Court Opinion

ID: 9363885
Source: CourtListenerOpinion
Date Created: 2023-01-17 21:00:34.261634+00
Date Added: 2024-06-11T17:15:34.691570
License: Public Domain

FILED
                           NOT FOR PUBLICATION
                                                                            JAN 17 2023
                    UNITED STATES COURT OF APPEALS                      MOLLY C. DWYER, CLERK
                                                                         U.S. COURT OF APPEALS

                           FOR THE NINTH CIRCUIT

ANI GHARIBIAN, Relator; ex rel United           No.    21-56253
States of America,
                                                D.C. No.
             Plaintiff-Appellant,               2:16-cv-04777-MCS-PLA

 and
                                                MEMORANDUM*
UNITED STATES OF AMERICA; et al.,

             Plaintiffs,

 v.

VALLEY CAMPUS PHARMACY, INC.,
DBA TNH Advanced Speciality
Pharmacy; et al.,

             Defendants-Appellees.

                   Appeal from the United States District Court
                      for the Central District of California
                    Mark C. Scarsi, District Judge, Presiding

                    Argued and Submitted November 17, 2022
                              Pasadena, California

       *
             This disposition is not appropriate for publication and is not precedent
except as provided by Ninth Circuit Rule 36-3.
Before: TASHIMA and NGUYEN, Circuit Judges, and FITZWATER,** District
Judge.

      Appellant Ani Gharibian (“Gharibian”) appeals the dismissal under Federal

Rule of Civil Procedure 12(b)(6) of her qui tam action alleging False Claims Act

violations and related state-law claims. We have jurisdiction under 28 U.S.C. § 1291,

and we affirm.

      Gharibian, as a qui tam relator, sued Defendants-Appellees Valley Campus

Pharmacy, Inc., d/b/a TNH Advanced Specialty Pharmacy (“TNH”), Diplomat

Pharmacy, Inc., and OpumRx, Inc. (collectively, “Appellees”), alleging that they had

engaged in a fraudulent course of conduct that violated the federal False Claims Act,

31 U.S.C. §§ 3729-3733 (“FCA”), and various analogous state laws. In sum,

Gharibian, a former TNH employee, alleged that Appellees had instructed their

employees to misrepresent who their employers were and to falsify patient records in

order to procure prior authorizations for prescription medications from insurance

providers. After dismissing Gharibian’s complaint and granting her leave to amend,

the district court dismissed Gharibian’s second amended complaint (“SAC”) for

failure to state a claim. Gharibian appeals the judgment dismissing her SAC.

      **
            The Honorable Sidney A. Fitzwater, United States District Judge for the
Northern District of Texas, sitting by designation.
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      The district court dismissed Gharibian’s claims related to Appellees’ instructing

their employees to misrepresent who their employers were on the grounds that the

SAC did not adequately plead materiality and that most of the alleged

misrepresentations did not involve claims made to government payors. The district

court dismissed the allegations pertaining to falsifying patient records on the ground

that they lacked specificity.

      We review de novo the grant of a motion to dismiss for failure to state a claim.

E.g., Lee v. City of Los Angeles, 250 F.3d 668, 679 (9th Cir. 2001). We presume that

all factual allegations in the operative complaint are true, and we view them in the

light most favorable to the appellant, but we disregard conclusory allegations. Id. “In

reviewing the dismissal of a complaint, we inquire whether the complaint’s factual

allegations, together with all reasonable inferences, state a plausible claim for relief.”

United States ex rel. Cafasso v. Gen. Dynamics C4 Sys., Inc., 637 F.3d 1047, 1054

(9th Cir. 2011). “We can affirm a 12(b)(6) dismissal on any ground supported by the

record, even if the district court did not rely on the ground.” United States v.

Corinthian Colls., 655 F.3d 984, 992 (9th Cir. 2011) (internal quotation marks

omitted).

      “[A] plaintiff must plead FCA claims with particularity under Federal Rule of

Civil Procedure 9(b).” Winter ex rel. United States v. Gardens Reg’l Hosp. & Med.

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Ctr, Inc., 953 F.3d 1108, 1116 (9th Cir. 2020) (internal quotation marks omitted). “In

alleging fraud or mistake, Rule 9(b) requires a party to state with particularity the

circumstances constituting fraud or mistake, including the who, what, when, where,

and how of the misconduct charged.” Ebeid ex rel. United States v. Lungwitz, 616

F.3d 993, 998 (9th Cir. 2010) (internal quotation marks and alteration omitted).

      In the context of the FCA, “it is sufficient to allege particular details of a

scheme to submit false claims paired with reliable indicia that lead to a strong

inference that claims were actually submitted.” Id. at 998-99 (internal quotation

marks omitted). “Rule 9(b) does not require a relator to allege the details of every

false claim submitted to the federal government for reimbursement.” United States

ex rel. Solis v. Millennium Pharms., Inc., 885 F.3d 623, 628-29 (9th Cir. 2018). But

allegations made on the basis of “information and belief,” such as those in the instant

SAC, must also state the factual basis for the belief. Neubronner v. Milken, 6 F.3d

666, 672 (9th Cir. 1993).

      The FCA is “intended to reach all types of fraud, without qualification, that

might result in financial loss to the Government.” United States v. Neifert-White Co.,

390 U.S. 228, 232 (1968) (emphasis added). The elements of an FCA claim are “(1)

a false statement or fraudulent course of conduct, (2) made with scienter, (3) that was

material, causing (4) the government to pay out money or forfeit moneys due.” United

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States ex rel. Hendow v. Univ. of Phoenix, 461 F.3d 1166, 1174 (9th Cir. 2006)

(emphasis added). Accordingly, to plead a plausible FCA claim and a claim under

state-law analogues, a complaint must adequately allege that the claim was made to

a government payor.

          1. With respect to all but two allegations, the SAC does not adequately plead

that a false claim was made to a government payor. The inadequate parts of the SAC

are insufficient either because they specifically identify a private insurer—for

instance, “‘Anthony’ called Express Scripts for Anthem,” or “[i]n an August 1, 2016

phone call to BlueCross Blue Shield of Michigan”—or because they are

conclusory—for example, asserting that Appellees “regularly made false and

fraudulent statements to government and private insurers.” The former category of

allegations fails to plead a government payor. The latter category is based on

“information and belief” and does not adequately state the factual basis for the belief.

For these reasons, all but two allegations of the SAC fail to plead a plausible claim for

relief.

          2. The remaining two allegations are also insufficient, but for a different

reason: they fail to adequately allege materiality. Materiality, like the existence of a

government payor, is an essential element of an FCA claim. Hendow, 461 F.3d at

1174. “Under the [FCA], the misrepresentation must be material to the other party’s

                                            5
course of action.” Universal Health Servs., Inc. v. United States ex rel. Escobar, 579

U.S. 176, 191 (2016). The FCA defines materiality as “having a natural tendency to

influence, or be capable of influencing, the payment or receipt of money or property.”

31 U.S.C. § 3729(b)(4). “Under any understanding of the concept, materiality looks

to the effect on the likely or actual behavior of the recipient of the alleged

misrepresentation.”     Escobar, 579 U.S. at 193 (internal quotation marks and

alterations omitted).

      Both remaining allegations pertain to Appellees’ practice of instructing their

employees to misrepresent the identities of their employers when seeking prior

authorizations for prescription medications from insurance providers. The allegations

of the SAC do not plausibly plead that this practice was material to an insurer’s

decision to grant prior authorization. The SAC does not allege that insurers would

have refused to pay had they known that the request was coming from a pharmacy

rather than from a physician’s office.

      Gharibian’s authorities supporting the proposition that physicians are supposed

to be the ones obtaining prior authorizations do not establish that the caller’s identity

is information that would influence the decision-making of insurance providers. The

Supreme Court has held that “when evaluating materiality under the False Claims Act,

the Government’s decision to expressly identify a provision as a condition of payment

                                           6
is relevant, but not automatically dispositive.” Escobar, 579 U.S. at 194. Some

Medicare regulations appear, in fact, to contemplate that individuals other than

physicians or their representatives will be the ones obtaining prior authorizations on

behalf of patients. See, e.g., 42 C.F.R. § 423.566(b).

      Because the SAC fails to adequately plead materiality with respect to the two

remaining allegations, the district court did not commit reversible error in dismissing

the SAC in its entirety.

      AFFIRMED.

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