, 933 F.3d at 473.
          C. Materiality
          Finally, the relator contends that “this [c]ourt’s test for materiality
   has been satisfied by overwhelming proof demonstrating that [GGNSC’s]
   false certifications affected the Governments’ payment decisions.” The
   relator has once again missed the mark. Under the FCA, “[t]he term
   ‘material’ means having a natural tendency to influence, or be capable of
   influencing, the payment or receipt of money or property, which requires us
   to evaluate the effect on the likely or actual behavior of the recipient of the

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   alleged misrepresentation.” Hodge, 933 F.3d at 473–74 (citing United States
   ex rel. Harman v. Trinity Indus. Inc., 872 F.3d 645, 661 (5th Cir. 2017) (quoting
   Escobar, 579 U.S. at 192–93)).
           We have already determined that GGNSC did not breach the
   governing regulation because Trofort’s multistate nursing credential was
   valid when she was working at Golden Living. Because there was no breach,
   we need not address materiality. Additionally, as the district court reasoned,
   “[t]he summary judgment evidence shows no linkage between nurse
   licensure and the amount the government pays to the defendants in
   satisfaction of their submitted claims.” Thus, even if there was a breach, the
   relator could not establish that it was material in these circumstances. See
   Hodge, 933 F.3d at 473–74.
           In sum, we agree with the district court that GGNSC has
   “demonstrated a complete failure of proof on each of the essential elements
   of the relator’s claims” and hold that its summary judgment in favor of
   GGNSC was proper. Sanders, 970 F.3d at 561 (citing FED. R. CIV. P.
   56(a)). 4
                                   IV. CONCLUSION
           For the foregoing reasons, the district court’s summary judgment in
   favor of GGNSC is AFFIRMED.

           4
             We likewise agree with the district court that GGNSC makes a good public
   disclosure bar argument but that it is unnecessary to rule on this issue since its summary
   judgment in favor of GGNSC is adequately supported by other grounds in the record. See
   Reed, 701 F.3d at 438 (noting that a panel may affirm summary judgment on any ground
   supported by the record).

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